Positions Entered

Following up on the last post, I have established the following positions:

DBA - ~10% @ $27.58
PALL - ~5% @ $52.72
TBT - ~15% @ $33.12

Each of these positions are a bet on inflation and weakness in the U.S. dollar. I understand taking these positions is relatively risky prior to the Federal Reserve meeting today however, I believe the risk/ reward is in favor of a bearish view on Treasury prices since it would take around $2 trillion of security purchases to push yields on 10-year notes by 1%. Even if the Fed does announce a major asset purchase program this week, I believe it will only fuel faster inflation growth in the next 1-6 months. So I'm prepared to take a short-term risk for what I perceive will pay-off by the end of the year.

The PALL and DBA positions are an effort to cover inflationary pressure, in general, growing demand for food in developing China and India, and a potential perceived improvement in the U.S. economy (and an aggressive purchase of materials by tech companies fearful of being behind the curve) associated with inflation acceleration.

Powershares DB Agricultural Fund (Ticker: DBA): "The investment seeks to track the price and yield performance, before fees and expenses, of the Deutsche Bank Liquid Commodity Index - Optimum Yield Agriculture Excess Return. The index is a rules-based index composed of futures contracts on some of the most liquid and widely traded agricultural commodities – corn, wheat, soy beans and sugar. The index is intended to reflect the performance of the agricultural sector."

ETFS Physical Palladium Shares (Ticker: PALL): "The investment seeks to reflect the performance of the price of physical palladium, less the expenses of the Trust’s operations. The fund is designed for investors who want a cost-effective and convenient way to invest in palladium with minimal credit risk. Advantages of investing in the Shares include: Ease and Flexibility of Investment, Expenses, Minimal Credit Risk."

Proshares Ultrashort 20+ Year Treasury (Ticker: TBT): "The investment seeks daily investment results, before fees and expenses and interest income earned on cash and financial instruments, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Barclays Capital 20+ Year U.S. Treasury Bond index. The fund invests in derivatives that advisors believes should have similar daily return characteristics as twice (200%) the inverse of the daily performance of the Index. It invests typically the rest of the assets in money market instruments. The fund is non-diversified.