Quantitative Easing Explained

This is important to understand, when QE2 ends in a few months The Fed will either announce a new purchasing program (which is what I think will happen) or they'll be responsible (which hasn't happened in over 30 years). Either way, depending on the outcome a short or long position in US Treasury ETF's should be a profitable medium term trade. We have a few months to go before Ben announces his plans (He doesn't like to surprise the markets). When this happens, it will be time to front run the Fed.

More to come on this trade as it develops. Anyone interested in participating should understand the basics of bonds. For example, the inverse correlation between bond prices and yields. No need to dive deep into this subject, just a simple understanding will do.