Commodity Trade Mantra

Posts Tagged ‘US Treasuries’

Massive Debt Pain in China Could Be a Blessing for Gold Investors

Although the economy grew by 6.7% in 2016, the debt is causing a host of problems in China. The main reason many Chinese are buying gold is to preserve wealth against the backdrop of massive fiscal stimulus & lax credit conditions. Never has a big economy piled up so much debt so quickly without serious repercussions. It could be wise to take a lesson from Chinese investors & buy physical gold.

Central Banks’ Attitude to Gold Allocation to Undergo a Massive Change

Demand for physical gold, to escape the alternative of counterparty risk on deposits with Eurozone banks, is bound to grow. One suspects that the Eurozone area will be the first to see widespread gold buying by high net worth individuals, trying to protect themselves from a systemic event that has become all but certain, and will even threaten the entire banking system.

Gold Price Holds While US Treasuries Dumped In Record Volumes

Central bankers the world over are beginning to shed treasuries & refrain from debt market participation because they are not convinced that the rhetoric supporting the viability of the fiat currency regime now underlying the world monetary system is sustainable. And if you’re one of the throwback gold enthusiasts, you’re likely enjoying the apparent strength in the gold price currently evident.

China On A Gold Buying Binge Despite Massive Debt For Obvious Reasons

Similar to that of other developed nations, China’s debt has also reached “bubbly” proportions. But they know that during the next crisis those nations with a large gold backing will not only survive, but will be prosperous as well! China will most certainly increase its gold reserves even further. Imagine if only a portion of their $1.22 trillion US treasury holdings are shifted to gold. BOOM…

Gold and Silver - Lowest Risk, Highest Probability Investments in Today's World

If central banks are successful in reflating the global economy and inflation rises, gold and silver rise. If they are unsuccessful, global economy falters, but gold rises. The size of the moves that gold and silver can make will be dependent on which of the global outcomes will unfold in the next 6 to 12 months & beyond. Either way gold is the best beneficiary of each of them.

Foreign Central Banks Dumping US Debt & Buying Gold at Alarming Pace

Central banks around the world sold off a net $17 billion in US Treasury bonds in March. Sales set a record in January, hitting $57 billion. Between December and February, China’s central bank sold off an alarming $236 billion. By selling US debt, central banks can get hard cash to buy up their local currency. But many of them aren’t just purchasing local currency. They are buying gold.

Preparing for a Potential Economic Collapse in October

When debt reaches the level that it cannot be repaid, a major re-set of some sort must take place. The major economies of the world have exceeded that point & the debt problem is no mere anomaly that can be papered over. It is, instead, systemic. There must be a major forgiveness of debt, a default, or an economic collapse, or some combination of the three.

Russia Buys Most Gold In Six Months, Continues Selling US Treasuries

The rumors of Russia selling its gold reserves, it is now clear, were greatly exaggerated as not only did Putin not sell, Russian gold reserves rose by their largest amount in six months in December to just over $46 billion. On the other hand, there is another trend that continues for the Russians – that of reducing their exposure to US Treasury debt.

Yes, A Gold-Backed Renminbi Can Dethrone The US Dollar

The US appears to be doing everything in its power to hasten the relative decline of its own currency. Seems that the days of exorbitant privilege of issuing a currency that’s also the global reserve currency may be coming to an end – to be replaced, in time, with a bi-polar reserve currency world incorporating both the US dollar & the renminbi.

The U.S. Fed And It’s Secret Piggy Bank

The Fed has announced using “Reverse repos” as a new tool to manage monetary policy. Its just a way the Fed soaks up cash from financial institutions. The Fed is the “borrower,” swapping its Treasuries for banks’ cash. You might call it opposite of quantitative easing: Reverse repos drain money from the financial system.

Liquidity Becoming A Serious Issue As Japan's Bond Market Death Goes Global

Government intervention has killed the largest bond market in the world. While there are ‘trade-less’ sessions now in Japanese bonds, lack of liquidity is becoming a growing problem in US Treasuries (where Fed owns 1/3rd of the market) & Europe where as JPMorgan warns, “some of this liquidity may be more superficial than really deep.

Safe Havens Since The Great Financial Crisis

How have the traditional safe havens performed since the great financial crash of 2008 / 2009? What can we expect from the traditional safe havens going forward? As we try to answer these two questions, the safe havens we look at in this article are the US Dollar, US Treasuries, Gold and the Yen.

Emerging Markets Banking Crises Are Next

The concern for emerging markets is that carry trades and subsequent inflows of capital have created substantial credit and real estate bubbles in many of these markets. The unwinding of these bubbles is likely to lead to banking crises in several countries, including China.

China Sold Second-Largest Amount Ever Of US Treasuries In December

At a time when America’s two largest foreign creditors, China & Japan, went on a buyers strike, the entity that came to US rescue was Belgium which is another name for Europe – Wonder what favors were/ are being exchanged behind the scenes in order to preserve the semblance that “All is well.”

Bank Of America Warns "The US Dollar Is In Trouble"

Global financial and commodity markets are warning that the US Dollar is in for a bout of trouble, warns (Bank Of America) BofAML’s Macneil Curry. Across assets gold has been the lead market against the US Dollar; having forged its base back in mid December.

Gold: Hold It Or Fold It? - Peter Schiff

It’s starting to feel like we are part of a giant poker game against the US government, whose hand is the true condition (unknown to us) of the American economy – So, who should investors believe about gold? Should one hold it or fold it?

Gold And The Four Words That Define Western Economic Policy

It makes sense to own gold because currencies are being printed to destruction; the long-term downtrend in paper money remains intact – The debt mountain cannot and will not resolve itself and there is a non-trivial chance of a gigantic financial system reset.

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