Ben’s Important Day………….shorting more stocks at 8:45 AM CDT
Mr Bernanke goes up on the hill to answer questions today. While Fed Governor Janet Yellen continued her push for more easy money, a more solid governor, Richard Fisher said essentially in a recent speech, the money is out there, the economy just isn’t using it, why would we give it more? Well said.
So today Ben has to draw his line in the sand, he has to say he has done everything that is needed, now Congress and the Administration have to work out an approach that will keep the economy from falling off the cliff. That’s it, nothing more.
If Ben were to handle the answers correctly, which I’m sure he will be hesitant to do, but just maybe he does feel his back is against the wall, look for stocks and gold to both drop precipitously. In fact as we watch the tone of his comments this morning we may quickly unload the long gold side of our long gold / short stock position even though we increased our short stock position to double the long gold position yesterday.
8:45 AM Update: The euphoria this morning seems to be asking to be faded by me. I might be stepping into big trouble but at the moment I have the bullets and am increasing the stock short position to 100 percent of equity. This makes our total long/short leverage at 140 percent of equity, ie. 100 percent short stocks, 30 % long gold, and 10 percent short T-Bonds.