railroad events, big bet traders, inflation, and currency balloons
the information in this forward reminds of reading past circumstances surrounding Rockefeller as to which a couple years afterward it was determined the purpose of this big bet trader information was THEIR way of selling to all those reading this information.
the inflation trade may remain the theme of trading beyond even our own years; however, the inflation trade has run for perhaps 300 years already and i may dare to say it is a price in...just a little bit. never yet have i ever seen so many coincident indications relative to deflation.
as of friday 12.04.09 my market observation concerning currencies is as such:
The Euro and Yen are being inflated like balloons tied to the US Dollar attempting to prevent our currency from getting stronger. Furthermore the Yuan may attempt to become stronger than the US Dollar, so our currency will appear more inflated from that perspective.
i think there could be a new race between the US and China for the worlds strongest currency. this could force both countries to strengthen their currencies.
stock prices may have already priced inflation expectations and economic turnaround into the advance. it might take additional quant easing to spur greater inflation expectations which our central bank balance sheet does not have capacity for.
current policy is now being positioned to act as a buyer of last resort for collateral via its repurchase program. should collateral prices fall, the fed stands ready to exchange cash for collateral when sellers significantly outnumber buyers.
in the meantime, the commercial RE meltdown market has been hidden. i also think the Green Energy theme will stagnate as countries move toward focuses on reality. not until enough investment capital can be aggregated to make a sustained launch into this theme will Green Energy become a railroad event.
The healthcare sector imo has the greatest chance for a railroad event since infrastructure is already in place, and the bill should create the inflation all parties are looking for. a health care backed security must be in the works to underwrite this railroad event.
While Wall Street was in ruin last year, John Paulson was laughing all the way to the bank thanks to his $20 billion bet against subprime and banks. Almost instantly, Paulson, who was something of a Wall Street unknown, became one of the richest men in hedge fund history. Today, he continues to bet big. However, in a strategy shift he's actually buying banks now. Paulson this year has bought a significant stake in banks, including Bank of America, which he expects to nearly double by 2011, as well as Citigroup. Paulson's other big gamble is less contrarian than those in the recent past. Even with gold reaching new highs on a daily basis, Paulson plans to open a gold fund in January 2010 and invest up to $250 million of his own fortune in it, as detailed in a recent Wall Street Journal article. Already a major shareholder in miners AngloGold Ashanti and Kinross Gold, Paulson thinks there's plenty more money to be made in gold, according to our guest Gregory Zuckerman, author of “The Greatest Trade Ever” . Zuckerman notes two primary reasons for Paulson's confidence in the trade:
Central banks around the globe have gone from sellers of gold to buyers, and that the global supply of gold is constrained.
The Federal Reserve will be very slow to raise interest rates and has dramatically increased the money supply. This of course will lead to inflation, another reason to be bullish on gold.
But with a net worth of about $6 billion, why is Paulson still looking for the next big trade? Why not just live the good life? "He's not like you or I, I don't think," Zuckerman says. "To John Paulson buying gold is the safe play." Having already reaped the single-most profitable trade in Wall Street history, the odds suggest Paulson won't be as fortunate with gold. But I wouldn't want to bet against him.