Zero Hedge reports:
Fan, meet shit: “Dagong has downgraded the local and foreign currency long term sovereign credit rating of the United States of America (hereinafter referred to as “United States” ) from “AA” to “A+“, which reflects its deteriorating debt repayment capability and drastic decline of the government’s intention of debt repayment. The serious defects in the United States economic development and management model will lead to the long-term recession of its national economy, fundamentally lowering the national solvency. The new round of quantitative easing monetary policy adopted by the Federal Reserve has brought about an obvious trend of depreciation of the U.S. dollar, and the continuation and deepening of credit crisis in the U.S. Such a move entirely encroaches on the interests of the creditors, indicating the decline of the U.S. government’s intention of debt repayment. Analysis shows that the crisis confronting the U.S. cannot be ultimately resolved through currency depreciation. On the contrary, it is likely that an overall crisis might be triggered by the U.S. government’s policy to continuously depreciate the U.S. dollar against the will of creditors.“
It will only be short while longer until the rest of the world stops buying our bogus treasury bills, forcing Bernanke to print money in order to maintain our government’s bloated carcass.
I feel this is already occurring and is the primary reason for “QE2”. No one wants our debt. They know the US isn’t good for it. They will not get paid back in dollars that are worth anything.
Anyone holding US treasuries is a sucker.
Gold Trades North Of $1,420 After China’s PBOC Advisor Li says it is “absurd” to call the dollar a reserve currency
Zero Hedge reports:
Precious metals have now entered their parabolic phase. The latest catalyst for gold having traded north of $1,420 is not only the ongoing collapse of Europe via surging spreads and accelerating ECB bond monetization, which in tried and true bizarro fashion have lead to a more than 100 pip move higher in the EURUSD, but the latest speech by PBOC academic advisor Li Daokui, who said that it is “absurd” that the dollar is still the reserve currency of the world. We are confident that pretty much everyone in China agrees.
As ZH notes, we are entering a phase of the economic meltdown where the dollar rapidly loses value.
We will see prices skyrocket as wages remain flat.
Shopping at Wal Mart is about to get a whole lot more expensive.