Good Morning Traders and Investors…

The Dow surges higher and the Allshare Index falls, another week of divergences between indices and confusing signals in global markets.

The Bond markets offshore are showing signs of trouble and China has just issued SDR Bonds backed by gold! (SDR stands for “Special Drawing Rights”.)

SDR is like a new currency and the bad news is it’s a global currency! Accepted and traded between countries and central banks. It’s not main-stream yet and if it goes main-stream it could spell trouble.

What kind of trouble you may ask?

Special Drawing Rights are what the IMF uses to valuate all the major currencies around the world in what is known as the Reserve Currency Basket. The SDR is what is used to trade between countries.

When a superpower like China issues a Bond denominated in SDR’s, who on the planet is going to stop them? This means that investment could flow out of US Treasury bonds into the SDR Bonds and other countries may start issuing them too.

They could replace the US Treasury Bonds which currently have a risk free rating, i.e. it’s safe.

It seems to me that the world is starting to think otherwise about the US Treasury Bonds regarding its safety and rating. If anything changes we’ll see it here and interest rates will sky rocket as investors move to safer fixed assets like the SDR Bonds.

China’s are backed by gold and are redeemable for Yuan which is also backed by gold. So they have their own little gold standard going and if the powers that be continue to stifle the gold price movement… The more severe the blowout, when it happens.

Bottom line guys and gals…

The world financial markets are changing rapidly and we must adjust our way of thinking and be ready to take advantage of the opportunity that is knocking.

Get yourselves out of debt as soon as you can.

Gorrit?