Monetizing our debt is happening as I write this. When a central bank prints money in excess of the revenue coming in, we refer to this as monetizing the debt. It has the effect of debasing that country's currency.

Let's look at what our central bank is doing right now. Since Labor Day, the Fed's assets have exploded to $2.31 trillion dollars from $905.7 billion dollars. Add to this President-elect Obama's plans to add another $700-800 billion dollars to this already bloated balance sheet and you are creating the seeds of a new disaster.

The effects of keeping interest rates near zero and monetizing the debt at the same time will create a double whammy. We saw what happened when Greenspan kept interest rates near zero for too long and created the housing bubble that has burst into skyrocketing unemployment and ever-rising home foreclosures. The Federal Reserve has done this, plus monetized the debt at the same time. It doesn't take a genius to figure out that we are headed into one of the greatest inflationary cycles in history and creating a new and even bigger bubble.

Then, also, we are creating an additional problem. We have been dependent on other countries to buy our debt. With interest rates near zero, there is no incentive for them to keep doing this.

It seems that the Fed's goal is to inflate us out of the deflationary cycle we are in now.

Monetizing our debt. What does it mean? originally appeared on BloggingStocks on Wed, 24 Dec 2008 11:30:00 EST. Please see our terms for use of feeds.

Harley-Davidson (NYSE: HOG) volatility at 29 as the company announced it reduces motorcycle shipment & EPS guidance.

HOG is recently trading at $48.80 in pre-open trading, below its close of $54.09. HOG lowered motorcycle shipment and financial guidance. HOG sees 2007 EPS of $3.69-$3.77 vs. consensus of $4.12. Jim Ziemer, CEO of HOG, says ,"this is a difficult time for the U.S. consumer." HOG September option implied volatility of 29 was near its 26-week average of 27 according to Track Data, suggesting slightly larger price risks.

Market Vectors Gold Miners ETF (AMEX: GDX) volatility elevated as gold trades above $700.

GDX seeks to replicate the performance of gold and silver mining companies represented in the Amex Gold Miners Index. GDX closed at $40.95. Gold is up 0.33% to $706.90 according to Bloomberg. GDX option volume of 20,596 contracts was heavy on 9/6/07. GDX over all option implied volatility of 37 is above its 26-week average of 32 according to Track Data, suggesting larger risk.

General Motors (NYSE: GM) October volatility up into UAW 9/14 contract deadline.

GM closed at $31.07. The UAW's current four-year contract with all three automakers is set to expire on September 14. Goldman Sachs says, "cutting estimates, target goes to $37; retain Buy on UAW talks." GM September option implied volatility is at 43; October is at 47; above its 26-week average of 41 according to Track Data, suggesting larger risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Option update: HOG reduces motorcycle shipment & EPS guidance originally appeared on BloggingStocks on Fri, 07 Sep 2007 09:15:00 EST. Please see our terms for use of feeds.

"As a professional trader, there's nothing I like more than going with the odds," says Keith Fitz-Gerald, who also says that the odds are calling for as much as a 50% gain in the next 12 months. The reasoning behind this bullish forecast is one of the market's most consistent seasonal patterns, the Presidential Effect.

He explains, "Since 1933, no single third year 12-month period in a presidential term beginning in October has registered a loss, the average total return has been 28%, and the worst positive return has been 6.6%."

To clarify, the one-year period that runs from the current month through the end of next October represents the third year of the Presidential Cycle. The following 12-month period ending at the 2008 elections will be year four. "I'm licking my chops in anticipation of the Presidential Effect."

For his stock selections, Fitz-Gerald uses a system that he pioneered known as non-linear analysis, which applies pattern recognition to historical and current market data. And while his trading and hedging services are limited to institutions and high net worth clients, his stock advice is easily accessible through The Skeptical Investor newsletter.

And while his system will frequently uncover small, lesser known stocks, today it's pointing to some of the biggest players around - Microsoft Corporation (NASDAQ: MSFT) and General Electric Company (NYSE: GE), a pair "beaten down true blues that I think are poised for serious gains in the months ahead -- perhaps as much as 20%-50%."

Continue reading MSFT and GE: 'Presidential' blue chips

MSFT and GE: 'Presidential' blue chips originally appeared on BloggingStocks on Fri, 27 Oct 2006 11:00:00 EST. Please see our terms for use of feeds.