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Gold Scramble Driving Interest Rate Spike as Treasury-values Fall Steeply, Reflecting Asia Abandonment of US Dollar


Looks like the continuing Asian abandonment of the US dollar marches onward….

Chart shows big spike down in value of US Treasuries (10 yr shown); bond values move inversely to i-rates….i.e. if i-rates are declining, bond values are going up, and…

Ergo….
If bond values (shown here) are going down, i-rates are spiking upward to protect the value of the dollar.

http://futures.tradingcharts.com/chart/ZN/

There’s a mad scramble right now among global governments to have and hold their own gold.

REASON: NOBODY TRUSTS THE DOLLAR WHEN IT DOESN’T PAY JACK-SHIT IN INTEREST.

What happens if more (i.e. the Swiss as latest) pile on? the Fed will be forced to raise interest rates.

THIS WILL UTTERLY DEVASTATE GLOBAL BOND MARKETS, WHO HAVE BEEN ISSUING ALL THIS LOW-INTEREST PAPER FOR 4 YEARS NOW!

Get out of all your bond funds, ASAP! especially if they’re shitty junk bond funds, even if you have an income situation, because you will suffer amazing losses of principal!

 

MORGAN STANLEY ANALYST: Every Investor I Met At Davos Was Worried About The Same Fed Scenario

Morgan Stanley bank analyst Huw Van Steenis attended the World Economic Forum in Davos last week, and there was one concern he said kept coming up over and over in meetings with investors.

 

The dreaded “1994 scenario.”

In 1994, against the backdrop of a strengthening U.S. economy, the Federal Reserve surprised investors by hiking interest rates, causing a bloodbath in the bond market. The Fed was trying to ward off inflation – even though no real sign of rising prices had yet emerged.

Read more: http://www.businessinsider.com/investors-at-davos-feared-1994-moment-2013-1#ixzz2JKybA6ad

 

A Gap Is Emerging That Shows Why The Bond Market Could Get Crushed

Read more: http://www.businessinsider.com/dislocation-between-risky-assets-and-rates-2013-1

China Finally Admitting They Are Launching A Gold Backed Currency For World Trade?!

The source of this information is Jim Willie, and though an admitted doomer, he is still a respected source of economic information. The timing of this information also coincides with Jim Sinclair’s recent announcement that gold and silver are set for a moonshot after “this last takedown” by Central Banks ends.Combine the information that China is now admitting they are launching a gold backed currency for world trade, with upcoming Basel III regs, and many other economic pitfalls, such as the fiscal cliff and debt ceiling negotiations, all pointing to this Spring as a date of severe stress on the dollar.

Right now everything is pointing at a window of March thru June, however that could be pushed back, depending on circumstances and Central Bank intervention. People around here know that I have a gloomy outlook on future economic conditions, but I don’t do a lot of prognostication because there are so many measures they can do to intervene if the timing of a collapse isn’t on their schedule, but that said… Keep a close eye on the proposed circulation date for China’s gold backed currency! You won’t have a lot of time after that…

 

Dollar Sell Off Within 4 Months-John Williams

OCCAM’S RAZOR

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