What do they know that they're not telling us?

FTSE 6 October 2011

The Bank of England has handed another £75bn to those greedy banks in the form of quantitative easing. Is that good or bad? Frankly I don't know. But it is bloody frightening. What, I ask myself, does the Government know that it is not telling us. How weak are those banks' balance sheets?

Commentators will be attributing the FTSE's strength to this bold move by the BofE and will ignore the fact that the Dow rose 140 yesterday and another 95 today and that the DAX is up 172. The FTSE rise might be flattered by the announcement but the main pull is the tether.

Sterling did a big dive and then a sharp recovery against the $. Against the Euro it just sank.

For me there is a new worry. Where will all that new money go. In all likelihood it will find its way into the markets. So the odds on a fall in the indices have lengthened. I should no longer be so keen to take out shorts and should look instead for opportunities to buy the market. This is good because it is easier to make money in a rising market. But it requires a serious mental adjustment. I've closed part of my short FTSE position to get used to the idea.

In the mean time gold and silver have had a goodish day. Better in the morning than the afternoon.