GOLD AND SILVER NEWS
June 24, 2013 in Economics
Fed’s reducing bond monetization
will crash both U.S. and world, von Greyerz says
Gold fund manager Egon von Greyerz today tells King World News that the Federal Reserve can’t possibly reduce its bond monetization because much of the world is already on the edge of collapse along with the United States itself.
An excerpt from the interview is posted at the King World News blog :http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/6/23_Th…
Jan Skoyles: Taking the blinkers off the gold analysts
In her new commentary, “Taking the Blinkers Off the Gold Analysts,” Jan Skoyles of The Real Asset Co. in London contrasts the gold markets of the West and East — the West being mainly paper and the East being mainly real metal.
“On Comex total gold delivered didn’t even meet 10 percent of global gold production, while delivery from the Shanghai Gold Exchange was nearly 100 percent of total world gold mining production. … Global physical gold demand is now likely to have surpassed total supply for this year — all driven by that ignored part of the world. …
“Gold prices set in major Western markets may be in retreat, but dampened demand is certainly not omnipresent across the globe. The pace of increasing premiums in Asia means physical gold prices are booming while physical gold cannot be delivered quick enough. There is only so much time left before the paper gold bugs can no longer keep the price down and geographically blinkered analysts have to open their eyes.”
Skoyles’ analysis is headlined “Taking the Blinkers Off the Gold Analysts” and it’s posted at The Real Asset Co.’s Internet site : http://therealasset.co.uk/blinkers-off-gold-experts/
Each step forward for the Chinese currency is a step backwards for the US currency.
UK and China in £21bn currency swap deal
The Bank of England and its Chinese counterpart have signed a deal likely to boost trade between the UK and China in the yuan.
The Bank and the People’s Bank of China have signed a three-year currency swap arrangement worth 200bn yuan (£21bn, $33bn), the UK central bank confirmed.
The UK is looking to become a centre for the Chinese currency, also known as the renminbi.
British banks hold 35bn yuan worth of deposits in the Chinese currency.
Currency-swap agreements allow central banks to swap currencies and can be used by firms to settle trade in local currencies rather than in US dollars, as happens now, since China’s currency is not fully convertible to other currencies.
The prospective deal was first announced in February by BoE Governor Sir Mervyn King.
“In the unlikely event that a generalised shortage of offshore renminbi liquidity emerges, the Bank will have the capability to facilitate renminbi liquidity to eligible institutions in the UK,” Sir Mervyn said on Saturday.
Last year, the UK Treasury announced plans to make London – the world’s largest currency trading hub – the leading international centre for trading the yuan outside mainland China and Hong Kong.
Bondholders would lose more than $1 trillion if yields spike – BIS | Reuters
LONDON (Reuters) – Bondholders in the United States alone would lose more than $1 trillion (648 billion pounds) if yields leap, showing how urgent it is for governments to put their finances in order, the Bank for International Settlements said on Sunday.
The Basel-based BIS lambasted firms and households as well as the public sector for not making good use of the time bought by ultra-loose monetary policy, which it said had ended up creating new financial strains and delaying rather than encouraging necessary economic adjustments.
The BIS, a grouping of central banks, was one of the few organisations to foresee the global financial crisis that erupted in 2008.
Since then, government bond yields have sunk as investors seek a traditionally safe place to park funds, regulators tell banks to hold more bonds and central banks buy bonds as a means of pumping money into vulnerable economies.
The BIS said in its annual report that a rise in bond yields of 3 percentage points across the maturity spectrum would inflict losses on U.S. bond investors – excluding the Federal Reserve – of more than $1 trillion, or 8 percent of U.S. gross domestic product.
Banking collapse ‘bail in’ dispute 22/06/2013
Bail-in is coming at warp speed towards you and you are doing nothing whatsoever. For your sake, Why?
Europe failed to agree on how to share the cost of bank collapses today as Germany resisted attempts by France to water down rules designed to spare taxpayers in future crises.
Almost 20 hours of talks late into the night could not forge a way for countries to set up an EU-wide regime that would first impose losses on shareholders and bondholders when a bank fails, followed by depositors with more than €100,000 (NZ$160,000).
Ministers will make a fresh attempt to break the impasse at a meeting on Wednesday, on the eve of an EU leaders summit, and resolve one of the most difficult questions posed by Europe’s banking crisis – how to shut failed banks without sowing panic or burdening taxpayers.
”I think we can reach a deal if we take a few more days,” said Michel Barnier, the European commissioner in charge of regulation.
”We are not far off now from a political agreement.”
The European Union spent the equivalent of a third of its economic output on saving its banks between 2008 and 2011, using taxpayer cash but struggling to contain the crisis and – in the case of Ireland – almost bankrupting the country.
German Finance Minister Wolfgang Schaeuble blamed the complexity of the issue and conflicting interests for not being able to reach a final result on Saturday. One EU official, who asked not to be named, described the meeting as chaotic.
At the heart of the disagreement, chiefly between Germany and France, was how much leeway countries should have when imposing losses on bondholders or large savers, a procedure known as ”bail-in”. More…