If you sell it, will they come? So far, yes with respect to the ability of the US Treasury to sell debt to fund the ever growing deficits of the US government. With continued falls in the US$, coincident rise in gold and growing inflation expectations, today’s 10 year auction and Thursday’s 30 year will be a great test of the appetite for this longer term paper which provides no protection against future inflation. The Oct NFIB small business optimism index rose a touch to 89.1 from 88.8 with the components very mixed. Those that plan to hire rose 3 pts but remains slightly negative but plans for increased cap spending fell. Those that expect higher sales and plan to increase inventory both were up but are still negative and those that say it’s a good time to expand fell. Nov German ZEW 6 month confidence outlook fell 5 pts and was 4 pts below forecasts and Sept French IP unexpectedly fell and the euro is down in response.
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