“It is my belief that in most cases there is time to react once the die is cast. It takes time for markets to react to changes that will impact a cross spectrum of prices. The Fed adding reserves would be a signal that the Fed has changed course from deflationary to inflationary. It would not be a signal that would be fully understood as to its significance by most market participants. For example, once a Fed adding reserves becomes clear, it would be unlikely that gold would jump by $100 an ounce, but such a jump could be clearly justified. So there will be time to move into inflationary positions, once a Fed stance that way is clear. So am I expecting accelerated inflation right now? No. But I realize Bernanke could turn the kaleidoscope soon, so I am beginning to think about what such a turn of the kaleidoscope would mean, and how to position for it.” (03/18/10)