Reasons to buy Gold. Part 111

[JulieW]

Zero Hedge is a head shaker today:

1.

On one hand:

BOJ OFFERS TO BUY 300B YEN DEBT WITH MORE THAN 10YR MATURITY
BOJ OFFERS TO BUY 600B YEN IN 5-10YR GOVT DEBT

and on the other

ABE SAYS BOJ ISN'T DIRECTLY BUYING GOVERNMENT DEBT

2.

(Milli)seconds after today's market open, utilities NextEra Energy (NEE) and American Electric Power (AEP) did what most stocks in the New Normal do when there is an unexpected event (like a 4 sigma plunge in the Nikkei): they flash crashed. What is different about AEP and NEE is that unlike most other daily stocks that implode in a matter of milliseconds, the collective market cap of the two companies was nearly $60 billion, which in turn sent the broader utilities index down over 10%. Of course, for a few milliseconds it was more like $30 billion: because that is how much in capitalization was lost in under one second, when today's flash crash du jour struck.

and the topper:

3.

What this means simply is that as of this moment, the Fed has, in its possession, a record 30.32% of all outstanding ten year equivalents, or said in plain English: duration-adjusted government bonds. It also means that the amount of bonds left in the hands of the private sector has dropped to a record low 69.68% from 69.95% in the prior week. Finally, the above means that with every passing week, the Fed's creeping takeover of the US bond market absorbs just under 0.3% of all TSY bonds outstanding: a pace which means the Fed will own 45% of all in 2014, 60% in 2015, 75% in 2016 and 90% or so by the end of 2017 (and ifthe US budget deficit is indeed contracting, these targets will be hit far sooner). By the end of 2018 there would be no privately held US treasury paper.

 

[Midnight Man]

Yup, Julie, I read Zerohedge daily, and invariably find something to shake my head at in the first few posts.

Things like this exemplify to me a few important points - (1) Things are getting way crazy "out there", and (2) Things are becoming very unsustainable - the more I read the more I understand how "fake" everything is in the market. Has a good effect of driving me back to the fundamentals in my way of thinking.