Silver

I'm using SLV as an example, but physical if you can get your hands on it is just as good.

 As previously mentioned, the area of the red line appears to be where Blythe Masters (JP Morgan ) and HSBC lost the battle to suppress silver to protect their inherited short positions from Lehman. The parabolic move up is reminiscent of short covering.

Yesterday in covering SLV, I mentioned a target based on the historical gold/silver ratio, it's nearly double. Silver is hitting blues skies now (no resistance) and no reason it shouldn't appreciate to the historical average. The pullback we saw was cut short yesterday and SLV and GLD ran, SLV to a much greater extent. This reflects the market's view that Bernanke will continue to debase the dollar and that inflation is probably more then transitory. Keeping rates between ZIRP and .25% for the foreseeable future will cause inflation to bloom. I personally believe the transitory language is an outright deception and it seems the market for the foreseeable future would agree. Bernanke's policies have not had the effect they were intended to so the mission of QE was redefined. In effect, Bernanke has boxed himself in, or created what I've been calling the Bernanke Chinese Finger Trap.

The wild card now is whether China intends on making good on its threats. It's a hard question to answer, there are few currencies liquid enough to replace their dollar denominated holdings. Does China really want to use the Euro rather then the dollar? On the other side of the coin, Congress and Bernanke haven't showed the Chinese anything that says we care about your holdings, I think Bernanke understands he's taking a gamble that the Chinese have few alternatives in the debt/currency realm and may be calling their bluff. I'm guessing the Chinese will respond with a strong signal, but won't go so far as they've threatened, however try to create the impression that they will. We'll see in upcoming auctions and what China says over the next few days. Silver and Gold are certainly part of a solution for them.