Fed's true color

Today, Fed showed what they really think about inflation (going up) and economy (slowing down), and they reset the inflation target and growth target, this is to manage the expectation better, and allow them more freely to cut interest rate again. Fed's true color is revealed today. Before it's all over, the real infation will be higher than their forecast. Now is a great time to buy commodities. Fed is saying, they have to deal with short term issue (economy) first and worry about inflation later, you know how this will be played out.

1. I sold DBA a few days back to protect my gain, it turned out to be not necessary, it recovered all and hit new record today.
2. I did add GDX using the money I sold for DBA. Since I think GDX has more catch up to do than DBA.
3. I think the Fed will cut rate aggressively to avoid a recession, and this in turn will be a great year for gold and commodities.
4. DBA is a great vehicle to play three of the most important agriculture components: corn, wheat and soybean. All three are in shortage, however, I think they're all extended and specially wheat, with some reports saying Australia will have a record havest year in 2008 due to the rain, from previous three down years. So use a sharp correction to add, and sharp rally to sell.
5. Gold has different purpose, now with dollar in a long term decline, China and the middle east countries, Russia will be forced to use gold as one pillar of their reserve, this will be one of the long term trend in gold.
6. And more investors are using gold ETF to balance their portofio. Even a small 3% in all investors portofio will push gold price much higher.
7. Likely gold will touch 1000 soon (as early as this month), and then 1250 in 2008.
8. Tomorrow ABX and NEM will report. The result will impact GDX performance. In the long run, it doesn't matter their earning is good or bad, as long as they have the gold reserves, they'll be paid, and if gold price keeps going up, these companies will be worth more.
9. Another ETF, MOO is a good candidate to play commodities too. Remember the gold rush, it's not the miner who got rich, it's the people who sold the tools. Add to my watch list.