From Dan Denning in St.Kilda:

--On behalf of everyone at DR headquarters in Melbourne, we want to let everyone in Northern Queensland know you’re in our thoughts and prayers. It seems like we’ve had to write that a few times this summer. Here’s hoping you’re safe and well.

--While other Australians have more urgent personal matters to attend to, financial markets trundle on. In fact, there’s already been a direct response in commodities markets to Cyclone Yasi before the wind has even died down.

--Sugar futures have hit a new 30-year high, >100-year ‘ultra-long’ bonds.

--What kind of jack ass would ever loan the American government money for 100 years? Only a brain dead jack ass, of course. Or, if not brain dead, perhaps a company with long-lived, long-term liabilities might try and match those liabilities with long-term Treasuries. But frankly, the whole exercise seems like the sign of an establishment that’s running out of ways to make its debt attractive to investors.

--People notice. “China’s gold imports are estimated to have more than doubled from a year ago in the run-up to Chinese new year, putting the country on track to overtake India as the world’s largest consumer of the precious metal,” http://clicks.portphillippublishing.net//t/AQ/AAQM7A/AAQXig/AANGWQ/AQ/AgMlFg/oFaK">reports the FT. The FT also reports the Federal Reserve has surpassed China as the leading holder of U.S. Treasury Securities.

--Let’s see. The Fed is set to replace China as the top buyer of U.S. bonds. China is set to become the top buyer of gold. Ships passing in the geopolitical night?

--The big danger for Aussie investors right now is that this is the beginning of another massive speculative bubble in commodity prices. The race out of the dollar has driven up precious metals, base metals, grains, and most of the commodity complex. Oil could be next.

--But how does it all end? In massive hyperinflation? Or massive deflation? Stay tuned...