James Lewis

Looming Currency Devaluations

X-15 if other countires do not step up and buy Treasuries, then the Fed will expand their balance sheet and buy them. This is the modern form of printing of money.

Please everyone note that countries around the world need to be holding a developed currency backed by large debt market in order to be involved in world trade. Therefore you are not going to see the major currencies Euro, USD and Yen all drop in tandem and all money repatritaed into local currency. This could only happen if globalistation contracted back to where it was 100 years ago.

So one of the currencies needs to move up.
Central Banks are funneling money to Gold to spread their holdings.
But you can not trade using gold so its really only a hedge.

Everyone keep son talking about how much Treasuries are coming on the market and the deficits the USA has but it is all relative to their huge GNP/GDP. And people always refer to the 30 trillion they owe on their balance sheet, but never consider the value of their assets (people, technology, financial colonial power, military network, domestic infrastructure). This is worth far far far in excess of 30 trillion, therefore assets exceed liabilities. And lets be fair there is certainly no cash flow problem as long as they control the system (which they do)

I think Europe is in far worse shape so yo'll get a situation that money flows out of Euros and supports the dollar. I also question whether it would be wise for the Europeans to sell some of their gold holdings a these levels to shore up their financial situation. This could offer an interesting counter-intuitive move.

Euro Slumps to Five Month Low Against the Dollar

THANK-YOU - THANK-YOU - THANK-YOU

The charts you have displayed are EXCATLY what the big financial institutions/central banks are looking at.

Its a very clear picture, made even clearer by you article.

Oil Jumps, Stocks Slide, Dollar Succumbs

Erm...

Why are we talking about US data, when yesterday it became apparent that the Citi Group are going to write down another 8.9 billion USD. In effect this is an advert that they are insolvent.

The only think stopping them from bankcruptcy is by raising funds from the Middle East and Asia.

And of course the FED printing money day in day out.

This begs the question if Cit Group are insolvent what counter-party risk has the rest of the worlds companies have.

Also we are now seeing write-downs in all sort of other exciting areas. Its a good job all the rating agencies are not independent or the flawed financial system would have gone down.

What a system:-

Credit Default Swaps written by insolvent banks with AAA credit ratings.

You all know what happens next....


Disclaimer - Very Very Very Very Long Gold.