Things Are Getting Interesting

Well, CDE wasn't the place to be right now. I did sell some off early week and re-up when it hit 27 by adding May 30s. However, who knows what is going to happen now? Silver fell off a cliff from the margin raise(five times!!!). Sold off 20% of my physical holdings at different spots when silver was in the mid-40's. Plowed it right back into gold. Currently down nicely on my CDE calls.

Luckily, I was holding those Jun USO 36 puts. Too bad I didn't hold on to all of my USO puts. That would have really made my year. I made a lucky play on UUP and caught the bottom with some May 21s at 17 cents.

We are in May and I am looking for my spot to bow out for the summer. Probably before May expiration. However, I am really trying to force myself to hold this USO position as long as I can stomach it. My target for oil is 85/barrel. IF we get there, I will cash out. That should put USO somewhere in the 34's and I will be able to show a nice profit on the trade.

In other news, the economy still sucks. America is basically like someone who lost their job, blew through their little savings and is living off its credit lines to keep up appearances. People are getting squeezed at every corner. The fantasy economy will have to come down to reality at some point. Which point is it? 2012? 2013? Beyond? Never?

Will there be QE3? Will they tighten? I think the correct answer moving forward is it doesn't matter. If you are going 70 and approaching a brick wall, at some point, it doesn't matter whether you throw on the breaks or not. I am guessing QE2 was that point.

The depression needs to happen. Just like it had to happen back in the 30's. The only difference now is we will live through a hyper-inflationary depression, instead of a deflationary one. The bright spot is a hyper-inflationary one may not lead to a global war.

One thing I am certain of is the Fed, and those that REALLY control it, know exactly what their best options are. I do not expect them to make a mistake from a game theory standpoint moving forward. I think it is safe to say they have played it perfectly, from their own standpoint, since 2008(including letting Lehman fail/seizing WAMU). They can profit immensely from a hyper-inflation scenario, as long as they are able to front-run it.

Something has got to give, and give it shall.