RE:Watch US Treasury MarketMy Comment: It's all about the DEBT
Investors will want to own gold as ‘America faces a debt reckoning' - Maison Placements Canada's John Ing | Kitco News Excerpts:
According to Ing, the biggest factor behind most of the global economic threats comes down to growing debt problems in the U.S. Ing noted that since 2008, the supply of Treasuries has risen five-fold to more than $25 trillion.
“The biggest threat to the dollar comes not from others but from the US government itself,” he said. “And that is a worry because the burden of debt is America’s Achilles heel.”
At the same time, Ing said that the selloff in bond markets has only begun as investors are reluctant to expose themselves to more U.S. debt.
“A meltdown in Treasuries now ranks among the worst Treasury crashes in history with 10-years collapsing 46% in the last three years while the 30-year bond erased 53% of gains. The meltdown has just begun,” he said. “America’s addiction to low rates and profligate spending debases the dollar, eroding its dominance, central to America’s credibility in financial markets.”
“We believe this fiscal unsustainability will show up in even higher yields and pain, from the shopping cart to corporate balance sheets, to taxpayers, as those chickens are only coming home to roost.”