Courtesy of Read the Ticker
The warning bells of a US sovereign debt crisis are getting louder. When the bells ring you know something is going to get burned down.
Dear reader the market is ringing the bells, can you hear them. Big money is doing something different this time.
Take a look.
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This is why, too much supply of US debt, while inflation, oil and the US dollar are hot.
In 2022 the FED wants to sell into a rising interest rate market a $1 trillion of US debt off its own balance sheet (QT), get this, while the US Govt is planning to issue new debt of $800 billion and also roll over $900 billion of older debt in 2022 (chart below).
This is a supply of $2.7 trillion in US debt to sell while the US dollar is making new all time yearly highs.
In the past the Japanese and the Europeans have been large buyers of US Debt, today the Japanese and the Europeans can not buy the debt while their currencies plunge lower, so who is going to be the buyer of this debt. US corporations and banks are already loaded up to the gills. The FED will be buyer of last resort and their balance sheet will expand the release valve will be a lower US dollar (DXY).
Of course what if Japan starts selling its $1.3 trillion in US assets to support its currency? They will need to sell something as they must import 100% of their oil. This does not make US debt supply crisis any easier. Of course other countries may also do the same while the US dollar screams higher.
investors just do not like US ‘Zombie’ debt, even when they are being scared out of stocks.
Guess what in this movie gold kills zombie debt.
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Investing Quote…
..”Thus, I affirm, every class of phenomena, whether in nature or in the stock market, must be subject to the universal law of causation and harmony. Every effect must have an adequate cause.”..
William D Gann
..”A radical is one who speaks the truth.”..
Charles August Lindbergh Snr
After a question on how to become a better investor professional Mr Munger responded, ..“Read history, read history, read history.”..
Charlie Munger
..“Investing should be like watching paint dry or watching grass grow. If you want excitement…go to Las Vegas.”…
Paul Samuelson
..“One must search through a maze of complex and contradictory details to get to the significant facts … Then he must be able to operate coldly, clearly, and skilfully on the basis of those facts.” The challenge for the successful speculator is “how to disentangle the cold hard facts from the rather warm feelings of the people dealing with the facts.” Moreover, “if you get all the facts, your judgment can be right; if you don’t get all the facts, it can’t be right”…
Bernard Baruch
