Make or Break Moment for the Greenback at Nobullshit Network Forum

jazzz · 06-30-2009, 07:02 AM

With all the talk lately about the dethroning of the US currency as the premiere reserve investment for sovereign countries, the debate is about to get a stark reality check.

This week, the US is doing its best to auction off a whopping 106 Billion Dollars in new debt, in a bond auction and what Forex online blogs and street traders are looking for is how quickly they sell. There is no doubt that it will sell out, but the questions are, who will be doing the buying? And, how quickly will it be sold?

The US auctions typically has a short life, with most of the debt going away even before the official gavel is dropped down. However, it has been a sobering sign for the US Treasury that in recent auctions, it was been more difficult to get rid of the debt, to the point that yields on the bonds and notes have hit record highs as if the buyers are saying that the investment is more risky than others and therefore you need to pay us for assuming that risk.