RE: $1.20If you understand the following you would know the answer of your question:
"In the past two months, a remarkable sequence of events has taken place regarding US$-based bonds. They have been called home , a demand to be brought back to US shores."
Bellow is a part of the article written on Sept 11/08 in UK.
In all likelihood the Bank For International Settlements in Basel Switzerland ordered the United States to call in USTreasurys and USAgencys, the bond instruments, the financial weapons of mass destruction. The BIS ordered the financial leadership to call their damaged risky debt securities home, so that they can explode on US soil, so that their greatest concentration rests on US soil, so that the maximum loss occurs to US institutions, so that the risk can be kept to a practical minimum for foreign nations. The benefits given to Americans are two-fold, one a bizarre paradox, the other an open door to steal.
THE BIZARRE USDOLLAR RALLY
..."When the USTreasury Bonds were purchased with powerful bids in a gigantic display by major global central banks ( excluding Russia, China, Arabs), the USDollar broke through resistance levels easily. The volume was just too significant. The initial big move from 73 to 77 in the US$ DX index was powered by the unprecedented central bank purchase of USTBonds in July and August, as they tripled their usual volume pace. This is a vividly clear illicit market override. The latest big move from 77 to over 80 has been powered by the formal bailout of Fannie Mae & Freddie Mac. To call nationalization of this cratered corrupt colossus a positive for the USDollar is like calling the death of all your children a positive since it consolidates the family fortune. Take a close look at details of the bailout. Hidden from view is a giant severance package for Fannie Mae's CEO Daniel Mudd and Freddie Mac's CEO Richard Syron. They are to receive $14 million and $9.2 million respectively. They managed the corruption and slush funds well, supplying amply the USGovt friends and syndicate alike. Mission accomplished!..."
..."The financial structure of the Untied States is besieged by powerful bankrupt insolvencies. 1) USGovt federal deficits are exploding, from war, from handouts, from recession, from bailouts. 2) US trade deficits are chronic and have risen over $60 billion monthly, soon to worsen from the US$ rise rendering harm to exports. 3) US banks are insolvent, with congames the only force forestalling bankruptcy as they continue to distort their balance sheets, while showing inability to raise needed cash in their replenishment. 4) US homeowners are now increasingly living with loans that reflect negative equity, as the proportion sits around one third in such upside-down living rooms. In the next few months, all four wrecked pillars will worsen dramatically. Fundamentals drive the USDollar lower. An assault on the USTreasurys will put the US$ into No Man's Land.
The most dangerous reaction investors can make now is to believe the USDollar has begun a major new upleg. The second most dangerous reaction is to sell gold or silver into this climax of fraud, manipulation, bankruptcy, and protected larceny. The sun is soon to set on the Fascist Business Model network. Those who put leverage into their portfolios have forfeited their freedom to hold. The father of a friend down here in half sunny, half rainy Costa Rica just lost his $250k silver account. He had told me of his father's strong belief in silver and the wrecked US$ condition, but he was not even aware that his father had a silver futures account, not physical silver bullion or coins. He owned paper silver, bound by the illusion of wealth. Now Dad has no silver at all, as he liquidated after a few margin calls. A piece of the inheritance is gone. My Dad has significant bank deposits, which might be under a different strain as banks drop like flies this winter. My advised strategy since the beginning of the year has been to hold silver or gold in physical form, for at least one third of accounts, maybe more.
The uplift coming this autumn and winter will be historic, as new chapters will be written on the global financial rehabilitation and remake. The world is planning the post-US era, amused by the celebration taking place on Wall Street. It will wind down soon enough. The next chapter will be characterized by isolation, retribution, receivership , dismissed government, overriding supply contracts, and redrawn lines...."
...."On the week of September 15 thru 19, some initial events are anticipated to occur. An important event schedule will be initiated. The party and celebration and corrupt raids should come to an end abruptly. Many possible events are offered in conjecture in the September Hat Trick Letter, due out late this weekend. In all, 13 powerful shock wave events are suggested as possible. Foreigners are watching the tainted party, viewing it as staged atop the heavily listing Titanic vessel. The four pillars of insolvency, plus the looming credit derivative roof crumple, seem not to matter. The entire global playing field, related to commerce and finance, is soon to be reshaped, with the Untied States becoming a bit player, or not invited. The turkey carving is nigh.
When the events begin to unfold, one event will lead to another. Just like the Iraq War, a schedule does not adhere to a calendar, but rather to events. One event leads to released new pressures, factors to be made clear, obstacles to be removed (possibly forcibly), and the next event unfolds. My view of the sequence very simple is to reveal the big picture, RECEIVERSHIP & DEFAULT. The gold & silver prices will rocket higher. Part of the event schedule, down the road in time, not at an early stage, is the launch of the gold-backed Russian currency and the gold-backed Gulf dinar.
These are not new news items, but well advertised and fully ignored by a dismissive US failing financial fortress. The gold & silver prices have become laughable. Very little supply was available in the low 800s for gold. Very little supply was available at 13 for silver. Now prices are lower. One should try to imagine the building rage by angry foreign owners of physical gold & silver, who look at the price schemes dominated by paperhangers on Wall Street, who use the printing press and electronic switchboards to create new counterfeit supply to sell. Foreigners seek justice, to stem the corruption, to stem the threat to global stability, both financially and militarily. Do Americans have much of any idea of the foreign perspective? Do they know about violated NATO treaties, and poking the Russian bear with sharp sticks repeatedly? Americans are soon to be given a fresh course in receivership. The opening salvo was Fannie Mae and the fat little brother Freddie Mac. Never in modern history has a widened pattern of nationalization been favorable to a currency!
Note that the Credit Default Swap on the USTreasury Bond itself has moved up 3.5 basis points in the last week to a record 18 basis points. In April it was 6 bpts. This is record territory. German Bund CDSwap protection costs only 8 bpts. The USTBonds have suffered from greater risk after assuming the Fannie & Freddie risk. The risk of USTBond default is next. Watch the CDSwap continue to rise, as the rest of the bailout candidates knock at the door. The precedent has been set. The door is open. The die has been cast toward deep decay of socialism. Add to insolvency exported fraud and aggressive military behavior, and the prescription for foreign reaction is huge. It is coming!...."
..."The latest economic myths are two: the USDollar is stronger and price inflation is gone. Neither is true. The foreign currencies have moved down, as their economies have slowed, as their own bank distress is evident. The US$ is a giant beneficiary of global debt liquidation, hardly a strength. The US$ rally is actually a signal of its imminent implosion or disappearance. As for price inflation, it is raging at 12.5% from the 2Q2008 according to Shadow Govt Statistics. The official heavily distorted CPI has posted back to back months above 5%. Suppressing the gold price via paper games does not constitute a repeal of price inflation. The biggest story on the price inflation front is the nationalization bailout of Fannie & Freddie mortgage giants. Even with no additional bailout beneficiaries (losers) such as General Motors or airline firms or even Citigroup, the price inflation inside the USEconomy will be magnificent next year. Some analysts expect the doctored CPI to rise above the 10% level...."
Simply translated, Energy price, gold, strategic materials, food.... would go high and very high...and many more other thinks could happened....