Speaking of Precious Metals - Beware the Ides of May

I created something of a stir with my interview with Conversations with Casey earlier this week. For those of you who missed it and want to save the reading time, I shared my strongly held opinion that the Fed won't continue the quantitative easing (read, monetization of Treasury debt) past the scheduled June end date.

In time, as the economy again sinks, they'll get back to debasement as usual - but at least for a little while, they'll adopt a less accommodating stance.

If I'm right, then the shift in policy will be made clear in the minutes released within a couple weeks of the next FOMC meeting, scheduled for April 26 - 27. While I will have much more on this topic in the upcoming Casey Report, my conclusion is that the shift of Fed policy from extremely loose to something less so will create at least a temporary rebound in the crumbling dollar. That, in turn, could trigger a serious correction in the frothy commodities sector and possibly suck the wind out of the sails of equities as well.

There is much nuance to this topic, but for now I think it's important not to assume the trajectory for gold and silver (and other commodities) will be straight up from here, though that could certainly happen if the FOMC acted contrary to recent statements and rolled straight into a third round of quantitative easing.

I just don't see that happening, and so I'm personally building cash to take advantage of the potential correction, temporary though it may be.

(In case you are interested in such things, "ides" is a reference from the ancient Roman calendar to the 15th day of March, May, July and October - and the 13th of all the other months. By my calculation, by the "ides of May" - May 15 - we'll have a clearer indication of Fed policy.)