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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Berk who wrote (76951)	7/27/2011 6:51:17 PM
From: carranza2	Respond to of 218197

Certainly under normal circumstances. We've never lived thru a downgrade of the debt of a reserve currency so TWT. It may be a non-event, might be huge. Back in April, when SP gave it a negative outlook, it didn't affect gold. It went up on the day it was announced. Of course, interest rates were unaffected. zerohedge.com My instincts tell me it would go up, but with that and a dollar, you can get a Coke.

To: Berk who wrote (76951)	7/27/2011 7:07:04 PM
From: carranza2	Read Replies (2) \| Respond to of 218197

With hat tip to Sea Otter who posted this elsewhere: online.wsj.com

To: Berk who wrote (76951)	7/28/2011 1:26:32 AM
From: TobagoJack	Respond to of 218197

<<If interest rates go up because of a rating downgrade on US debt, isn't that a negative for the price of gold? >> It ordinarily could be, unless - gold is international in scope n universal in psychology - recent n relatively short duration (70 years) view of usd as safe haven is no more - there is a large overhang of usd that would in expectation n in fact be printed every which ways soon after ratings downgrade as USA financing cost rises Gold may tank, but if so, add more gold. And if wish to sell gold in exchange for ... Whatever, must wait for whatever to crash. A ratings downgrade should crater everything in usd-domain far more than it would crush universal gold that is outside of USA domain. For the bubble is in the dollar, trillions of it. None of us know many people with substantive mats of gold in physical possession, and there is only 2-swimming pool volume of the useless stuff. Bubble? Not yet, but eventually should be, unless history ended. Above based on my working theory in turn underpinned by my long term premise, n wish to be tested.