With so much liquidity chasing return, Minerd thinks a wide range of assets are about to make large gains. “Over the next 2-3 years, it’s risk on,” he says. And he’s planning to position as follows:
- Long High-Beta Equities
- Long gold and silver
- Long junk bonds
- Buy art & collectibles
- Short Treasurys
In the near term, that sounds good for your equity portfolio –but if you have a longer time horizon, Minerd also makes some troubling comments.
He believes the current environment is similar to 1998, when the stock market was in the early stages of a bubble. He also believes it’s similar to 2003 when the housing market was in the early stages of a bubble.
And you know how that ended.
Eventually investors will have to pay the piper – and the fee this time around will probably come in the form of serious inflation. However, Minerd thinks you have some time to maneuver before you have to deal with that.
“Milton Friedman told us that inflation is always a monetary phenomenon but it is subject to long and variable lags. And the long variable lag is caused by the velocity of money and how far away we are from potential output. And we are way far away from any capacity constraint."
In other words, Minerd thinks we have years before inflation becomes a problem. In the meantime, enjoy the ride higher.
Got something to to say? Send us an e-mail at email@example.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment, but not have it published on our Web site, send those e-mails to firstname.lastname@example.org.
Trader disclosure: On Feb. 28, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Gartman is long gold futures; Gartman is short oil futures; McCullough is long (XLU); McCullough is long (GLD); McCullough is short (XLY); Finerman is long (AAPL); Finerman is long (BAC); Finerman is long (JPM); Finerman is long (HPQ); Finerman is long (CMI); Finerman is short (SPY); Finerman is short (MDY); Finerman is short (IWM); Adami is long ( C); Adami is long (GS); Adami is long (INTC); Adami is long (AGU); Adami is long (NUE); Adami is long (MSFT); Adami is long (BTU);
For Mike Khouw
For Doug Yearley
For Gordon Johnson
For Gerard Cassidy
For Larry McDonald
CNBC.com with wires.