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August 20, 2010 07:17 AM

Jim Sinclair’s Commentary

Let not get deflected by MOPE. It is not the selling of US Treasuries by China that is the problem. It is the momentum collapse of that buying that harbors an ill motive to the bond safety bubble.

Gold is your only insurance and that message is very near to the delivery point via the long bond market. You run the near and intermediate bond rates of return to negative interest rates, and you put the pin in the Bond Bubble. That is the final Pillar of Gold at $1650 and beyond.

It Looks Like U.S. Government Bonds Aren’t Supported By China Anymore
Vincent Fernando, CFA | Aug. 20, 2010, 3:45 AM

Earlier this week we highlighted how cut its holdings of U.S. government bonds by the largest ever monthly amount in June. Expanding this thread, it should be noted that China’s U.S. debt ownership has fallen to $843.7 billion in June from $938.3 billion in September 200,9 according to U.S. Treasury Department released Monday. This equates to nearly an 11% reduction by China.



Yet interestingly, the 10-year U.S. treasury yield has fallen over the same period, despite the meme that China’s voracious U.S. debt buying supports keeps America’s bond yields low. (Note that China’s U.S. debt holdings encompasses more than just ten-year U.S. bonds, however. )

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Jim Sinclair’s Commentary

QE to Infinity

There is no other politically expedient solution as the can gets kicked down the road many more times.

Click to view data on growing unemployment in the US…