Bill Holter’s Commentary
Did the Tylers listen to this week’s call for subscribers? Denny point blank asked this very same question on Saturday…without a doubt, THE most important financial question facing our nation.
The $64 Trillion Question: With Foreigners Stepping Aside, Who Will Buy U.S Treasuries?
March 10, 2019
During its latest, quarterly meeting, the Treasury Borrowing Advisory Committee (aka the TBAC, which many years ago we dubbed the Supercommittee That Really Runs America, an assessment which 8 years later Bloomberg now generally agrees with), released minutes of its Jan. 29 meeting held at the Hay-Adams Hotel in conjunction with the U.S. government’s quarterly refunding announcement.
While there were many topics of discussion (discussed previously here), the TBAC highlighted two key areas of concern: i) the soaring US budget deficit, and specifically the possibility of significant financing gap over next 10 years amounting to over $12 trillion and the potential need for more domestic investor participation if foreign reserve growth slows; and tied to that ii) the worry that since “foreign investors already hold significant dollar debt”, and have been paring back substantially on their Treasury purchases in recent years, the US will have to increasingly rely on domestic savings to fund its future budget deficits.
Of particular note, the TBAC said, tongue in cheek, that while the “USD is still the dominant reserve currency”, reserve managers have been very gradually increasing allocation to other currencies, and that the USD share of FX reserves has steadily come down from 72% in 2000 to 62% now. It also pointed out that other countries with significant debt issuance needs (as a share of GDP) depend far more on domestic savings. As a result, “the Treasury should plan to meet financing needs more domestically than in the recent past.”
Silvers US$ Value Should Already Be At The Bolivars Price
March 11, 2019
Good and Wonderful Monday Morning Folks,
Remember that Gold had a good day on Friday where it rallied just over 1%. Also remember that good days like these are almost never allowed to have a second or third day of rally with today being no different with Gold now at $1,294.60 down $4.70 and right at the London Low of $1,294.20 with the high at $1,299.20. Silver, the Tag-A-Long-Kid, is now trading at $15.305, down 4.4 cents and at the low of $15.285 with the high to beat at $15.365 after its 30 cent price rise on Friday. The US Dollar is up but barely with the value now pegged at 97.30, up 3.1 points and closer to the low of 97.23 then the high at 97.41. All this of course is done way before 5 am pst and the Comex Open. The Venezuelan nightmare continues with Gold now pegged at 12,929.82 Bolivar gaining 5 more Bolivar over the weekend with Silver at 152.859 it too gaining 1.698 Bolivar as we read that the people of the country have now been without power for four full days.
March Silver’s Open Interest is the same as last Friday’s numbers which means we still don’t have good up to date data with the count at 535 requests for physical with 0 Volume up on the board so far this morning. We do a have a buy order for 33 more obligations at $15.215 (March) with no takers as of yet proving someone still needs product. Silver’s Overall Open Interest lost 143 contracts with the total count now at 191,993 Overnighters still in trade as we wait for better data later in the day.
Theresa May is expected to call a second meaningful vote on her Brexit plan (Today), the prime minister is facing another massive defeat .. But according to MPs and cabinet ministers who have shared their grievances with the Telegraph, BBC and other British media outlets, it’s possible that May could be forced to resign before she gets there. It seems everything is tied to Britain so we wait to see if anyone else out there sees the precious metals as a safe haven as things continue to get wonky in all currencies and as the British Pound may be the next to take a hit.