If the Fed does quantitative easing as we all expect, then it may be time to start buying flowers. Not as an investment, of course, but with full intention of selling at higher prices what we buy today on the cheap. But let’s not all rush into this trade at once. Because the Fed has not actually QE’d anything lately, though they are signaling via wink and nod. Perhaps they may temper their plans as the list of potential unintended consequences mount.
Corn has limited up two days in a row. Wheat and Beans are rallying in sympathy. Precious metals are persistently trending upwards. What could be wrong with this you ask? Hmmm. Well, if you’re a Midwest farmer with a pile of gold coins buried in your corn field, nothing could be finer. But if you’re retired and chasing lower yields on risk-free assets so you can buy corn flakes for breakfast, well then it may be a different story.
In equities, it’s becoming a little heady as well with the new vogue perception that you just can’t lose with the Fed at your back, ready to continue debasing the dollar for your benefit. Either stocks go up and you win, or stocks go down and then back up, and you win. I wonder what could go wrong here. I don’t know, but if I were a swan I’d get my black Sharpie out right about now.
Be careful not to trip over dollars to pick up flowers as you head to your local florist. Someone is laying tripwire out there, and it may not end well.