Simit Patel

For a Fork in the Road, a Barbell Portfolio

Volcker is correct in his assessment that inflation is the real concern, but he is hitting the crack pipe a little too hard if he thinks the Fed is doing the right thing. The Fed's behavior is inflationary and it is doing its best to force banks to lend in an environment where there are not creditworthy borrowers. When we see massive inflation over the next four years it will become apparent how bad the Fed's behavior is.

The Japanese Yen is the ultimate play for those torn between inflation and deflation; regardless of whether you are an inflationist or a deflationist, going long Yen and short US dollars can make sense. For those who know the game is inflation, though, gold and silver are where it's at.