The Unthinkable?

"Don't deny what your own eyes are seeing" was my admonishment to traders and brokers over the years...

So let's recap what we are seeing right now:

1. The Fed and Treasury appear to have walked away from the US$ in favor of housing and banking.

I would have thought they would have tried to walk the tight rope, but it appears that both their actions AND their speeches are telling folks to abandon the US$. "Don't deny what your own eyes are seeing".

2. The International Debt Market continues to buy Treasury bonds, notes, and bills - but for how much longer? The Japanese continue to buy, and have accelerated their purchases of, Treasury paper; clearly they believe that deflation is the bigger risk. They better be right, or the Treasury market is going to have one very, very unpleasant day sometime soon. (Disclosure: My biggest holding, bigger than precious metals are Treasury Notes.)

3. The Gold market does not believe in anything except Gold. That market continues to go vertical.

4. Natural Gas consumption denies the industrial pickup that the equity market foresees.

5. Oil prices in US$'s are high enough to tip the US over into another recession.

Given the above, I have no firm conviction on any course of action.