Think deeper about the QE2

QE2 is finally out on Thursday, November 4th. Here are some quick points for it:

1. The total QE2 amount is 600Billion, separated into 8 proportions, with each equal to 75Billion
2. Starting from November in 2010, FED will purchase 2-5 years bill, notes and bonds from the US Government
3. The aim for the QE2 is to increase the " Expectation Inflation " in US by keeping the 2-5 years interest rate in a certain range
4. Separating the QE2 into 8 different proportions shall increase the " Expectation Inflation " in the market of US
5. Yet, this is not the end of the story
6. Obama should have known that his party will lose seats in the House of Representative
7. In the coming days, it will be harsh for Obama and his party to make up policies that involve spending money or printing money
8. Personally, I predict that the US Government will cut off some spending in the coming months
9. It may not involve the money that printed in the QE2 plan, but there must be some plans that will be adopted by the US government to reduce spending
10. While " Expected Inflation " keep on increasing, US Government will keep on reducing spending
11. Government will not increase interest rate in the coming 8 months, otherwise, the QE2 plan is a failure

For general investors, I suggest:

1. Buy real estate stocks in US, hold it until May of 2012
2. Buy real estate stocks in HK, hold it until May of 2012
3. Buy commodity stocks, especially oil and natural gas, hold it until March of 2012
4. Include gold stocks in your portfolio, hold it until May of 2012

Thanks

Paul

Photo: http://www.wretch.cc/blog/makoto771/22365264