DiggerUK

The Fear Bubble: Treasuries and Gold

I don't believe that the gold trades of bugs, citizens,the panicked mob, and those like myself who own less than 120 oz's affects the spot price by a penny. It is the trading of major institutions that have a greater effect.
Most postings take a very blinkered and "UScentric" view of world finances.
Understandable when you consider the dominance of the US in world affairs for the best part of 60 years.
Now it is different. The biggest debtor nation on the planet is in danger of losing control of it's own currency. Not just any old fiat currency but the majority of the world's reserve currency.
It seems to me that the only reason the $US is holding out is because some central banks are still on 0+% interest rates. How are they not going to have to reduce to near 0% interest rates without collapsing their currencies if they hold out?
Then the chickens will have to come home to roost.
The chickens I refer to are the unknown ammount of $US in circulation that are the eqivalent of cheques not yet presented to the bank.
If "Bank USA" dishonours these cheques what then happens to confidence in "Bank USA"
Panic amongst the mob is one thing, but when the major institutions flip out what then?
Will they head for Treasuries, Real Estate, Bargain Shares, or real money(Au?).

The Fear Bubble: Treasuries and Gold

I don't refer to myself as a Gold Bug. Nothing against them, it's just that none of my best friends are Gold Bugs.
I do accept the old addage that says "money isn't allways gold, but gold is allways money"
I do accept that fear moves the mob to buy gold, but not the market place.
So why is the market in gold holding up? It seems to be down to vanishing profits as they are used to deleverage the debts that are being called in. My holdings are for no other reason than to protect my retirement pot, not to speculate.
Talk of inflation/deflation are not of any worth to me,you may as well read tealeaves.
Gold is the only financial instument not affected in the current marketplace. Despite it's peaks and troughs over the last 15 years, it is trending up. Unlike all other instruments.
I'll end with some food for thought. At the March price spike gold in the UK was 500 GBP, todays a.m. fix was 550GBP. In March the exchange rate was about the $2.00 mark , and today it's about $1.50.