Monday, December 01, 2008

Conundrum of Rising US Dollar, Falling Treasury Yields and rising Prise for protection from US Default. GDX, HUI, XAU

Last time Sir Greenspan used the word "conundrum" all Hell broke lose within couple of months. We have very interesting development today: US Dollar is up testing recent Break Down line, Treasury Yields are down with sell off in the market, But insurance price on US Defaults is at all time high! Quantitative easing at its best: FED is buying Treasuries like there is no tomorrow, but commercials in the market are well aware about the consequences.
"LONDON, Sept 24 (Reuters) - The cost of insuring 10-year U.S. government debt against default rose to a record high on Wednesday as investors fretted over the feasibility of the government's $700 billion plan to contain the financial crisis.
Credit default swaps on 10-year Treasury debt expanded to 29.2 basis points -- its widest ever -- from 26.5 basis points on Tuesday, according to CMA, a specialised data provider.
CMA said CDS on five-year widened to 22.0 basis points from 20.5 basis points. (Reporting by Emelia Sithole-Matarise"

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