Saudi Treasury dumping
rmpsrpms
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So what would happen to the PM market if the Saudis dump their Treasury holdings in response to being sued for 9/11?
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Gold would go up in that instance. Dollars would crash along with the stock market.
It means that the Treasury wouldn't be as easily able to sell more paper into a declining market for paper and financing the debt would become even harder.
Math being what it is, selling more paper into a declining market will devalue the currency accordingly. We may not even notice, because almost every other country is doing the same thing.
The result will be higher asset prices, and the tax people love rising asset prices.
I knew it would happen.
Why would they dump? I understand they might threaten to dump but I can't see them doing it. They need us more than we need them
Metals would go up, it would be taken as a loss of dollar confidence. Metals are all about dollar confidence.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
FED has demonstrated they are the new big buyer in town.
Metals would go up, it would be taken as a loss of dollar confidence. Metals are all about dollar confidence.
If Saudi Arabia sold it's treasury holdings it would be a sign of loss of confidence in the Saudi economy, not a loss of confidence in the dollar.
We've been hearing this loss of dollar confidence bullsh-- for decades. And more recently "China is dumping, Russia is dumping"...lmao. Give your tired old mantra a rest already.
Knowledge is the enemy of fear
FED has demonstrated they are the new big buyer in town.
Metals would go up, it would be taken as a loss of dollar confidence. Metals are all about dollar confidence.
If Saudi Arabia sold it's treasury holdings it would be a sign of loss of confidence in the Saudi economy, not a loss of confidence in the dollar.
We've been hearing this loss of dollar confidence bullsh-- for decades. And more recently "China is dumping, Russia is dumping"...lmao. Give your tired old mantra a rest already.
10 4...but it does make for interesting readings and a few chuckles. I get the same fuzzy feelings, when I read the headlines of the scandal mags at grocery store check-out lines.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
effect...Cheers, RickO
coho's beloved charts verify the inverse relationship between gold and dollars. The facts speak for themselves.
Funny how inconsequential you just pointed gold out to be. Everything you buy from a unit of labor to a six pack to real estate to a trip to Moscow is priced in dollars. If the dollar goes lower the perceived value of all those things goes up. Everything has an inverse relation to the medium of exchange it is tied to. Genius, derryb, genius.
Knowledge is the enemy of fear
And the price of gold is also tied to confidence in the dollar, just as derryb pointed out.
If Saudi were to start a serious liquidation of Treasuries, it would be an indication that the well is running dry, literally. But it could also mean that they feel more confident owning something other than dollars, such as gold or F-16s or real estate or US Senators.
I knew it would happen.
coho's beloved charts verify the inverse relationship between gold and dollars. The facts speak for themselves.
Funny how inconsequential you just pointed gold out to be. Everything you buy from a unit of labor to a six pack to real estate to a trip to Moscow is priced in dollars. If the dollar goes lower the perceived value of all those things goes up. Everything has an inverse relation to the medium of exchange it is tied to. Genius, derryb, genius.
POP QUIZ, let's use pictures to help you out (dollar charted in black):
Do US treasury bonds have a direct or an inverse relationship with the dollar (ETF GOVT in green)?
How about US equities (ETF SPY in green)?
And US real estate (ETF IYR in green)?
And oil (EFT USO in green)?
To help you out here's what an inverse relationship looks like using gold (ETF GLD in green):
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
If only you could actually read and understand what I wrote you would ave saved yourself a lot of time. Just reread it again...maybe you'll see you don't need a chart.
Knowledge is the enemy of fear
Thanks for charts...you've really opened my eyes. I've never seen a chart before. Lol
If only you could actually read and understand what I wrote you would ave saved yourself a lot of time. Just reread it again...maybe you'll see you don't need a chart.
You said everything has an inverse relationship to the currency it is purchased with, I showed you it doesn't. I also showed you that gold is not like most everything else. Words don't work with you with a differing opion and now we know charts don't either. I do believe your eyes will never be opened.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
been rising for years is now declining.
The Saudi economy is not doing well and I expect them to continue to be sellers,
with no effect on the Treasury market.
Saudis hold around $117 billion in US Treasury securities. That number, which had
been rising for years is now declining.
The Saudi economy is not doing well and I expect them to continue to be sellers,
with no effect on the Treasury market.
I'd be interested in a chart of the Saudi economy plotted against the number of public beheadings they conduct .
Saudis hold around $117 billion in US Treasury securities. That number, which had
been rising for years is now declining.
The Saudi economy is not doing well and I expect them to continue to be sellers,
with no effect on the Treasury market.
Because they are smart enough to sell slow and not dump them all at once. Why shoot yourself in the foot?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
The Saudis are not selling because they don't want or have lost faith in US Treasuries, they
are selling because their oil revenues are not enough to sustain the Saudi economy.
Everything has an inverse relation to the medium of exchange it is tied to.
And the price of gold is also tied to confidence in the dollar, just as derryb pointed out.
If Saudi were to start a serious liquidation of Treasuries, it would be an indication that the well is running dry, literally. But it could also mean that they feel more confident owning something other than dollars, such as gold or F-16s or real estate or US Senators.
US Senators?
Thanks for charts...you've really opened my eyes. I've never seen a chart before. Lol
If only you could actually read and understand what I wrote you would ave saved yourself a lot of time. Just reread it again...maybe you'll see you don't need a chart.
You said everything has an inverse relationship to the currency it is purchased with, I showed you it doesn't. I also showed you that gold is not like most everything else. Words don't work with you with a differing opion and now we know charts don't either. I do believe your eyes will never be opened.
Why dont you show a chart of the dollar vs all those other charts over the last 30 years? Wouldnt prove your point very well would it?
Why is it that most things cost more today than 10, 20, 40, 60 , 80 years ago? Why does your haircut cost more, or a lollipop, or a mans wage or an ounce of gold or an acre of real estate?
Love your new sigline also----only folks who have lost confidence are those who accept failure. I think they call them folks, losers.
Wouldnt it be more prudent to hinge ones bets on something that does not require losers? I see lots of winners out there, too bad you dont also. Youre missing out on a lot.
Knowledge is the enemy of fear
You know why - dollars are worth less.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
That would be true (prices for things, and the value of the currency they're priced in, having a simple, reliable, and highly correlated inverse relationship)
if it were not for the variables of changes in supply and demand over the course of time.
maybe sometimes, over certain periods, the apparent "correlation" is just a coincidence
Liberty: Parent of Science & Industry
I saw this a few weeks ago about Saudi Arabia and thought it was interesting.
Oil decline and the currency peg
If they want to defend the Riyal they have to sell them and buy dollars.
They are preparing to borrow $15 billion more.
They hold US Treasury securities and also borrow in dollars.
Saudi foreign reserves are declining fairly rapidly.
If they sold all their Treasury securities, it would have little impact on
precious metals.
Two month ago, the Saudis borrowed $10 billion. (in US $)
They are preparing to borrow $15 billion more.
They hold US Treasury securities and also borrow in dollars.
Saudi foreign reserves are declining fairly rapidly.
If they sold all their Treasury securities, it would have little impact on
precious metals.
best answer yet. However, if they did sell all their US debt, the reason why may have an impact on dollar perception which in turn would affect PMs.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Two month ago, the Saudis borrowed $10 billion. (in US $)
They are preparing to borrow $15 billion more.
They hold US Treasury securities and also borrow in dollars.
Saudi foreign reserves are declining fairly rapidly.
If they sold all their Treasury securities, it would have little impact on
precious metals.
This is interesting because they historically haven't been a debtor nation.
They have a pretty big welfare state and oil revenues are declining.
They basically have to bribe the people with free stuff to keep them in line , so they are going to borrow money to avoid benefit cuts.
Two month ago, the Saudis borrowed $10 billion. (in US $)
They are preparing to borrow $15 billion more.
They hold US Treasury securities and also borrow in dollars.
Saudi foreign reserves are declining fairly rapidly.
If they sold all their Treasury securities, it would have little impact on
precious metals.
This is interesting because they historically haven't been a debtor nation.
They have a pretty big welfare state and oil revenues are declining.
They basically have to bribe the people with free stuff to keep them in line , so they are going to borrow money to avoid benefit cuts.
Rome found that gladiator shows and free food would do the trick - until it didn't. Entertainment on a full belly only goes so far, but apparently much farther in the US.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Two month ago, the Saudis borrowed $10 billion. (in US $)
They are preparing to borrow $15 billion more.
They hold US Treasury securities and also borrow in dollars.
Saudi foreign reserves are declining fairly rapidly.
If they sold all their Treasury securities, it would have little impact on
precious metals.
This is interesting because they historically haven't been a debtor nation.
They have a pretty big welfare state and oil revenues are declining.
They basically have to bribe the people with free stuff to keep them in line , so they are going to borrow money to avoid benefit cuts.
Rome found that gladiator shows and free food would do the trick - until it didn't. Entertainment on a full belly only goes so far, but apparently much farther in the US.
The USA style welfare queens ain't got nothing on the slugs of Saudi Arabia. Totally different demographic , lazy male religious lunatics from the 7th century are a bit more dangerous when they get wound up.
They need their free money so they can continue to lie around and argue about how many angels can dance on the head of a pin. Actually dancing is probably against the law even for angels , they would stone them to death if they tried . In the Saudi version of the movie "Footloose" the kids all get executed
Anyway, there is no work for them to do , the kingdom imports laborers of lesser races to do what needs to be done .
Like eating the top rat on the pile because it isn't AS rotten.
I mean who WOULDN'T want the currency backed by a great bankrupt nation?
Time will cure it.
Got gold?