Obviously, this strange beast called "QE2" is in the news a lot, and lots of folks are having their say. I'll have mine: It's wrong.

I'm with Mark Cuban. Unlike him, I'm not a billionaire. Like him, I am not an economist (thank god), and I agree with common sense. Common sense tells me that QE2 is wrong. Government solutions to market problems have failed in the past, and they will fail again.

Here are some of the reasons why QE2 is wrong:

Well, the Fed's dangerous game has commenced. Yesterday the Federal Reserve Board voted to crank up the printing-presses even harder, setting aside another $600B or so to buy bonds and other assets through June of 2011. This morning, markets are on fire, especially commodities such as copper, cotton, gold, silver, and the grains.

Keep in mind that this is an "experimental" policy on a historic scale. The most powerful central bank in the world is firing up the world's most powerful printing press in a way never used before -- to buy back trillions of its own bonds.

Well it's time for Markets Gone Wild, but you may not have the DVD, so let's recap: The Fed has been heavily telegraphing an accelerated money-printing schedule, driving bankers, traders, and speculators into all matter of commodities, stocks, and various exotic financial instruments.

Here's a summary:

* Silver reached a new 30-year high this morning. Incredibly bullish action. I think you should stay long silver here, a way to do that is SLV, or a mining company like Pan American Silver (PAAS), or silver futures. (Disclosure: I'm long all of the above). I've been bullish on silver for what seems like forever, and I remain so.

* Gold made a new high, and pulled back. With more money-printing on the way, it looks poised to break out, again.

* Our Riverbed/FFIV pairs trade worked out okay, in a strange way. F5 Networks (FFIV) has climbed 14% since we spotlighted the idea (we were short), but Riverbed (RVBD) is up 30% (we were long), so if you did the pairs long/short trade the difference has netted about 15%. Not bad for a month's work. The philosophy of this trade worked out okay -- the cloud "bubble" had pushed FFIV to a more unreasonalbe valuation, and it was time for Riverbed to catch up. (Disclosure: I am out of the trade, I think "cloud networking stocks" are getting overextended, though I still like Riverbed long term).

* New highs in stocks we like: EBIX, RVBD, PAAS

* Remember Right Now (RNOW)? Incredibly strong stock. Methinks something is up.

Wow. Things have really taken off here. Stocks, commodities, and most notably -- the precious metals. Gold is at an all-time nominal high of 1372 and silver at 20-year highs. Copper is pushing aggressively higher.

The trigger for the greedfest was yesterday's release of the Fed minutes, in which the fed governors indicated they are *this close* to unleashing the hounds of quantitative easing.

For those not into the Fed inside baseball or with only a passing knowledge of economics, "Quantitive Easing" is a central banker euphemism for "printing money." There is a reason why they call him Helicopter Ben. The phrase is interesting in that it makes money printing sound exotic and alluring, though it is not that at all: It's printing money.

Quantitative easing may sound sexy if you are an academic economist from Princeton, but in reality it is the siren song for central bankers. They can be dragged into the rocks very quickly. What can go wrong? Well, just take a look at the 1970s. Money-printing seemed great until inflation and the price of oil got out of control and pretty soon you were looking at 18% mortgage rates.

As I've been writing on this site for some time, the only way to prepare for this is to participate in the rally -- of everything -- but to keep tight stops on your trades and hedge with a healthy precious metals position. Metals are still outperforming everthing else, which is a symptom of central banker money printing gone wild. Think about the fact that the precious metals have been appreciating 10-15% per year for 10 years, while stocks are basically flat. That is the byproduct of money-printing: It has an unintended consequence on hard assets which are reflecting the devaluation of a currency.

Well, Ben Bernanke appears to be winning over the gloom-and-doom crowd, at least today.  What an impressive rally. I was surfing some data trying to rationalize it, and I have noticed some interesting changes going on in the market. The clue may be in the money supply.

If you look at recent charts of the money supply as put together by the dark, yet excellent analysis of government statistics over on Shadowstats.com, John Williams's site, you can see something that is truly intriguing: an uptick in the money supply growth rates.

Source: Shadowstats.com

Stocks are showing some early symptoms of rolling over. Yesterday, the Federal Reserve annnounced it was ready to print money ad infinitum to make sure the world does not run out of money. I do not know what Ben Bernanke's academic friends at Princeton call this, but I call it the "Banana Republic" strategy. Stocks are reacting poorly to the news today.

Perhaps it is the fact that the Federal Reserve statement read more like jawboning than an actual decision. They said in the statement that they will do what they can, but the fact remains that there isn't much left to do but print more money and monetize the debt -- an approach more familiar to countries such as Argentina than the United States of America. And we know how well that worked out in Argentina.

Stocks have rallied powerfully in the last month but they are running up against some heavy resistance levels and technical signals show some of the same patterns we saw before previous corrections -- see the chart below.

The precious metals breakout still has legs, you want to accumulate on pullbacks because precious metals will be the place to be through 2011. I believe in an "Innovation-Devaluation" barbell strategy, but tech stocks are more difficult because they have run far and fast. I believe it can be legged into on the next significant correction before the November election. Don't worry, it's coming -- it always does.

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value."

--Alan Greenspan, 1966

The bizarre, hypocritical evolution of Alan Greenspan continues, as he drifts deeper into the Austrian economics camp. Greenspan is getting some airtime on Financial TV (FTV) this morning as he now says the rising gold price is the "canary in the coalmine."

Greenspan also gained some notoriety recently when it became known that he was advising John Paulson, one of the largest and most successful hedge fund players on the planet, on monetary policy and gold. This advice is ostensibly bullish for gold, as Paulson has built one of the largest gold positions of any hedge fund.

Let's see, the stock market rallied while economic data was weakening. Yet bonds were rallying at the same time, and yields have been plunging -- to near record-lows of 2.75% in the 10-year! This was a great dichotomy that had many people scratching their heads. Why would stocks rally and bond yields plunge while we got weakening economic data?

Well, if they were fueling up the helicopters, that would make sense.

Remember the bond market is often "smarter" than the stock market. The plunge in yields has been telling you something. Is it not interesting that the stock market and bond rally continued until the Fed announcement and then failed on yesterday's news? Sell the news, baby.

There has been a massive amount of attention focused on Fed Chairman Ben Bernanke's testimony before Congress today. The testimony lacked any new large developments. However, we did glean more insight into his thinking and what it means for the American -- and global -- economy.

My macro opinion of "the economy" is that it is being held hostage by debt and uncertainty. For too long, our financial markets have focused on government largesse, policy moves, and debt funding to drive growth on Wall Street. Unfortunately, this is not what the real economy -- "Main Street" -- is all about.

The economy cannot be controlled by Ben Bernanke and the federal government. You see that now when 0% interest rates are doing nothing. That is because for too long, the economy has been fueled by financing and easy money that drove Wall Street bonuses and the debt bubble. As we saw, the more debt we create, the more we borrow from the future.

An analyst I often consult with described this morning's market as "soggy," which is just about the best term I can think of. The Fed did nothing to buoy spirits yesterday, as they downgraded their outlook on the economy, keeping rates artificially low (perhaps forever?).

This morning, equities are trading down. Right now the market is trading on headline news, the regulatory framework in Wasthington, and largely ignoring corporate profits news, which has been positive-to-benign.

Tonight we have big tech reports from RIM (RIMM) and Oracle. Lately the trend has been for the market to sell off on good news, which is indicative of a bear market approaching, so this will be interesting to watch. Remember: it is the reaction to the news not the news itself that matters.

I am looking more at technicals as I believe this is a technical/supercomputer driven market and I continue to believe we are setting up for a "death cross" as the 50-day moving average threatens to crossover the 200-day moving average shortly. I am surprised that more people are not talking about this, as it is a medium-trend indicator not to be ignored. In addition to that, we have formed a large head-and-shoulders pattern in the S&P, another formation that I do not like, especially given the recent action in the market.

In my long-term investment accounts, I am currently largely in cash. In my short-term trading accounts, I am short the S&P. I added to that S&P position this morning. I also re-entered a gold position.

(Disclosure: Short S&P futures, long gold)