mrbill

China Is Now in Firm Control of U.S. Debt Markets

"I also find it quite funny to see everybody calling to buy gold. Look, there is no inflation right now. There is just speculation about the eventual weakness in the USD. This is driving gold and oil higher because they are paper and speculative markets."

Gas prices have been going up. Is that deflation?

"To verify my theory just check out the price of Nat Gas, which in my view is a much better indication of commodity inflation. It keeps on deflating."

Your theory stinks. The reason natural gas is down is because of a massive oversupply. But thanks to quantitative easing, it's now forming a bottom. See UNG.

On May 26 07:05 AM jeandit75 wrote:

> China being the largest creditor of the U.S. Government, they can't
> afford to have a collaps in the USD cause it would wipe out their
> investment. The other reason why China must keep a strong dollar
> currency is the Yuan's undervaluation is working as a natural subsidiary
> to their exports, a natural competitive advantage they surely want
> to keep. I therefore can't see why China would shoot themselves in
> the foot in having a dollar collaps. That's that simple.
>
> I also find it quite funny to see everybody calling to buy gold.
> Look, there is no inflation right now. There is just speculation
> about the eventual weakness in the USD. This is driving gold and
> oil higher because they are paper and speculative markets.
>
> To verify my theory just check out the price of Nat Gas, which in
> my view is a much better indication of commodity inflation. It keeps
> on deflating. It is impacting the Utilities' profitability and is
> a proof that this current recession is driven by delevraging and
> deflation.