The beginning of the end for Fiat? Last week the Japanese Bond market was a litmus test for the Americans. First time in recent history nobody made a bid on on 30 and 40 year Treasuries. The Japs cant raise money internationally, the usual purchasers think the risk of purchase out weighs the interest reward (ie. too risky). US Bond sales have slowed too, but not completely like last week in Japan.
Watch this space, its gone largely unnoticed by most commentators but the implications are potentially enormous. Whats this got to do with VAU? If things go tits up, the gold price will sky rocket.
Another important point to consider too, is that the Chinese have moved from being net buyers of US Treasuries - to net sellers. They are selling down all their dollar denominated debt because its a depreciating liability. The Chinese could cripple the Americans tomorrow if they dumped all their Bonds at one time, but then they wouldn't get paid. Plan is to unload slowly before the Americans implode under their collosal debt burden.
VAU Price at posting:
46.5¢ Sentiment: Buy Disclosure: Held
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