The dollar’s slumping. Gold is soaring. The Fed must have won the battle against deflation, right?
What? They’ve just begun to fight?
Financial markets are discounting mechanisms, but sometimes they put the cart before the horse. The initial rally to 1.4866 in September proved to be one of those instances.
If you’ve been lucky enough to catch a signficant portion of this breath-taking trend, I’d suggest using some of those profits to buy a cheap lottery ticket. Buy a deep out-of the-money dollar call on the idea that the market has gotten ahead of itself in pricing in inflation.
