Posted: Feb 08 2011 By: Eric King Post Edited: February 8, 2011 at 11:20 pm
Filed under: King World News, Trader Dan Norcini
Dear CIGAs,
On the heels of the Robin Griffiths interview where Griffiths is looking for the Chinese to increase their gold reserves five-fold from 2% to 10%, King World News interviewed Dan Norcini to get his thoughts. “Eric, if you base Chinese reserves on $2.5 trillion, for China to move from 2% to 10% they will have to increase their gold holdings a staggering 5,042 tons at current prices.”
Norcini continues:
“I’ve been seeing reports and I don’t think that it is any secret that the Chinese officials have been telegraphing their intention to dramatically increase their gold reserves. The reason behind this is that China wants to ultimately position the Yuan for the longer-term as being part of a basket of currencies that would comprise a new official global reserve currency.
A dramatic increase in gold holdings is necessary for China to achieve this goal. By way of comparison, right now both the US and Germany have roughly 70% of their reserves in gold, while China is at a paltry 2%. We don’t want to leave out China’s neighbor Japan which also only holds 2.5% of their total reserves in gold.
Click here to read the full interview on KingWorldNews.com…
It was less than three short days ago that we wrote about what is poised to be an imminent surge in corn prices. To wit, we said: "If revised Chinese import estimates by the US Grain Council are even remotely correct, look for corn prices of $6.80 a bushel at last check to jump by at least 15% in a very short amount of time. As the FT reports, "Corn prices – and with them, the price of meat – are set to explode if the latest import estimates from China are correct. The US Grain Council, the industry body, said late on Thursday that it has received information pointing to Chinese imports as high as 9m tonnes in 2011-12, up from 1.3m in 2010-11." Why is this a concern? Because "the US Department of Agriculture, which compiles benchmark estimates of supply, demand and stocks, forecast Chinese imports at just 1m tonnes in 2011-12." In other words, the whole forecast supply-demand equilibrium is about to be torn to shreds." And with the market being perfectly efficient, and not dominated by dumb robotic HFT trading at all, it has taken the "market makers-cum-liquidity providers-cum-no volume meltup facilitators" just over 48 hours to understand what this means. And what it means practically is another limit up open in the grain.
Filed under: King World News, Trader Dan Norcini
Dear CIGAs,
On the heels of the Robin Griffiths interview where Griffiths is looking for the Chinese to increase their gold reserves five-fold from 2% to 10%, King World News interviewed Dan Norcini to get his thoughts. “Eric, if you base Chinese reserves on $2.5 trillion, for China to move from 2% to 10% they will have to increase their gold holdings a staggering 5,042 tons at current prices.”
Norcini continues:
“I’ve been seeing reports and I don’t think that it is any secret that the Chinese officials have been telegraphing their intention to dramatically increase their gold reserves. The reason behind this is that China wants to ultimately position the Yuan for the longer-term as being part of a basket of currencies that would comprise a new official global reserve currency.
A dramatic increase in gold holdings is necessary for China to achieve this goal. By way of comparison, right now both the US and Germany have roughly 70% of their reserves in gold, while China is at a paltry 2%. We don’t want to leave out China’s neighbor Japan which also only holds 2.5% of their total reserves in gold.
Click here to read the full interview on KingWorldNews.com…
Corn Opens Limit Up As HFT Robots Parse What "Ninefold Chinese Import Increase" Means In Fortran
Submitted by Tyler Durden on 02/09/2011 09:35 -0500It was less than three short days ago that we wrote about what is poised to be an imminent surge in corn prices. To wit, we said: "If revised Chinese import estimates by the US Grain Council are even remotely correct, look for corn prices of $6.80 a bushel at last check to jump by at least 15% in a very short amount of time. As the FT reports, "Corn prices – and with them, the price of meat – are set to explode if the latest import estimates from China are correct. The US Grain Council, the industry body, said late on Thursday that it has received information pointing to Chinese imports as high as 9m tonnes in 2011-12, up from 1.3m in 2010-11." Why is this a concern? Because "the US Department of Agriculture, which compiles benchmark estimates of supply, demand and stocks, forecast Chinese imports at just 1m tonnes in 2011-12." In other words, the whole forecast supply-demand equilibrium is about to be torn to shreds." And with the market being perfectly efficient, and not dominated by dumb robotic HFT trading at all, it has taken the "market makers-cum-liquidity providers-cum-no volume meltup facilitators" just over 48 hours to understand what this means. And what it means practically is another limit up open in the grain.
Frontrunning: February 9
Submitted by Tyler Durden on 02/09/2011 08:56 -0500- Two Fed Skeptics of Bond Purchases Say Inflation Underscores Stimulus Risk (Bloomberg)
- 'Heavy Lifting’ Looms as China Rate Below Inflation (BusinessWeek)
- Rothschild to take control of the weather next (EarthNews)
- Underground world hints at China's coming crisis (Telegraph)
- Wait A Minute--Why Should I Hate Bernie Madoff? (Forbes)
- Egyptian Unrest Throws Deficit Goals Off Course as Yields Rise (BusinessWeek), all they need is Paulson pitching blank check TARP now
- SEC to Wean Markets Off Credit Ratings (Reuters)
- You don't say: Commodity prices could squeeze economy, just as in 2008 (Barrons)
- And speaking of, did anyone even notice that Moody’s lowered Jordan's debt outlook (BusinessWeek)?
- Asia Fights Inflation With Stronger Currencies (WSJ)
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