When 'confidence' dies, the 'confidence game' ends. Game over.
It was a HUGE wakeup call when Bill Gross of PIMCO headed for the exits re: US Treasurys. It is always a good idea to follow the money...especially the smart money!
Only China, Japan, and OPEC....and the Fed continue to buy US Treasurys (bonds for 'progressives').
- We all know what is happening in Japan right now, and many of us think they will have to 'sell' Treasurys to repatriate cash to rebuild from the twin-disasters of Tsunami and Fukushima.
- China has been backing-away from purchasing Treasurys as fast as it can without tanking their remaining holdings by creating a panic before they can exit.
- OPEC? Yeah, there is a 'stable' entity we can count on! Again, anyone not distracted by "America's Got Talent" or "Prancing With The Stars" has a pretty good idea of what is currently happening in the Arab oil-producing countries right now.
- The FED? Benjamin has a 'plan' allright...it consists of the FED being the largest buyer of US debt (look at the Treasury flows chart attached).
Unreported by the MSM, even by the Financial Media/FTV is this stunner:
- For the FIRST time ever in our history Americans are refusing to buy their own country's debt!
This is not a good time to be 'long' bonds, but one should be looking further ahead and consider that after bonds 'die' the Dollar is next.....
Wednesday, 23 March 2011
Confidence..............from Rico
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So let's complete this disaster. The largest purchasers have disappeared and will likely start selling. The Fed will continue to buy with fresh money straight off the digital presses and US citizens are not going to be fooled again.
So where does the Fed/Treasury find a large pool of funds to help buy up the mountain of debt issues required to flood the market with liquidity again? Anyone? Bueller? Bueller?
Yep, you guessed it. Retirement accounts. There is approximately $5Trillion of fresh meat available there and it would not faze Congress in the least to pass a law requiring money managers to allocate a portion of retirement accounts to the 'safety and security' (snort) of US Treasury issues. W-h-e-n that happens, you will lose control of at least part of your retirement account and are practically guaranteed a loss on the investment as interest rates will rise in the future once the Bond Vigilantes finally force the matter.
Finally, despite their treachery, forcing investment into Treasuries will not stop the inevitable currency collapse that has been baked into the cake by our government and the Feds insane plan to cure debt saturation with more debt! Absolutely criminal. While more people are waking up to their shenanigans, once the currency crisis begins in earnest, I expect a political crisis to follow in short order and we will move into some very interesting territory at that point.
Suggest you stock up on extra food, water, guns and ammo before the crowd finally realizes the "change we can believe in" has royally screwed us all.
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