Foreign governments dumping U.S Debt like never before

One of the reasons for this is the economic rut the world is facing.  The oil market crash and overall commodities bust cycle have affected many nations and has forced them to draw down on their reserves. As many of these countries park their reserves in Treasuries, this means that they have to sell them to get access to this cash.  However, there is another reason, smart nations like China and Russia are divesting from the dollar and into Gold.  They know that on average a nation holds onto super power status for roughly 250 years; the US has been in this position for almost 241 years, so the clock is ticking fast.

Foreign central banks sold $57.2 billion of U.S. Treasury debt and other notes in January, according to the numbers released on Tuesday, up $9.2 billion from Decembers sales of $48 billion.   This is the highest monthly figure on record since 1978, so this is something huge.

source: www.money.ccn.com

It appears that nations such as China and Russia are preparing for a day when the U.S is no longer the dominant player.  When that day finally comes to pass the USD is going to lose a significant portion of its value and the best hedge for such an event would be to have a position in Bullion. In fact, the currency should start to decline long before the US is displaced by China.   Prudent investors would do well to have a position in Gold bullion.  Think of it as insurance against unforeseeable events; in other words, disaster insurance.  You don’t buy it because you know disaster is going to strike, but you buy it because you know that if it hits you are covered.

Other stories of interest:

US Congress losing mind over Russian Arms Sales to Iran (March 17)

Russian economy improving; Inflation down over 50% (March 17)

Fed’s change of Heart Could trigger strong Rally in 2016  (March 17)

seeking perfection Recipe for Financial Tragedy (March 16)

China-India: value of understanding Good Neighborly Relations  (March 14)