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Strategies & Market Trends : The coming US dollar crisis

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To: axial who wrote (19263)3/29/2009 5:18:20 PM
From: gregor_us2 Recommendations  Read Replies (1) of 71455
 
Sadly, the means by which the US could go down has now appeared on the horizon: the fall in net capital inward flows that support the Treasury market. This sets up a potentially cataclysmic outcome as the delta of falling net inward capital flows against increasing US Treasury supply triggers more aggressive action on the part of the FED's monetization program. Imagine waking up each day and watching the US Treasury market weaken as the FED comes in more frequently to prop it up.

It's already started, actually. But you know, it's the start of the dynamic so everyone has calmed themselves by taking the advertised intention of monetization as comfort: you know, "to get interest rates lower."

Actually, the monetization has now started at precisely the juncture where a shortfall has started to appear in inward capital flows.

G
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