“What I’m even more confused about is who, exactly, is buying all the Treasury debt while simultaneously buying all the equity’s (and real estate, and and and)?. . . I’m astounded that somehow the domestic public is able to push equity prices up by over $16 trillion from there ’09 lows while simultaneously buying record quantities of Treasury debt. The TIC data (Treasury International Capital system) combined with Fed data and further Treasury data show the public is presently purchasing nearly $70 billion a month (average) of still near record low yielding debt?!? The only previous period that the domestic public bought even 2/3rds the present amount, asset valuations were in free fall from 2008 to 2010 as money rotated from risk to perceived safety.”
MK note: Confused? So are we. . . . .
Also. . . .
Why biggest U.S. creditors are selling Treasuries/Bloomberg/2-22-2017
“It’s the biggest pile of debt in the world — the $13.9 trillion U.S. Treasuries market. It’s been built with the help of foreign central banks and investors, who have clamored to buy U.S. government debt through good times and bad. But what happens if they lose their taste for Treasuries? With creditors from Tokyo to Beijing to London having second thoughts, we may be about to find out.”
MK note: Based on the data, they have already lost their taste for U.S. government debt. The real question reverts back to the previous article: Who is buying all this U.S. government debt in a rising interest rate environment? There is always a kind of built-in demand based on normal day-to-day financial market needs, but when you factor in the huge amount of debt sold in Asia plus the huge on-going needs of the U.S. government we are talking some very big numbers. . .very big supply and very big demand.
“As a result, the customs office did not include in the export tallies the more than 2,000 tonnes of gold worth CHF80.5 billion that it said were “exported” in 2016, just slightly more than the Swiss pharma trade’s exports. By comparison, the Swiss gold export was roughly equal to Sri Lanka’s entire annual GDP in 2015 and accounts for about four-fifths of all the gold that the world extracts in a year (about 2,500 tonnes).”
MK note: Remarkable. We’ve written extensively about the London-Zurich-Hong Kong-Shanghai gold pipeline. These statistics demonstrate the breadth and depth of the physical gold market. The ultimate source is London-based gold ETFs and London’s bullion banks. The reason for the stop in Switzerland on the way to the East is to reconfigure the large 400-troy ounce LBMA good delivery bars to the 32.15 ounce kilo bars traded on the Shanghai and Hong Kong gold exchanges.
MK note: Our old friend, Ron Griess (Thechartstore.com) sent along this chart today for re-posting to the site. His comments are worth noting.
Coin News Net/1-9-2017
“U.S. Mint distributors spent a good deal of money buying just released 2017-dated American Eagle and Buffalo bullion coins. There was some pent-up demand with popular 2016-dated editions selling out in early December.
First-day sales of 2017 America Silver Eagles hit 3,747,500 coins, marking a 36% increase over the opening day total of 2,756,500 coins for last year’s release. The one-day tally is already higher than half of the monthly totals logged in 2016.
A combined 68,000 ounces in American Gold Eagles sold on Monday, up 13.3% from opening day sales in 2016 of 60,000 ounces.”
MK note: More direct evidence of physical demand. The lion’s share of gold and silver American Eagle bullion coin demand originates in the United States and is taken up by U.S.-based investors.
By the way, we should reiterate our warnings about purchasing bullion coins – proof or business strike – issued by grading services as perfect Proof or Mint State 70 and sold for very high mark-ups by various dealers. Almost all the coins purchased from the Mint and submitted to the grading services would end up in the “69” or “70” categorization. There is nothing special about this though it is endlessly promoted, particularly this time of year at first issue, as out of this world.. . . . . ..NOT SO!
If someone is trying to sell you on this concept BEWARE. Read here.
The Sovereign Investor/JL Yastine/1-4-2016
MK note: With the DJIA down about 120 this morning, this is probably a good time to get this link on the board. London-based Mr. Smithers is a highly respected commentator on global financial markets, and this forecast from him on the U.S. stock market quite frankly took me by surprise. He is a regular contributor to Financial Times.
“In 2014 Total Global Assets Topped $105 TRILLION (i.e more than $105,000,000,000,000) An astronomical amount by any standards. Interestingly, only a small fraction of this monumental amount has been allocated to gold investments.”
MK note: Old friend, Vronsky, posts a quick read and an interesting tale of “what if. . . . . .”.
“Rutledge’s top asset pick is real estate — the opposite of what was recommended when Reagan was beginning his presidency, the economist said.”
MK note: Former Reagan economist John Rutledge details an opinion very similar to what we expressed in a News & Views Special Report published earlier this month titled “Trump, Reagan economies at polar opposites.” If you read that Special Report and thought the argument had some merit, you will gain from the first-hand details provided at the link above. In the 1970s, the era that preceded the Reagan years (1980s), inflation dominated the financial landscape. Real estate did well and so did gold and silver – in fact spectacularly well. Rutledge seems to be expecting an era more like the 1970s than the 1980s.
If you would like to read the USAGOLD Special Report mentioned above, you can sign-up for immediate access here.