Today's 10-Year Treasury Auction
Today’s 10-year Treasury auction was solid with a coverage ratio of 2.58. That’s about in-line with where comparable auctions have been as of late.
However, if one was to look back to the 2011-2014 time frame, coverage ratios were regularly at or above 3.00 or 20-30% higher than what is normal today. Of course, 10-15 years ago China held more Treasuries than it holds today. China essentially shorted the Dollar and went long gold, a smart bet.
My view is that Gold will continue to outperform the Dollar (and other fiat currencies) over the intermediate to long-term as the Federal Government reduces the Dollar’s purchasing power by regularly running large fiscal deficits (chart below).
