More Chinese economists urge easing out of Treasuries, adding gold
Filed under: General Editorial
Dear CIGAs,
If gold market participants were all tank drivers their machine would have but one gear – reverse. The smallest book in the world is the book of confirmed gold price visionaries.
Someone says deflation and the long gold positions hit the fan. Gold banks make their short covers even though the fuel in Bernanke’s Helicopter Money Drop is founded in the dreaded use of the “D” word.
People are so fixed in present time that they cannot picture a euro back towards its high and the dollar back towards its low because the financial condition of the USA dwarfs the problems of the USA.
Hyperinflation is always the product of a loss of confidence in currency resulting in a “Currency Produced Cost-Push Hyperinflation.”
No one with a synapse talking to another synapse expects a “Demand-Pull Inflation.”
All hyperinflation in modern history has occurred for one reason, and one reason only. That is loss of confidence in currency.
Loss of confidence in a currency can be brought about by many reasons, but there is one constant factor. When hyperinflation has occurred in modern history EVERY economy involved was decimated as and when it occurred.
It has never been caused by “Demand-Pull,” but always and without exception caused by “Currency Induced Cost Push Hyperinflation.”
The nonsense being spread by the F-TV taking heads is that the Fed is out of ammunition to fight deflation. That is raving BS. The Fed can and will do QE to infinity which is restricted as a tool by nothing whatsoever. The ECB will not be far behind the Fed.
Argue all you want, but this is exactly what is going to happen starting now. Stop being glib. Study hyperinflation in modern times listed below before you ask me to explain it one more time.
What is out there today QE wise is enough to result in hyperinflation as confidence falls in currencies due to two characteristics, QE and volatility.
Try meditating on the concept of “Currency Induced Cost Push Hyperinflation,” rather than loading your pants over gold banks manipulation full of sound and fury, but meaningless in the great scheme of things.
Examples of hyperinflation in modern times:
Angola, Argentina, Belarus, Bolivia, Bosnia-Herzegovina, Brazil, Bulgaria, Chile, China, Congo, Free City of Danzig, Georgia, Germany, Greece, Hungary, Israel, Japan, Madagascar, Mozambique, Nicaragua, Peru, Philippines, Poland, Russia, Taiwan, Turkey, Ukraine, United States, Yugoslavia and
Filed under: In The News
Jim Sinclair’s Commentary
Asia and Africa rise as the West has given it all away to political expediency and Wall Street.
Hong Kong, China Central Banks Sign Pact to Spur Yuan Investment Products
By Sophie Leung and Saiyu Zhou – Jul 19, 2010
The central banks of Hong Kong and China signed agreements to ease restrictions on yuan transfers between banks and companies in the city, seeking to encourage use of the currency in the Asian finance hub.
The People’s Bank of China and the Hong Kong Monetary Authority also agreed that the city will have no restrictions on yuan deposit holders transferring cash to buy wealth-management products, HKMA Chief Executive Norman Chan said at the signing ceremony.
“The real breakthrough lies in the creation of an offshore renminbi interbank market in Hong Kong,” economists led by Joanne Yim at Hang Seng Bank Ltd. said in an e-mailed report today. “The renminbi spot foreign exchange and interest rates could deviate from those of the onshore market, reflecting the demand and supply conditions of renminbi funds in Hong Kong, providing important benchmarks for mainland policymakers.”
Yim expects total yuan trade settlement between Hong Kong and China will rise to 113 billion yuan ($14.5 billion) at the end of this year.
HKMA said June 18 the latest agreement would encourage financial institutions to develop investment products denominated in yuan, helping to offer higher returns on yuan savings accounts in the city that currently pay interest rates of less than 0.5 percent. Deposits in China’s currency in Hong Kong rose 4.7 percent in May to 84.7 billion yuan ($12.5 billion), HKMA figures show.
Jim Sinclair’s Commentary
It appears Europe knows who the enemy is.
Europe freezes out Goldman Sachs
Shocked by past deals with Italy and Greece, governments are excluding the Wall Street bank from sovereign bond sales
Sunday 18 July 2010
Elena Moya
European governments are turning their backs on Goldman Sachs, the all-conquering investment bank that has suffered a series of blows to its reputation, capped by the biggest ever fine imposed on a Wall Street firm.
According to data from Dealogic, Greece, Spain, France and Italy have all denied the bank a lead role in their recent sovereign bond sales.
Last Thursday, Goldman agreed to pay a $550m fine to settle US regulators’ claims that the bank misled investors in a mortgage-backed security. Goldman admitted that its marketing materials were incomplete, because they failed to state that the same third party that helped choose the assets had taken a bet against them.
But governments have also been shocked at the emergence of past transactions between Goldman and Greece and Italy, where products the bank helped to sell aided both in hiding government debt. Greece, which used Goldman in a bond sale this year, is practically at war with the bank. A sharp contrast with the situation months before, when Goldman bankers dined with the prime minister in a private meeting overlooking the Acropolis. The relationship broke down, though, after news leaked earlier this year that Goldman was about to strike a bond sale deal with China’s sovereign fund – which never materialised.
Spain, which used Goldman among its top 10 bookrunners last year, has not done so in 2010, while Italy has not given the bank a leading role since 2007. France has not used Goldman in any lead position over the past three years, and it seems doubtful that it will do so in the near future. "French people would riot in the streets if we chose Goldman," said a person familiar with the French treasury.
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