Update on Gold, Treasuries, and the Dollar

Something about to break loose with Gold?

Gold “Nearing Break-Out” as Obama Stimulus Judged “Too Small”, CFTC Looks to Curb Crude Oil Trading, Goldseek

Longer-term, however, “Any correction in the Gold Price [will be] short-lived given our belief that a tightening in the US monetary remains a distant prospect,” says a new report from Deutsche Bank analysts Michael Lewis and Xiao Fu, who maintain their “mildly bullish outlook for gold into the second half of the year.”

“We believe the macroeconomic environment remains broadly supportive for gold, namely negative US real interest rates when deflated by core CPI, skittish global equity markets, and a relatively weak US Dollar.”

…”Global investors and officials are concerned about the credibility and the sustainability of our fiscal policies. So am I,” writes Richard Berner, managing director and chief US economist at Morgan Stanley.

Peter Schiff on Gold and Gold Stocks ‘Buy!’

Jim Rogers Sells Dollars, Plans to Short Treasuries, Bloomberg
‘“The government is printing lots of money and borrowing even more; that’s not the basis for a sound currency,” he said in a telephone interview today from Singapore. “The idea that anybody would lend money to the U.S. government for 30 years at 3 or 4 or 5 or 6 percent interest is mind-boggling to me.”

Rogers, the author of books including “Investment Biker” and “Adventure Capitalist”, said he holds fewer dollars than a year ago and plans to “short U.S. government bonds someday.” A short bet involves selling a security you don’t own with a view to buying it back after the price has fallen.’

Monster Treasury Supply, Financial Sense University

For the US Treasury bond market it’s time for some reflection. What we have in front of us could be “game-changing.” This, from a June 7 Bloomberg essay entitled, Treasury’s Summer Rally Not This Year Due to Supply:

In Step to Enhance Currency, China Allows Its Use in Some Foreign Payments, New York Times
“Banks in China and Hong Kong began wiring Chinese renminbi directly to one another on Monday to settle payments for imports and exports, as China took another step toward establishing the renminbi as a global currency — and, eventually, an international alternative to the dollar.

…The day that the renminbi is fully convertible — more than a few years away, but perhaps less than a few decades — will most likely signal a huge shift in global economic power, and a day of reckoning of sorts not just for China but also for the United States, which will no longer be able to run up huge debt without economic consequences.”

Yuan Ascendent: Cross-Border Trade Uses Chinese Currency

SHANGHAI — Three Shanghai companies used the yuan to settle cross-border trade deals for the first time Monday, a step toward promoting broader use of the Chinese currency internationally and, over time, reducing China’s dependence on the dollar.

China Ratchets Up Pressure on the Dollar, Business Week

122 Days To Go, Jim Sinclair Mineset

As revenue collapses on all fronts while spending for all governmental activities including the major rescue actions rise violently and a few wars are being processed in historically un-winnable areas, the amount of Treasury instruments that must be issued will rise to eclipse the sun.

The dollar impact is as devastating as it has been to any empire’s currency that embarked on this well trodden road in history to financial perdition.

…The situation in California is a mini prelude to when Washington makes the US dollar a clear IOU chit. It is already, but MOPE via SPIN still has Ivy League Wall Street keeping the sheeple as sheeple.

122 days to go.