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."