Now this is not the ship we are talking about, it is the next round of Federal Reserve quantitative easing. As round one has officially not worked, they are extending their holdings of treasuries and other securities. Effectively this is the second round of quantitative easing.
Currently the market is rejoicing but I feel that this will be short lived. Investors need to realize that if the $1.75 trillion did not work in round one, there is no reason to believe that it will work in round two. Once the market realizes this the rubber will meet the road and it is my expectation that this will end badly.
You do not repair a debt problem with more debt and you do not create more jobs by burning the dollar. This will result in inflation and the Fed will have no-where to go. It is officially over (although the market may rejoice) and beginning later this month or early September I would be short the market and long gold.
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