Mr. Bernanke spoke to Congress today and we were again treated to the usual political gas from both sides of the aisle with an occaisional question directed at the chairman of the Federal Reserve. Notable among Mr. Bernankes answers was his admission that interest rates couldn't go lower and that, to paraphrase: "other options involve some difficult choices".
I think that his choice of the phrase "difficult choices" is a key to his reluctance to let the Fed take on additional significant debt. As well as a nod to the political battle going on over the debt levels of the Fed and the federal government.
To a stock market hooked on hopium delivered by frequent injections of Federal Reserve stimulus this must raise the possibility of some withdrawal pains in the future.
Gold and Silver reacted immediately, but the stock market is hanging in there. So far today...
I pay attention to the precious metals as they are primarily an indicator of inflation expectations. And the stock market must have inflation to sustain these levels.
I put on a short stock position and sold my gold and silver trading position today....