Financial Armegeddon.

Yields are spiking, the dollar is falling, and inflation is finally being addressed. For quite some time now, we have seen soaring food and energy prices but government statistics (which I have no respect for) have not shown any signs of it until now.

I think we've seen a major bottom in treasuries. Now we'll have to wait and watch if Mr. Bernanke can hold yields down and keep interest rates at 0.05%. Remember the Fed Interest Rate is a result of treasury/bond yield rates, the Federal Reserve can't just come out and say, "Rates are 'X' percent." They must buy the treasuries themselves therefore increasing demand and driving rates lower.

But the market isn't that quite easy to tame. I suspect the Federal Reserve will think otherwise and believe that if they keep printing money and buying more and more treasuries they will influence yields. This will bring even more inflation into the economy. It will be a vicious cycle. Asset markets will be extremely volatile during this time, I repeat extremely.

Expect more inflation, higher yields, volatile asset markets, social unrest and perhaps war. If you are a long-term investor stay invested in Gold and Oil. Traders should trade the volatility and expect a correction between today and the next 2 weeks.

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