If USD collapses

[AMR]

I agree the bond bubble will pop one day.

What to we buy or sell to benefit from the bond bubble popping?

I believe CMC has "T-bonds" to buy or short.

[Aussie]

As this commentary says, it's interesting that Fed Chairman Bernanke and FDIC Chairwoman Sheila Bair this week both blew off a couple The US Congressional hearings at the last minute to attend an "emergency" meeting of central bankers at the Rothschild controlled Bank of International Settlements (BIS) in Basel Switzerland. It's not news to anyone that the largest US banks have been on life support for the past 12 months or so. There is no doubt that they are insolvent and have become "zombie" banks that are only functional due to the huge inflows of capital from the Fed and Treasury. One has to wonder how long this charade can continue . . . ?

__________________________

The largest banks in the country are getting hammered again today and are trading at multi year lows. Bank of America is receiving another $10 Billion band aid and Citi is back to where it was a month ago when it was "saved". JP Morgan announced 7 cents per share earnings [FANTASY] a few days earlier than the expected report, I think the advance timing has to do with getting the release out before a new set of overseers from the Obama administration may or may not allow "fantasy" earnings. If every bank in the country is and has been reporting massive losses, and JP Morgan was the leader in "cutting edge" toxic investments AND was THE most leveraged of all, then they are sitting on hundreds of $ billions if not $ trillions in losses!

This credit crunch has progressively moved to more and more important institutions, 2 of the last 3 are now "fessing up" and imploding. It is only a matter of time before JP Morgan is attacked and thus the Fed. So we have the last three big U.S. institutions under scrutiny and attack and the Dollar rallies. Like I said earlier this week, huh? Can you say manipulation? It is also notable that an emergency Basel meeting has been called because THEY KNOW. They know that these banks are about to blow and something drastic needs to be done, and fast. Basel meetings are always scheduled far in advance, this time IS different.

There is also the Mexico, Russia etc. oil producing nation problem that must be addressed, crude prices MUST go higher or we will witness several sovereign failures that will lead to a domino cascade of bankruptcies. The rubber is hitting the road and hard, right now. All of the past manipulations have caused "unintended consequences" that are just now beginning to kick in full force. The perfect storm of financial collapse has been lining up for years now and appears to have assembled across the board from individuals, companies, states, and countries. All we need now is some 1st grader to appear on CNBC and say "but Mr. Kudlow, 2+2=4, they taught me this in school, why is everyone saying it is 5?". The delusion of crap is about to be obliterated, and with it the illusion of paper wealth.

Watch the banks, the Treasury market, and the Dollar, these are going to gap down or even fail bigtime while physical metal will become unattainable and go to levels where only central banks can reach. It is this reason that I think Silver will outperform Gold, the masses will only be able to afford Silver. I will write about this subject next week. For now, hold on tight as it will be amazing what can happen in a one month period of time. Perceptions will be swept away and reality will bite hard.

Regards, Bill Holter
via Le Metropole Cafe

[Aussie]

U.S. net inflows fall to $56.8 billion in November
Fri, Jan 16 2009, 14:15 GMT
http://www.afxnews.com

NEW YORK, Jan 16 (Reuters) - Net capital inflows into the United States fell to $56.8 billion in November from a revised inflow of $260.6 billion in October, the Treasury Department said on Friday.

The department originally reported inflows of $286.3 billion in October.

November's capital inflows were sufficient to cover the month's trade deficit of $40.4 billion.

Net long-term capital flows excluding swaps showed an outflow of $21.7 billion in November compared with revised outflows of $400 million the previous month. October's figure was initially reported by the Treasury as an inflow of $1.5 billion.

The report showed foreign investors sold U.S. Treasury bonds for the first time since August 2007, when the credit crunch began. Foreigners sold $22.87 billion worth of Treasury securities, after buying $32.87 billion in October.

http://www.fxstreet.com/news/forex-n...d-0f7c2349e13c

[peat]

From 13/01

I agree the bond bubble will pop one day.

What to we buy or sell to benefit from the bond bubble popping?

I sold in demo 100 Bunds (GBP 11,000) and 250 US T-Bonds (GBP 24,000) on the day of this post - so thats nearly a week ago.

The Bund got stopped out at -100 but the T-Bond is going well now at +383 = GBP 680 so seems like it wasnt too bad a thing to have done. Less of course the 100 quid lost on the Bunds.

It wasnt at all a well timed entry point see how I didnt even wait for the 38% retracment and it went to almost 62% before falling again. Could be gathering some momentum now

Anyway I know its in demo but hey just showing how bonds can be fun too!

[Dr_Who]

Ive never traded bonds before.

It sounds abit complicated. Will have to read more on how to trade bonds.

Cheers mate.

[peat]

the only thing weird about bonds is that their yield and their price are inversely related - so if interest rates go up the price of bonds goes down.

other than that I would just treat them as a number on a chart like everything else.... thats whats cool about technical analysis.

[Dr_Who]

Bel, I do keep a close eye on the economy and rates movement via the OCR. I try to predict what the RB will do and usually I do get it right. I have never dabble in bonds before, but I did buy some ANZ notes last year with over 9% yield. Cant remember the exact rate, cos I am too lazy to look it up. It is also listed on the NZSE. This is more of a long term yield play for me giving fantastic rates.

[Aussie]

It's getting closer day by day. Gold staged a HUGE rally last night even in the face a relatively strong dollar - still 85'ish on the USDX. The following is from Bill Holter at Le Metropole Cafe . . . I'd be interested in what you guys think of this.

________________________

Termites did it.

I wrote on Tuesday about the swirling phrase "Treasuries fall on debt concerns", I'd like to expand on this after a couple days of thought. Bottom line, IT'S OVER! If anyone talked or wrote 18 months ago that the credit quality and solvency of the U.S. Treasury would come into question they would have been ushered off stage left and put into a straight jacket. Fast forward 18 months and the topic is all over the world including in the U.S., my what a few burnt $trillion here and there will do.

Never mind that mathematically the biggest game of Monopoly/Ponzi ever played is past the point of no return [we are witnessing a business as usual mentality far beyond this point], the key is perception or "direction of the herd". The fact that U.S. sovereign solvency even has been spoken about publicly means that we are VERY close to a PANIC. Yes the economy and fundamentals have weakened very rapidly, but it is the "perceptions", the "confidence", that moves the herd. The thing is, perceptions can change at the drop of a hat and be 180 degrees within days. If we were on a Gold standard [we wouldn't be where we are now] a panic could [and did in the past] happen, however, there would not be the possibility [probability] of a worldwide banking and all things financial collapse such as we have now.

The credit crunch has chewed its way like termites up the totem pole all the way to Uncle Sam's bare ass, I say this because everything below him has been chewed up and spit out. Only the Treasury remains, there are no other targets left. Unfortunately the U.S. has put itself in a stupid position. We cannot survive without borrowing more money and the rest of the world sees this. EVERYONE sees this, now it is only a matter of time before confidence breaks. The "silly" questions about U.S. solvency are like the cracking and snapping sounds a tree makes in a wind storm just before it breaks. The ONLY thing left is confidence, the fundamentals and strong foundation were termite food long ago.

It was a "good run" that lasted 38 yrs., in fact, the current fiat experiment has lasted longer than any other in history to my knowledge. If you study the busts that came after previous fiat/credit booms then you know that the experience is very "compacted, vicious, and swift", the current fairy tale will be all of these and more because of size and scope. The entire world drank $ Kool Aid for years based on nothing but confidence. The changes occurring in current thought is like a hot knife through the butter of monetary confidence, the panic will be swift!

I am sorry to harp on the Dollar, confidence, solvency and all the other "unimportant" topics but they are the foundation to a fair and functioning financial and trade system. We were led down the path to drink the Kool Aid, now fewer and fewer are complying and others in line are hearing the "grumblings of common sense". The tipping point cannot now be far off, Uncle Sam's financial termite infestation will soon be visible even to those looking the other way because too many are TALKING ABOUT IT! Talk is cheap except when it comes to a fiat currency based on confidence, then talk can topple currencies and the governments that issue them. Be prepared,

Bill Holter

[Dr_Who]

Which currency is best to buy to benefit from the USD weakness?

[JBmurc]

Which currency is best to buy to benefit from the USD weakness?

IMHO Hard currency PGM's the best Silver accepted worldwide as true money

only prob is everone else is starting to see how undervalued it is just try and buy some
been produced for 5,000yrs have only economical reserves of 26yrs left on earth