• Tag Archives Treasuries
  • Diversify Into Gold Urges Dalio on Linkedin – ‘Militaristic Leaders Playing Chicken Risks Hellacious War’

    – Don’t let ‘traditional biases’ stop you from diversifying into gold – Dalio on Linkedin
    – ‘Risks are now rising and do not appear appropriately priced in’ warns founder of world’s largest hedge fund
    – Geo-political risk from North Korea & ‘risk of hellacious war’
    – Risk that U. S. debt ceiling not raised; technical US default
    – Safe haven gold likely to benefit by more than dollar, treasuries
    – Investors should allocate at least 5% to 10% of assets to gold
    – ‘If you don’t have 5-10% of your assets in gold as a hedge, we’d suggest that you relook at this’
    – ‘If you do have an excellent analysis of why you shouldn’t have such an allocation to gold, we’d appreciate you sharing it with us …’
    by Ray Dalio via Linkedin
    There are returns, and there are risks. We think of them individually, and then we combine them into a portfolio.
    We think of returns and opportunities as coming from those things we’d bet on, and we think of risks as the adverse market consequences of us being wrong due to our being out of balance. We start with our balanced beta portfolio – i.e., that portfolio that would most certainly fund our intended uses of the money.

    This post was published at Gold Core on August 15, 2017.


  • Technical Scoop – Weekly Update: August 13, 2017

    It hardly seems much of a contest: the world’s most powerful nation both economically and militarily vs. one of the poorest nations on earth but with a strong, or at least large, military. So far, the war has been rhetorical as both sides though their respective leaders hurl superlatives at each other that usually end in one of them being engulfed in a ring of fire. The words, however, have unnerved global markets.
    This past week saw upwards of $1 trillion shaved from global stock markets triggered by Donald Trump’s and Kim Jong Un’s ongoing war of words. The last word has so far gone to Donald Trump who did his usual tweet, asserting that ‘military solutions are now in place, locked and loaded, should North Korea act unwisely.’ Earlier, North Korea had threatened to land a missile near the US Pacific territory of Guam in response to Trump’s promise to unleash ‘fire and fury.’ The world can only shudder at the thought of a nuclear exchange. But words are having an impact as stock markets ‘hurled’ and safe havens of Japanese Yen, Swiss Francs, US Treasuries, and German Bunds and gold jumped higher.
    US and global stock markets had been hurtling ever higher and valuations are near record. A correction was most likely overdue. The war of words and tensions over North Korea was the trigger. How deep the correction goes is anybody’s guess at the moment. Numerous pundits believe that the odds of actual war between the verbal combatants is low, but that a correction was probably overdue and this could result in a buying opportunity.
    The likelihood is that the rhetoric and war of words is liable to continue for some time. Even if North Korea were to launch more missiles into the sea, it most likely would up the ante and rattle markets further. An overvalued market and sabre rattling is a recipe for the correction. Inflation numbers released this past week were benign. As a result, the combination of the sabre rattling and a stumbling market could keep the Fed on the sidelines through the rest of the year. And that is not even getting into the looming fight over the budget, tax reform and the debt ceiling. Also, let’s not forget the ongoing investigation into the Trump campaign and the Russians being conducted by special counsel Robert Mueller.

    This post was published at GoldSeek on 13 August 2017.


  • T.Rowe Price Issues A Warning For Investors, Cuts Stock Allocation To Lowest Since 2000

    One day after DoubleLine chief Jeff Gundlach told Bloomberg TV that it is time for investors to head for the exits as his highest conviction trade is “volatility is about to go up”, and that he is reducing his positions in junk bonds, EM debt and other lower-quality investments on fears investor sentiment may roll over (explaining later to CNBC that he expects to make no less than 400% on his S&P puts) today two other money-managing titans – T. Rowe Price and Pimco – both issued similar warnings to investors, urging investors to start taking profits.
    In its latest Midyear asset allocation report “Preparing for Pivot Points”, bond giant Pimco said Investors should pare stocks and high-yield debt while shifting to lower-risk assets, such as Treasuries and mortgage-backed securities. Some selected excerpts:
    “After reviewing the landscape, we conclude that the lack of near-term positive catalysts combined with current valuations does not offer sufficient margin of safety to support a risk-on posture.”

    This post was published at Zero Hedge on Aug 9, 2017.


  • Global Markets Roiled By Trump Warning North Korea Of ‘Fire and Fury’

    This is a syndicated repost courtesy of Money Morning – We Make Investing Profitable. To view original, click here. Reposted with permission.
    (Kitco News) – There is keener anxiety and risk aversion in the marketplace Wednesday after U. S. President Donald Trump warned North Korea there would be ‘fire and fury like the world has never seen’ if North Korea keeps threatening the U. S.
    North Korea, meantime, responded by saying it may fire a missile toward the U. S. territory of Guam. North Korea had recently threatened to use its nuclear weapons against the U. S. after the United Nations slapped more sanctions on the rogue nation. Some U. S. lawmakers have criticized Trump for his remarks Tuesday on North Korea, saying he should tone down his rhetoric.
    World stock markets sold off Wednesday on the heightened U. S.-North Korea tensions. U. S. stock indexes are pointed toward lower openings when the New York day session begins.
    Gold prices are solidly higher on safe-haven demand. U. S. Treasuries are also seeing safe-haven buying after Trump’s North Korea remarks to reporters in New Jersey on Tuesday.

    This post was published at Wall Street Examiner by Jim Wyckoff ‘ August 9, 2017.


  • Risk Off: Global Stocks Slide As “Fire And Fury” Results In “Selling And Fear”

    US futures are set for a sharply lower open (at least in recent market terms) following a steep decline in European stocks and a selloff in Asian shares, following yesterday’s sharp escalation in the war of words between the U. S. and North Korea. In a broad risk-off move U. S. Treasuries rose, the VIX surged above 12 overnight, while German bund futures climbed to the highest level in six weeks. The Swiss franc gained 1.2 percent to 1.1320 per euro its biggest daily advance since February 2015, while the yen surged as much as 0.8% against per euro, its strongest level in three weeks while gold rose.
    “Trump’s comments about North Korea have created nervousness and the fear is if the President really means what he said: “fire and fury”,” said Naeem Aslam, chief market analyst at Think Markets in London. “The typical text book trade is that investors rush for safe havens.”
    Gold was headed for it’s largest gain this month while the yen and Swiss franc were the biggest advancers among G-10 currencies after President Donald Trump ratcheted up his rhetoric against North Korea. Treasuries and most European government bonds climbed amid the shift to safer assets, while almost every sector of the Stoxx Europe 600 Index fell and emerging markets equities were poised for the biggest drop since June 15. The rand extended losses after South Africa’s president survived a no-confidence vote.

    This post was published at Zero Hedge on Aug 9, 2017.


  • These Were The Best Performing Assets In July And YTD

    July was a great month for virtually all asset classes (at least those tracked by Deutsche Bank) with the notable exception of what, which tumbled after surging previously.
    As DB’s Jim Reid writes, there was strong performance for most assets in the bank’s sample as various market volatility measures trended lower over the past month to touch new all-time lows. 33 out of 39 assets posted positive total returns in local currency terms while all assets except for one (wheat) saw positive returns in USD terms after a tough month for the Greenback (-2.9%). In summary commodities and equities make up the top of both the local currency and USD performance tables while European assets (equities and government bonds) crowd at the bottom of the LC performance table. However the strong performance of the Euro (and USD weakness more generally) lifted most European assets into more positive territory in USD terms. Thus in USD terms the worst performers were mostly US credit and treasuries, rounded out by two relatively underperforming agricultural commodities in Corn (+0.1%) and Wheat (-7%).
    In terms of the key movers on the month, oil was one of the strongest performers as it led all assets in local currency terms (WTI +9%; Brent: +8%). It should be noted that nearly all of the gains came at the tail end of the month following news of Saudi Arabia’s pledge to reduce crude exports in August. Elsewhere the Bovespa (+11%) and FTSE MIB (+8%) matched gains in oil to top the USD table following a rally in the underlying equities (Bovespa LC: +5%; FTSE MIB LC: +5%) and strong performance in their respective currencies (BRL +6%; EUR +3%). Broader EM equities also saw strong performance in general (MSCI EM: +6%). An important dynamic to note is the fact that despite the poor performance of broader European assets in LC terms (and middling performance in USD terms), European banks actually saw strong returns on the month with gains of +3% in LC terms and over +6% in USD terms as Euro area economic momentum continues to hold strong and Eurozone government bond yields have risen following Draghi’s speech at Sintra.

    This post was published at Zero Hedge on Aug 1, 2017.


  • The Breakdown Before the Breakthrough

    Since our last note, the US dollar index has made its way down to the lows of last summer, currently hovering just above the Brexit upside pivot from June 24th, 2016.
    Although asset trends can elicit major technical breaks from oversold conditions (i.e. crash), the more probable outcome from our perspective favors another retracement bounce, before traders can set their sights on breaking through long-term underlying support that’s confined all declines in the dollar index over the past 3 years.
    Maintaining a KISS approach of lower highs and lows that has served traders well this year in the US dollar index, we would look for the highs from early July to contain a prospective bounce. This methodology also applies to the flipside of momentum for potential lows in the euro, yen and gold – with the two latter assets also likely influenced by the short-term respective trends in equities and yields. In this respect, over the near-term the Japanese yen and gold could hold up better than the euro, as we suspect the rally in equities gives back this months gains – largely supporting the uptrend in long-term Treasuries and buttressing safe haven assets like the yen and gold.

    This post was published at GoldSeek on Tuesday, 25 July 2017.


  • El-Erian Exposes The Upside And Downside Of Liquidity-Driven Markets

    Authored by Mohamed El-Erian via Bloomberg.com,
    Over the past few months, government bond yields have fallen, the dollar has weakened and financials have underperformed, yet the major stock indexes are at or very near record highs, as persistently supportive liquidity conditions have more than compensated for policy and growth disappointments.
    By boosting returns and repressing volatility, ample liquidity is a gift for investors. It makes the investment journey pleasing, comfortable and lengthy. But it is not a destination.
    With the exception of buoyant stocks market indexes, it is hard to find many financial markets that have managed to retain their post-U. S. election mood. Specifically:
    After climbing to 2.60 percent, the yield on 10-year Treasuries has fallen to below 2.30 percent. The yield differential between U. S. Treasuries and German Bunds has narrowed from more than 220 basis points to just 170 basis points. The widely followed DXY dollar index, which reached a high of 103 on Dec. 28, has depreciated sharply to 94, a level not seen since August of last year. The Mexican peso has appreciated to its strongest level in a year, after falling sharply on fears of U. S. protectionism.

    This post was published at Zero Hedge on Jul 21, 2017.


  • The Elephant in the Room: Debt

    It’s the elephant in the room; the guest no one wants to talk to – debt! Total global debt is estimated to be about $217 trillion and some believe it could be as high as $230 trillion. In 2008, when the global financial system almost collapsed global debt stood at roughly $142 trillion. The growth since then has been astounding. Instead of the world de-leveraging, the world has instead leveraged up. While global debt has been growing at about 5% annually, global nominal GDP has been averaging only about 3% annually (all measured in US$). World debt to GDP is estimated at about 325% (that is all debt – governments, corporations, individuals). In some countries such as the United Kingdom, it exceeds 600%. It has taken upwards of $4 in new debt to purchase $1 of GDP since the 2008 financial crisis. Many have studied and reported on the massive growth of debt including McKinsey & Company http://www.mickinsey.com, the International Monetary Fund (IMF) http://www.imf.org, and the World Bank http://www.worldbank.org.
    So how did we get here? The 2008 financial crisis threatened to bring down the entire global financial structure. The authorities (central banks) responded in probably the only way they could. They effectively bailed out the system by lowering interest rates to zero (or lower), flooding the system with money, and bailing out the financial system (with taxpayers’ money).
    It was during this period that saw the monetary base in the US and the Federal Reserve’s balance sheet explode from $800 billion to over $4 trillion in a matter of a few years. They flooded the system with money through a process known as quantitative easing (QE). All central banks especially the Fed, the BOJ and the ECB and the Treasuries of the respective countries did the same. It was the biggest bailout in history. As an example, the US national debt exploded from $10.4 trillion in 2008 to $19.9 trillion today. It wasn’t just the US though as the entire world went on a debt binge, thanks primarily to low interest rates that persist today.

    This post was published at GoldSeek on Friday, 21 July 2017.


  • TopWatch

    The market is up 2% since I called the top a month ago. This financial analyst gig ain’t easy!
    Financial newsletters are now stuffed with bubble porn – their favorite subject is complaining about how overpriced everything is. As a financial writer, it’s tough to stay fresh when that’s all there is to talk about.
    Let’s continue, nonetheless.
    I got an email from a longtime reader the other day, and I usually get emails from him when he is right and I am wrong. He said:
    ‘None of my indicators are flashing red except valuation and it’s the least important. Liquidity, sentiment, breadth, credit, et al [are all showing] green light.’
    So I replied: ‘Credit?’
    He said: ‘High yield and high grade at the tights.’
    It Can’t Get Any Tighter
    You always flinch when you hear statements like this, but what I am hearing from the folks in credit is that it just can’t get any tighter. Spreads over treasuries cannot get any smaller. This is as tight as it can possibly get.
    That means that credit probably could get tighter, but I respect everyone’s opinion. The corporate credit markets are richer than anyone has ever seen them.

    This post was published at Mauldin Economics on JULY 20, 2017.


  • Dollar Tumbles, Euro Soars After Obamacare Repeal Dies; China Intervenes To Halt Rout

    Bulletin headline summary from RanSquawk
    The USD-index dropped to 10 month lows amid fading hopes of US reforms after Obamacare repeal effectively died last night. Soft CPI from the UK and NZ weigh on both currencies Looking ahead, highlights include BoE’s Carney and the API Crude report The Dollar Index sank to its lowest level since September, a fresh 10-month low, after two more Republican defections on Monday night doomed the proposed GOP healthcare plan in the Senate. And while Treasuries rose on concerns about inflationary pressures and the viability of the Trump stimulus agenda, S&P futures rebounded gingerly from session lows, and were up 0.01% after posting nominal declines earlier in kneejerk reaction to the Senate news.

    This post was published at Zero Hedge on Jul 18, 2017.


  • Visa Begins Bribing Merchants To Stop Taking Cash

    The war on cash is escalating. A big driver isn’t central banks who want to be able to inflict negative interest rates on savers, or Treasuries who see cash transactions as hiding revenues from their tax collectors, but the payment networks that want to kill cash (and checks!) as competitors to their oh so terrific (and fee-gouging) credit and debit cards.
    However, one bit of good news is there doesn’t appear to be much enthusiasm on the buyer, as in merchant, end.
    First, the overview from the Wall Street Journal:
    Visa Inc. has a new offer for small merchants: take thousands of dollars from the card giant to upgrade their payment technology. In return, the businesses must stop accepting cash.
    The company unveiled the initiative on Wednesday as part of a broader effort to steer Americans away from using old-fashioned paper money. Visa says it is planning to give $10,000 apiece to up to 50 restaurants and food vendors to pay for their technology and marketing costs, as long as the businesses pledge to start what Visa executive Jack Forestell calls a ‘journey to cashless.’

    This post was published at Zero Hedge on Jul 13, 2017.


  • Wonderful Monetary Policy and Beautiful Deleveragings — Doug Noland

    While traditional analysis would look first to U.S. economic fundamentals (including household and corporate debt, earnings, employment and inflation) for indications of underlying market vulnerability, I would point instead to Global Market Bubble Dynamics – while reminding readers that the current backdrop is distinct to previous Bubble experiences. As such, market indicators this week at the periphery – EM as well as European – were flashing heightened susceptibility to de-risking/de-leveraging and the potential for liquidity challenges. Considering the enormity of recent flows, perhaps EM will provide an early test for the thesis of Market Structural Vulnerabilities.
    Here at home, 10-year Treasury yields rose eight bps to 2.39%. In equities, there was more of this choppy topping action rotation away from tech/high-flyers and into financials/laggards. Corporate debt markets are beginning to feel the strain of rising global yields. High-yield bond funds saw another $1.1bn of outflows, though investment-grade corporates are still attracting large inflows. The high-yield ETF (HYG) traded near a two-month low. Commodities, as well, seemed to support the thesis of fledgling ‘Risk Off’ and waning liquidity. With crude down almost 4%, the GSCI Commodities Index dropped 1.8%. Copper fell 2.4% and gold lost 2.3%. But it was wild trading in silver (down 7.2%) that might have provided a harbinger of more general market liquidity issues to come.
    That Treasuries, equities, corporate Credit and commodities all seem to be indicating a (thus far subtle) shift in market liquidity, we can look to ‘risk parity’ – and similar multi-asset class strategies that incorporate leverage – as a possible weak link in a Vulnerable Global Market Structure. And we’re supposed to savor this moment and pay a debt of gratitude to courageous central bankers? Strange world.

    This post was published at Credit Bubble Bulletin


  • BOND ROUT!!!

    Nothing ever goes in a straight line. For every rally there will inevitably be a retracement, a minor selloff often of no more than profit taking. These are generally pauses where a durable trend either overcomes doubts, or succumbs to them. In the stock market, they call it the wall of worry. In bonds, it’s become a bit more complicated.
    At this particular moment, US treasuries are again being sold. It’s really not to this point all that much, but you wouldn’t know it from the commentary trying to describe it. The headlines all scream in unison BOND ROUT! It is in many ways the opposite of stocks, where even larger corrections (like the liquidations in 215 and 2016) get shrugged off as nothing of great concern.
    This disparity is, however, quite easily explained. Stocks on the way up are a reflection of the way the world is supposed to be. It just isn’t possible, in mainstream convention, for prolonged economic agony. Share prices as they are now, as they have been since especially QE3 in 2012, are signaling the end of the malaise and the belated return of conventional sense. Bond yields going only lower are a loud (and more robust) contradiction to good orthodox understanding of the way the whole world might actually work.

    This post was published at Wall Street Examiner by Jeffrey P. Snider – July 7, 2017.


  • Global Stocks Rebound From Korea Jitters; S&P Flat As Fed Minutes Await; Oil Slides

    S&P futures were little changed at 2,425, ignoring the N. Korea tensions of the past two days which will likely be a major topic in the upcoming G-20 summit, as European stocks fluctuate and Asian markets advance. Crude oil fell, snapping the longest winning streak this year, as Russia said it opposed any proposal to deepen OPEC-led production cuts.
    Just like Tuesday, it was a session of two halves, with the Yen initially starting the day stronger as military tensions built up in Korean peninsula, and cash Treasuries breaking with a firmer tone as 10-year yield initially fell. Aussie reversed part of Tuesday’s losses despite a drop in Caixin PMI data, and Dalian iron ore 1.6% higher.
    “North Korea has rattled markets but central bankers are more important,” said Kathleen Brooks, research director at City Index in London. “While North Korea’s military ambitions are a background threat for markets, we don’t think that this particular geopolitical event is at the stage yet where it will cause a spike in volatility.”

    This post was published at Zero Hedge on Jul 5, 2017.


  • Is This Why The Fed Is Raising Rates???

    Authored by Chris Hamilton via Econimica blog,
    As the Fed is in the midst of a rate hike cycle, it seems important to remember why this cycle is like no previous rate hike cycle. The mechanics of this hiking cycle are completely unique and experimental…thus the outcome is far more of an unknown than “normal”.
    Why? In a typical cycle, the Fed would sell a relatively small portion of its assets…er, balance sheet (typically short duration bills and notes) to banks. This would withdraw some of banks liquid funds (replacing them with less liquid assets) and create “tightness”. This tightness would push overnight lending rates higher and the daisy chain of rising rates would work its way through from the shortest eventually all the way to the 30yr Treasury bonds.
    However, this time, nothing like that is happening. This is because the Fed sold all its short term notes/bills (in Operation Twist) and bought longer duration MBS (mortgage backed securities) and longer duration Treasuries in Quantitative Easing to the tune of $4.5 trillion. Further, since the Fed bought most of these assets from large banks, these banks held much of the proceeds from these sales at the FRB (Federal Reserve Bank). For the Fed to perform typical rate hikes, it would need to remove most of the $2.1 trillion banks are now sitting on in excess reserves @ the FRB…likely creating a crisis in the process. Conversely, if the Fed can’t contain the $2.1 trillion at the FRB, and the reserves are leveraged into the market…stand back in awe of the mother of all bubbles.
    Thus, the Fed has instead determined to raise rates via paying banks interest on these excess reserves to maintain the reserves at the Federal Reserve. In short, pay banks not to lend money, not to invest the reserves. This is just like Federal programs that paid farmers not to farm…IOER (interest on excess reserves) pays big bankers not to bank.

    This post was published at Zero Hedge on Jun 30, 2017.


  • Dollar, Bond “Carnage” Pauses; Global Stocks Rebound Led By Tech Shares

    S&P futures rebounded shortly after the stronger than expected European CPI print, rising 0.3% to 2,426, as markets try to forget all about yesterday’s brief 50% VIX surge and tech rout, which trimmed the seventh consecutive quarterly gain for the S&P 500 Index to 2.4%. Europe shares rose 0.4%, led by tech stocks, after a drop in Asian markets, as oil and the dollar gained.
    The action this week however, yesterday’s equity fireworks notwithstanding, has been in dollar and bonds, where as Bloomberg says this morning, the “carnage has paused for a breather” with Treasuries steady after yields across the globe rose this week as central bankers shifted toward a more hawkish tone while the dollar gained against most G10 peers, paring its worst weekly loss in six.
    Putting the dollar’s quarterly performance in context, it is down -4.8% in Q2, its worst quarterly performance since 2010. Market skepticism remains over the Fed’s dots and tightening intentions, the recent 22 bps of curve flattening, and what the ECB may do next. “Obviously there’s a shift afoot. It really seems that there’s some coordinated effort going on out here among the G10 central banks,” said Stephen Innes, head of trading in Asia-Pacific for OANDA in Singapore, referring to the series of hawkish-sounding comments on monetary policy.

    This post was published at Zero Hedge on Jun 30, 2017.


  • The Incredible Shrinking Relative Float Of Treasury Bonds

    Via Global Macro Monitor blog,
    Lots of hand wringing these days about the flattening yield curve. We still maintain our position that the signal from the bond market is significantly distorted due to the global central bank intervention (QE) into the bond markets. See here and here.
    Most of what is happening with the U. S. yield curve is technical. Sure, traders can get a wild hair up their arse, believing the economy is slowing and try and game duration by punting in the cash or futures markets. Given the small relative float of the U. S. Treasury bond market, however, it doesn’t take much buying to move yields. In the words of economists, the supply curve of outstanding Treasuries is very inelastic.
    This is illustrated in the following chart. The combined market cap of just Apple and Amazon at today’s close is larger than the entire the float of outstanding Treasury notes and bonds that mature from 2027-2027. We define float (US$1.16 trillion) as total Treasury securities (2027-2047) outstanding (US$1.73 trillion) less Fed holdings (US$575 billion).

    This post was published at Zero Hedge on Jun 23, 2017.


  • SWOT Analysis: Is India’s Gold Market Recovering?

    Strengths
    The best performing precious metal for the week was gold, off just 1.02 percent despite a Fed rate hike. The Fed may not be in a position to continue with multiple rate hikes. Mike McGlone, BI Commodity Strategist, points out the current situation that both crude oil futures and Treasury bond yields are falling. Since 1983, the Fed has never sustained a rate hike cycle while both crude and Treasuries are falling. Gold has risen from a three-week low as investors digest the latest rate hike and anticipate the probability of additional rate hikes, reports Bloomberg. Suki Cooper, an analyst with Standard Chartered, writes, ‘If the market starts pricing in the end to the current hiking cycle, this would remove a major headwind for gold and allow prices to breach the stubborn $1,300 threshold in a sustained move higher.’ Bloomberg reports that public sector investors increased their net gold holdings to an estimated 31,000 tons last year, an increase of 377 tons. This is the highest level since 1999. Weaknesses
    The worst performing precious metal for the week was silver with a loss of 2.90 percent. Money managers cut their net-long by about 10 percent this past week. For the second week in a row, gold traders and analysts surveyed by Bloomberg are bearish. This is the first time survey results have indicated two-week run of bearish outlook since December. Gold futures have had the longest losing streak in three months, as investors have anticipated the Fed’s actions this week. Bullion futures for August delivery closed down for the fourth straight session earlier this week.

    This post was published at GoldSeek on Monday, 19 June 2017.


  • PetroDollar System In Trouble As Saudi Arabia Continues To Liquidate Foreign Exchange Reserves

    The U. S. PetroDollar system is in serious trouble as the Middle East’s largest oil producer continues to suffer as extremely low oil price devastates its financial bottom line. Saudi Arabia, the key player in the PetroDollar system, continues to liquidate its foreign exchange reserves as the current price of oil is not covering the cost to produce oil as well as finance its national budget.
    The PetroDollar system was started in the early 1970’s, after Nixon dropped the Gold-Dollar peg, by exchanging Saudi Oil for U. S. Dollars. The agreement was for the Saudi’s only to take U. S. Dollars for their oil and reinvest the surpluses in U. S. Treasuries. Thus, this allowed the U. S. Empire to continue for another 46 years, as it ran up its ENERGY CREDIT CARD.
    And run up its Energy Credit Card it did. According to the most recent statistics, the total cumulative U. S. Trade Deficit since 1971, is approximately $10.5 trillion. Now, considering the amount of U. S. net oil imports since 1971, I calculated that a little less than half of that $10.5 trillion cumulative trade deficit was for oil. So, that is one heck of a large ENERGY CREDIT CARD BALANCE.

    This post was published at SRSrocco Report on JUNE 16, 2017.