Thursday, December 5, 2013

SGX & HKEx to Promote Internationalization of Chinese Yuan

It was a Memorandum of Understanding signed by representatives of the Singapore Exchange and Hong Kong Exchange. Their purpose is to join forces to push out more financial products denominated in Chinese Yuan.  This is but another sign of the US Dollar losing its appeal.

Friday, November 22, 2013

Latest - China To Stop Buying US Debt

For years, China has been accumulating dollars and working hard to keep the value of the dollar up and the value of the yuan down. One of the goals has been to make Chinese products less expensive in the international marketplace. But now China has announced that the time has come for it to stop stockpiling U.S. dollars. And if that does indeed turn out to be the case, than many U.S. analysts are suggesting that China could also soon stop buying any more U.S. debt...
For years, China has been systematically propping up the value of the U.S. dollar and keeping the value of the yuan artificially low. This has resulted in a massive flood of super cheap products from across the Pacific that U.S. consumers have been eagerly gobbling up.
The People’s Bank of China said the country does not benefit any more from increases in its foreign-currency holdings, adding to signs policy makers will rein in dollar purchases that limit the yuan’s appreciation.
“It’s no longer in China’s favor to accumulate foreign-exchange reserves,” Yi Gang, a deputy governor at the central bank, said in a speech organized by China Economists 50 Forum at Tsinghua University
It isn’t going to happen overnight, but the value of the U.S. dollar is going to start to go down, and all of that cheap stuff that you are used to buying at Wal-Mart and the dollar store is going to become a lot more expensive.

But of even more importance is what this latest move by China could mean for U.S. government debt. As most Americans have heard, we are heavily dependent on foreign nations such as China lending us money. Right now, China owns nearly 1.3 trillion dollars of our debt. Unfortunately, as CNBC is noting, if China is going to quit stockpiling our dollars than it is likely that they will stop stockpiling our debt as well…
And just this week there was another major announcement which indicates that China is getting ready to make a major move against the U.S. dollar. According to Reuters, crude oil futures may soon be priced in yuan on the Shanghai Futures Exchange…

The Shanghai Futures Exchange (SHFE) may price its crude oil futures contract in yuan and use medium sour crude as its benchmark, its chairman said on Thursday, adding that the bourse is speeding up preparatory work to secure regulatory approvals.
If that actually happens, that will be absolutely huge. China is the number one importer of oil in the world, and it was only a matter of time before they started to openly challenge the petrodollar.

More from Original Article

23 Countries Setting up Swap Lines to Bypass US Dollar

Here is another sign of the losing confidence of the US Dollar.  Here is an excerpt.

On Nov. 18, a former head trader for a major financial institution issued a harbinger and stated that 23 countries, and 60% of the world's GDP, are right now setting up new swap lines which bypass the dollar, SWIFT, and the BIS, and will usher in a new global currency system which will kill the dollar.
The list of the 23 countries which are creating new swap lines outside of the dollar include China, Russia, India, and surprisingly, Germany, France, and the United Kingdom. This means that the Eurozone itself is abandoning the dollar, and preparing for transition to a new central banking system.
One year ago, China, along with the BRICs nations of Brazil, Russia, India and South Africa, loaned money to a new financial institution they established and labeled the BRICs bank. This bank was created with the intention of bypassing the dollar, and allowing free trade to occur between nations without the need to trade for dollars first, as is currently the format under the petrodollar system. In fact, the new BRICs bank will function both as a bank of international settlement, as well as a lender of last resort, eliminating the need for the BIS and IMF, which currently reside under dollar dominion.
What started in September of last year, when an agreement between China and Russia ended the dollar's stranglehold over oil and how it was purchased, the past 14 months have seen a momentous rush towards setting up the infrastructure to replace the dollar completely in global transactions. And with 23 countries, including those from the BRICs nations and the Eurozone, preparing for new swap lines outside of dollar hegemony, the fuse has been lit on the dollar's death rattle, and the when has changed into the now.

Friday, November 15, 2013

China is World's Top Gold Buyer

China has raced past India to become the world's top gold consumer.

Gold prices may have bottomed out earlier this year, but the precious metal hasn't lost its luster among Chinese consumers.

China has purchased 798 tonnes of the precious metal so far this year, compared to India's 715 tonnes, according to the latest World Gold Council report...

"Rising disposable incomes and a growing middle class in China is driving demand," said Albert Cheng, the World Gold Council's Far East Managing Director. "Consumers continue to invest in higher carat and heavier pieces of gold jewelery."

Gold also ranks alongside stocks and property as a favorite of investors in China, and under-performance in those markets has boosted gold, Cheng said.

Wednesday, November 6, 2013

There is No Reason to Restrict the Renminbi Globalization, says Jim Rogers

On 08 Sept 2013, at the 11th Captial Forum on the 17th China International Fair for Investment & Trade held in Xiamen, China, 
Mr. Rogers said that “there are many wisdom and ambitions people in China, I feel very optimistic about the future of China and its currency” “The only currency I can see that is on the rise and can replace the US dollar some day is the Renminbi."...

Mr. Rogers added that China should "globalize the Renminbi in the next 20 minutes rather than the next 20 years". He thought that China is currently the world’s second largest economic entity as well as the country with most amount of foreign exchange reserve, “there is no reason to restrict the Renminbi globalization. It is good for all Chinese people, as Renminbi globalization means all investors worldwide can invest in China, which will bring great market opportunities to China’s commodities. Stock price in China will rise, China will become the world’s center for commodity transaction, China’s financial market will be the best in the world. The US dollar is a troubled currency, Renminbi globalization can’t wait too long, now it is an opportunity for it. ”
Mr. Rogers said that “the significant decline of market value in mining industry is a very good opportunity for people who are familiar with this field. If the value drops to 10% of original value, I am going to take some actions.”

Tuesday, October 22, 2013

China Allows Direct Trading Between Currencies With Singapore

SINGAPORE: China and Singapore have agreed to allow direct trading between each other's currency, Singapore's central bank said on Tuesday.

The move, along with other agreements on financial cooperation, is expected to bolster Singapore's status as a leading offshore trading centre for the Chinese yuan, officially called the renminbi (RMB).

China will also grant Singapore-based investors a 50-billion-yuan ($8.2 billion) investment quota under its Renminbi Qualified Foreign Institutional Investor programme, MAS said.

This would allow investors based in the city-state to use the yuan to invest in Chinese stocks and bonds.
Its managing director Ravi Menon added: "Financial ties between the two countries have deepened considerably and Singapore is well placed to promote greater use of the RMB in international trade and investment in the years to come."

China's rise as the world's second biggest economy has seen the yuan take on a bigger role in international financial markets.

(Editor's comment : This is another clear sign that nations are slowly moving away from the US Dollar reserved currency trade.)

Tuesday, October 15, 2013

China to Report 5,000 tonnes of Gold Reserves Next Year

China will shock the world with an announcement that it has accumulated 5,000 tonnes of gold next April, according to Jim Rickards...

His prediction is that come April 2014, China will report gold reserves of 5,000 tonnes. This will send the price of gold spinning upwards, which is why the Chinese have done this secretly of course and in collusion with the bullion banks most probably.

He continues: ‘That should be an earthquake. Because even the gold deniers, the gold doubters, are going to have to sit up and take notice. Either the Chinese are dopes, which they’re not, or people will start to get gold, which I think they will.’

‘The world of $4,000 gold is the world of $400 oil, $100 silver, higher prices for copper, corn, wheat and everything else. In other words, it’s a world of very high inflation in which the value of your retirement funds and your annuities, etc., have been wiped out.

Monday, October 14, 2013

Why China Is Calling For A De-Amercanized World

China's official news agency has called for the creation of a "de-Americanised world", saying the destinies of people should not be left in the hands of a hypocritical nation with a dysfunctional government.
"As US politicians of both political parties are still shuffling back and forth between the White House and the Capitol Hill without striking a viable deal to bring normality to the body politic they brag about, it is perhaps a good time for the befuddled world to start considering building a de-Americanised world," the editorial said.
"The developing and emerging market economies need to have more say in major international financial institutions including the World Bank and the International Monetary Fund, so that they could better reflect the transformations of the global economic and political landscape," the editorial says.

It also called for an end to the use of the US dollar as the international reserve currency, a step that would ensure the international community could maintain a safe distance from the side-effects of domestic political turmoil in the United States.

Read Original Source

Watch the video here from Bloomberg that talks about this as well

Tuesday, September 24, 2013

Singapore Pushing To Become Asian Gold Hub

The wealthy Asian city state of Singapore which has become one of the world’s most important financial centres in recent years continues its push towards making Singapore a global gold hub to rival New York and London.

Singapore has been trying to persuade Thailand's top five gold traders to establish footholds in the city-state as it aims to become a centre for gold price referencing in Southeast Asia before the ASEAN Economic Community (AEC) takes shape in 2015, according to the The Nation.

It reports that the Singaporean government dispatched a team to Thailand to offer relaxed regulations and tax incentives to traders who open offices in that country. It wants to become a reference centre for global gold prices....

The very negative treatment of gold by the government in India is encouraging companies involved in offering gold and gold related investments in India, to consider moving to Singapore.

In October 2012, in a shrewd move, the Singapore government removed a sales tax on gold and silver. Already, there are significant flows of gold into the city state as wealthy investors, ultra high and high net worth individuals and family offices are opting for Singapore as a safe location for gold storage.

Excerpt from Original Article

Saturday, September 14, 2013

Is China Seeking to Replace the World Currency with Yuan?

China has been buying and hoarding gold like a hungry dragon. Perhaps it is taking a leap forward to control the world currency and to replace it with the Chinese yuan, said Dr. Thorsten Pattberg, the China expert at the Peking University.

China is vowing to make more reforms, among them cutting red tape and establishing the yuan as a world currency. The 7th Annual Meeting of the New Champions is opening in the Chinese city of Dalian, the gathering has become known as a ‘summer Davos’. RT has talked to Dr. Pattberg about China’s prospects for introducing a new world currency.

Here is an excerpt of the interview on RT.

RT: Do you think when China says it wants to make the yuan a global alternative to the dollar, is there any possibility of that happening at some point?

Thorsten Pattberg: Yes, it’s perfectly reasonable to think that the Chinese want to see their currency become the next world currency, there’s a plan. And of course China at the moment is purchasing more and more gold, this also plays into this. We heard they recently purchased several hundred tons of gold through Hong Kong, the trading hub. And of course if you hoard gold like a dragon, this is a lot about prestige. The mere presence of gold in your country gives rise to even more self-confidence and to this bling-bling sensation that China is really up to something. The mere intention to buy more gold in the future will certainly have an impact on the rise of gold prices in the world. So China is taking a leap forward to control the world currency and to replace it with yuan.

HSBC Global Research Raised 2013 Gold Price Forecast

REUTERS – HSBC Global Research raised its 2013 gold price forecast and said physical demand is becoming a major driver for the yellow metal.

The bank lifted its gold price outlook for this year to $1,446 per ounce from $1,396, and kept its 2014 forecast unchanged at $1,435 an ounce. Spot gold was trading at $1,330.66 at 17:36 GMT on Thursday.

“Physical demand for jewelry, coins, and bars from China, especially, are supportive and becoming a key driver,” HSBC said in a note on Thursday.

The Indian Government's Gold Folly

Article by Alasdair Macleod of

"Until recently the Indian government has allowed families to buy imported gold, having repealed the Gold Control Act in 1990. The lesson from this legislation was that it merely drove gold dealing onto the black market, and did nothing to stop individuals getting hold of gold if they wanted to.

However, the Indian government is not fully in favour of free markets and seeks to control many aspects of Indian life, including gold ownership. This is why the State and the financial sector (which is licensed by the State) are now encouraging ordinary people to buy Exchange Traded Funds and e-gold instead of physical bullion.

So what is the government’s real agenda? There are three possible considerations...."

Thursday, September 5, 2013

China Import Gold from Hong Kong Climbed

Gold shipments to China from Hong Kong increased in July as importers took advantage of local prices that were an average 2.1 percent higher than global markets and as mainland investors bought jewelry and coins.
Mainland buyers purchased 129 tons in July, including scrap, compared with 113 tons in June, data from the Hong Kong government showed today...

China’s purchases in July were 70 percent higher than the 75.8 tons in the same month last year, according to the data from the Hong Kong Census and Statistics Department. Mainland China doesn’t publish such data.

Exports of gold to Hong Kong from China were 16 tons in July, according to a separate Statistics Department statement, compared with 11.7 tons in June and 30 tons in July 2012.

Friday, August 2, 2013

ANZ Bank - Latest to Open Gold Vault in Singapore

Singapore's rare AAA rating is one of the reasons why gold is finding its way here, says ANZ bank which is the latest to open a gold vault here.

The 50-tonne facility will be geared towards its institutional clients such as banks and sovereign wealth funds, as compared to other banks such as Deutsche Bank and UBS whose recently-opened vaults are for both institutional and private clients.
Gold is also growing in popularity as the wealth management sector gains traction in Singapore, adding to the success that the city-state has already found in commodities.

While part of the commodity complex, gold is often used as a store of wealth and a portfolio diversification tool.
JP Morgan Chase was the first bank to launch a vault in Singapore in 2010.

ANZ becomes the fourth bank to start a gold vault here, and is unlikely to be the last.

(Editor: Dear readers, this piece of news should tell us that real physical gold remains in demand despite the drop in paper gold price.  Otherwise, why would more and more banks open up gold vault in Singapore?)

Tuesday, July 23, 2013

Singapore Central Bank Says Rising Household Debt 'Worrying'

Singapore's central bank expressed concern at the growing mountain of household debt and surging property prices, saying they posed "significant risks" to the country's financial system.
While the city-state's banking system remains sound, the build-up in household debt was "worrying", said Ravi Menon, managing director of the Monetary Authority of Singapore (MAS).
He said a growing number of households have over-borrowed in the property market, largely due to low interest rates and stretched loan tenures.
"The combination of low interest rates, growing leverage and surging property prices poses significant risks to financial stability," Menon said at a news conference.
Global credit rating agency Moody's last week downgraded its outlook on Singapore's main banks from "stable" to negative", citing rapid loan growth and rising real estate prices.
Moody's said these "have increased the probability of deterioration in the banks' credit profiles under potential adverse conditions in the future".
Menon said an estimated 5 to 10 percent of borrowers in Singapore "have probably over-leveraged on their property purchases, that is, they have total debt service payments at more than 60 percent of their income".

Read Original Article

Wednesday, July 3, 2013

World's First Physical Precious Metals Exchange Launches in Singapore

SINGAPORE: Precious metal investors now have a new platform to trade with the launch of the Singapore Precious Metals Exchange (SGPMX).

It is the world's first precious metal exchange that is fully backed by physical precious metals.

With as little as US$1,000, investors can buy, store, transport and trade precious metals like gold and silver.

The whole process is as easy and secure as trading in other financial instruments.

SGPMX said its customer base is growing. It currently has over 10,000 customers with about 1,000 customers from Singapore and 4,000 from Japan.
Investor and author, Jim Rogers, are among those that started to trade on the new exchange by buying more gold on Wednesday.

He is not concerned about the recent correction in gold prices and said he will keep buying more gold.

“If gold price goes down 50 per cent from its high, that will be US$960. Why can't gold sell between US$900 and US$1,000? I know it can and perhaps it will. If that happens, I hope I am smart enough to buy a lot more,” said Rogers.

Editor : This exchange sounds similar to founded by James Turk except that it also enables investors to carry out peer-to-peer buying and selling of precious metals.  All these setup points to the fact that the demand for gold and silver continues to remain bullish despite the crush of the price of gold (paper) in the futures and derivatives market.

UBS Starts Gold-Vault Service in Singapore

Switzerland’s biggest bank, started storing gold for wealth-management clients at a facility in Singapore, citing interest from investors in the region even after the metal slumped into a bear market.
UBS joins Deutsche Bank AG and JPMorgan Chase & Co. in offering storage services in Asia, where China may surpass India as the largest user this year. Bullion fell to a 34-month low on June 28 in a rout that’s erased $66 billion from the value of investor holdings. Goldman Sachs Group Inc. forecasts further declines as the U.S. Federal Reserve may withdraw stimulus.

“Notwithstanding the drop in gold prices, we are still receiving queries on the offering from clients who are keen to reap the benefits of asset and geographical diversification,” Kok said in an e-mailed reply to questions.

The Singapore government has been promoting the country as a bullion-trading hub, removing a 7 percent sales tax from investment-grade precious metals last year. Millionaires in Asia outside Japan will create $7 trillion in new wealth by 2016, boosting the share of global riches from emerging markets to about 37 percent by that year from 24 percent at the end of 2008, according to McKinsey & Co.

Sunday, June 30, 2013

Russia and China Building their Gold Reserves

Western economic commentary on China and Russia is usually coloured by monetarist assumptions not necessarily shared in Moscow and Beijing. For this reason, Russian and Chinese fiscal and monetary policies are misunderstood in financial markets, as well as the reasons their governments buy gold.

China has been notably relaxed about her own people acquiring gold, and the government itself appears to be absorbing all of China’s mine output. Russia is also building her official reserves from her own mine supply. The result over time has been the transfer of aboveground gold stocks towards these countries and their allies. The geo-political implications are highly important, but have been ignored by western governments.

China and Russia see themselves as having much in common: they are coordinating security, infrastructure projects and cross-border trade through the Shanghai Cooperation Organisation. Furthermore, those at the top have personal experience of the catastrophic failings of socialism, which have not yet been experienced in Western Europe and North America. Consequently neither government subscribes to the economic and monetary concepts prevalent in the West without serious reservations.

Monday, June 10, 2013

Deutsche Bank to Open 200-tonne Gold Storage Facility in Singapore

SINGAPORE (Reuters) - Deutsche Bank is opening a gold storage vault in Singapore that can hold up to 200 tonnes of the metal as it looks to capture surging demand for bullion in Asia.
"This offering will encourage a significant development in a Singapore-based precious metals market," Ronan Donohoe, Deutsche Bank's global head of metals and dry bulk trading, said in a statement.

Deutsche Bank already has precious metals trading, financing and physical distribution operations in Singapore. The bank said the new vault would be one of the largest physical holdings of gold in the city state.

Tuesday, June 4, 2013

China Want the Yuan to Emerge as a Gold-Backed Currency in the World

Philippa Malmgren is an insider's insider. She was Special Assistant to the President for Economic Policy on the National Economic Council recently commented:

"The most interesting piece of the puzzle is that the Chinese have emerged as the biggest buyer of gold, mainly in large off market. They want the Yuan to emerge as a hard, gold-backed currency in a world where everyone else has chosen to inflate and devalue. The recent bilateral currency deals with Australia, France Russia and Singapore, and many others, reflect this desire to displace the USD as the world's reserve currency. It may be an interesting and long race between the Chinese reaching for convertibility and the Western central banks straining credibility."

So what is her advice to investors:

"Gold bulls have a rare chance to double up now. Gold bears will have a hard time doubling down from a record profit. Meanwhile, apparently the Indians and everybody else in the emerging markets recognizes a good deal when they see it. As inflation pain continues to make headlines from high tomato prices in Brazil to the same for onions in India, no emerging market investors have any illusions. Inflation for them is here for the duration. A gold backed Yuan is increasingly sounding like a sensible idea."

Friday, May 31, 2013

The Real Price of Gold is More Than the Gold Price

Watch how William Grants presented his Mathematical perspective on the world economics.  This was presented on 21 May 2013 at Marina Bay Sands in Singapore.  He started off by bringing us back to the basics of Maths (see how he proves 1=0.999...)

No matter what the media and governments in the world are telling us about the economic recovery, mathematical facts are facts.  In the video, he showed the inevitable mathematical and statistical facts of what is really going on in the world economics.   Some of the key points include:
  1. Outside influence (QE) are dangerous things
  2. If it makes no sense, it is nonsense.
  3. The gold price is not the price of gold
A very educational content for anyone who wants to understand the current world economics.  The more interesting presentation starts at the 7th minute in case you like to skip the introduction.

Tuesday, May 28, 2013

Japan's Interest Payment is Compounding despite their efforts to keep interest rates low

Despite what the media is still telling us about Japan's economic recovery, the facts don't lie.  Regardless of any growth they are having in their GDP numbers, Japan's interest payment is getting out of control due to its compounding effect.  Could Japan be the first domino to fall? This is what Otterwood observed on the Japan Ministry of Finance website.  Anyone who understands should be concerned.

Wednesday, May 22, 2013

4 Signs That We're Back in Dangerous Bubble Territory

By Chris Martenson:

Here are the four things that convince me that we are in truly bubbly territory:

Sign #1: Junk Bond Prices at Record Highs
The Fed, et al., have been buying up all of the 'safe' bonds, with the twin intents of driving down interest rates and chasing investors into riskier assets. With lower yields comes (hopefully) more borrowing; and when investors move towards riskier assets, this drives up the equity markets – which, as the thinking goes, will paint a rosier picture of the economy plus boost consumer confidence and spending.

Sign #2: Junk Sovereign Debt Being Chased to New Highs
It was just over a year ago when Greece ten-year debt was yielding a whopping 30%...Today? Greek ten-year debt is under 10%.

Sign #3: It's Not Official Until It's Denied
The poster child for a bubble market has to be Japan, where the main stock index of the island nation, the Nikkei, is up an astonishing 70% in the past six months

Sign #4: Making Up Crazy Excuses
My final sign of that we are in bubble territory is when the folks who consider it their job to make sense of the high and spiking prices offer up thin, sometimes stretched-to-the-breaking-point, rationalizations for why the current price action make sense.

Read full article

Wednesday, April 24, 2013

Worldwide Silver Shortage Pushes Silver Eagles Premiums to All Time High

In just the past few weeks the premium has nearly DOUBLED, despite the silver price dropping sharply and investor sentiment supposedly at multi-year lows. The manager of the shop told me the silver shortage was worldwide and it was more difficult than ever to secure supply and keep up with demand.
Ebay prices are even higher at around $32 per ounce for silver eagles or $9 over spot price. This is a premium of roughly 40%! Silver eagles from a few years back are selling for $700 or more per roll of 20, which is $12 over the spot price and a premium of more than 50%.
Whatever the truth may be, the disconnect between paper prices and free-market real-world prices has never been greater. There is definitely something strange happening in order to create an environment where increasing demand and supply shortages somehow results in lower prices. This breaks the most fundamental economic law of supply and demand, supporting claims by GATA and others that gold and silver prices are being manipulated.

PS. I had the same experience and observation while making my own silver bullion purchase.

Wednesday, April 17, 2013

Paper Gold Silver Price Down but Physical Gold Silver Demand Up

Although the price of Gold and silver is down in the recently correction, the demand for physical gold and silver is up everywhere, even in Singapore.  Experience precious metal investors will know that this is due to the discrepancy between the paper gold silver market and the physical gold and silver market.  There are actually 2 separate markets going on.  The current smack down in the paper price is causing a surge in demand for the physical metals.

Look at website, all the coins have been snapped up.

So I had to look for another dealer - to find silver coins.  When I got there, the seller Dennis told me that all the Monster boxes have been snapped up.

Then I read in a reuter's report that says, "People are actually buying everything, gold bars, gold coins. People are rushing to get a hand on it. We have a problem meeting the demand because we are unable to get new supply," said Brian Lan, managing director of GoldSilver Central Pte Ltd in Singapore. "There's a huge backlog. It's the same for silver. So far sentiment seems to be improving. Even the price has more or less stabilised."

Friends, we should not be confused and discouraged.  There are 2 different gold/silver markets functioning here.  The paper gold silver market is not reflecting the true market price of the metals because it is a speculative market.  One day the real physical market will prevail when people lose confidence of the financial system in view of all the QEs that are going on the Japan, US and Europe.   

This is one of the best opportunity to stack up more.   People like Jim Rickards, Jim Rogers, Marc Faber, Bill Gross (bond king) Peter Schiff, Eric Sprott, James Grant, James Turk are still bullish about gold and silver.

Finally check out this recent related blog - The Real Price of Gold is More than the Gold Price

Sunday, April 7, 2013

How High Could The Japanese Yen Go With Recent QE?

Hayman Capital's Kyle Bass expects the Japanese yen to weaken significantly (could hit 200 vs US Dollar) against the dollar and says that this is the riskiest time for an investor to be complacent about the markets.  He believed that if the Japanese QE failed, markets everywhere will sell their bonds and the Japanese retirees will loose up to 50% of their retirement savings.

Can BOJ Print Its Way Out Of Japan's Debt Trap?

Haruhiko Kuroda followed in the footsteps of Ben Bernanke and Mario Draghi as he swung the Bank of Japan (BOJ) to unprecedented stimulus in his first policy meeting as governor.

He has promised to to unleash a massive programme of quantitative easing – worth $1.4 TRILLION to double the monetary base by the end of 2014 through buying government bonds.  This is even more aggressive than what Ben Bernanke is doing because Japan's economy is only one-third the size of US. This is truly a race to the bottom in the on-going currency wars.

The idea and motivation behind this move is to encourage companies to raise wages with the hope that consumers will in turn respond by increasing spending, and thus cause prices to rise. They believed that persistent deflation tends to encourage households to hoard their cash, as they wait for prices to fall further.

Japan's debt is already 24 times its GDP.  Here is a video to explain how serious their debt trap is today.  They cannot keep kicking the can down the road without any consequence.  If you are holding or earning Japanese Yen, you might want to quickly convert them into hard assets (eg. real estate, gold, silver, commodities) because they start to lose more purchasing value.  

Monday, March 18, 2013

Cyprus Bailout A Game Changer and Wake Up Call

Anyone who reads the news about the Cyprus bailout should be concerned. This could be a game changer in the political and financial world. Here are some analysis by Lars Seier Christensen, the co-founder & CEO of Saxo Bank A/S in his recent blog:

This is a breach of fundamental property rights, dictated to a small country by foreign powers and it must make every bank depositor in Europe shiver. Although the representatives at the bailout press conference tried to present this as a one-off, they were not willing to rule out similar measures elsewhere - not that it would have mattered much as the trust is gone anyway. It is now difficult to expect any kind of limitation to what measures the Troika and EU might take when the crisis really starts to bite.

if you can do this once, you can do it again. if you can confiscate 10 percent of a bank customer's money, you can confiscate 25, 50 or even 100 percent. I now believe we will see worse as the panic increases, with politicians desperately trying to keep the EUR alive.

This is a major, MAJOR game changer and the fallout will be with us for a long time to come. I believe it could be the beginning of the end for the Eurozone...

James Turk also recently commented :

Here is how my colleague Alasdair Macleod describes this wake-up call to bank depositors.

1) It places depositors below bondholders, riding roughshod over property rights. It is a clear example of the state placing itself above the interests of its citizens, and will be noted by depositors in all troubled jurisdictions.

2) The politicians are now dithering on the announced terms, which will most probably extend the crisis and destroy confidence.

3) The longer Cyprus’s banks are closed, the more the crisis is likely to intensify.

4) The package assumes continuing Russian support for Cyprus. As this mess develops the Russians are increasingly likely to walk away.

5) Contagion into the Greek banks appears certain, with possible threats to Russian and middle-European banking systems.

6) Depositors all around the eurozone are likely to seek alternatives to bank deposits. These alternatives are likely to be cash withdrawals, capital flight into Swiss and other banks, and into physical gold.

This should be a wake up call for us to own physical gold and silver.  

"The fool never learn from his own mistakes, the wise learns from his own mistakes, but the wiser learns from the mistakes of others"

Cyprus Savers to Pay for Banks' Mistakes

When Cyprus's banks reopen on Tuesday morning, every depositor will have some of his or her money levied. Deposits accounts under 100,000 euros will have 6.75% of the funds levied. Accounts over 100,000 euros will have 9.9% levied. Only then will the Eurozone's emergency lending facility and the IMF inject 10 billion euros into the banks to allow them to keep operating.

Their justification? To prevent immediate bankruptcy and closure of the major banks.   Just imagine this happens to your own bank account.  If you have $10000 in your account, after this Tuesday morning, $675 is automatically gone.  If you have $100000 of your hard earn savings? $6750 will be deducted on Tuesday morning by the government so that they can secure more loans from IMF and EU to bailout the banks.

Why do the savers need to pay for the mistakes made by the banks? Why shouldn't the banks' stakeholders bare the risk? Well, because they are too big to fail. Bankruptcy has become a taboo these days. This has never happen before. How is this going to turn out? Definitely not good. This is day like robbery on the common folks.

Wednesday, February 27, 2013

Ben Bernanke Acknowledged the Fed is Artificially Keeping the Interest Rate Low

Watch Ben Bernanke's reply to Bachmann's questions and decide for yourselves if he is in total denial or ignorant of the US debt problem.  In particular around the 3rd min of the clip, where he on the one hand acknowledged that the US debt is in great demand worldwide and then when asked further, he said the Fed still needs to buy the debt in order to keep interest rate lower.

Isn't Ben Bernanke acknowledging that the Fed is manipulating the interest rate?

Singapore Stands as a Beacon of Sound Currency in a World Gone Mad

(By: John Browne)  As China enters the “Year of the Snake,” Singapore stands as a beacon of sound currency in a world gone mad. China's renminbi remains pegged to the US dollar, while even steadfast Switzerland has followed the US, UK, EU, and Japan into an impoverishing strategy of currency debasement. Singapore, alone, has been able to sustain genuine economic growth in the context of a strong national currency.
The result? Singapore’s economy is outperforming. GDP grew by 1.3 percent in 2012, while the Singapore dollar was up 6.5% against the US dollar for the year. Unemployment has actually remained down since the start of the financial crisis, pushing below 2 percent in 2012. This figure would be a pipe dream in the West.

What's more, Singapore remains a creditor nation, with a current account balance that has remained on an uptrend for over two decades.

Clearly, currency devaluation is not a winning strategy, especially for a country with a strong balance shee

Editor : Thank you Mr John Browne for your compliment for my country.  I truly hope my leaders will stay on the course and not be forced to join the 'race to the bottom' and be a true beacon of sound currency to the whole world.

Tuesday, February 26, 2013

Jim Rickards Latest Analysis on Gold and Currency Wars

Watch Jim Rickards' latest interview where he addresses the following questions:
  • Why did the US dollar seem to be stronger recently despite the ongoing QE3?
  • What were his take on the latest FOMC minutes and Fed's QE3 strategies?
  • Who will be the winners of the currency wars in the end? (Interestingly he believed Singapore will be among those who will win.)
  • Why he thinks the British Sterling is going to go down significantly?

Gold Pullback Explained by Peter Schiff

Have you been concerned about the recent gold price smack down? What causes the gold price pullback? Here's how Peter Schiff explain the pullback by looking at the fundamentals.

Thursday, February 21, 2013

Jim Rickards is Buying Gold Now

Jim Rickards, arthur of the famous book Currency Wars has just bought more gold in the current smack down price.  What about you?

David Morgan on Guide to Investing in Gold and Silver in CNA

Happen to chance upon this video that I missed in 2011. David Morgan was interviewed by ChannelNewsAsia when he came for Asia Summit 2011.

Wednesday, February 20, 2013

More Fundamental Reasons To Buy Gold and Silver Today

"I'm a fundamental guy. I care nothing about golden crosses or death crosses or anything of the kind," says Michael Pento, founder and president of Pento Portfolio Strategies.

Pento says a combination of growing money supply, a mushrooming balance sheet at the Fed, the Federal debt and US deficit, a devalued US dollar and global central bank demand for gold are good reasons to buy gold. 

Pento predicts these will drive gold to a record $2300 an ounce over the next 12 to 18 months.

Tuesday, February 19, 2013

How FED Monetary Easing is Going to End Badly

Jim Grant, "Grant's Interest Rate Observer" editor was asked by CNBC on how the perfect storm is going to play out.  Can the central banks continue to print currencies without any repercussions? Take a look at how he explains why central bank easing, ultra-low yields and access to corporate and sovereign credit is going to 'end badly'.

Hedge Fund Quietly Investing In Gold, Silver and Mining Shares

While the mainstream media continues to spew out bearish news and headlines on precious metals and (especially) mining shares, SAC Capital Partners LP, a $20 billion dollar group of hedge funds founded by Stephen A. Cohen, quietly positioned itself in over $240 million dollars worth of gold, silver, and mining share investments during Q4 2012.

Of great interest is the structure of those positions. They are indicating, that the firm is expecting a massive spike in both gold and silver, as well as a staggering move higher in the mining shares.

Friday, February 15, 2013

Gold Is Money - Says The Central Banks of the World

What are the Central Banks saying to us today? Gold is money. How do we know?

1. Germany's recent announcement of its plan to bring home part of its massive gold reserves.

2. Hugo Ch├ívez’s repatriation of Venezuelan gold in late 2011.

3. Russia had been increasing its gold holdings hand over fist in recent years. In 2012, its gold reserves by more than 6%.

4. In 2011, four members of the Swiss parliament called for “Gold Initiative: A Swiss Initiative to Secure the Swiss National Bank’s Gold Reserves.”

5. Recently the Dutch Christian Democratic Appeal Party has made an official appeal to repatriate Netherlands’ gold reserves.

6. As the world’s largest gold producer for the past six years, China is perfectly capable of building reserves under the radar and more ...

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What Happens When Countries Are Printing Currencies Without Limit?

Despite weak commodity prices in 2012, Mr. Dines’ biggest prediction for 2013 is a roaring comeback of inflation. 

He said, “What you don’t spend is your savings, that’s your capital. But when governments print too much paper, it dilutes your capital. It diminishes it and you lose. It’s expressed as higher prices. 

When more paper money chases the same goods and services, prices have to go up by the law of supply and demand. So I predict inflation ahead…

How do you protect yourself from it?…The answer is to own hard assets, and that is what I call, gold, silver, platinum, and palladium, maybe even land long-term—and especially coins, because you can move them.”

Tuesday, February 12, 2013

Japan’s Economic Minister Wants Nikkei to Surge to 13,000

YOKOHAMA – Economic and fiscal policy minister Akira Amari said Saturday the government will step up economic recovery efforts so that the benchmark Nikkei index jumps an additional 17 percent to 13,000 points by the end of March.

“It will be important to show our mettle and see the Nikkei reach the 13,000 mark by the end of the fiscal year (March 31),” Amari said in a speech. “We want to continue taking (new) steps to help stock prices rise” further, Amari stressed..

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This is indeed absurd. It seemed that the minister is more concerned about the stock market than real economic growth in Japan. Here is a good commentary on the news by Mike Shedlock:

Yet, I do not pretend to know whether or not the Nikkei will soar another 17% by March. However, I do know that it is economically foolish for politicians to hijack currencies and stock markets. Thus, my positioning is certainly not an endorsement of Japanese policy.

At some point, and perhaps we have crossed the point already, currency wars can and will get out of control. If and when that happens, the Yen will spiral downward out of control, with energy prices (in Yen) skyrocketing. Moreover, Japanese exports may not necessarily rise as everyone believes.

Sentiment is a powerful thing. Convincing everyone in Japan that a huge outburst of inflation is on the way, is not the brightest thing to do, to say the least. As I have stated many times, Japan better be careful or it may get (and then some in spades) more of what it seeks.

Gold Is Always Money, Paper Money Fails - Ron Paul

Watch Dr Ron Paul recent interview with Bloomberg television as he discussed about the currency war that is now going on the world's major economies.  He commented on the Bank of Japan's yen devaluation and its eventual implications that "people will move to hard assets altogether as they are losing confidence in paper assets.

Finally, Ron Paul says for over 6000 years of history gold is always money and paper money fails. So what would this mean for the price of gold and silver?

Germany's Bundesbank to Repatriate Their Gold

The financial world was shocked this month by a demand from Germany's Bundesbank to repatriate a large portion of its gold reserves held abroad.

By 2020, Germany wants 50% of its total gold reserves back in Frankfurt - including 300 tons from the Federal Reserve.

The Bundesbank's announcement comes just three months after the Fed refused to submit to an audit of its holdings on Germany's behalf. One cannot help but wonder if the refusal triggered the demand.

Either way, Germany appears to be waking up to a reality for which central banks around the world have been preparing: the dollar is no longer the world's safe-haven asset and the US government is no longer a trustworthy banker for foreign nations...

The impact of Germany's repatriation on the dollar revolves around an unanswered question: why will it take seven years to complete the transfer?

The popular explanation is that the Fed has already rehypothecated all of its gold holdings in the name of other countries. That is, the same mound of bullion is earmarked as collateral for a host of different lenders...

Saturday, February 9, 2013

Venezuela Currency Devalued by 32 Percent Against US Dollar

Venezuela has decided to devalue their currency (Bolivar) against US Dollar with effect on Wed. The bolivar will go from 4.3 to 6.3 to the dollar. This is the country's 5th currency devaluation in a decade! Why are they doing that?

'The goal is to "minimize expenditure and maximize results." One effect of a devaluation is to make a country's exports cheaper and thus more enticing to buyers. But another effect is to cut the deficit, which in Venezuela last year was estimated to be nearly 10 per cent of GDP.'

So can you imagine in just overnight, the value of your currency just disappeared by 32%?

Guess what was their inflation rate last year ? A whooping 20%!

'The move should ease the fiscal gap by giving the government more in local currency terms for every dollar it earns in oil exports through state oil giant Petroleos de Venezuela, one of the world's biggest oil companies. The fiscal gap will close to 5.3% of gross domestic product compared with 8.5% last year, said Francisco Rodriguez, an economist at Bank of America Merrill Lynch.

"It's still a high deficit, the government hasn't completely solved the problem and they will most likely have to devalue again at the end of this year or the beginning of next year," he said

Isn't this what the biggest economies like US and Japan are now doing? Venezuela is the 8th country in the world that has dived into the global currency war.  Which other country would be next in line? And what is going to happen to the price of gold and silver?

Thursday, February 7, 2013

China the Largest Producer and Consumer of Gold

According to data produced by Bloomberg gold imports from Hong Kong jumped by 94 per cent to 834.5 tonnes in 2012 with a monthly record of 114.4 tonnes in December. China is also the world’s largest gold producer but that has not been enough to satisfy its ravenous appetite for the yellow metal.
Where do we go from here? Will the Chinese consumption of gold double again this year? Will it impact on the gold price? Well the trend is definitely up and not down and China is likely to get its first gold ETFs this year.

Wednesday, February 6, 2013

US Mint Sales of American Eagle Silver Soared

Sales of American Eagle silver coins by the U.S. Mint jumped to a record in January 2013 on increased demand.  The US Mint sold 7.42 million ounces in January, the biggest monthly total since 1986.

So-called loose monetary policies and rising industrial consumption will support silver demand, according to Morgan Stanley, which described the metal as a “cheap gold proxy” in a Jan. 24 report. Prices have more than doubled since 2008 as the U.S. Federal Reserve, which concludes a two-day policy meeting today, boosts stimulus to spur a recovery. Investment holdings of silver reached an all-time high this month.

“The quantitative easing has helped boost sales as people are worried about currency debasement and future inflation,” Anthem Blanchard, chief executive officer of Blanchard Vault, a Las Vegas-based online retailer of gold and silver."

Tuesday, February 5, 2013

Jim Rickards on Currency Wars and Gold Price

Watch Jim Rickards' latest interview with WSJ explaining why some countries today like Japan is printing money and the present currency war scenario.  He believed that among the world's currencies, Singapore, Australian and Canadian dollar will be stronger.   What's his pricing for gold? Still the same - US$7000 per ounce.

Increased Physical Silver Demand in Singapore

[SINGAPORE] Gold has long been the darling of Asian investors. But its lesser cousin silver may now be coming into its own as an investment asset.

Demand for physical silver has rocketed in the past few months, propelled by repeated "quantitative easing" (QE) in the US, the waiver of goods and services tax (GST) on precious metals here last October, and the belief that it is undervalued relative to gold.

Silver Bullion, one of the oldest physical silver dealers in Singapore, said its sales have tripled since last October to about $6 million a month. The firm launched trading through a website in April 2009 and has seen revenue grow from $7.6 million in 2010 to $31.5 million last year....

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Monday, February 4, 2013

Construction of a Gold Refinery & Freeport in Singapore

Singapore Freeport
Singapore took one more step towards becoming “the new Switzerland,” as Mike Maloney often calls it, when Swiss precious metals refiner Metalor decided to build a new refinery on the Pacific Rim, as reported by Metalor Group CEO Scott Morrison:

"The construction of a gold refinery in Singapore comes at a time of rising demand for precious metals and is therefore perfectly in line with our development strategy in the Asia-Pacific region."

In our March 2012 article, Singapore Writes Support for a Gold and Silver Hub into Law, we quoted Nick Trevethan, a senior commodity strategist at ANZ Bank in Singapore:

The removal of the GST [Goods & Services Tax] on precious metals will allow Singapore to better compete with Hong Kong and other bullion trading centers in the region… it seems a little unfair to put a sales tax on what is essentially money.

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Below was an excerpt from old news article last year where it reported about Singapore's aim to capture 15% of the world's gold trading market.

SINGAPORE : Singapore hopes to capture 10 to 15 percent of the global gold trading market in the next 5 to 10 years, said International Enterprise Singapore (IE Singapore) on Wednesday.
The government had earlier announced that the country aims to work with other agencies to grow a new precious metals trading cluster to tap strong demand for investment-grade gold.

Senior commodities strategist at ANZ, Nick Trevethan, said: "I think the market needs a venue. Singapore needs a strong commodities exchange with effective pricing and sufficient liquidity in order to really develop its own market. Otherwise it's just going to have to piggy back off prices from the LME and from other exchanges around the world."

Assistant CEO of IE Singapore, Kathy Lai, said: "With the phenomenal economic growth in Asia, there has been a lot of Asian wealth created in the last 10, 15 years. Asian demand constitutes 70 percent of global demand - and this is just gold. And so, in Asia there isn't a gold hub of the same kind of level as London and Zurich and we have heard feedback from the market and industry that this is opportune time to serve the Asian market better."

Thursday, January 31, 2013

Young Japanese Buying Gold Bars Becoming Popular Trend

Here is one article reporting that there has been growing number of young Japanese who are selling old gold jewelry to buy gold bars, apparently a growing popular trend now in Japan.

"With the yen continuing to spiral downwards, gold is becoming a quick favorite in terms of investment options with gold prices in Japan hitting a 32 year high. That’s despite international gold prices going in the opposite direction trending lower since the beginning of this year.

With the Japanese currency weakening by 14 percent against the US dollar since last September, gold prices in Japan have soared over nearly 20 percent from the average level in December until now, alone bucking the trend seen in the global bullion market..."

Sunday, January 27, 2013

Chinese Citizens Are Now Buying Silver

Chinese citizens are “now buying silver because gold topped out in 2011 and silver is much more affordable,” said Thomas, a silver bull who has recently tripled his exposure to the white metal.

Silver is undervalued next to gold, has a finite and rapidly decreasing supply and it’s more accessible in greater quantities than gold, she said. All of these factors are “falling into place and becoming more acute, which therefore has driven up silver investment demand.” ...

“The increased demand for silver coins, as well as record holdings in silver-backed [exchanged-traded products], indicate that increasing numbers of people are looking to protect themselves with wealth-preserving assets,” said Skoyles.

Holdings in silver global ETPs stood at more than 600 million ounces as of Jan. 18, compared with just over 300 million in late 2008, according to data from ETF Securities.

HSBC Buy $876 Million Worth of Silver Bars

HSBC has quietly moved into acquiring large amounts of silver bullion. The bank has secured another deal to buy silver bars from KGHM which brings their total purchases of silver from KGHM alone in the last 12 months to $876 million or PLN 3.65 billion. KGHM is one of the largest producers of silver in the world and is the second-largest producer of refined silver in the world.
KGHM is one of the largest companies in Poland and one of the largest mining & metallurgy companies in the world. The main customers of Polish silver in recent years have been the United Kingdom, Germany and Belgium. HSBC appears to be one of their main customers now.

Respected and erudite, James Steel, the chief commodity analyst at HSBC Securities (USA) Inc. continues to be bullish on silver and recently said how “silver tends to track gold, except it over performs in a bull market” and how he was “moderately bullish on silver” in 2013.

Thursday, January 24, 2013

Coming Financial Collapse of America

Watch this video which was film in the early 2000s.  You will realise how similar the situation was then and is now getting worse.  Many has been warning about the uncontrollable deficit spending of the US government.  But unfortunately their warnings were ignored.   

Wednesday, January 23, 2013

Indian Gold Purchases Climbed in January

Gold remained firm although still trading below 1700. Statistics showed that physical demand for the yellow metal surprisingly soared in January. Normally, gold purchases soar in November on festive buying. The exceptional January spike should be driven by Indian consumers who increase purchases ahead of the tariff hike. Gold price is likely to rise further as central banks remain on accommodative modes with the BOJ accelerating its QE measures in January...

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Jim Rickards on German Repatriation of Gold

Germany made a surprise announcement last week that the Bundesbank would begin repatriating gold reserves held overseas. The central bank said it wanted to keep more than 50% of its gold reserves at home. On the other hand, China is accumulating and increasing its gold reserved. What will that mean for the price of gold? Jim Rickards is bullish on gold short term and says gold prices will rise the most in currencies that are weakening the most.