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dcstrade (92.35)

You and Whose Treasuries?

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September 18, 2011 – Comments (5) | RELATED TICKERS: PSLV.DL , RJA

Money is flocking into U.S. Treasuries at record levels, but whose money is it? People are broke, not lending to the government. What is the effect on other asset classes once a new low in 10-year yields is reached?

5 Comments – Post Your Own

#1) On September 19, 2011 at 9:58 AM, Jbay76 (< 20) wrote:

thanks for the post and link!

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#2) On September 19, 2011 at 12:45 PM, vriguy (70.19) wrote:

Not everyone is broke - plenty of folks worldwide (and here in the US) still have money, want to keep it safe, and do not see gold/silver as an alternative.  I suspect they are sending some money into the Treasury market.  And, of course, big banks and central banks are up to their usual stunts.  Tread warily.

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#3) On September 19, 2011 at 2:51 PM, chk999 (99.99) wrote:

Remember, the big movers in the financial markets are the pension funds. They have about 13 trillion $ in assets. They also have a constant stream of cash coming in from the various 401(k), IRA and other pension payroll deductions.

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#4) On September 19, 2011 at 8:55 PM, dcstrade (92.35) wrote:

@chk999 I believe it.  Although pensions, IRA, 401K might sound very middle class, I think it makes sense to group corporations and government agencies offering such funds into the "special interests" category.  It is the institutionalization of America.  Kind of reminds me of a caste system.

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#5) On September 29, 2011 at 10:47 AM, rfaramir (97.63) wrote:

"plenty of folks worldwide (and here in the US) still have money, want to keep it safe, and do not see gold/silver as an alternative"

This is why gold is not in a bubble, yet. Until it is widely held, i.e., offered in 401(k)'s, it cannot reach bubble proportions.

I also don't think it *can* be in a bubble. Think about it. If the dollar price of gold goes to infinity, people trade any possible dollars they are left holding for gold at any price. The dollar dies. It's replaced by gold. Which becomes our next money. When dollars are worthless, dumping them for gold will be logical, not a bubble. And gold won't be like tulips or flippable houses which bubbled up and down, because there's only so much of them that is usable, but speculators drove up overproduction of them. Once gold is money, we will use it like money, we will spend it. You can't spend tulips or houses, or use more than a few directly. Gold you can. You practically can't have too much. It is not bubblable.

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