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China limits world’s highest foreign currency reserves
China’s central bank has said it no longer sees any benefit in increasing its $3.66 trillion foreign currency reserves – already the world’s largest. China will cap its purchases of US dollars in an effort to limit the depreciation of the yuan.
“It’s no longer in China’s favor to accumulate foreign-exchange reserves,” Bloomberg quoted Yi Gang, a deputy governor at the central bank as saying Tuesday.
Decreasing the influence of the dollar and other currencies is a step closer to reaching China’s 2015 goal to “float” its currency and according to the People’s Bank of China will help the everyday Chinese citizen.
Between July and September 2013 China’s increased its foreign – currency holdings by $166 billion, boosting it to the world’s highest of $3.66 trillion. This is also more that the Read more…
A Quadrillion Yen And Counting – The Japanese Debt Bomb Could Set Off Global Panic At Any Moment
How much is 1,000,000,000,000,000 yen worth? Well, a quadrillion yen is worth approximately 10.5 trillion dollars. It is an amount of money that is larger than the “the economies of Germany, France and the U.K. combined“. It is such an astounding amount of debt that it is hard to even get your mind around it. The government debt to GDP ratio in Japan will reach 247 percent this year, and the Japanese currently spend about 50 percent of all central government tax revenue on debt service. Realistically, there are only two ways out of this overwhelming debt trap for the Japanese. Either they default or they try to inflate the debt away. At this point, the Japanese have chosen to try to inflate the debt away. They have initiated the greatest quantitative easing experiment that a major industrialized nation has attempted since the days of the Weimar Republic. Over the next two years, the Bank of Japan plans to zap 60 trillion yen into existence out of thin air and use it to buy Read more…
World food prices keep on rising — UN
MILAN — Global food prices rose in March for a third successive month, driven by gains in grains and vegetable oils, the United Nations’ Food and Agriculture Organisation (FAO) said on Thursday, putting food inflation firmly back on the economic agenda.Food prices hit record highs in February 2011 and stoked protests connected to the Arab Spring wave of civil unrest in some North African and Middle Eastern countries. They then receded, but started to grow again in January.
The index, which measures monthly price changes for a food basket of cereals, oilseeds, dairy, meat and sugar, averaged 215,9 points in March, up from a revised 215,4 points in February, FAO data showed.
Its cereal price index averaged 227 points in March, up from February, with maize prices showing gains, supported by low inventories and a strong soybean market, the FAO said.
“You can see prices in the near term rising even further,” FAO’s senior economist and grain analyst Abdolreza Abbassian said before the index update.
The FAO also confirmed its earlier forecast for world wheat output to fall 1,4% from Read more…
Ron Paul To Ben Bernanke: “People Lose Trust In The Government Because You Lie To Them About Inflation” (Video)
by Tyler Durden
Anytime Ron Paul sits across from Ben Bernanke you know sparks will fly. Sure enough, they did: starting 50 seconds into the clip below, Ron Paul, guns blazing, asks the Chairman if he does his own shopping, if he is aware of what true inflation is, and if he knows that Americans don’t trust the government because they are being lied to about inflation. And it only gets better, once Paul starts brandishing a silver coin. The punchline: “The Fed will self-destruct anyway when the money is gone” – amen. And ironically letting the Fed keep on doing what it is doing will achieve that in the fastest possible way. In fact, letting the system cannibalize itself with no further hindrances may be the best option currently available – just go to town.
$6 Gas This Summer — U.S. Economy Falls Off Cliff
Dominique de Kevelioc de Bailleul:
Strap on that safety belt for one wild summer of frantic trading in the energy complex, according to economist, prolific author and wealth strategist, Stephen Leeb. He says gas prices in the US could reach $6 per gallon by the summer driving season.
And if there’s any economic event that could surely torpedo an already near-flat-lined US economy
into a death spiral, it will come from a massive price hike in that most critical commodity to any economy—oil. According to the charts, oil has again breached the Read more…
Key Players Buying More Gold Now
Investor appetite for gold is heating up, in part because of signals from hedge fund guru John Paulson, the guy who saw the real estate meltdown coming in 2007 and became a billionaire as a result.
The Paulson & Co. founder “told investors it’s time to buy the metal as protection against inflation caused by government spending,” Bloomberg reported today.
Bloomberg reported that 12 of 22 companies surveyed had a buy on gold, with five surveyed neutral.
Paulson & Co., the largest owner of the SPDR Gold Trust Exchange Traded Fund, which trades in gold futures, cut its position in 2011, Bloomberg reported earlier, probably to cover losses in securities.
A Feb. 14 SEC filing showed Paulson & Co. with $2.9 billion worth of SPDR shares, according to Bloomberg’s latest report.
Meanwhile, central banks—even as they act to inflate Read more…
China Could Soon Overtake India As The Biggest Gold Market In The World
HONG KONG (AP) — China is poised to overtake India to become the world’s biggest gold market this year as rising incomes fuel demand for the precious metal and a weak rupee diminishes Indian purchases, an industry group said Thursday.The amount of gold bought in China rose 20 percent in 2011 over the year before to 770 metric tons, the World Gold Council said in its annual report. That put China behind only first-place India, where 933 metric tons were bought.
Worldwide, the amount of gold purchased rose 0.4 percent to 4,0671 metric tons worth $205.5 billion.
The council said it’s “likely that China will emerge” as the world’s largest gold market for the first time in 2012.
Rising incomes in China, which is the world’s No. 2 economy, have resulted in a surge in demand for gold jewelry and other luxury goods. China became the world’s largest market for gold jewelry in the second half of 2011 as demand rose in every quarter, the report said.
Gold bars, coins and other gold-backed products are also popular because of a lack of Read more…
Why Are Economists Allergic To Gold?
As the old saying goes, the more things change, the more they stay the same.
Some 32 years ago, Ronald Reagan ran for U.S. President, in part, on a promise to appoint a “gold commission” to study the issue of whether and how the United States should return to some variation of the gold standard.
The nation had just come through a couple of tough decades during which, at times, it seemed as if the whole fabric of American society was being ripped apart. Devastating inflation and a lagging economy only made worse the social and emotional turmoil created by changing mores and standards surrounding civil rights, gender roles and military intervention. President Richard Nixon’s shocking act of severing the U.S. dollar’s ties to gold had failed to bring economic prosperity to the nation, and the Republican Party was feeling a bit of buyers’ remorse. The idea of a return to a gold-based monetary system gained steam.
A recent New York Times article describes the pre-election environment:
Bernanke Lights a Fire Under Gold and Silver Prices
“Party on!” was Federal Reserve Chairman Ben Bernanke’s message to Wall Street yesterday, as he announced that the Fed will be keeping interest rates at “exceptionally low” levels until late 2014, owing to concerns about stubbornly-high unemployment and the sustainability of the current statistical recovery. Bernanke also confirmed that for the first time in the Fed’s 99-year history, the institution will explicitly target a 2% inflation rate, as measured on the Personal Consumption Index (PCI). Other central banks have long had explicit inflation targets, but not the Fed.
Unsurprisingly given their enthusiasm for easy money, the market response to this move was euphoric. The Dow gained 0.64% to settle at 12756.96, while the Nasdaq tacked on 1.14% to settle at 2818.31. Asian and European exchanges have also reported Read more…
Wikileaks Discloses The Reason(s) Behind China’s Shadow Gold Buying Spree
Wondering why gold at $1850 is cheap, or why gold at double that price will also be cheap, or frankly at any price? Because, as the following leaked cable explains, gold is, to China at least, nothing but the opportunity cost of destroying the dollar’s reserve status. Putting that into dollar terms is, therefore, impractical at best, and illogical at worst. We have a suspicion that the following cable from the US embassy in China is about to go not viral but very much global, and prompt all those mutual fund managers who are on the golden sidelines to dip a toe in the 24 karat pool. The only thing that matters from China’s perspective is that “suppressing the price of gold is very beneficial for the U.S. in maintaining the U.S. dollar’s role as the Read more…
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