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Yesterday minutes of the last Federal Open Market Committee (FOMC) meeting were made public and that group, in not so many words, said, “The double dip is coming, in the real world if not in the data.”

No, I am not a bear twisting words. An economic outlook that includes opinions suggesting a six-year time frame to restore unemployment to normal means the material reality of a recession is still upon us and will be so for quite a while. Recessions are statistically defined but lived through by people – unemployed people, scared people, uncertain people. If too large a percentage of the population is unemployed, underemployed, given up looking for employment, scared of unemployment or uncertain about their employment status, spending is less robust than it was in previous rebounds and business activity, over time, takes a hit. And when that happens, corporate profits eventually stall and succumb, and historically this means markets must take a hit.

This may not be the case in 2011. Yes, we will be a real world recession and yes, after mid-year corporate profits will take a hit. But this will give the Fed and eventually the ECB the political foundation for keeping interest rates near zero and printing money to reflate an economy savaged by deflated assets. This is how the market is trading, right now – it trades on the QE II/currency trade.

Then again, 2011 may see the market decline for the decline of the dollar is going to stop declining and begin to rise again as Europe melts a bit more – perhaps a lot more. Greece can never repay its debts without structuring, which the Germans insist must now include a haircut for bondholders; Ireland has done all the right things in terms of austerity but is going to drain the European rescue fund of as much as $150 billion; the bond bears are moving on to Portugal and then, mother of all meltdowns, Spain.

So what are an investor or a trader to do?

Investors should take two approaches – a five to ten year time horizon and dividends. First, investors should look at cost saving medical technologies – forget life saving, too hard to predict, but you can see where new technologies save money. I like Cerus (CERS) and own it, the company makes a system that cleans blood of pathogens as platelets are being produced, approved and used in Europe, waiting for the US and approval to go for a trial for whole blood, a bigger market. No technology risk, just waiting for sales to ramp, they have no competition. I also like Cepheid (CPHD), world leader in molecular diagnostics, have a new TB test that enables doctors to determine what kind of TB and therefore what kind of treatment to use, saving lives and money. They also have the leading MRSA and hospital acquired infection tests, business is very good. They too are ramping sales (already $200 million per annum plus). Both companies are also easy targets for buyouts.

Second, investors should look at the charts of the great dividend payers. The one that stands out is Annaly Capital (NLY), a company that arbitrages borrowed money, buying mortgage related securities with a yield higher than the money they have borrowed. NLY recently converted to being a REIT and pays an incredible 15% dividend. The other great payers are the gas transmission companies and Canadian gas trusts, the latter having a benefit of a rising loonie.

What should traders do? Think about riding uncertainty about Europe, the world, the economy, the New York football Giants. That means gold and silver, ETFs or calls on the ETFs SLV and GLD, I also like the dollar, right here, right now – the UUP ETF or calls on the ETF.

Yes, I got this all from the body language in the Fed minutes. For now that the great wise ones have begun to discuss a non-rebound rebound, the market will follow.

Source: FOMC Minutes and How to Play the Non-Rebound Rebound