msgtb

June Postmortem: World Markets, The Dollar, The Banks

Cliff

I don't agree with your statement that China and other foreign holders of U.S. Debt decrease their holding of U.S. Treasuries. I believe they have already started by by stocking up on raw materials rather than put their excess into treasury's. The treasury just changed the reporting of who is buying treasures for the month of June. I believe that was caused because China and other countries are not buying treasuries at levels that will service the growing U.S. Debt. They may buy the two year bond but not the 30 year and if that information becomes public knowledge all hell will break out. We the citizens are not privy to what the U.S. Treasury and the Federal Reserve are really doing. Why would China, Japan or any other country buy our long term debt? At the rate we are going we may default in less than ten years. America's current account deficit has been and is continuing to grow at exponential rates. The U.S. A. was sold a bill of good's that said that the best way forward was with a Service Economy. Who really believes that a country which has Service as the largest part of its economy is going to grow our way out of this mess? That is why the Chinese want to change the World Reserve currency to include gold. Their recommendation to use the IMF's Special Drawing Right's (SDR) with the inclusion of the Yuan and gold is an excellent idea and has much merit. It would depending on the percentage of the gold held in the SDR would help governments to stop inflating their way out of problems. The fiat currency is just like a stock the more you have the less it is worth. On wall st. this called devaluation of a stocks value. The dollar or any other fiat currency that contains no real intrinsic value is the problem. IF this New World Reserve Currency has intrinsic value and then it would not be in the holders best interest to devalue it and thus would level the playing field and something that I as a US Citizen would strongly support. Our greatest mistake was when we allowed the government to take us off the gold standard. The destruction caused by countries inflating themselves out of debt at the cost to the common man is clearly detrimental to humankind. The people of the US and the world need to stand up and be counted. The bankers and politicians need to be taken to task for their failure and the harm that they have caused.

Good luck and good trading

Dave