Wednesday, December 1, 2010

Bookkeeping: Sold 25% of Ultra Silver (AGQ)

(please note - I am not normally this good)

Monday I bought a stake in Ultra Silver (AGQ) - today it was up 10% from my entry point, in less than 48 hours.  If you annualize that... errr...

Whatever the case, if I buy something that goes up double digits in less than 2 days, I am compelled to take something off the table so I sold 25%.

I am now reading that overnight the ECB hinted at the nuclear option - that is their own version of quantitative easing as the world is running out of debt buyers willing to buy European sovereign debt, and hence the only solution the world has to globally kick the can down the road is for central bankers to buy government debt and stash it on their balance sheet.  This would have been unheard of in the U.S. or Europe 4 years ago, especially Europe.  But now things are getting so desperate overseas, Trichet is potentially going down the Bernanke path.*

This could explain the resilience of the precious metals....

*please note the ECB has already been buying relatively moderate amounts of bonds in weaker countries, but they have been sterilizing it i.e. not adding to the money supply.  The talk overnight now is they are going to go the full QE route, so this is a whole different animal.  The entire global bond market is completely artificial with central bankers dominating - we continue to live in amazing times.  But for the speculator class this is always 'good news' because artificial prices and moral hazard are 'awesome'.

Long Ultra Silver in fund; no personal position


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