I reset my short calls on SPY and EFA today, expiring in a couple of months. I've also decided to bet in a different direction with my gold holdings. I've decided to sell puts on IAU and GDX (and maintain my long holdings of the ETFs) because I believe, at some point in the very near future, the price of gold will finally begin its inexorable move upward. I don't want to be forced out of my long positions in gold when that happens, so I'd rather risk the possibility that I'll be forced to buy a little more gold.
Why do I believe in gold? Here's one reason. China has recently shifted its purchases of Treasuries to the ultra-short end of the curve, which will eventually force the U.S. to roll over more of its debt in the short term than in the long term. This accelerates the date at which the U.S. will face a bond market dislocation, thus furthering Beijing's long-term strategy of financially weakening the U.S. China's moves out of long-term Treasuries are also consistent with this approach.
BTW, I also purchased more FXI (with covered calls) based on the continuing strength of the Chinese economy.
Why do I believe in gold? Here's one reason. China has recently shifted its purchases of Treasuries to the ultra-short end of the curve, which will eventually force the U.S. to roll over more of its debt in the short term than in the long term. This accelerates the date at which the U.S. will face a bond market dislocation, thus furthering Beijing's long-term strategy of financially weakening the U.S. China's moves out of long-term Treasuries are also consistent with this approach.
BTW, I also purchased more FXI (with covered calls) based on the continuing strength of the Chinese economy.
