Monday, May 30, 2011

China SAFE Reports Monetary Gold Holdings Increased By $11 Billion, Or 30%, In 2010, As Gross Foreign Financial Assets Pass $4 Trillion

China's State Administration of Foreign Exchange (SAFE) has released its breakdown of 2010 international investments. In summary: financial assets abroad rose 19% last year to $4.126 trillion from $3.457 trillion. That includes the country's $2.914 trillion of foreign reserves at the end of 2010 as well as other assets such as direct investments, securities, and gold. As for gold, it increased by $11 billion from $37.1 billion to $48.1 billion, or a 29.6% increase (it is unclear if this number is at a fixed gold price or accounts for MTM). On the liabilities side, which increased from $1.946 trillion to $2.335 trillion, the biggest change was as a result of a surge in Foreign Direct Investment into China which increased by $162 billion to $1.476 trillion. Netting liabilities against assets leads to a net position of $1.79 trillion in external net assets.

- Read the full story at Zero Hedge, Here:


http://www.zerohedge.com/article/china-safe-reports-monetary-gold-holdings-increased-11-billion-or-30-2010-gross-foreign-fina

Thursday, May 26, 2011

The Mathematics Of Gold

Assumption:

Because gold is held by many central banks, once as a reserve currency but now as an inventory currency, it functions as a swing asset to balance the International Balance sheet of the US.

Central banks are sellers of dollars but still hold, by default, large dollar inventories.

China has hedged its dollar position 50% through commitments to long term dollar commercial agreements, pay in, mineral, and energy deals internationally. That is an act of pure genius.

We can assume other central banks still hold 90% of their reported dollar positions, on average unhedged by commercial obligation positions.

In crisis times, the US dollar price of gold ALWAYS seeks to balance the International Balance Sheet of the USA.

Therefore:

Take 90% of international US dollar debt less China and then add 50% of the US debt owned by China. Then divide that number by the ounces supposed to be owned by the US Treasury. The result is where gold wants to go.

In 1974 this gave me $900 gold. Now you do your homework, and submit your analysis to me. Do this, and I will give you Angels going to that price by a little known technique of Jesse Livermore that only works on gold after it has broken to a new high above all resistance.

Little by little I am passing on all that I have learned from Jesse through Bert to those that read every day in thanks for your support of me and mine.

- Jim Sinclair of JSMineSet.com

Monday, May 23, 2011

Don't Trade Gold. Accumulate it.

"Too many people who are new to the precious metals markets attempt to trade them.  Non-professionals are attracted to trading like moths to a flame and both are very dangerous.  The bottom line is to focus on accumulating physical gold and silver because at the end of this bull market what will matter is not how many dollars you have, but how many ounces of gold and silver you own.”

- James Turk, KWN Interview

Friday, May 20, 2011

China Is Now Top Gold Bug

Chinese investors are snapping up gold bars and coins, buying more than ever before in the first quarter of 2011 and overtaking Indian buyers as the world's biggest purchasers of the metal.

China's investment demand for gold more than doubled to 90.9 metric tons in the first three months of the year, outpacing India's modest rise to 85.6 tons, the World Gold Council said in its quarterly report on Thursday. China now accounts for 25% of gold investment demand, compared with India's 23%.

- Wall Street Journal

Thursday, May 19, 2011

Jim Sinclair - The View From The Bridge

From outside of North America looking back, the opinion in the Eastern world is that in the last month North America confiscated its citizen’s retirement funds and invaded a country.

The view from this bridge does not enjoinder confidence in the US dollar. It sees gold as a preferential storehouse of value rather than a currency of a spend thrift brute.

The view from this bridge sees traffic crossing it no longer from east to west, but now financially from west to east.

The safest place to be during hyperinflation is not in the midst of brutes, but amongst kind people.

In my opinion, the safest place to be is in Tanzania working, producing, giving employment and respect to the locals, working with the people for mutual best interests.

Times have changed. Change with them and prosper. If you choose to fight the change you will financially perish.

Respectfully from the bridge,

Jim

Wednesday, May 18, 2011

Peter Schiff - Mexican Central Bank Buys 100 Tons of Gold

When asked about the Mexican central bank purchase of 100 tons of gold Schiff replied, 

“What surprises me is that more central banks aren’t buying even more gold.  Central banks are loaded up with depreciating dollars, they need to buy gold instead.   The crazy thing is that I’m even hearing talk about the US selling its gold to help fund its debts.  That would be the worst thing we could do.  The last thing we would want to sell is our gold, I mean if we sold that then that would be it, we would have nothing.  The dollar would just become complete confetti.”

- Peter Schiff via King World News Interview

Read the full interview here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/5/17_Peter_Schiff_-_Silver_to_Take_Out_$50,_New_Shorts_are_Suckers.html

Monday, May 16, 2011

London Trader - Massive Asian Buying of Physical Gold & Silver

"Gold is not going to go down much further at this point, so you should not see an awful lot more damage to silver.  Shanghai just closed with a premium to gold just a few minutes ago.  If you look at what happened to gold on Friday, when did the smash occur?  After the fix, after London had gone home, suddenly 35,000 contracts came out on the sell side.  The Chinese and the rest of Asia along with London had gone home and paper was used to drive the price down."

"This physical buying is part of an increase in hard asset reserves for China and other Asian countries who are underweight precious metals and it is expected to continue for quite some time, most likely for many years.  Right now, each time we see gold under $1,500 the demand out of Asia is massive, they are huge physical buyers."

- London Source, Kind World News

Read the full article here:

Sunday, May 15, 2011

Zimbabwe Says Days Of The US Dollar Are Numbered, Pushes For Gold-Backed Local Currency

"Topping off a weekend of surreal news is the announcement from the Central Bank of Zimbabwe that the country is now evaluating introducing a gold-backed Zimbabwean dollar, and, in keeping with the Salvador Dali feel to the past 48 hours, that the "days of the US dollar as the world's reserve currency are numbered." Yes. Zimbabwe, the same place that two years ago sported a brand new crisp Z$100 trillion bill. What is just as odd is that this news comes less than a week after Iran's President Mahmoud Ahmadinejad criticized US economic policies, saying that the paper currency created by the American government is taking a heavy toll on the global economy. While Zimbabwe, which now transacts almost exclusively in foreign currencies such as the USD and the South African Rand, is actively considering ways to return its own currency into circulation, the man who has up to now served as an inspiration and a role model to Ben Bernanke, Gideon Gono, said the country should consider adopting a gold-backed currency. “There is a need for us to begin thinking seriously and urgently about introducing a Gold-backed Zimbabwe currency which will not only stable but internationally acceptable,” he said in an interview with state media... That giant ripping noise you hear is the Chairsatan tearing down each and every 20x10 poster of Gideon Gono, lining the hallways of the Princeton Economics department."

Read the full story at Zero Hedge here:

http://www.zerohedge.com/article/zimbabwe-says-days-us-dollar-are-numbered-pushes-gold-backed-local-currency

Saturday, May 14, 2011

Louise Yamada - $5,200 Gold is Long-Term Channel Target

“Well it hit our target at $1,500, so that is due for a rest in terms of achieving a target and than taking a little bit of a breather. But certainly $2,000 is next and we have higher targets over the long-term for gold. If you look at it from a very, very long-term perspective all the way to the early ’70’s when the dollar was delinked, the long-term channel line could take you to $5,200.”

- Louise Yamada via a King World News Interview

Read the full interview here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/5/14_Louise_Yamada_-_$5,200_Gold_is_Long-Term_Channel_Target.html

Friday, May 13, 2011

Forbes: Return to Gold Standard Within Five Years

“When it comes to exchange rates and monetary policy, people often don’t grasp” what is at stake for the economy, Forbes said. By restoring the gold standard, the United States would shift away from “less responsible policies” and toward a stronger dollar and a stronger America, he said. “If the dollar was as good as gold, other countries would want to buy it.”

Read the full story here:

http://www.thenewamerican.com/economy/markets-mainmenu-45/7465-forbes-return-to-gold-standard-within-five-years

Thursday, May 12, 2011

Central Banks Purchase 127 Tons Of Gold In Q1

"Most have heard by now that Mexico disclosed that back in Q1 it bought 93.1 tonnes of gold, increasing its total gold holdings from 7.1 tons to a whopping 100.2 total tons, a stunning move which was disclosed to have been done "in line with prudent diversification principles of reserves management." However, what is less known is that many other central banks, chief among them Russia and Thailand were also waving the shiny yellow metal in between January and March. And just as importantly, from the World Gold Council, from where this update comes: "The latest statistics show no significant selling by the signatory central banks in Year 2 of the third Central Bank Gold Agreement (CBGA3)." So no central banks sell, yet the daytrading retail public knows better. As for the key question of whether China is adding to its meager holdings of 1,054 tons, which put it behind the GLD, not to mention France and Italy, there is no update. Recall, however, that when China announced an addition of +454 tonnes of gold in April of 2009, this indicated stealthy purchases of the metal in the 2003-2009 period. In other words, China is very likely accumulating gold and the next update will likely come some time in 2015"

- Read the full Story at Zero Hedge, Here:

http://www.zerohedge.com/article/central-banks-purchase-127-tons-gold-q1