Saturday, May 20, 2006


...volatility this week. Commodites were thoroughly trounced, stocks plummeted, and it appears most of the players have re-established their appetities in bonds.

This was the primary reason for my belief that the U.S. $ is not going to substantially depreciate. When volatility increases (as measured by the VIX) by 50% in one week, people sailing those turbulent seas seek a safe harbor. The safe harbor is government debt denominated in U.S. $.

As I stated in the previous post, I thought the markets would decrease significantly in the summer from an unanticipated rate hike or some other catalyst. Still, I think that now is the time to buy stocks, fully informed of the performance of stocks in an evironment of increasing interest rates.

Of course, the probablity I will be wrong in this assesessment is currently very high and asymptotically increasing to 1...

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