Acceleration of QE across all Western Nations

Dear Friends:

1. Euro is stronger this morning on debt sales by weaker Euro countries AND GERMANY HIGH COURT PERMITTING BAILOUTS actually changing nothing.
As I see it this was use of the emergency funds via beards which is as effective QE as if they were bought directly by ECB and Fed.
2. Criminal litigation against major international investment companies in the Southern District of New York which for them must be extremely scary. The Manko & Edelman cases should be review not only for legal precedent set, but also for legal points made by the prosecutor.
3. Nothing has changed except for the acceleration of QE across all Western nations.

Respectfully,
Jim

Nothing has changed except for the acceleration of QE across all Western nations.

Let's take a moment to look at the acceleration in the United States. Recently released data illustrates the acceleration of debt being accumulated by foreigners relative to GDP (FDHBFINGDPR). FDHBFINGDPR has soared from 15% in 2006 to 27% in the first quarter of 2010. This illustrates not only an eye-popping acceleration but also huge chunk of current GDP.

Federal Debt Held by Foreign & International Investors As a % of GDP (FDHBFINGDPR) and the London P.M. Fixed Price of Gold (GOLD):


This size (and shocking acceleration) of this liability implies an ever growing equilibrium price of gold.

Federal Debt Held by Foreign & International Investors (FDHBFIN) and the Equilibrium Price (FDHBFIN/OZ):


It's no suprise that gold is running in short supply at current prices.