Can it really work that way? I mean without "inflating the debts away" ? Will US citizens pay with more valuable dollars the debts they have accumulated over the last few years? How exactly are the US citizens going to manage servicing those debts, with interest rates rising AND the "real" value of their debts rising (as USD has become much stronger vs Euro, Yen, BP etc)? And with stagnant income, due to global wage arbitrage? Will they become debt slaves? Will foreclosures soar? In theory, sure it can work IN THEORY. They can deflate the housing bubble and let deflation take its course. Remember that 40% of the NFP jobs created during the last few years are real-estate related. IF THEY PLAN TO LET IT DEFLATE, I ARGUE THEY SHOULD HAVE LEFT NATURE RUN ITS COURSE 4yr AGO, after Bubble-I. Not create the housing MegaBubble-II and wait to deflate AFTER US citizens have loaded debt to their nostrils, to buy a home at 2-3x the price it cost 5yr ago! This way, the lenders and the banking system will be the big winners. But you can kiss the middle class goodbye in the US (I'm pretty sure the lower class is dead anyway). In a world of fiat currencies, governments have the ability to CHOOSE: inflation or deflation. In the end, it's a political decision. My logic tells me that politicians always prefer inflation. Maybe with the US it's different...
Gold was extended? Wtf? Look at Oil. That's extended. Gold has been in a trading range forever.. A few failed breakouts.
This first trading day of the new quarter stuff always is a bag of tricks. I really dont think its ever much of a coincidence when you see something like this kind of damage in the long end of the curve and gold fall apart the first day. Its just sort of surprising there wasnt more of a reaction in some of the high fliers today, although GOOG came off a little bit.
Yes, and then the lightining bolts will appear from the sky and the machines will emerge from the cracks in the earth.
Apparently ! They started their holiday on friday, and they keep drinking on the 4th cause its dead with america on holday.
Just wait - the well-known Canadian juggernaut will soon catapult gold back to ( you insert the price).