Nervous Americans want easy access to their cash

September 16, 2010 by · Leave a Comment
Filed under: Currency News 

This is a sign that investors and holders of capital are not as confident in our banks holding their cash when deposits are paying historically low interests.  FDIC said that certificates of deposits (CD) declined by $200 billion while checking and savings accounts rose by almost the same amount.  Wonder if the $30 billion difference went into hard assets while we are seeing all time highs in the hard metals.    With this money going into very short term accounts, we are seeing credit tighten even more.

Partially some people might be questioning the banks ability to repay in 6-12 months time so they want to be as liquid as possible.  We are in fall again and the stock market rally has lost steam and we are overdue for a large correction.  After the last decline, maybe people are wising up and waiting for the stock market drop so they can buy at the bottom again.  The trick is to know when we have really hit bottom?   Something to ponder.

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Britain at risk of worse deficit crisis than Greece in the EU

February 19, 2010 by · Leave a Comment
Filed under: Currency News 

The Euro has been taking a beating after the news of Greece did not seem to calm investors and now these numbers from the UK showing there deficit is going to be even larger than projected this year.  With this waning confidence in all other currencies and strength in the U.S. dollar, it is looking more and more likely that we are not seeing a recovery and instead this bear market rally is over and now it might be time to retest lows set in March last year.  Very interesting times.

In surprise news which sent the pound sliding on Thursday, official figures showed that the Government borrowed £4.3 billion last month.

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Morgan Stanley Forecasts 5.5% 10 Year Note as U.S. Faces Deficits

December 29, 2009 by · Leave a Comment
Filed under: Currency News 

There is a battle taking place right now between the bulls and bears.  At this point almost every analysis is extremely bullish on the growth prospects in the U.S. for 2010.  I have heard today alone for GDP estimates from 3.5 to 5.5% in 2010.  With 10% unemployment, I would be very surprise to see how we would produce those growth targets.

When I hear and read everyone staying the same predictions it makes me think it is now a good time to see if it would be beneficial to be on the opposite side of this trade.  Maybe shorting the 10 year bond is the move for 2010???

Bloomberg – If Morgan Stanley is right, the best sale of U.S. Treasuries for 2010 may be the short sale.  Yields on benchmark 10-year notes will climb about 40 percent to 5.5 percent, the biggest annual increase since 1999, according to David Greenlaw, chief fixed-income economist at Morgan Stanley in New York. The surge will push interest rates on 30-year fixed mortgages to 7.5 percent to 8 percent, almost the highest in a decade, Greenlaw said.

Investors are demanding higher returns on government debt, boosting rates this month by the most since January, on concern President Barack Obama’s attempt to revive economic growth with record spending will keep the deficit at $1 trillion. Rising borrowing costs risk jeopardizing a recovery from a plunge in the residential mortgage market that led to the worst global recession in six decades.

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U.S. Dollar Markets Left to Runs Its Natural Course

October 6, 2009 by · Leave a Comment
Filed under: Currency News 

If gold’s jump to a new high during New York is any indication, it looks if the U.S. dollar is on a downward trend at the moment.  Don’t let that lull you into complacency either.  As we see, if we have a serious downturn, investors turn to the dollar as a safe-haven bet and that makes it rise rather quickly.

I would like to see the Yuan much higher so their exports are as attractive as they have been.  I don’t believe we do enough to give protection (yes I said it) to our native producers.  We are at double-digit unemployment so encouraging job creation in non-service areas of the economy is what is needed to get the income that is needed to support a middle-class and correct our massive trade imbalance.

Dow Jones, Istanbul – Big ideas failed to gain traction at the International Monetary Fund’s annual meeting, but that was because natural processes have already paved ahead.  IMF Managing-Director Dominique Strauss-Kahn’s proposal of making the IMF a global lender of last resort was politely downsized to a research project.

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China alarmed by U.S. money printing

September 7, 2009 by · Leave a Comment
Filed under: Currency News 

Interesting news piece from the Telegraph.  The most interesting part was when Cheng Siwei was quoted with this little tidbit, “Gold is definitely an alternative, but when we buy, the price goes up. We have to do it carefully so as not to stimulate the markets.”  He was speaking to an alternative to the U.S. dollar.  China is very aware of the fact that any major public gold bullion purchases would “stimulate” the markets, I read this as drive the price to the moon and some.  I will close with this little interesting fact that gold as consolidated at $930.00/oz. during the traditionally lower demand part of the year.  Unless we see a major correction tomorrow morning in the New York Spot market, I predict we will finally see gold bust through $1,000.00 per ounce.  Does the smart money know something the average joe doesn’t?  Likely in my opinion.

Telegraph, London – Cheng Siwei, former vice-chairman of the Standing Committee and now head of China’s green energy drive, said Beijing was dismayed by the Fed’s recourse to “credit easing”.  “We hope there will be a change in monetary policy as soon as they have positive growth again,” he said at the Ambrosetti Workshop, a policy gathering on Lake Como.

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