Send the dollar to hell and time to lift the gold UP.
March 19th, 2009 | by winsonlee |Fed has announce that they are going to use $1.75 trillion in securities to buy agency and mortgage debt. Now what the USian need is money printing machine. Practically now much money that are printed goes to the financial sector to shore the whole economy up
“The big concern in Treasuries is, ‘What will the Fed do if we see inflation coming back and what is the strategy for reversing these purchases?’” said Mustafa Chowdhury, head of U.S. interest-rates research in New York at Deutsche Bank AG, one of 16 primary dealers that trade government securities with the Fed. “If a clear exit strategy is not spelled out for the market, it will cause a huge reaction.”
Ten-year Treasury yields tumbled 47 basis points yesterday to 2.53 percent after the Fed’s announcement. Why would you still buy Treasury note when the yield is so low ? Keeping the cash under your pillow or in the biscuit container is no longer feasible. It is the same concept as keeping your cash with the government.
It has been reported that the dollar faces the biggest daily fall in more then two decades upon the US Federal Reserve announcement. The dollar index slide by 3 percent on Wednesday and that was its biggest one day drop since 1985.
For the same reason this has caused gold price to rise from $884 / ounce at 10.35 am on 18 mar to $945 / once at 3.17pm.
Many has heard about Warren Buffet. Have you heard about Jim Roger who appears on Bloomberg television interview ? There are few important issue that Jim Roger who is the chairman of Rogers Holdings mention about that i would like to highlight here. In 2006 he predicted that the oil price will reach $100 a barrel. It is true enough that the oil surges to a high of $143.
What the government should do with the falling banks ?
I would have let them all go bankrupt. The idea that they’re spending over a billion dollars on bonuses at AIG is total insanity. They should have let them go bankrupt and they wouldn’t have to pay anybody anything. These are bankrupt companies - you don’t throw money into a bankrupt company. You give the money to confident people who can start over from a sound and solid base. You don’t try to prop up dead companies.
Will commodities be a good option to invest ?
Listen, corn can not go to zero. Natural gas can not go to zero. Stocks can go to zero. Stocks can go down a lot. But commodities can not go to zero.
What is your thought on gold ?
I own some gold. I do think that if it goes down I’ll buy some more. Remember the IMF is trying to sell its gold. The IMF is one of the largest holders of gold in the world and if they sell their gold, it could conceivabley knock gold down a lot. But, if they do, you better buy all the gold you can because then that will be the bottom of the gold market and we’ll get rid of the IMF too because they won’t have any money left which is good for the world.But I own gold. I think I’ll make more money in other things.
