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This is one of the better interviews I have seen recently in terms of clarity.

Dennis Gartman, the King of Commodities (as much so as Bill Gross is the King of Bonds), makes a very compelling case for the death of bonds and the re-birth of equities. And he properly describes the trend as secular, taking 20-30 years to fully play out.

The transition from bonds to equities has many implications and potential investment themes. First, get out of bonds, or if out, get short of bonds. I am in TBT, which is the levered inverse of bonds. Its value will go up as the long bond interest rate goes up. The 20 year is just short of 4% now. If it makes it to 5.5% in 2011, TBT will do very well with potentially a 30% gain. Any economic growth in the USA will result in higher interest rates as they "normalize". Normal rates would be around 3% for the shortest T-Bills and 5.5% for the longer bonds, 20-30 years. The 10 year would be at 4%, "normally".

But, if Bernanke keeps his foot on the liquidity pedal, inflation will likely overshoot his target and we could see the long rates over 6% within two years. This presumes the rest of the world cooperates and no major economy contracts significantly. I doubt the Chinese will do this and Europe seems to have got the message to print money to save its peripherals (as well as accept infusions from the Chinese Treasury).

To show the complete transition from bearish to bullish economy, even David Rosenberg is now acknowledging that the market is headed higher with stronger economic growth, though he will say it is all "purchased" growth, and therefore, short term. We shall see. If the rest of the world accepts dollar devaluation through various QEs, then buying back growth may work, especially if followed on by spending control measures in Congress.

Disclosure: Author holds TBT.