DarthMaul09 (30.41)

How low will the US dollar index go and when will the US bond market begin to fear inflation?

August 08, 2010 – Comments (2) | RELATED TICKERS: SA , TCK , SQM

The US dollar index has been on a relatively quiet two-month losing streak, which apparently has gotten the attention of the Chinese government.  Since they hold almost a trillion dollars of US treasuries it is not surprising that they become concerned when the US dollar index falls from 89 to 80 in just two months.  They understand the need of the US government to devalue the US dollar to minimize the real value of the US debt.  With the recent European debt crisis and the rising US dollar, their buying power had been temporarily improved, but now that the US dollar appears to be ready to break below 80, they may view this as a good time to trade this debt for hard assets around the world.   [more]