Today oil is above $90. Last night I paid $1.119 (CDN) per litre for gasoline to fill my wife’s RAV4. Unlike most people, I actually have a smile on my face when filling up.
I really owe a debt of gratitude to Ben Bernanke; you see he told 60 Minutes that he won’t stop with QE2–600 billion. Quantitative easing is a fluid concept. It is really as much as you need to make everything happy again. And this is really like pouring money into my portfolio: my positions are short the US dollar. I’ve sold put options in US dollars against Barrick Gold (ABX), Gold Corp (GG), New Gold (NGD), Penn West (PWE), Pengrowth (PGH): gold and oil. I hold long positions in most of these companies too. Thanks Ben. You have provided me with the Bernanke put so that I can invest in these companies virtually risk-free; if the economy sucks, you have decided to poor gas (QE) on the fire, and they are assured to explode in price. Dear Ben, have I told you recently that you’re my best friend? Now I know you think you can control inflation. As long as you believe you can, you will continue to put money in my portfolio. So please, by all means, just keep it up.
Nota Bene to my esteemed readers: I may be just a little ironic in my tone above–I’m yanking Bernanke’s chain–not that that important man has either the time or the inclination to read my humble blog. What I actually believe is this (does this scenario seem unreasonable today?):