U.S. DOWNGRADE MAY NOT AFFECT INSTITUTIONAL TREASURY HOLDINGS (SLV, GLD, TBT, TBF, TLT, SPY, DIA, QQQ, ZSL,)

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….Correct Information About The Law

Here is what the law is:

  • While S&P cut the long-term rating, it reaffirmed the short-term rating for the US at the top A-1+ level. This means money market funds will not be forced to sell US Treasuries.
  • Most banks in the United States are regulated by the Federal Reserve Bank. The Federal Reserve has issued a crystal clear statement that there is no change in the risk weighting of US Treasuries. This means that the banks will not be forced to sell US Treasuries.
  • Most insurance companies in the United States are governed by state regulators. It is likely that state regulators will follow the lead of the Federal Reserve, and insurance companies will not be required to sell US Treasuries.
  • There are three primary credit rating agencies ‘“ S&P, Moody’s (MCO), and Fitch. W…

The Plan

I will be providing guidance in real time to clients and subscribers. If time permits, I will also provide some guidance on an ongoing basis on my blog.

We will stick with the plan outlined in my last article.

  • If stocks get hit, we will be buyers of the ETFs SPY, DIA, and QQQ.
  • If gold and silver spike up, we will short sell the ETFs GLD and SLV or buy ZSL.
  • We will take the opposite side of the first move in US Treasuries. We will use the ETFs TBT, TBF, and TLT.
  • We will be buyers of other assets if they come down to .   read more….

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