http://www.bloomberg.com/news/2011-...-puts-negative-outlook-on-u-s-aaa-rating.html Gold took a vertical stab at 1500 just as the news was announced, then corrected. The world is moving pretty damn fast atm. Makes the head spin.
wasn't someone suggesting failed us treasury bond auctions around july in that thread about the us hitting their debt ceiling last week? this is setting it up nicely. BRICS are bailing on the US dollar. it's all coming together and quite rapidly..
I've thought for quite a while now that the euro news was just a sideshow to what was coming in regards to the US. Weird things is though the US dollar has rallied. That seems a bit like running in to a burning building. edit If the dollar hadn't rallied gold would have gone through 1500 most likely.
i think it's just by comparison to the euro atm that the us dollar seems like a stronger option. makes no sense. gold is creeping back up now, halfway through new york trading. going to be an interesting night..
If the dollar turns around we could see gold really start rallying. That's enough for me will see what's happened in the morning.
Because S&P/Moody's etc are all paid off by the US in USD. It is in their best interest to make USD look good It's a joke rating really.
Just read this in Simon Blacks report. "In his speech, Guan called for the establishment of a global rating agency that follows clearly outlined international standards, effectively putting an end to the cowardly analysis that dominates the industry now and replacing it with a healthy dose of reality. Putting its money where its mouth is, Dagong has a long-standing, negative outlook on US debt that doesn't pull any punches. From its November 2010 report: "In essence the depreciation of the U.S. dollar adopted by the U.S. government indicates that its solvency is on the brink of collapse, therefore it wants to cut its debt through the act of devaluation with the national will; such a move has severely harmed the interests of creditors." Following suit, S&P stunned financial markets this morning by revising its US outlook to 'negative', citing politicians' inability to address medium-term and long-term challenges. " Interesting times indeed.
Mike Maloney's take.. "Ratings agencies like Standard and Poors lost a lot credibility during the Financial Crisis for rubber-stamping AAA ratings, the highest mark, on mortgage-backed securities that became nearly worthless when crisis hit. While many savvy investors simply ignore the ratings given by the discredited ratings agencies, the voice of the ratings agencies still matters because many mutual funds have legal contracts with their investors that only permit them to invest in AAA-rated securities. When an issuer or a bond loses its AAA rating, those mutual funds must legally get rid of those bondsleading to a sharp selloff... ...Bill Gross, co-CEO of PIMCO, is credited with introducing the Plankton Theory back in 1980, in relation to the housing market. The "plankton" Gross initially referred to are the first-time homebuyers, young couples and families who kept the housing market robustand prices rising. When the plankton disappear, Gross's theory holds, watch out, because the bottom may be about to drop out of the market. In the case of the United States' credit rating, the "plankton" are the mutual fund investors who will be forced to shed their U.S. Treasuries when the U.S. loses its AAA. If the plankton go, the U.S. will be looking at a potential financial meltdown unlike any in its history. bold is my emphasis.. obviously, some heavy invisible hands will make sure they don't get downgraded.. http://wealthcycles.com/blog/2011/0...&utm_campaign=Blog:+Ratings+Outlook+Downgrade
