Today I come across new on bloomberg subject " China Can’t Buy Enough Treasuries as Dollar Drop No Deterrent " This a hi-light from this new which caught my attention , which make me to think.. hey someone is trying to convince investor to buy the treasury.. First the dollar gain some ground, stock become underpressure ... if you take note of this timeline during the past treasury auction this has being always the case ...
The first hilight which I would to comment is "
China, the biggest foreign owner of Treasuries, added $24.1 billion in July after net sales of $25.1 billion in June, raising its stake in U.S. government debt 3.1 percent to $800.5 billion, Treasury data showed on Sept. 16. The country’s holdings have risen 10 percent this year, after a 52 percent gain in 2008 amid the surge in demand for the safety of U.S. government debt as global credit markets froze."
There one thing you have to take note ... the china is actually decrease the holding of treasury by 1 billion ...
US treasury has being selling almost trillion dollar to fund stimulus, and will be selling more trillion to fund the economy expension...
I have a feeling the QE might be extended, as the US will have to to spend more stimulus then orignally planned due to US consumer save more then spend and alot of bank and business in US economy will be underpressure for the next few quarter ...
Don't Short Gold this time, if you are comfortable to short based on history movement, always put a tight stop or covered when you see profit .
Be warn this is just begining of the new bull in Gold ...
A few big of central have being buying gold for the past five and will be adding aggressively in the furture to exchange dollar for gold and alot of central will follow suit due to dollar and treasury bubble ... Instant dollar will be carry trade currency like yen for time to come ...
This term is still new which I call "Dollar bubble"
For the past 20 years dollar have enjoy as world reserved currency and have being circulate in the world trade for the past, this circulation have increase in such a magnitude for the past five year.
20- 30 years The world is is accumluting the dollar as reserve which result giant pool of dollar and this reserve had began to unwind as the world try stimulus their economy and will use dollar and at the same will start to increase other country reserve and gold reserve to hedge again dollar devaluation in time to come. Fed unfortunately did not do much to save dollar and print more dollar to buy up treasury both direct and indirect way. This result in adding more dollar supply to the world while the the world demand for dollar is decreasing ...
Gold and commodities and asset will face some pressure for the next 3-4 trading session ..,, hold on tight this will get bumpy ...
Intra day - or short term trading is sutiable for this type market. Sell on trength buy on weakness.
Good Trade everyone
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