Article

2009-03-07 Britain

Foreign investors pull $1 trillion out of the City

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Posted by tipper 2009-03-07 08:18|| || Front Page|| [1 views ] Top

#1 Ouch.

Posted by Seafarious 2009-03-07 08:29|| 2009-03-07 08:29|| Front Page Top

#2 So, where did that money go? Follow the money.

Posted by Richard of Oregon 2009-03-07 09:19|| 2009-03-07 09:19|| Front Page Top

#3 Unter der matratze?

Posted by Besoeker 2009-03-07 09:57|| 2009-03-07 09:57|| Front Page Top

#4 Its going into US$ to buy US Treasuries. That is the next big bubble and when it bursts it will be catastrophic. Imagine buying a 10 year bond at around 2% yield and then as the interest rates rise the yield goes to 4%. That means half the principal will be lost if one wants to sell the bond. Does one reasonably believe that with the refinancings due this year [e.g. Greece 360bln] and the growing demand from the US that the interest rates will stay so low.

In addition, the US is benefitting from a flight to safety at the moment. But as soon as there is a crack in the US$ interest rates will have to go up just to compensate for the perceived currency risk.

Copper has stabilized and oil is now holding consistently above $44. Those are inflationary indicators. Gold is in a trading range for the moment but as soon is goes above $1000 it will be off to the races. M2 is rising dramatically and velocity is rising. Walmart figures yesterday indicated that the consumer is still alive. Inflation is on the way.

James Carville once said words to the effect that if he is reincarnated he wants to be the bond market because that is where the power is. (Wall Street Journal (February 25, 1993, p. A1)

Obama doesn't understand the basics of the market. The bond market will ring the bell in due course.

Posted by Omoter Speaking for Boskone7794 2009-03-07 10:12|| 2009-03-07 10:12|| Front Page Top

#5 Obama doesn't understand the basics of the market.

A blinding, burning, solar flare flash of the obvious.

Posted by Besoeker 2009-03-07 10:17|| 2009-03-07 10:17|| Front Page Top

#6 Obama doesn't understand the basics

was enough.

Posted by Bright Pebbles the flatulent 2009-03-07 12:45|| 2009-03-07 12:45|| Front Page Top

#7 It get even worse for the Brits. They've gone the route of QE, except the bulk of the money form the BoE is going to purchase government debt.

Posted by Mike N. 2009-03-07 14:19|| 2009-03-07 14:19|| Front Page Top

#8 Is velocity really increasing? Seems counter-intuitive given the massive scope of consumer debt deflation and the rise in saving rate.

Posted by Cynicism Inc 2009-03-07 18:46|| 2009-03-07 18:46|| Front Page Top

#9 Velocity has decreased, which is why there has not yet been inflation.

One of the current nightmare scenarios is a failed U.S. Treasury auction. Short term treasuries are currently the safety security of choice.

Posted by DoDo 2009-03-07 19:32|| 2009-03-07 19:32|| Front Page Top

#10 All the money in the world is based on debt. It has to be parked somewhere. It sure doesn't exist as currency.

Posted by Anguper Hupomosing9418 2009-03-07 20:45|| 2009-03-07 20:45|| Front Page Top

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