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Swiss Charges On Trillions Of Held Currency To Move To US Real Estate Investment Trust Reviewed In Las Vegas By Ross Aldridge

|Includes: ProShares UltraShort Financials ETF (SKF)

After all, the Swiss held assets are being charged an additional holding fee could be reason to consider the United States Real Estate Investment Trust. The REIT being touted in Las Vegas Nevada is the "Key" REIT that is currently being structured by a consortium of banks and private investment institutions. Combine the Swiss action with the possible Federal intervention in the up and blooming cannabis industries and we could certainly have high times in the market in the second quarter of 2015 but more roller coaster action till that smoke clears.

In his New York Times column today, Nobel Prize-winning economist Paul Krugman seizes on the market frenzy sparked by the Swiss franc Thursday to illustrate how Very Serious elites jeopardize the United States' economic recovery.

Here's what happened yesterday: Switzerland's central bank, the Swiss National Bank, announced that it would no longer peg the franc to the euro, and that it would cut the interest rate it pays on bank reserves to negative 0.75 percent, meaning that investors must pay to place their funds in Swiss banks. The drastic steps are a response to a clear and present deflationary threat. Since Greece's debt crisis sent investors fleeing in search of safe havens, Switzerland has seen an influx of funds, leading the Swiss franc to spike in value and undermining Switzerland's commercial competitiveness.

Krugman identifies a crucial lesson in Switzerland's experience, one that the Very Serious policymakers pushing the U.S. Federal Reserve to raise interest rates should heed: It would be foolhardy to raise rates even as inflation remains remarkably low:

What this says is that you really, really shouldn't let yourself get too close to deflation - you might fall in, and then it's extremely hard to get out. This is one reason that slashing government spending in a depressed economy is such a bad idea: It's not just the immediate cost in lost jobs, but the increased risk of getting caught in a deflationary trap.

It's also a reason to be very cautious about raising interest rates when you have low inflation, even if you don't think deflation is imminent. Right now serious people - the same serious people who decided, wrongly, that 2010 was the year we should pivot from jobs to deficits - seem to be arriving at a consensus that the Fed should start hiking very soon. But why? There's no sign of accelerating inflation in the actual data, and market indicators of expected inflation are plunging, suggesting that investors see deflationary risk even if the Fed doesn't.

And I share that market concern. If the U.S. recovery weakens, either through contagion from troubles abroad or because our own fundamentals aren't as strong as we think, tightening monetary policy could all too easily prove to be an act of utter folly.

Clamor Over Legal Marijuana May Force Feds to Act

Current federal policy that allows states to make their own decisions about recreational and medical marijuana is coming under pressure, with demands rising that the Obama administration, the Supreme Court or Congress set guidelines that would apply nationwide, Politico reported.

Marijuana is legal in Colorado, Washington, Alaska and Oregon. The District of Columbia voted to legalize pot but some Republicans like Rep. Andy Harris of Maryland want Congress to block the decision.

Another eight states -Arizona, California, Maine, Massachusetts and Nevada, along with Missouri, Montana and Florida - are all leaning in the legalization direction.

Meanwhile, Nebraska and Oklahoma say that Colorado's tolerant marijuana policies are having a spillover effect on them. They have filed a request for the Supreme Court to intervene.

There is also the practical matter of moving legal marijuana across states where it is illegal.

Those against pot legalization would like to see federal marijuana laws enforced.

Proponents want federal marijuana laws revamped to take pot off the list of controlled substances, which includes heroin.

There has been no great desire at the White House or on Capitol Hill to get involved.

Now, Republican Sen. Chuck Grassley of Iowa, the incoming Senate Judiciary chairman, says the impact of Colorado's policies beyond its borders can no longer be disregarded by the federal government.

He is expected to press attorney general nominee Loretta Lynch to say whether she will continue her predecessor's hands-off approach.

The issue has risen from "slow burn to a hot, cauldron bubble," Ohio State University law professor Douglas Berman told Politico. "I think the next six months to a year is a time that Congress needs to do something relatively big."

The Republican base may favor a prohibitory line on pot but polls show that a majority of Americans favor marijuana legalization. Most don't want federal laws enforced and younger voters, in particular, oppose leaving pot criminalized, according to Politico.

Samford University law professor Brannon Denning argues that the Constitution recognizes "that having states go their own ways is not necessarily an unalloyed good." There are cases when "a single, national rule governing conduct in all 50 states" make sense, he told Politico.

We continue to see pressure in the financial sector and more bad data from the earning season will on add fuel to the fire. Continue to hold long positions in SKF.

Disclosure: The author is long SKF.