Tuesday, December 4, 2012

US Mint November Gold coin sales hit most since July 2010

NEW YORK (Commodity Online): The United States Mint sales of American Eagle gold bullion coins in November were the most since July 2010, although the year-to-date tally remains below the first 11 months of 2011 while its sales of silver bullion coins in November topped the 3 million mark for the third straight month.

As per latest rata on the Mint's Web site shows 136,500 ounces of gold coins were sold last month, up sharply from 59,000 in October and 41,000 from November 2011.

Read Original Source

US Debt Ceiling Just $63 Billion Away

US debt ceiling of $16.394 trillion is now just $63 billion away. Furthermore, once Thursday's Bill auction adds another $26 billion in net debt, the ceiling will be a tiny $40 billion off, or just one week's worth of net debt issuance away, which is why the Treasury just warned the debt ceiling will be breached in a few weeks.

At that point, just like in August 2011, the Treasury will have no choice but to start raiding the G-fund, and other sundry government retirement funds, until such time in February or latest March, when the debt ceiling debate, and hike, can be no longer postponed.

Read Original Source

Goldman Sachs expects Fed to Announce QE4

Goldman Sachs expects, next month, for the Fed to come out of their policy meeting announcing QE4. It will be a purchase of $45 billion each month in Treasuries. This number will be in addition to the already existing QE3, which is $40 billion per month in mortgage-backed security debt.
Goldman expects this to continue all the way into 2015. So we are looking at close $2 trillion of QE over the next couple of years. Keep in mind this is already in addition to the $2.5 trillion of QE1 and QE2. We are talking about close to $4.5 trillion which has been and will continue to be manufactured out of thin air in order to keep interest rates artificially low.

But will this fix anything? Unfortunately it will not, at least according to Paul Volcker….

“Another round of QE is understandable – but it will fail to fix the problem. There is so much liquidity in the market that adding more is not going to change the economy.”

This is the “most extreme easing of monetary policy” he could recall. Mr Volcker’s comments came as the World Trade Organisation intensified the economic gloom by slashing its global growth forecasts.

Read Original Source

Why Gold Prices Will Soar After FOMC Meeting?

Gold prices will start another epic run beginning Dec. 12 – the day the Federal Reserve will double down on QE3 at its Federal Open Market Committee (FOMC) meeting.

Decisions made at the Dec. 12 FOMC meeting could add as much as $2.2 trillion to the Fed's balance sheet over the next two years, which will turbocharge gold prices, silver prices and oil prices.

"Our baseline expectation is a continuation of the current pace of asset purchases of $85 billion per month on an open-ended basis..."

Read Original Source

Spain has requested a €39.5bn bailout

Spain has formally requested €39.5bn of European funds to recapitalise its struggling banks, according to an Economy Ministry statement. The majority of the money, €37bn, will go to the four nationalised banks: Bankia, Catalunya Banc, NCG Banco and Banco de Valencia. A further €2.5bn will be channelled into the "bad bank" which is being used to absorb and quarantine toxic real estate assets.

The money should be paid to the state's banking fund FROB by December 12. Eurozone finance ministers are expected to formally approve the bailout this afternoon at a meeting in Brussels.

Read Original Source

Saturday, November 3, 2012

Singapore Bank Selling Renminbi Banknotes as Collectibles

While opening up my mails today, I realized a Singapore bank was advertising the sale of Chinese Renminbi (RMB) banknotes as collectible items as part of their early effort to advertise Chinese New Year products.  The collection is an album of six bank notes with the same serial number.  The album is selling for S$368.

I find this intriguing because in the past, they only sell albums of local currency but not RMB.  Does this signify and indicate a growing demand for RMB notes in the world? Why not sell US dollars banknotes, which is the world's reserved currency or Singapore currency banknotes as they do in the past?

Anyway, keep stacking gold and silver and perhaps the Renminbi banknotes too.  China is buying precious metals today.  Perhaps they know of the impending currency crisis that is looming and preparing to back their RMB with gold.

And wishing all readers an early happy Lunar New Year from Singapore!

Sunday, October 28, 2012

Buying and Storing Gold in Singapore

Having traveled to more than 100 countries, I can say unequivocally that Singapore stands out as one of the best places in the world to own and store gold. Here’s what I like about it:

1) It’s one of the safest places on the planet. There’s practically zero crime.

2) There’s no corruption either. Singapore is one of the most transparent places in the world. If someone doesn’t abide by the terms of a contract, for example, any foreigner could get a fair hearing in court to enforce the contract.

3) Singapore is optimized for business and investment. Taxes on income and profits are low. There is no capital gains tax. It’s quite easy to set up a company. And practically every nationality in the world can travel here visa free.

4) It’s stable, and growing. This is not some fledgling third world country that has a coup every other Tuesday. Singapore has long been one of the wealthiest places in the world per capita, and it has a very, very bright future as one of the world’s largest financial centers.

Singapore recently made it even easier to store gold here, dropping the sales tax on investment grade precious metals. For gold, this includes the Maple Leaf, Buffalo, Kangaroo, and Panda. US Eagles and South African Krugerrands are not included as their purity is too low. Silver Eagles, however, qualify for tax exemption.

Excerpt from Original Source

Asian Economies Turn to Yuan

The Peterson Institute for International Economics, or PIIE, said in its latest research that China has moved closer to its long-term goal for the renminbi to become a global reserve currency.

Since the global financial crisis, the report said, more and more nations, especiallyemerging economies, see the yuan as the main reference currency when setting theirexchange rate.

And now seven out of 10 economies in the region — including South Korea, Indonesia,Malaysia, Singapore and Thailand — track the renminbi more closely than they do the US dollar.
Wang Jianhui, chief economist with Southwest Securities Co Ltd, agreed. "Investors are looking for new reserve currencies at a time when both the dollar and euro are under pressure. This is a good opportunity for the yuan," he said.

The Royal Bank of Scotland predicted in a report on Monday that renminbi will become a fully convertible currency in 2015.

Excerpt from Original Source

German Politicians Questioning the Authenticity of the Bundesbank Gold Reserves Abroad

In a bizarre twist in the Eurozone crisis, German politicians are now questioning the authenticity of the Bundesbank gold reserves abroad. In response, the German government may initiate the largest 'cash for gold' deal ever seen...

This week the German Audit Court issued a report stating that the country's central bank must begin a major stocktaking exercise of its gold holdings around the world. According to the report, there has never been a thorough "assessment" to evaluate the true worth of the gold kept in the various central bank's around the globe.

Excerpt from Original Source

Monday, September 24, 2012

Gold Should Be Part Investor's Portfolio - Raymond Dalio

Raymond Dalio, Bridgewater Associates founder, & CIO, discusses his biggest concerns about the global economy, and why he thinks gold is 'like cash' and should be part of every investor's portfolio in a monetary crisis scenario and why he thinks Warren Buffet is making a big mistake for not touching gold.

Sunday, September 23, 2012

Gold Prices Could Reach $5,000 says Bank of America

Bank of America Merrill Lynch analysts said gold could soar to $3,000 or even $5,000 over the longer-term. “We will be focusing in on gold. Ultimately we think gold can trade between $3,000 and $5,000 an ounce going forward,” MacNeil Curry, head of foreign-exchange and rates technical strategy at BAML...

Read More from Original Source

Saturday, September 15, 2012

What Will Happen to all the New QE3 Money?

... So what will happen to all of this new money?
If banks and financial institutions use that money to make loans then it could have somewhat of a positive impact on the economy in the short-term. However, the truth is that it isn't as if banks are hurting for cash to loan out. In fact, right now banks are already sitting on $1.6 trillion in excess reserves. Just like with the first two rounds of quantitative easing, a lot of the money from QE3 will likely end up being put on the shelf...

And without a doubt the mainstream media will be proclaiming this to be "good news" for the economy in the short-term. But is QE3 really going to help the average person on the street? Well, first let's take a look at employment. We are told that one of the primary reasons for QE3 is jobs...

But did QE1 and QE2 create jobs? The answer is clearly no...

But what more quantitative easing is likely to do is to pump up stock market values because a lot of the money from QE3 is going to end up being put into stocks and other investments. This is going to help the wealthy get even wealthier, and it is going to make the "wealth gap" between the rich and the poor even larger in America. QE3 is also probably going to cause commodity prices to rise just like QE1 and QE2 did. That means that you will be paying more for gasoline, food and other basic necessities. So there may not be more jobs, but at least you will get the privilege of paying more for things. The inflation that QE3 will cause will be particularly cruel for those on fixed incomes such as retirees.

Excerpt from Original Source

Nouriel Roubini on ECB Decision & Fed's QE3

In the eurozone, euphoria followed the ECB’s decision to provide support with potentially unlimited purchases of distressed countries’ bonds. But the move is not a game changer; it only buys time for policymakers to implement the tough measures needed to resolve the crisis. And the policy challenges are daunting: the eurozone’s recession is deepening as front-loaded fiscal consolidation and severe credit rationing continues...

In the United States, the latest economic data – including a weak labour market – confirm that growth is anemic, with output in the second half of 2012 unlikely to be significantly stronger than the 1.6 percent annual gain recorded in January-June.

And, given America’s political polarization and policy gridlock, we can expect more fights on the budget and the debt ceiling, another rating downgrade, and no agreement on a path toward medium-term fiscal consolidation and sustainability – regardless of whether President Barack Obama is re-elected in November.
Ineffective governments with weak leadership are at the root of the problem. In democracies, repeated elections lead to short-term policy choices...

But, as everyone kicks the can down the road, the can is getting heavier and, in the major emerging markets and advanced economies alike, is approaching a brick wall. Policymakers can either crash into that wall, or they can show the leadership and vision needed to dismantle it safely.

Excerpts from Original Source

Egan Jones Downgrades US debt rating to AA-

NEW YORK — Egan-Jones, an independent credit-research firm, downgraded its rating on U.S. government debt to AA- from AA on Friday, citing the Federal Reserve’s plans to try to stimulate the economy.
The credit rating agency said the Fed’s plans to buy mortgage bonds will likely hurt the economy more than help it. The plan will weaken the value of the dollar and push up prices for oil and other commodities, Egan-Jones said. That would leave less for consumers to spend on other things....

Saturday, September 8, 2012

Debt forecast - U.S. will look like Greece by 2021

The federal debt crossed the $16 trillion mark this week. What’s more remarkable than the number of zeros in that figure is that Washington somehow didn’t see this coming...

Currently, the CBO estimates that the federal debt will hit $25 trillion by 2021. But if that forecast is also off by 40%, we’ll actually be facing a federal debt of $35 trillion by then.

What will our country look like with a $35 trillion debt? The CBO has a good track record of predicting gross domestic product, and it predicts 2021’s economy will exceed $24 trillion. That will put our debt at almost 150% of GDP, or about where Greece is today...

Read More from Original Source

Tuesday, September 4, 2012

Fed First Audit Reveals Startling Results

What was revealed in the audit was startling:

$16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. From the period between December 2007 and June 2010, the Federal Reserve had secretly bailed out many of the world’s banks, corporations, and governments. The Federal Reserve likes to refer to these secret bailouts as an all-inclusive loan program, but virtually none of the money has been returned and it was loaned out at 0% interest. Why the Federal Reserve had never been public about this or even informed the United States Congress about the $16 trillion dollar bailout is obvious – the American public would have been outraged to find out that the Federal Reserve bailed out foreign banks while Americans were struggling to find jobs.

The list of institutions that received the most money from the Federal Reserve can be found on page 131of the GAO Audit and are as follows..
  • Citigroup: $2.5 trillion ($2,500,000,000,000)
  • Morgan Stanley: $2.04 trillion ($2,040,000,000,000)
  • Merrill Lynch: $1.949 trillion ($1,949,000,000,000)
  • Bank of America: $1.344 trillion ($1,344,000,000,000)
  • Barclays PLC (United Kingdom): $868 billion ($868,000,000,000)
  • Bear Sterns: $853 billion ($853,000,000,000)
  • Goldman Sachs: $814 billion ($814,000,000,000)
  • Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)
  • JP Morgan Chase: $391 billion ($391,000,000,000)

Monday, September 3, 2012

Billionaire Believes Gold Is Going Higher

Watch this excellent interview video where Billionaire Frank Giustra shares his views on the macro economics and policies.  He believes that the world is moving towards inflation and that it is bullish for gold and hard assets whereas those who believes in deflation will see their cash savings wiped out.  In the video he also shared how he picked up the 'body language' of the politicians to arrive at his conclusion.  Terms that have slowly become common language today like "Trillion", "Too Big to Fail", "Quantative Easing" all points towards an inflationary policies that the governments of the world are moving towards.

Sunday, August 5, 2012

Nobel Economist Comments on Euro & the Dollar

Nobel Economist Laureate Edward Prescott gives his view on the current situation in Europe and US. He thinks that the Euro is doomed, the banks are in trouble and America will have a giant economic collapse.

Gold Is About To Soar Higher - James Turk

“The way the metals traded yesterday and today illustrates the important point I was making when we did that interview. There’s a ton of money on the sidelines waiting to buy the dips. This is exactly the type of thing you see at the beginning of a bull market.

I’ve been talking about a summer rally, and here we are at the beginning of August, and I think the summer rally is actually beginning now...

“People are starting to understand they are being played with by these guys. Draghi came out last week and said he will do whatever it takes to preserve the euro. Then he said something to the effect of, ‘And believe me it will be enough.’
The bottom line is we are in a fiat currency bubble. Eventually this bubble is going to pop because we are using this fiat currency, backed by nothing, not just in one country, but throughout the world.”

Monday, July 23, 2012

Singapore Inflation Edges Higher to 5.3% in June

Source: www.tradingeconomics.com
SINGAPORE: Inflation in Singapore continues to climb with housing and transport costs topping the increase. 

The consumer price index (CPI), a key gauge of inflation, rose to 5.3 per cent year-on-year in June, according to a statement from the Department of Statistics.

However, economists said if inflation stays stubbornly high, the MAS may allow further appreciation of the Singapore dollar to tackle increased costs. 

Economists are concerned over food supply disruption from agricultural economies and whether the US Federal Reserve may implement a third round of quantitative easing.

Aurobindo Ghosh, program director, SKBI, Singapore Management University, said: "Increase of liquidity is not necessarily a way of generating more growth if the banks are not lending to each other more enough then it is very difficult even with more liquidity to keep control on inflation because inflation is related to more liquidity in the market as well."

Original Source

Tuesday, July 10, 2012

Gold Price to Reach US$2000 This Year

By Rujun Shen SINGAPORE, July 10 (Reuters)

Gold prices edged down on Tuesday, pressured by a higher dollar as investors nervous about global economic growth piled into the greenback for safety. The dollar index hovered near a one-month high hit earlier this week, while the euro edged lower towards a two-year low against the greenback, after China released weaker-than-expected imports data that suggested decreasing domestic demand in the world's second-largest economy.
"The market is being a little pessimistic and cautious about the global economy, and investors are choosing the dollar as the top safety haven," said Li Ning, an analyst at Shanghai CIFCO Futures. "The strength in the dollar is in turn putting pressure on gold prices."
The Merrill Lynch analysts, however, expect gold prices to get a boost if the U.S. Federal Reserve loosens monetary policy later in the year. "Loose monetary policies, with a scope for more aggressive balance sheet use in the U.S. and Europe, will keep real rates in most reserve currencies low (or negative) during 2012. We continue to believe that this will allow investor demand to remain strong and prices to reach our $2,000/oz target by the end of the year."

Monday, June 25, 2012

Regulators to Classify Gold as Zero-Risk Asset


For the first time, unencumbered gold bullion is to be classified as zero risk, in line with dollar cash, US Treasuries and other explicitly government-guaranteed assets. If implemented, this will be an important step in the re-monetisation of gold and, other factors equal, should be strongly supportive of the gold price, both outright and relative to that for government bonds, the primary beneficiaries of the most recent flight to safety.
Well, on 4th June the Federal Reserve, OCC (Office of the Comptroller of the Currency) and FDIC (Federal Deposit Insurance Corporation) collectively circulated a memo asking for comment on their proposed changes to the regulatory capital risk-weighting framework. Section 11, ‘Other Assets’, specifies that a “zero risk weight” is to be applied to “gold bullion held in the banking organization’s own vaults, or held in another depository institution’s vaults on an allocated basis…”.[2]
Indeed, as I wrote in The Canary in the Gold Mine, if gold is re-classified as a zero-risk-weighted asset, “the price is likely to soar to a new, all-time high.”

Editor's Note : If what John postulates is true, during a crisis, gold will be pushed up as institutions and investors seek for zero-risk safe haven asset.

Excerpt from Original Source

Thursday, June 21, 2012

Hong Kong Considering to De-peg from USD

For over 30 years, Hong King’s currency has been pegged to the US dollar with hope that the reserve currency would bring monetary stability. However, with the current uncertainty in the USD, Hong Kong policy makers are weighing their options whether to peg to another currency or let the HKD be traded independently.
In the subsequent three decades, China's economy has grown from strength to strength, overtaking Japan as the world's second biggest income generator in 2010.
At the same time, growth in the US economy has slowed and its currency seems to be showing signs of a long-term downward trend.

With more than half of Hong Kong's exports going to the mainland, and with financial engagement between the two sides deepening, Hong Kong's currency system is likely to become ever more linked to China's.

Read More

Tuesday, June 19, 2012

2008 Financial Crisis - An Inside Job

Inside Job

Many of us still think that the Financial Crisis in 2008 was an accident. This video may change your perspective and perhaps even make you feel outraged.

Watch this Academy Award winning documentary directed and produced by Charles Ferguson. His work might just wakes us up from our ignorance. I personally believe that the 2008 crisis is not yet over. In fact, it was just the beginning and today we are moving towards the eye of the storm.

Watch full movie online

Tuesday, June 5, 2012

China Gold Import From Hong Kong Up by 62%


Hong Kong's gold shipments to mainland China in April jumped 62 percent to the second-highest level on record, while gold flow from China increased to an unprecedented level, official Hong Kong trade data showed on Monday.

Hong Kong shipped out 101,768 kg of gold to mainland China in April, and received 34,368 kg from China, which brings the net exports to 67,400 kg, a surge of 77 percent on the month, according to the data posted on the website of the government agency.
In the first four months of the year, Hong Kong sent a total of 237,287 kg of gold to China, and received 70,688 kg from the mainland. On an annualised basis, net gold exports to China could reach nearly 500 tonnes in 2012, compared with last year's 380 tonnes, according to Reuters calculations.

China has overtaken India as the world's top gold consumer in the past two quarters, with consumer gold demand in the first quarter of 2012 hitting a record high of 255.2 tonnes, said the World Gold Council.

Excerpt from Original Source

Tuesday, May 29, 2012

End Of The Road Documentary

In 2008 the world experienced one of the greatest financial turmoils in modern history. Markets around the world started crashing, stock prices plummeted, and major financial institutions, once thought to be invincible, started showing signs of collapse. Governments responded quickly, issuing massive bailouts and stimulus packages in an effort to keep the world economy afloat.

While we’re told that these drastic measures prevented a total collapse of our system, a growing sense of unease has spread throughout the population. In the world of finance, indeed in all facets of modern life, cracks have started to appear. What lies ahead as a result of these bold ‘money printing’ measures? Was the financial crisis solved, or were the problems merely ‘kicked down the road?’

The new film "End Of The Road" has just been released for public viewing, featuring Mike Maloney, Peter Schiff, Jim Rickards, Jim Puplava, James Turk, Eric Sprott and more.


Friday, May 25, 2012

Will Greece Exit the Eurozone?

Will Greece exit the Eurozone? These days the media are filled news on the possibilities and consequences of Greece exit from the Eurozone. But there is a minority who believes that Greece will not exit the Eurozone because the entire Eurozone is too big to fail. James Rickards is one of those. Primarily because the EU is a political project dominated by the Germans and not just an economical project. Here are some of his recent comments on twitter:
  • I've said all along, so one more time: #Greece not quitting, not kicked out. Euro not failing.
  • Europe evolving into export-investment power
  • Well, you just proved my point. If somthing cannot happen, it will not happen.
  • Why do people who believe that banks are too big to fail think that whole continents are not? Game is fixed, top down. Euro holds
  • Why do I say the Euro is "working as planned?" Because it's leading to integrated Europe under #German domination
Here was an interview he had with CapitalAccount.  You may jump to the 20th minute of the video where he shared his views on the Eurozone crisis.  I personally agree with his analysis on this possibility.

Thursday, May 24, 2012

Singapore Ranked Top for Searching 'Bank Run' in Google Search

According to Google Trend, Singapore ranked top among those who Google search for the phrase 'bank run'.  Is this a sign or some worries going on in the island? Perhaps there is a valid reason for Singapore banks and government to be worried.  

According to Moody's assessment in 2011, Singapore and Hong Kong will be the hardest hit countries in the event of an Europe banking crisis.  

“An escalation of the euro area crisis could quicken the retreat of European banks from the region,” said Jean-Francois Tremblay, Associate Managing Director at Moody’s Investor Service.

According to Zerohedge article (Why Stability Stalwart Singapore Should Be Seriously Scared If The Feta Is Truly Accomplished) published recently, Singapore's exposure to Euro banks' claim has reached 60% of GDP (citing BIS and BofA Merril Lynch Global Research). 

"Widespread risk aversion linked to fears of a Greek euro exit underscores the global nature of the European crisis. As we argued in the new year, the systemic threat of an untamed banking and sovereign crisis in Europe would push reluctant outsiders to preventively bolster IMF funding. This indeed materialized in March. However, both IMF and European firewalls still fall short of the amounts needed to protect Italy, Spain and the rest of the periphery. Global markets thus remain sensitive to rising probabilities of tail-risk scenarios."

With all these underlying global implications, do you think the world is going let Greece exit out of Euro?

Friday, May 18, 2012

First Japanese Pension Fund to Make Public Purchases of Gold

Okayama Metal & Machinery has become the first Japanese pension fund to make public purchases of gold, in a sign of dwindling faith in paper currencies.

Initially, the fund aims to keep about 1.5 per cent of its total assets of Y40 billion ($500 million) in bullion-backed exchange traded funds, according to chief investment officer Yoshisuke Kiguchi, who said he was diversifying into gold to “escape sovereign risk”.
With institutions warming to gold, too, demand could grow further.

“If you look at assets over the past couple of decades, equity has been a loser, while fixed income offers tiny coupons,” said Yoshio Kuno, Japan head of Newedge, the futures broker. “Gold is becoming an acceptable currency substitute.”

(Editor's comment : Sounds like investment institutions are beginning to look at gold.  I'm sure more and more will follow suit in view of the global financial instability.)

Excerpt from Original Source

Wednesday, May 16, 2012

Sudden Surge in Gold Bullion Demand in Asia

Wholesale market gold bullion prices dipped below $1550 an ounce for the first time since December on Tuesday – a fall of 7% since the start of this month – before regaining some ground by lunchtime in London.

"The bear channel support had been at $1581," say technical analysts at Scotia Mocatta, the bullion banking division of Bank of Nova Scotia.

"The next target is a full retracement to December's low of $1522 and there does not appear to be much standing in the way."

"Gold bugs [are] hiding deep in their gold caves pondering why gold isn't rallying in spite of [the] sharp spike in risk-off sentiment," said NYU professor Nouriel Roubini on Monday via the medium of Twitter.

Asian dealers however report a pickup in physical gold bullion demand.

"At the moment supply is a bit tight for immediate delivery," one Singapore dealer tells news agency Reuters.

"Refiners can't deliver immediate gold because there's a sudden surge in demand. We're seeing demand from India, Thailand and Indonesia."

Tuesday, May 15, 2012

Jim Rickards : Why Jamie Dimon Should Resign?

Jim Rickards : "...Banks are propped up by taxpayer guarantees and fatten their earnings at the expense of everyday American savers. Then they risk those earnings on bets that serve no purpose but to enrich the greedy executives who make them. When things go wrong those executives cry that markets are too complicated to manage. In fact, the bet is no more complicated than putting money on red at roulette. As a last resort, the executives hide behind the flag of free market capitalism when in fact they are the new welfare queens with government subsidies galore.

The whole thing is a disgrace. If Jamie Dimon had an ounce of decency, he would resign now. Not because his acts were criminal, but because he presides over a corrupt institution that extracts wealth from the many and directs it to the few with no value added and not even a nod in the direction of the hard-working American victims of this scam."
Excerpt from Original Source

Monday, May 14, 2012

Greece Crisis Getting Worse By The Day?

The battle between austerity and democracy continues to get worse in Greece.  Greece's exit from Eurozone is deemed 'inevitable' by analyst today.  How will this turn out socially and financially to the entire Europe and the world?  Below are the views expressed by those living in the 'eye of the storm'.

Greece on Fire

Germans dare Greeks to Kickstart Euro Exit

Sunday, May 13, 2012

Euro Money Printing will Drive Up Gold Prices

"Those investors panicking now and selling their gold and silver will feel as sick as dogs when they see   what happens next to prices. For after a bleak patch lasting at most a couple of months the eurozone authorities will start their money printing presses rolling and hey what is the one money that they can never print? ...  

Now consider what has to happen for gold and silver not to rise in price. The eurozone has to make a stand against its debts and let countries fail and whole populations fall into ruin. In the world of muddle-through committee politics that is never going to be allowed to occur, except perhaps in the special case of Greece who should never have been allowed to join the European Union let alone the eurozone..."
Excerpt from Original Source

Wednesday, May 9, 2012

Time to Jump Back into Gold

As of today, gold has been hammered down and stood at $1,592.90 an ounce.  Is this the time to jump back into gold?  UBS’ Edel Tully suggests three major factors that may call for it, namely : 
  • A weak U.S. economy
  • Uncertainty and anti-austerity in Europe
  • Indian demand for gold is coming back

Read Article - Why Gold Could Be Setting Up For A Killer Comeback

Tuesday, May 8, 2012

China Quietly Building Gold Reserves

Gold Imports From HK Soar By 587% In First Quarter.  Bloomberg reports, "Mainland China's gold imports from Hong Kong surged more than sixfold in the first quarter, to 156 metric tons, adding to signs that the country may displace India as the world's largest consumer of the precious metal on an annual basis." And the punchline: "The purchases through Hong Kong may signal that the mainland is accumulating reserves, London-based brokerage Sharps Pixley Ltd. said in February. The nation last made its reserves known more than two years ago, stating them at 1,054 tons." 

Excerpt from Original Source

The Europe Situation is Certain to Get Worse

Check out this interview with Alasdair Macleod, a weekly writer to GoldMoney.com and publisher of the FinanceAndEconomics.org as he shared his views on the European debt crisis with Chris Martenson on how the crisis originated and why the problems are not going to get better.  

In this interview, he provided also painted a picture of many well-meaning but anxious people who are trying hard to apply the wrong solutions to the incorrect diagnosis because of their Keynesian understanding of Economics.  One of which is their view of the economy using the GDP alone as a measuring indicator and Alasdair explained in simple terms why this was the wrong indicator they have been using.

Wednesday, May 2, 2012

Egan-Jones Cuts Spain's Rating From BBB- To BB+

"Monday, Spain said its economy contracted for the second-straight quarter during the first three months of the year putting it officially into recession. The country's economic weakness and high unemployment mean costs for social payments are surging, which makes its debt load even more unmanageable.
Bond investors have pushed yields on Spanish debt sharply higher because of the increasing potential risk for the country to default.
Egan-Jones estimated there is a 3% chance Spain will default on its debt in the next year. It projected Spain's rating will eventually fall to double-B.
Spanish 10-year debt yielded 5.75% Monday, according to Tradeweb. It yielded 4.63% three months ago."
Excerpt from Original Source

Monday, April 30, 2012

Gold Value Today

"2009 was the year when gold ETFs really broke into the mass consciousness...

Yet by 2011 the market had collapsed: people were buying much, much larger quantities of physical bullion and coins, but the popularity of ETFs had greatly slumped.

This is even clearer when the ETF market is expressed as a percentage of the physical market. While in 2009 ETFs looked poised to overtake the market in physical bullion and coins, by 2011 they constituted merely a tenth of the physical market:

So what does this say about gold? I think it is shouting and screaming one thing: the people are slowly and subtly waking up to gold’s true role...."

Original Source

Thursday, April 26, 2012

Gold Standard Inevitable, Gold Price 10000/oz

Check out Reuters TV's 5-min interview with John Butler (author of book, ‘The Golden Revolution : How to Prepare for the Coming Gold Standard.’ ) on the gold price as he thinks that returning to some form of Gold Standard is inevitable.   According to Butler if one of the BRICS countries be the first mover to peg their currency to gold, this could lead to a run on the US dollar and financial assets and could cause the dollar to lose 20% in 24 hours as investors pour into real assets such as oil and gold. surprising the world and the United States.  In particular, he points out that Russia may be that country to make that first move.   

Wednesday, April 25, 2012

Is it Revenue or Spending that causes Deficit?

Another succinct clip by Professor Antony Davies to breakdown the complex problem of US deficit problem in simple layman terms.  What is the real problem of the US debt and fiscal deficit problem? Is it the lack of Revenue or the over Spending?

Tuesday, April 24, 2012

Exponentially Unfixable Course

I just watch this presentation by Chris Martenson in Madrid.  It was basically a brief summary of his full course called the Crash Course.  It was an impressive presentation where he gave a very layman understanding of the current economic situation.  The most impressive segment was the parts where he explained how things are going EXPONENTIAL in nature - whether it is US debt or money supply with empirical evidence to support his thesis.  And how all these are going to implode. This is a must watch video.  The entire video is more than 1 hour in length but his presentation is only the first 35mins or so.

Monday, April 23, 2012

China Gold Imports and Gold Price

"A year ago China imported about 5 tons (t) gold a month through Hong Kong. That's been fairly consistent over time. We can track 5–15 t/month through Hong Kong. But around last June, it suddenly jumped to 25 t for the month. Then it went to 40 t. Then it went to 55 t. In November, it peaked at 100 t. If it kept up that pace, which it probably won't, that would be 1,200 t/year. That's about 45% of yearly mine supply in the world. So China is one of these wild cards because it hadn't really been out there in the market like this. 

If China does with gold what it's been doing with other commodities, it could keep that 11-year positive cycle going by looking for gold outside its borders. We're going to get a better picture of how much it truly wants to buy. The numbers could be pretty staggering and could be multiples of what we saw last year and the year before."

Tuesday, April 17, 2012

China Promoting Internationalization of RMB Backed By Gold

Image by Darren Wamboldt/Bergman Group 
China has been building the foundations for the RMB’s use internationally over the last few years. The latest milestone has the China Development Bank planning to offer loans in renminbi to the other BRIC countries, Brazil, Russia, India – as well as South Africa.  Having an international currency promotes trade, cutting the US dollar out of the equation. The ultimate goal may be to pitch the renminbi as a reserve currency to compete with – or displace – the US dollar.  To really sell the RMB as an international currency, it helps if it is backed with a significant amount of gold. China would never openly admit this, but a snippet from an embassy in China, via a wikileaks story, as good as confirmed it last month:

“The U.S. and Europe have always suppressed the rising price of gold. They intend to weaken gold’s function as an international reserve currency. They don’t want to see other countries turning to gold reserves instead of the U.S. dollar or Euro.

Therefore, suppressing the price of gold is very beneficial for the U.S. in maintaining the U.S. dollar’s role as the international reserve currency. China’s increased gold reserves will thus act as a model and lead other countries towards reserving more gold. Large gold reserves are also beneficial in promoting the internationalization of the RMB.“

Read Full Article : How China is Driving Gold Price

Greek and Italy Debt running out of control

Hedge Fund CEO Mike Platt Interviewed by Bloomberg on 15-12-2011 on the Euro Crisis. 
Mike thinks that the Greek and Italy Debt is running out of control and any country in Europe could be the next Greece.  His company, Bluecrest Capital Management, now keeps their money in US and German bonds to hedge themselves from a full blow out of the crisis.   

Although I do not agree with his strategy to go into bonds but he sure sounded pessimistically serious and convinced that a big crisis (worst than 2008 scenario) is coming.

Monday, April 16, 2012

Print Our Own Money?

Since the dollar is being devalued constantly with the massive currency printing these days, should we not print our own money? An interesting idea explored by John Stossel.

Thursday, April 12, 2012

The State Bank of Vietnam is instituting a de factonationalisation of Vietnam’s gold market, in an effort to restore confidence in the country’s currency – the dong
According to government statements, these measures are necessary to stop the flight from the dong. Vietnam's current account deficit has grown in the wake of the global financial crisis, and more and more Vietnamese citizens have been buying gold in order to preserve purchasing power. Record-high inflation has encouraged the use of gold as an unofficial currency.

Read More

Tuesday, April 10, 2012

Ten Mins After the Titanic Struck the Iceberg


Hubris led many to declare it financially unsinkable even as its fundamental design was riddled with fatal flaws and the human pilots in charge ran it straight into the ice field at top speed.
We have some time left before the ultimate fate is visible to all. Ten minutes after the collision, the Titanic's passengers had 2 hours and 30 minutes before the "unsinkable" ship sank. How much time we have left is unknown, but the bow of the ship will be visibly settling into the icy water within a year or two--and perhaps much sooner. 

Saturday, April 7, 2012

What May Happen to Gold and Mining Stocks if We Enter a Recession or Depression?

By Jeff Clark, Casey Research

... Here's an updated snapshot of the gold price during each recession since 1955.

Clearly, one should not assume that gold will perform poorly during a recession. Even in the crash of 2008, gold still ended the year with a 5% gain. And with the amount of currency dilution we've undergone since that time, it seems more likely gold will rise in any economic contraction than fall. Indeed, if the response of government to a recession is more money printing, precious metals will be a critical asset to have in your possession.

Read More

US Credit Rating Cut from AA+ to AA

Rating firm Egan-Jones cuts its credit rating on the U.S. government to "AA" from "AA+" with a negative watch, citing a lack of progress in cutting the mounting federal debt.

"When debt-to-GDP  exceeds 100 percent, a country's financial flexibility becomes increasingly strained," Managing Director Sean Egan wrote in his report on the downgrade. "For the first time since World War II, U.S. debt exceeds 100 percent." 

... Read More

Wednesday, April 4, 2012

What's Wrong with Printing More Money?

Since many economies in the world (especially in US) are running in budget deficits, what's wrong with more money printing ? Prof Antony Davies brings us back to basics.

Tuesday, April 3, 2012

Fed Will Be Powerless to Stop What's Coming

By Graham Summers
From the Scott Stantis archive at the Chicago Tribune.

Over the last two years, I’ve been caught into believing a Crash was coming several times. In some ways I was right: we got sizable corrections of 15+%. 

But we never got the REAL CRASH I thought we would because the Fed stepped in.

So what makes this time different?

Several items:

1)    The Crisis coming from Europe will be far, far larger in scope than anything the Fed has dealt with before.
2)    The Fed is now politically toxic and cannot engage in aggressive monetary policy without experiencing severe political backlash (this isan election year).
3)    The Fed’s resources are spent to the point that the only thing the Fedcould do would be to announce an ENORMOUS monetary program which would cause a Crisis in of itself.

Let me walk through each of these one at a time.

Regarding #1, we have several facts that we need to remember. They are:

1)    According to the IMF, European banks as a whole are leveraged at 26 to 1 (this data point is based on reported loans… the real leverage levels are likely much, much higher.) These are a Lehman Brothers leverage levels.

2)    The European Banking system is over $46 trillion in size (nearly 3X total EU GDP).

3)    The European Central Bank’s (ECB) balance sheet is now nearly $4 trillion in size (larger than Germany’s economy and roughly 1/3 the size of the ENTIRE EU’s GDP). Aside from the inflationary and systemic risks this poses (the ECB is now leveraged at over 36 to 1).

Is The Weimar Hyperinflation Happening Today?

Weimar Debt
Weimar Debt Chart
Source : www.nowandfutures.com/weimar.html
Well below we can see startling similarities between mistakes made in the 1920's that created and strengthened the Weimar Event along with many of the same mistakes being made by the United States and many other world governments today.

US Debt
US Debt Chart
Source : www.brillig.com
• The US Government's unwillingness to raise taxes to support its 10+ year war costs. Looking back at Weimar the same parallel can be seen, as their lack of raising taxes was a huge factor in the lack of funding for their post war re-construction and war reparation payments.

• High prolonged unemployment.
• Both the United States and 1920's Weimar Germany have operated with huge budget deficits and huge deficit spending.
• 40% of every dollar the US Government spends today is borrowed, while at the time Weimar's Government was borrowing 50% to support its costs.
• Both have kept interest rates way below the rate of inflation.
• Both creating rapidly increasing money supplies
Increasing the money supply is one of the most devastating factors in the creation of hyperinflation. Central Banks such as the US Federal Reserve are responsible for the creation and distribution of the paper currency they print. This 2-way responsibility creates an unbalanced supply and demand for printed money or fiat currency. With products and services attaining minimum growth at best, they do not match the "additional" amount of printed money, so the intrinsic value of this excessive money supply decreases.
Just as Weimar Germany had done many years ago, the Federal Reserve has been creating new money too, out of thin air. More recently during the last two "quantitative easing" bond buying schemes, operation twist and international dollar swaps programs with foreign central banks. Soon most likely, round three of the quantitative easing program will be coming out from the Fed. This money creation is done through speculative bets on the books of private banks; furthermore it produces nothing of value for the US Economy...
Read More

Monday, April 2, 2012

Consequences & Dangers of Printing Money

What are and will be the consequences and dangers of all the money printing around the world today in US, UK, Japan and Europe? Why are the price of oil, gasoline and gold going up? Where will all these lead to? This video presentation answer these questions simply using whiteboard marker illustrations.