Right now it's all about what the Central Banks and the FED are up to. People are trying to figure out what will happen now as QEII effects starts to fade away..me is anticipating a tsunami in to commodities within some 6 months..All dips are buying opportunities.
Isn’t this simply just ol' fashioned bond vigilantes? Mr Gross Pimco isn’t willing to buy any treasuries at these obscenely dirt low interest levels and thus is arguing for an interest hike (or he won't buy). And given the humongous amounts of debt and liabilities now accumulated by the Government buying bonds sure seems like a risky business.
Without any interest hike dollar is going to tank. This then as nobody will be willing to buy treasuries and thus full steam ahead towards QE3 as the FED will be the only one buying all these treasuries needed in order to finance the deficit.
With an interest hike dollar is going to tank as the cost for the deceit will escalate and thus offset any possible budget cuts -big time.
So where then will Mr Gross put all of that cash he’s currently holding as he now is all out on treasuries? Will he hoard cash and look forward to an unavoidable future dollar devaluation combined with increased inflation to take it's toll or will he buy in to the stock market or commodities in anticipation of a new round of QE?
If he manages this well he might benefit from a now weakening commodities markets, a possible but temporary dollar strengthening with a lot of cash at hand as deflation (again temporarily) as the effects of QEII now starts to fade away and well before expectations of QEIII starts to get more momentum start reentering the markets. My bet then is not the dollar or bonds paper markets but in to realt tagible stuff like hard assets (real estate excluded).
By the way that's exactely what JP Morgans did after that Blyte Masters had created the worst financial tsumani disaster ever seen. They used the paper markets (derivates, Credit Default Swaps) to get all paper markets down to severely depressed levels and then at that wery same point they then reentered in to commodeties and real hard assets.
This time Max Keiser and co-host, Stacy Herbert, talk about fake rice and real inequality and about a 'new model' that looks a whole lot like an old model called capitalism. In the second half of the show, Max talks to Pierre Jovanovic, author "Blythe Masters," about credit default swaps, the Queen of commodities and Marie Antoinette.
http://www.youtube.com/watch?v=i-B2V2l_6QE&feature=player_embedded
"Yields on Treasuries may be too low to sustain demand for U.S. government debt as the Federal Reserve approaches the end of its second round of quantitative easing, Gross wrote in a monthly investment outlook posted on Pimco’s website on March 2. Gross mentioned that Pimco may be a buyer of Treasuries if yields rise to attractive levels.
Treasury yields are about 150 basis points too low when viewed on a historical context and when compared with expected nominal gross domestic product growth of 5 percent, he wrote in the commentary. The Fed is scheduled to complete purchases of $600 billion of Treasuries in June.
Gross in his February commentary urged investors to reduce holdings of Treasuries and U.K. gilts and buy higher-returning securities such as debt from emerging-market nations. “Old- fashioned gilts and Treasury bonds may need to be ‘exorcised’ from model portfolios and replaced with more attractive alternatives both from a risk and a reward standpoint,” Gross wrote."
http://www.bloomberg.com/news/2011-03-09/gross-drops-government-debt-from-pimco-s-flagship-fund-zero-hedge-reports.html
These guys thinks Mr Gross is betting on the Dollar.
http://www.businessinsider.com/is-bill-gross-betting-on-a-vicious-move-higher-on-the-dollar-2011-3
Me thinks Mr Gross is avoiding treasuries. Same outcome (avoiding treasuries) but entirely different motives. Given that nobody but the FED now will help out finance the US deficit, I cannot even perceive what then the world would look like without a continuation of the QE initiative. Not however saying is good, simply it's politically insane not to.
By the way remember there is nothing in this world even close to being as inflationary as printing new money out of thin air in order to buy bonds in order to finance a deficit. Bottom line dollar IS gonna tank.
Then is now becoming evident for more and more people how evident the discrepancy between the availability of real hard assets and valuations on the paper markets. In a situation where the demand for tangible stuff like food, precious metals and oil just mentioning a few is higher than ever the corresponding paper valuation of these very same assets can become more than depressed.
What's really going on here is in fact the absence of "Rule Of Law" in the paper markets.
A society without rule of law is a society doomed. A society as ours today in the Western World based on e.g. lobbying, contributions, revolving doors, privatizations and deregulations all follow the same pattern.
You start with a society where taxpayers finance infrastructure healt and education. You create a deregulated financial market with no insight, oversight or regulation. With that backup great paper wealth is generated for the few and they then start to demand more and more also of that previously owned by the public domain. Thus demanding privatization of basically all infrastructural parts and aspects of society including Healt Care and education. After that privatization they demand deregulation and no regulatory insight in to these markets. Then at that point for sure there is no society worth the name ruled by law.
At times when you know how difficult it is to get physical delivery of silver and when you know that supply is a real constrain in the oil markets and when you in that very same time note the valuations of these very same paper markets decline, you know these paper markets are all just a big scam.
This as anything valued on paper in a society without proper Rule of Law simply is a scam. Of course that includes money that today is defined not by rule of law but as debt. Given the tremendous importance of money in our society having started of by defining it in an inappropriate way, well then you’re lost in the very beginning of trying to construct a free, just and fair society.
The Warning - Brooksley Born's side of the financial collapse
Brooksley Born, former appointed head of the CFTC (Commodity Futures Trading Commission) talks about the derivatives dark hidden market. Also about disagreements with Alan Greenspan and his cohorts. This documentary should be seen by every person who uses money to better understand what happened when the economy collapsed. The full broadcast can be viewed at
www.pbs.org/wgbh/pages/frontline/warning/view/
Global Correction on the Way
"In the developed world we have huge debt to GDP, in terms of government debt to GDP and unfunded liabilities that will come due," Faber said in a live interview via telephone. "These unfunded liabilities are so huge that eventually these governments will all have to print money before they default."
http://www.cnbc.com/id/35332965
Who is the Irish bailout really for?
Part of a talk by David Malone, author of The Debt Generation
http://www.youtube.com/watch?v=DtdEhVk55i4
The banks' big lie - Part of a talk by David Malone, author of The Debt Generation
http://www.youtube.com/watch?v=Jy9yluyizGo&feature=related
Are the banks solvent? Part of a talk by David Malone, author of The Debt Generation
http://www.youtube.com/watch?v=PD0YCSNdo8w&feature=channel_video_title
Ireland - Democracy for sale - Part of a talk by David Malone, author of The Debt Generation
http://www.youtube.com/watch?v=kYD7IpF5p0Y&feature=relmfu
Do we still live in a democracy? Part of a talk by David Malone, author of The Debt Generation
http://www.youtube.com/watch?v=Lj0aETOwxbw&feature=channel_video_title
Stephen Zarlenga works with Rep. Kucinich on The American Monetary Act, designed to resolve the banking crisis. This clip from a longer film defines 3 steps: In addition to nationalizing the Fed. and removing the power of banks to create money as debt out of thin air, the Act reminds us of the Constitution, Article I, Sec. 8, that states that our government has the sovereign power to issue money and spend it into circulation. Whatever you think about point 3 - the government could not possibly do any worse than the banks.
http://www.youtube.com/watch?v=V_kbyAl3-AM&feature=related
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