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Chinese Silver Demand Surges Incredible Four Fold in Just One Year
Gold is flat and silver marginally lower despite dollar weakness this morning. Some market participants are blaming the precious metal sell off on speculation that China may take more monetary action to curb surging inflation. This is unlikely to be the reason for the sharp selloff, rather it looks like another paper driven sell off in the futures market by leveraged players on Wall Street with various motives.
The fact that silver is again in backwardation at the front end of the curve suggests that tightness in the physical bullion market continues and may even be deepening. Indeed, the massive increase in silver bullion demand from China (confirmed overnight – see below) suggests that silver’s bull market remains very much intact despite becoming overvalued in the short term towards the end of 2010.
Table Courtesy of Mitsui
Surging inflation in China, India, wider Asia and much of the world is of course positive for gold and silver as it will likely lead to an even greater appetite for the precious metals in order to protect against the ravages of inflation and the further depreciation of paper currencies. Read more…
China buys gold and the world follows
“We are entering a period of strong seasonal growth in gold demand and Chinese New Year is a big part of that,” said Brien Lundin, editor of Gold Newsletter. “Physical demand has been supporting the gold prices on the downside even during the typical slack periods, and I expect that upcoming increase in demand will also support the price, but at higher levels.”
The Chinese New Year, also known as Lunar New Year, begins on Feb. 3 this year and ends with the Lantern Festival 15 days later.
“Chinese gold and silver demand has been phenomenal ahead of the New Year holiday,” said Adrian Ash, head of research at BullionVault.com, a leading online service for gold bullion trading and ownership, citing comments from dealers among others.
Shipments have been “heavy” and they began very early, in mid-December, he said. Read more…
Jim Rogers Says $200 Oil Will Lead Massive Commodity Surge
When it comes to state visits the devil is in the detail. It’s the nuances of the arrangements that allow you to calibrate just how important a relationship is. That’s why the world has been watching the visit of the Chinese President Hu Jintao with such attention. The state dinner at the White House – described as an “intimate” event – apparently signifies that Washington rates China as pretty much the most important nation, economically, on earth. But the visit has also prompted much speculation in the press about how long the Chinese economic miracle can last and whether it is about to come to a juddering halt. Jim Rogers, the legendary investor who co-founded the Quantum Fund with George Soros, has moved his family to Singapore and is making sure his two young daughters can speak Mandarin. He spoke to the Business Daily’s Justin Rowlatt.
Transcript is below
Jim Rogers: The largest creditor nations in the world are in Asia now: China, Korea, Japan, Hong Kong. This is where the assets are. You know who the debtors are and where they are.
Justin Rowlatt: But listen, I mean the Chinese economy is still way behind the American economy is and it is about the third the size of the American economy.
Jim Rogers: Yes, of course. They had a disaster for 300 years, but about 30 years ago, they woke up, they changed their minds and they said we got to try something new. They unleashed entrepreneurship and capitalism again, and they have been astonishing for 30 years. It takes a while to go from a disaster to rival the Americans, but they are on their way.
Justin Rowlatt: Do you really believe the Chinese boom can continue, because lots of people are saying there are all sorts of asset price bubbles that are going to trip the Chinese up in the coming years?
Jim Rogers: Well, the only asset bubble I see potentially in China is in urban coastal real estate, but real estate is not nearly the entire Chinese economy as it was in America and the U.K. Sure, they will have setbacks.
Justin, in the 19th Century, America had a horrible civil war. We had 15 depressions with a ‘D.’ We had very few human rights. We had massacres in the streets regularly. We had very little rule of law. You could buy and sell – you can still buy and sell congressmen in America, but in those days they were cheap. America had horrible problems, but they came out of that and had a pretty good 20th Century. Read more…
Lindsey Williams: China Owns The United States – Alex Jones
Infowars
America has been swallowed up by the globalists and will now be run from Beijing.
What is Plan B if China dumps its U.S. debt?
NEW YORK (Reuters) – When borrowing money it’s always good to have a Plan B in case a big creditor pulls the plug. That should be true whether the sum is a few thousand dollars or about a trillion, the size of the United States government’s debt to China.
With Chinese President Hu Jintao due to arrive in Washington on Tuesday, it is worth asking about U.S. officials’ Plan B just in case one day relations take a surprise turn for the worse and Beijing dumps its holdings of U.S. treasuries.
China is officially the United States’ biggest foreign creditor, with roughly $900 billion in Treasury holdings — or over $1 trillion with Hong Kong’s holdings included.
That means it could do severe damage to U.S. debt markets if it suddenly started selling large amounts.
Most experts say if there were signs of this happening, the U.S. government would go for a combination of persuading Americans to buy more U.S. debt, the same way they did in World War II, and finding friendly foreign governments to make additional purchases.
Banks could be called on to increase their holdings of treasuries, and as a last resort, the Federal Reserve could also be called on to fill the gap, though this could risk turning any dollar weakness into a slump. Read more…
China Builds Underground ‘Great Wall’ Against Nuke Attack
The Chinese Army is believed to have built an underground “Great Wall” that stretches for more than 5,000 km in the Hebei region of northern China. Citing the People’s Liberation Army’s official newsletter, the Ta Kung Pao daily of Hong Kong on Saturday said China’s strategic missile squadron, the Second Artillery Division, built a massive underground tunnel to conceal nuclear weapons, including the Dongfeng 5 intercontinental ballistic missile with a range of 13,000 km.
Since 1995, the Second Artillery Division has mobilized tens of thousands of soldiers to build a network of tunnels stretching for more than 5,000 km below the mountain regions of Hebei, China’s state-run CCTV reported. “A missile base has been built hundreds of meters underground and can withstand several nuclear attacks,” CCTV said. “People refer to the network of tunnels connecting to the missile base as the ‘Underground Great Wall.'” In March 2008, CCTV broadcast a documentary which revealed that the PLA had been building underground facilities enabling it to launch a counterstrike in case of a nuclear attack.
Taiwan’s Asia-Pacific Defense Magazine also said, “The early version of China’s mid- to long-range missiles had all been deployed above ground and were vulnerable to detection by spy satellites and attacks by interceptor missiles. That prompted the Chinese military to move all of their missiles hundreds of meters underground.” As a result, the squadrons of the PLA deployed there are completely undetectable because they are based in subterranean bunkers and move around beneath the surface.
The purpose of the secretly constructed underground Great Wall is to give China a second chance after a nuclear attack, military experts said. The main objective of the Second Artillery Division is to be able to launch a counterattack against enemy targets after escaping the first volley of attacks. The Ta Kung Pao daily reported that it was unprecedented for the PLA’s newsletter to reveal classified information about the tunnels and that this demonstrates Beijing’s confidence in its military power.
China’s covert spy pad technology
Watch your step — you might just be standing on a spy pad.Chinese researchers have given new meaning to the term “watch your step” with a so-called “spy pad,” a device that can identify people by their gait, the South China Morning Post reported.
According to a Wikileaks document released in December, the device is able to capture the biometric information of anyone who steps on it, such as the dimension, weight and force applied by a person’s foot when they walk.
Developers believe these statistics are unique to each individual and can be used for identification. The spy pad’s sensors are so sensitive that they are supposedly able to track human targets even if they’ve changed shoes.
You’ve got to wonder why Ian Fleming didn’t think of it when he was writing the James Bond books. Or, for that matter, George Orwell when he was writing “1984.”
Acording to the SCMP report, spy pads were created by scientists at China’s IIM, or Institute of Intelligent Machines, reportedly in collaboration with developers at Nintendo, which may explain the device’s similarities with the Wii Fit Balance Board.
The Ministry for State Security, China’s spy agency, has already jumped on the project and is currently its biggest financier, according to the South China Morning Post.
Zhou Xu, a leading researcher on the project, is quoted by the Post as saying that “the government wants to use this device to track some citizens of concern.”
The gadget piqued the curiosity of U.S. diplomats in Beijing, who wrote in a diplomatic cable in February last year:
“The device can be covertly installed in a floor and is able to collect biometrics data on individuals covertly without their knowledge.
“When questioned about the device’s potential applications, IIM officials stated the device was being used by ‘secret’ customers and was not available on the commercial market.”
The Post reported that the gadget has been tested on the lab’s 100-odd employees and has an accuracy rate of 98 percent.
Chinese President Hu Disses the Dollar; Says U.S. System is a ‘Product of the Past’
“The current international currency system is the product of the past,” Hu noted in answers to questions submitted to his foreign ministry office by The Wall Street Journal and the Washington Post.
BEIJING—Chinese President Hu Jintao emphasized the need for cooperation with the U.S. in areas from new energy to space ahead of his visit to Washington this week, but he called the present U.S. dollar-dominated currency system a “product of the past” and highlighted moves to turn the yuan into a global currency.
“We both stand to gain from a sound China-U.S. relationship, and lose from confrontation,” Hu said in written answers to questions from The Wall Street Journal and the Washington Post.
Hu acknowledged “some differences and sensitive issues between us,” but his tone was generally compromising, and he avoided specific mention of some of the controversial issues that have dogged relations with the U.S. over the past year or so—including U.S. arms sales to Taiwan that led to a freeze in military relations between the world’s sole superpower and its rising Asian rival. Read more…
Obama’s Push for China Currency Changes Could Cost U.S. Consumers
When President Obama meets with Chinese President Hu Jintao this week, one of the top items on the agenda will be resolving a dispute over how China sets the value of its currency. If Obama gets his way, it could spur U.S. exports, but it could also mean higher prices for American consumers.
For over a decade, China has held down the value of its currency, the Yuan, in relation to the dollar. That helps keep the cost of the goods Americans buy from China low and the price of American goods sold in China high. The cheap Chinese currency has helped open a wide trade imbalance between the two countries. In 2010, China’s trade advantage with the U.S. was more than $252 billion.
The Obama administration has made stopping China’s currency manipulation a central focus of the president’s push to increase American exports.
“China still closely manages the level of its exchange rate and restricts the ability of capital to move in and out of the country,” Treasury Secretary Timothy Geithner said is a speech last week. “As the [International Monetary Fund] has said consistently, these policies have the effect of keeping the Chinese currency substantially undervalued.”
On the surface, it’s a positive for Read more…
It Really Is a Small World
There is a flood in Australia of biblical proportions though it must be said there is little news of it in the U.S. media. Much of Queensland is under water which would be comparable to saying that much of Massachusetts, Connecticut, and a large portion of New York is under water. Australia is very big.
If that news was not disturbing enough, on Tuesday, Krakatau volcano in Indonesia erupted, forcing the evacuation of tens of thousands in its vicinity as ash rained down on two large provinces. Meanwhile, the Kizimen volcano on Kamchatka is erupting as well.
England is passing through the worst winter in the last hundred years of recorded history. Its heavy investment in clean energy, specifically wind turbines, has turned out to be a bad idea since they tend not to turn much when the weather turns cold. Having shut down most of its coal mines, England is experiencing a lack of electrical power that is killing some folks.
No, it is not the Apocalypse, but it might as well be for people fleeing or trapped by these huge events.
No doubt some people are trying to organize efforts to save the kangaroos and koala bears in Australia while others are worrying about indigenous animals in Indonesia. If this sounds like they have idiotic priorities, they do. The same indifference Nature shows to these critters applies to you as well.
The anniversary of the Haiti earthquake, January 13, will occasion a flurry of articles and analysis of what has happened since (not much) but will fade by the weekend. Haiti hasn’t had a good day for centuries.
Meanwhile, snow has fallen in 49 of the U.S. States including Hawaii! It covered 69% of the lower 48. The northeast just experienced its second blizzard since Christmas.
Time to panic? Hardly.
So when should we panic? I would suggest a good time would be when we in America wake up and discover that the current administration has forced enough coal-burning utilities to shut down and there’s no electricity or just not enough to go around. Coal provides fifty percent of all of the electricity we use in the U.S.
We might begin to panic when we realize that the government remains steadfastly in the way of building more nuclear plants to generate electricity, despite its rhetoric stating the opposite.
Most Americans will begin to get angry when a gallon of gasoline hits $4 or more and will wonder why without wondering what happens when the U.S. government shuts down much of the drilling in the Gulf of Mexico by simply not issuing permits and forbids exploration or drilling off the long East and West coasts where billions of barrels of oil are believed to exist. Brazil is doing it. Why not us?
Oil is a global commodity which means that its price is determined by supply and demand. Right now, as China’s economy continues to surge and ours continues to stagnate, China is buying up as much oil as it can get its hands on. It is drilling for it off the coast of Cuba, a mere 90 miles from the tip of Florida.
Due to the floods in Australia, a major producer of coal, China is looking to purchase coal dug out of the mines in Appalachia, precisely where the Obama administration has done its best to shut down mines.
So, you see, it really is a small world after all.
The last great eruption of Krakatau actually lowered the temperature worldwide by throwing so much “schmutz” into the atmosphere it interfered with the Sun’s warming rays.
No matter where you live, it helps if the government doesn’t behave in a totally irrational and stupid way in the name of some bogus notion like global warming.
By the way, where is Al Gore these days? I hear China is experiencing some monster snow storms and it wouldn’t surprise me to hear he’s over there.
© Alan Caruba,
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