Surprise! Room To Ease Is Gone Now

Good morning, and welcome back to my cozy abode.

I’m afraid that that theme which I’ve been harping on for so long now has again reared its ugly head; and once more, Ben Bernanke has no room to make loose policy announcements.

For a moment, I thought it might be possible, with oil in the high $70’s. But in just a matter of weeks, that lull was completely erased, and oil this morning is pushing $90 a barrel.

Now, it is possible that this is an insider response of some kind to a yet-to-be-official announcement that QE3 is under way.

However, in any fashion, what we are seeing continues to be a commodity market ready and willing to hold the world hostage at the slightest hint of news it doesn’t want to hear.

“Buy commodities to escape inflation” has been programmed into the head of every citizen within reach of a brokerage account. I know that gold bugs like to pretend that, somehow, their argument is still this novel revelation which has yet to go mainstream.

“Just wait until the average citizen learns about what the government is up to.”

Look here. The average citizen is the guy who tells ME to buy PMs when I chance upon a random conversation in the street. Everyone knows how this works. It’s not a secret. There won’t be a sudden surge in PMs and other commodities as the “average retail investor” gets in on the trade, because he’s already there.

The commodity trade is probably still overcrowded – and worse, by dumb money.

So maybe now we don’t get a QE3 announcement again. I was about ready to hear one, even if I thought it was a quarter off. Will Bernanke juggle hand grenades with $90 oil about? I don’t think so. But I could be wrong.

For the moment, I continue to hold lots of cash, and a small ERY position. AEC, CLP, CCJ, APC, and physical silver continue to be a standard part of my repertoire.

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