Gold down, treasuries up in the sovereign debt troubles... universal store of value?

[soccerballtux]

gold could skyrocket as high as $9000 a pound! Buy gold now!

Sorry, i couldn't resist.

$9000 a pound would a huge discount off today's prices

what 9000???

 

[soccerballtux]

I know this place has a ton of gold nuts, so i figured I'd ask the question:

How come the dollar is appreciating, gold is down and treasuries are gaining? If gold is the universal store of value and the safest place to put your money into, why are people putting it into "risky" treasuries?

fear unemployment [lack of real employed workers, that 9.7% doesn't mean much] going to dampen any growth. Recessionary fears lead to the dollar strengthening, because there will be fewer people getting paid out there and fewer people with dollars to spend-- so a dollar becomes "worth" more (because Walmart would lower prices to keep sales moving, so your dollar buys more, aka is worth more). If gold is priced in dollars, and dollars gain in purchasing power, then gold costs fewer dollars.

Treasury yields do not appear to be rising: http://www.ustreas.gov/offices/domestic-finance/debt-management/interest-rate/yield.shtml

 

[juiio]

what 9000???

What?

 

[halik]

fear unemployment [lack of real employed workers, that 9.7% doesn't mean much] going to dampen any growth. Recessionary fears lead to the dollar strengthening, because there will be fewer people getting paid out there and fewer people with dollars to spend-- so a dollar becomes "worth" more (because Walmart would lower prices to keep sales moving, so your dollar buys more, aka is worth more). If gold is priced in dollars, and dollars gain in purchasing power, then gold costs fewer dollars.

Treasury yields do not appear to be rising: http://www.ustreas.gov/offices/domestic-finance/debt-management/interest-rate/yield.shtml

Headline on bloomberg this morning was treasuries gaining, as the sovereign CDS are steadily rising. Yields were down all across the board last i checked in the afternoon.

 

[wwswimming]

WAT?

Stock market is a big conspiracy by FED to take our money? Euro sovereign debt fears are created by the US gov't?

who said that ?

don't put words in my mouth.

historically, when the stock market declines significantly, the US $ rises in value.

it's a separate issue what role the US government had in the problems of Greece, Portugal, etc.

however, those Euro credit crisis fears also send investors running to the $.

all i'm pointing out is that 3 of the 4 typical pre-conditions for a dollar rise occurred recently - during this last week.

and, at the same time, the US gov. has a huge need to borrow or print money. and it's very convenient if exchange rates are higher (for holders of the $) when the government makes the "we are printing money" announcement.

a few weeks ago, the US $ was at 1.03 Canadian (Canada's government is in WAY better shape fiscally than the US government - they actually have recent fiscal surpluses). now, after 3 of the 4 dollar-stimulating events this last week, it's at $1.07 Canadian.

the guy to watch - because he can tell when the US gov. is printing money, whether they announce it (overt printing of $) or not (covert printing of $) - is Denninger -
http://market-ticker.denninger.net/

in 2009 the US gov. sold bonds to the usual semi-priviliged first tier bond-buyers - and a week later, bought some of those bonds back. Denninger caught it by looking at the bond registries. "no comment" from the US gov.

 

[halik]

who said that ?

don't put words in my mouth.

historically, when the stock market declines significantly, the US $ rises in value.

it's a separate issue what role the US government had in the problems of Greece, Portugal, etc.

however, those Euro credit crisis fears also send investors running to the $.

all i'm pointing out is that 3 of the 4 typical pre-conditions for a dollar rise occurred recently - during this last week.

and, at the same time, the US gov. has a huge need to borrow or print money. and it's very convenient if exchange rates are higher (for holders of the $) when the government makes the "we are printing money" announcement.

a few weeks ago, the US $ was at 1.03 Canadian (Canada's government is in WAY better shape fiscally than the US government - they actually have recent fiscal surpluses). now, after 3 of the 4 dollar-stimulating events this last week, it's at $1.07 Canadian.

the guy to watch - because he can tell when the US gov. is printing money, whether they announce it (overt printing of $) or not (covert printing of $) - is Denninger -
http://market-ticker.denninger.net/

in 2009 the US gov. sold bonds to the usual semi-priviliged first tier bond-buyers - and a week later, bought some of those bonds back. Denninger caught it by looking at the bond registries. "no comment" from the US gov.

Ha yeah,
that guy is dead on

http://www.breakthematrix.com/content/Karl-Denninger-Says-Apocalypse-Imminent-Like-TODAY-Imminent

Why do you insist on listening to people with blogs and youtube videos, rather than educated professionals in the industry?

 

[wwswimming]

Ha yeah,
that guy is dead on

http://www.breakthematrix.com/content/Karl-Denninger-Says-Apocalypse-Imminent-Like-TODAY-Imminent

Why do you insist on listening to people with blogs and youtube videos, rather than educated professionals in the industry?

you mean educated professionals like ... who ? Jim Cramer ? Paul Krugman ?

Denninger is WAAAY more knowledgeable than most of the so-called professionals.

he started & grew a medium sized Internet company.

he does a better job of explaining the financial services industry than anybody else i know.

one other good economics journalist - John Mauldin. he did a great job explaining mortgage-backed securities & the effect of credit derivatives on the economy in his 2008 & 2009 writing.

his website -
http://www.investorsinsight.com/

Mauldin's background - he manages money for rich people, happens to be wealthy himself, and he writes.

 

[BigDH01]

you mean educated professionals like ... who ? Jim Cramer ? Paul Krugman ?

Denninger is WAAAY more knowledgeable than most of the so-called professionals.

he started & grew a medium sized Internet company.

he does a better job of explaining the financial services industry than anybody else i know.

one other good economics journalist - John Mauldin. he did a great job explaining mortgage-backed securities & the effect of credit derivatives on the economy in his 2008 & 2009 writing.

his website -
http://www.investorsinsight.com/

Mauldin's background - he manages money for rich people, happens to be wealthy himself, and he writes.

You didn't address halik's post, you simply deflected. You should address Denninger's predictions.

Also, I would favor Krugman over Denninger. Denninger might be able to rant and illicit emotion from his readers, but Krugman examined and refined models of international trade for which he won a Nobel. I don't think it's fair to call him a "so-called professional." I wouldn't even bestow that label upon Friedman, although I disagree with him.

And to be honest, I agree with Denninger about some things. I just think, like most journalists these days, he's selling you fear and paranoia. It makes it hard for me to take him too seriously.

 

[soccerballtux]

fear unemployment [lack of real employed workers, that 9.7% doesn't mean much] going to dampen any growth. Recessionary fears lead to the dollar strengthening, because there will be fewer people getting paid out there and fewer people with dollars to spend-- so a dollar becomes "worth" more (because Walmart would lower prices to keep sales moving, so your dollar buys more, aka is worth more). If gold is priced in dollars, and dollars gain in purchasing power, then gold costs fewer dollars.

Treasury yields do not appear to be rising: http://www.ustreas.gov/offices/domestic-finance/debt-management/interest-rate/yield.shtml

Headline on bloomberg this morning was treasuries gaining, as the sovereign CDS are steadily rising. Yields were down all across the board last i checked in the afternoon.

I really am not a fan of bloomberg, they change their headings back and forth; it's silly really :/
Started as unemployment fears, then changed to greece...IMO they and CNBC's and MSM's fault is in attributing the statistical noise to world events and politics...if you want to follow macro trends that way then ok, but barring some crazy event like 9-11 (well Greece failing to find lenders wasn't non-macro), it's just noise...

 

[LegendKiller]

You didn't address halik's post, you simply deflected. You should address Denninger's predictions.

Also, I would favor Krugman over Denninger. Denninger might be able to rant and illicit emotion from his readers, but Krugman examined and refined models of international trade for which he won a Nobel. I don't think it's fair to call him a "so-called professional." I wouldn't even bestow that label upon Friedman, although I disagree with him.

And to be honest, I agree with Denninger about some things. I just think, like most journalists these days, he's selling you fear and paranoia. It makes it hard for me to take him too seriously.

Agreed, Denninger may have some OK stuff, but I can't take him seriously, nor anybody who is a close adherent of his. Too much gloom-and-doom trash, his "printing" information is a joke.

 

[gotsmack]

I really am not a fan of bloomberg, they change their headings back and forth; it's silly really :/
Started as unemployment fears, then changed to greece...IMO they and CNBC's and MSM's fault is in attributing the statistical noise to world events and politics...if you want to follow macro trends that way then ok, but barring some crazy event like 9-11 (well Greece failing to find lenders wasn't non-macro), it's just noise...

That is the reason I like Bloomberg. They don't editorialize. They report the news as it comes in and lets you form your own opinions, unlike just about every other channel.