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Thursday, 16 August 2012

Suspension of postings

Dear Readers,

I am sorry that I am currently unable to continue posting.  Serious demands are now being made of my time, which has unfortunately pushed this free service down in the priority stack.  I thank you all for your kind support, emails and comments.  I look forward to returning as soon as I can.

with kind regards,
Nils.

Thursday, 12 July 2012

Gold price suppression easier than Libor manipulation.

The total amount of gold ever mined from this planet is approximately 160 thousand tons:  nine trillion dollars worth. Libor manipulation affected at least 800 trillion dollars worth of investment products.

Repetition of MF Global failure

See "For investors and customers, PFG is MF Global all over again...".  Trust in the US financial system, and in segregated investor accounts, is further eroded.  See also "Penson brokerage warning" and "Don't let another MF Global ruin you".

Monday, 9 July 2012

Steve Keen on solving debt crisis

Steve Keen explains how elimination of debt is needed to solve the financial crisis, in this RT.com interview:  Keen proposes that it would be better to inject stimulus funds into individuals to reduce their debt, instead of into financial institutions which are not lending those funds.

Thursday, 28 June 2012

Gold's importance might be promoted

The Bank of International Settlements (BIS) is considering upgrading gold's status as a capital asset from tier three to tier one.  See Peter Krauth's article, which I acknowledge.

Tuesday, 19 June 2012

Keynesian economics self destructs

Many people, in their hearts, know that the solution to too much long term unsustainable debt is not to spend more.

Friday, 15 June 2012

A strong case for Greek default

The documentary "Hot spots:  Greece"offers the best argument for allowing Greece to default that I have seen. 

European Union unfit to oversee unified banking union

Greece hid their true level of debt to join the euro currency zone.  European Union authorities accepted Greece's application despite hidden Greek debt.

Thursday, 14 June 2012

JP Morgan no longer distinguishes speculation from hedging

JP Morgan no longer recognises the difference between hedging and speculating.  Poor US taxpayers thus back JP Morgan's market speculation.

Kazakh central bank aiming for 20% of reserves in gold


See Mineweb's article "Kazakh central bank aiming for 20% of reserves in gold", which I acknowledge.

Euro crisis in a three minute video nutshell

Unlimited global money printing likely

Major global central banks are likely to continue printing money indefinitely, without limit, according to a Reuters article.  The solution to excessive western debt is to devalue the US dollar, the British pound, the euro and the Japanese yen.

Tuesday, 12 June 2012

US worse than Greece

US problems are greater than Europe's or Greece's, according to former US assistant treasury secretary Paul Craig Roberts.

Dangerous EU banking union proposed

Unification of EU banking regulations under one supervisor would be extremely dangerous for Europe.  Risk would be concentrated.

Monday, 11 June 2012

Euro has no real backers

Trust in the euro, and in all paper currencies, has been damaged, according to Jim Jubak.  The value of a paper currency rests upon trust in those who back the currency.

Saturday, 9 June 2012

Stunning increase in Chinese gold imports - Sprott

Eric Sprott and Shree Kargutkar report that gold imports to China have increased by 1300% on a year on year basis to April, 2012.

US, UK and media pressure Germany to further "support" bankrupts

US and UK officials, and the media, are increasing pressure upon Germany to increase German financial support for bankrupt European nations, and to support money printing.  Greek public sentiment towards Germany is hostile, despite German financial support.

Friday, 8 June 2012

Kazakhstan shifts from euro to gold

Kazakhstan's central bank is to reduce euro holdings and increase gold holdings.  See Mineweb's article "Kazakh central bank to boost gold holdings", which I acknowledge.

Thursday, 7 June 2012

Heroic poor save the planet

Hundreds of thousands of poor people are losing their electricity supplies.  They are being disconnected because electricity is unaffordable.

Spain gone

Spain's credit markets appear to have seized up, following the Greek pattern.  The Spanish government budget minister has called for European financial help, only days after rejecting calls for European financial assistance.

SLV trustee's conflict of interest

The Trustee of the iShares SLV silver trust has a conflict of interest, according to Jeff Nielson.

Saturday, 2 June 2012

Friday, 1 June 2012

Greek banks' position now "down to the wire" - Sprott

The run on Greek banks has brought the Greek banking system near to collapse;  and "we are past the tipping point where Greek depositors have had enough", according to Eric Sprott and David Baker.  Today Greek debt is up to E400B which is greater than the debt before the second bail-out two months ago.

Should Germany leave the euro?

If Germany, instead of Greece, were to leave the euro currency zone, would Greece continue to press for more lenient bail-out terms?  Would France still advocate European "growth" through spending and increased debt if Germany left the euro currency zone?  See Mike Shedlock's interview about the European financial situation, in which it is suggested that European aid is a euphemism for bailing out foreign lenders.

Thursday, 31 May 2012

Eighty percent of Greeks want both: euro; and new debt deal

Eighty percent of the Greek population want both:  to remain in the euro currency zone;  and to amend the debt agreement with creditors, according to a recent poll prior to the June 17 election.

US real estate market destroyed (reprint)

Buyers of foreclosed US property may not own that property, according to Dr Lan T Pham in Capital Account's interview.  Doubt is cast upon which collateral exactly backs mortgaged back securities.  The important aspects of this issue have not been reported fully in the mainstream press, despite awareness.

Monday, 28 May 2012

Run against Greece gathers pace

A French backed stock broker will now only execute sell orders on the Greek market;  and the olive oil price has been driven down.

Friday, 25 May 2012

Renewable electricity can be stored in Norway

Norway's proposal to store electricity solves one of the biggest electrical engineering problems of renewable energy sources:  the unsteadiness of power supply.

Thursday, 24 May 2012

Euro exchange rate observation

The euro currency exchange rate is approximately US$1.25, which remains greater than the 2010 low near US$1.19, despite the apparently worst ever European currency disarray and potential risk.  See the chart below.

Should Germany guarantee Greek debt?

The German Central Bank has issued long term bonds with a zero percent coupon rate.  Lenders are effectively paying to lend to Germany, again.  This reflects the real market:  investors are reallocating their funds away from risk to safer, non yielding assets.

Wednesday, 23 May 2012

Greeks tempted by ongoing German financial support without reform

"With austerity, Greece will need a third bail-out"- Tsipras. Without austerity, Greece will need a third bail-out. See Der Spiegel's article "Tsipras says Berlin must back down on austerity" and the earlier posting "third Greek bail-out".  Tsipras' position echoes that foreshadowed in "Greece likely to receive permanent bail-out, relieved of all obligations for financial prudence".

Wednesday, 16 May 2012

Derivatives valuations beyond human comprehension

The influence of large financial institutions over derivatives pricing has loosened the relationship between derivatives prices, their underlying assets, and their mathematical models, according to Chris Sheridan.  JP Morgan's recent loss suggests that theoretical pricing models of derivatives may no longer work properly.

German gold reserves audit

Der Spiegel reports of concerns about checking Germany's gold holdings in "Germans fret about their foreign gold reserves".

Tuesday, 15 May 2012

Greek financial reforms not implemented

Gikas Hardouvelis, the chief adviser to transitional Prime Minister Lucas Papademos, concludes that almost none of the government's reform efforts have been a success.

Saturday, 12 May 2012

US Fed breeding bigger, more dangerous whales

JP Morgan's derivatives loss amplifies deep concerns about the financial safety of the big banks.  Financial backstops designed to protect those banks privileged to be "too big to fail", along with very low interest rates and now declining profits, create incentives for those big banks to further increase their gigantic financial risks.

Money printing rekindles German fear

"Printing money can't be an answer" to solving the problems of European economic growth, according to German foreign minister Guido Westerwelle.

Wednesday, 9 May 2012

Gold breaks down through long term uptrend

The chart below shows that the gold price has broken down through the long term uptrend, answering last month's question in "Gold price test".

Saturday, 5 May 2012

Penson brokerage warning

It might be prudent to repatriate or otherwise secure any funds which are not required for immediate trading.  See Penson's price chart below, and Ann Barnhardt's warning. 

Tuesday, 1 May 2012

Gold manipulation to "kill the financial messenger"

I found this interview "GATA's Bill Murphy exposes how the gold cartel is bombing the market for precious metals" interesting.  GATA's* Bill Murphy claims that certain gold ETFs (exchange traded funds) are the major shorts in the gold market, including GLD whose gold custodian is HSBC.

Monday, 30 April 2012

Another Monday morning gold price spike

The gold price jumped up again this (Asian Monday) morning.  It is as though buy orders accumulated before the market opens force up demand.  Sell orders seem only to come in response to, and after, that buying demand.

Friday, 27 April 2012

On Warren Buffet’s view on gold

Summary
Warren Buffet prefers to invest in income producing assets rather than non-producing assets such as gold.  He claims that just about the only reason people buy gold is because of fear.  But beneath Buffet’s case against gold might lie a motive to support the US dollar.  By discouraging investment in gold, Buffet supports the US dollar. 

Wednesday, 25 April 2012

Difficulty of imposing democracy on Islamic cultures finally acknowledged

The notion that people should be given power to make their own laws has always conflicted dangerously, and at the most fundamental level, with the Islamic knowledge that all law comes from Allah, and from Allah alone.

Euro vulnerability increases again

Tuesday, 24 April 2012

Gold metal partially replaces US dollar for international trade

The west's strategy of short selling gold into Chinese hands is "novel" and "courageous".  China's plans to pay gold, and to barter other produce, to purchase Iranian oil follows India's similar intent.  The increasing denomination of international trade in gold and barter produce instead of the US dollar global reserve currency is significant.

Monday, 23 April 2012

Thursday, 19 April 2012

China's global currency role expands

The Chinese yuan's role as an international currency continues to grow, offering an alternative to the US dollar global reserve currency.  UK institutions seek to make London a yuan trading and investment hub, according to this Bloomberg article, which I acknowledge.

Syria offers to sell gold at discount

Syria is offering to sell their gold reserves at a 15% discount, according to these News24 and Reuters reports, which I acknowledge.

Wednesday, 18 April 2012

US taxpayers cover unquantifiably large derivatives risk

Avery Goodman has written an excellent explanation of the US derivatives situation, in which he argues that the astronomical value of US issued derivatives has created a frightening concentration of risk.  That is why large scale quantitative easing (money printing) will continue indefinitely, causing high inflation.

Banks "too big to fail" have grown even bigger

The five largest US banks, guaranteed government support for being "too big to fail", have grown significantly larger.  Almost no progress has been made on reducing the financial system's exposure to banks which are "too big to fail".

Gold's relationship with money, continued (3)

"Gold returning to the mainstream - part three" follows the two earlier articles:

Tuesday, 10 April 2012

Singapore to remove gold tax

Singapore will exempt gold, silver and platinum from their 7% goods and services tax from October, 2012.  Removal of the tax will have a number of consequences.

Gold becomes legal tender

Gold has become legal tender in South Carolina, joining Utah and other states in the USA who have legalised gold's use as money in parallel with the US dollar, according to Wealth Wire.

Monday, 9 April 2012

Gold price spike again

The gold price spiked up suddenly, again, shortly after 22:00 GMT = 8:00am AEDT (Sydney), Monday morning.  See Kitco's chart below.

Sunday, 8 April 2012

Gold price test

For those watching the price of gold, gold is approaching the long term upwards sloping trend line, shown below.  It is likely that Mainland China has a national policy to accumulate gold, as western interests sell.

Tuesday, 3 April 2012

Germany should repatriate gold from USA, and buy more gold - Peter Schiff

Peter Shiff argues that if he were head of the German Central Bank (Deutsche Bundesbank) he would have all of Germany's gold, 66% of which is currently held in the USA, repatriated to Germany, and, that he would have Germany exchange their US dollar reserves for gold bought on the free market.

Monday, 2 April 2012

Greece's third bailout defies reality

The Greek prime minister Lucas Papademos has announced that Greece might require a third bailout. [1, 2]

Saturday, 31 March 2012

Emerging markets performance

The ten year performance history of emerging markets is summarised nicely in this "Periodic table of emerging markets", courtesy of US Global Markets, who contend that performance varies over time in consistence with "reversion to the mean".

Saturday, 24 March 2012

Money printing can not cease

Massive money printing, in the order of tens of trillions of dollars, can not cease because of the financially destructive psychological impact that would have on market sentiment, according to Jim Sinclair.

Friday, 23 March 2012

Problems with a gold standard

The chairman of the US Federal Reserve Bank, Ben Bernanke, enumerated the problems with a gold standard, should one be considered as a replacement for the currently deteriorating western fiat currency system.

Thursday, 22 March 2012

China tightens totalitarian control

China has ordered lawyers to pledge their allegiance to the Chinese Communist Party, according to Reuters.

Wednesday, 21 March 2012

SWIFT's act of war will damage US dollar

Jim Sinclair's interview with Ellis Martin explains the consequences of SWIFT's selective exclusion of nations and banks from the international settlement system, and elaborates the ideas reported in February's posting here.

US exempts Japan, ten EU nations from Iran oil sanctions

The US has exempted eleven nations from Iranian oil sanctions, in an acknowledgement of western allies' energy needs.

Wednesday, 14 March 2012

ECB representative can not explain why Irish should pay billions for European banks

The European Central Bank's Klaus Masuch was left speechless unable to answer Irish journalist Vincent Browne's repeatedly restated question of why the Irish people should pay billions for unguaranteed bonds to support European financial institutions which have no bearing upon the Irish people, in a press conference video.

Saturday, 10 March 2012

CDS bond insurance will cover Greek haircuts

The ISDA (International Swaps and Derivatives Association) has declared that a Greek sovereign debt "credit event" has occurred, clearing the way for CDS (credit default swap) and other insurance instruments to be called upon to make good bondholders' losses.

Seabed mining progresses

Nautilus' revolutionary seabed mine continues to progress, 1600 metres beneath the Bismarck sea.

Thursday, 8 March 2012

US Fed focuses on printing more money

The US Federal Reserve continues to consider printing more US money.  Despite "spinning" the announcement to create the perception that it would not contribute to inflation, the fact remains that money printing is inflation.

Wednesday, 7 March 2012

European Central Bank facing "sizeable" possible losses

Should Greece default, the European Central Bank (ECB) would face "sizeable" losses of 177 billion euros, which would amount to over 200% of the ECB's capital base, according to the International Institute of Finance (IIF) in a Financial Times report.  And on top of that, the ECB's need to buy more risky European sovereign debt would increase.

Tuesday, 6 March 2012

Gold mining stocks will be utility stocks

Jim Sinclair argues that gold mining companies will become high yielding utility stocks in the future.

Icelanders consider replacing krona with Canadian dollar

Some Icelandic business leaders have proposed that Iceland adopt the Canadian dollar as their national currency, to improve stability and ease capital flows.  It is significant that the proposal was not to adopt the US dollar, which has traditionally been the global reserve currency, but whose status is now diminished.

Friday, 2 March 2012

Commodities price inflation likely

"It remains uncertain how the banks will use the cheap money" provided by the European Central Bank (ECB), which has lent 530 billion euros to European banks, according to Der Spiegel.

ISDA conflict of interest

The International Swaps and Derivatives Association (ISDA) is responsible for determining whether or not losses from failed bonds are covered by insurance.  It is surprising to note that some voting ISDA members appear to be the sellers of that insurance, and therefore would have a conflict of interest.

Greece fails to implement required reforms for second bail-out

Negative market sentiment towards the euro currency is likely to be amplified by polarising European disunity.  Some European finance ministers are not satisfied that all Greece's political party leaders are fully behind the reforms, according to Reuters.

Greek bondholder losses uninsurable

The ISDA (International Swaps and Derivatives Association) voted unanimously that no "credit event" has occurred with respect to the Hellenic Republic.

Thursday, 1 March 2012

Gold's relationship with the US dollar

I find Julian Phillips' explanation of gold's historic relationship with the US dollar most informative.

Gold price slammed down by $100

Some speculate that often a sharp fall in the gold price reflects orchestrated central bank selling to manipulate the gold price downwards, to support fiat currencies, and to foster positive global financial sentiment.  A report about central bank gold price manipulation has been deleted from the internet.

Tuesday, 28 February 2012

Lengthy credit default swap litigation likely

It remains possible that a private investor who did not voluntarily agree to their "haircut" losses on their Greek bond holdings might call upon credit default swap (CDS) insurance issuers to honour their obligations and compensate for bond holders' losses.  Prolonged litigation is the likely defence strategy.

Money printing floods the globe

The global money supply has increased by $10 trillion during the last eighteen months, according to Egon von Greyerz. [1]  This is approximately one sixth of total global annual GDP, which is a little over $60 trillion per annum.

Monday, 27 February 2012

Interminable European money printing assured

Private buyers of peripheral European bonds are likely to have completely dried up.  Chief executive Martin Blessing stressed "that Commerzbank wouldn't buy any more sovereign debt in Europe's financially troubled nations".[1]

Friday, 24 February 2012

"Voluntary" Greek bond haircut was compulsory

The "voluntary" haircut which private Greek bondholders "agreed" to was “as voluntary as a confession to the Spanish Inquisition”, according to the Financial Times report of comments by the chief executive of Commerzbank.  The reporting of this by the UK based Financial Times might mark the beginning of the unravelling of "the spin" on the Greek issue.

China likely to support euro

The anomalously high euro reflects expectations that China will provide financial support to Europe and the euro, argues Jim Sinclair.

How Goldman Sachs helped falsify Greece's national accounts

Nick Dunbar's video explains how Greece and Goldman Sachs entered into off-market swaps using fictitious exchange rates to hide Greek debt from Europe.

Germany resists expansion of rescue fund

Thursday, 23 February 2012

Gold pledge prevents drachma escape from euro

Greece has pledged its 111 ton national gold reserve to secure their second bail-out, according to Mineweb.  "The option of leaving the Eurozone and surviving independently has now gone", according to Julian Phillips, whose article I acknowledge.

Greek bail-out status clarification

Greece has not been rescued yet, despite recent media relief.  The second bail-out remains conditional upon Greece implementing the agreed but unpopular measures, within five days.  The risk of financial contagion will remain until European finance ministers approve Greece's remedial actions, and until private bondholders agree to their haircuts, which has not yet happened.  If any bondholder who refuses a haircut exercises CDS bond insurance, financial repercussions would be global.

Saturday, 18 February 2012

Gold's status as reliable currency boosted

Exclusion of Iran from Belgium's SWIFT funds transfer system reduces the value of Iran's - and everyone's - foreign currency holdings, and reduces global confidence in the international financial system and the global reserve currency.  Iran is not the only potential "enemy" of the west.

Western transfer to China of control of global reserve currency

If western central banks are suppressing the gold price by selling gold down as is claimed by GATA and others, then the west is subsidising Chinese accumulation of gold.  The west sells gold to support their currencies.  The west would thus be transferring control of any new global gold or yuan linked reserve currency to China, which would seem to conflict with western strategic interests.

Friday, 17 February 2012

CDS and therefore sovereign debt markets under threat

If any Greek or other debt default, or "haircut", is not deemed a default then credit default swap (CDS) debt insurance will not be called upon.  That would render CDSs useless, leaving lenders with uninsured losses.  That in turn would destroy confidence in the CDS market, which would render sovereign debt uninsurable and therefore unsellable.  This would make European sovereign debt rollover more difficult, or impossible for broke nations.  That would in turn place a greater financial burden on Europe who would be insurers of last resort.  I acknowledge Jim Sinclair and Eugene Stiglitz for their commentary on this matter.

Chinese reduction of US dollar holdings continues

Clearly China is at least partially "switching" out of the US dollar into gold; reflecting waning confidence in the global reserve currency.  It will be interesting to see how much, if any, they divert into the Euro (which I believe would be a strategic mistake).  See "China reduces US debt holdings", with thanks to Jim Sinclair and Forbes.

Chinese gold accumulation accelerates

"Gold market watchers believe China has been surreptitiously stockpiling gold as a means to diversify its reserves."  See "Chinese central bank big Q4 gold buy" courtesy of Mineweb and Reuters.

India promotes popular gold ownership

Wednesday, 15 February 2012

Central banks' trend to repatriate national gold holdings

Julian Phillips discusses growing needs for central banks to repatriate gold in "The politics of central bank gold holdings", in which he further confirms mainland China's strategy to accumulate large national gold holdings.  I acknowledge Mineweb.

Chinese yuan-denominated gold ETF

I acknowledge Mineweb for this news: "World's first yuan-denominated gold ETF makes weak HKSE debut".

Tuesday, 14 February 2012

Where to hold gold

I found this article interesting:  "Where you should hold your gold to avoid possible confiscation".  I acknowledge Julian Phillips and Mineweb.

Renewed Chinese uranium demand forecast

Mainland China continues to seek stakes in uranium deposits to support plans to have at lest 70GW of nuclear power generation capacity by 2020, according to David Talbot in his interview with Geoff Candy.  China has restated their pre-Fukushima nuclear objectives.

German energy policy

Renewable energy can not effectively provide nation-wide base load electric power.  For the foreseeable decade at least, only coal, gas, oil and nuclear energy sources can provide that electricity at reasonable cost.  Storage of electricity from sunny and windy times remains too expense despite decades of battery research.  See "Funding shortage threatens Germany's energy revolution".

Soros' criticism of German policy

George Soros' criticism of Germany's inherent values of financial prudence is based soundly on Keynesiamism.  Although taught universally for decades, there is growing scepticism about some of Keynes' doctrines.  The IMF has already concluded that the second Greek bail-out is now not big enough to achieve the intended rescue purposes.  Therefore a third bail-out would be required should the current Greek economy be sustained.

Greece betrays failure of most western democracies

Forty-three elected members of the Greek parliament were disendorsed and expelled from their Pasok and New Democracy parties because they did not vote for the austerity bill.  The usurpation of parliamentary votes by political parties is now common practice in democracies around the world, and only adds to growing social unrest.

Monday, 13 February 2012

Canada opens door to uranium trade with China

Greece to receive another bail-out despite falsifying accounts for first failed bail-out.

Such a headline has not appeared in global mainstream media.  Why not?  It should be major news that Greece receives a second bail-out despite submitting fraudulent national accounts for the first bail-out, which failed.

Gold price spike

The gold price spiked up momentarily by more than $30, before returning to pre-existing levels, shortly after 23:00 GMT = 10:00am AEDT (Sydney), Monday morning.  See Kitco's chart below.

Sunday, 12 February 2012

Taxpayers to guarantee $700 trillion derivatives market?

How could any proposed centralised clearing house act as ultimate guarantor for such a huge market?  The $700 trillion derivatives market continues to grow rapidly, opaquely to public scrutiny.

Saturday, 11 February 2012

Portugal might cause next euro crisis

Portugal needs adjustments to their 2011 bail-out package.  Germany would be ready to agree to more flexible terms for their 78M euro package.

US joins China in opposing EU aviation tax

The US now joins China and other nations in considering retaliating against the EU's carbon tax on international aviation.  This is a very rare case of public alignment of Chinese and US interests. (p15 AFR Feb11-12, 2012)

Thursday, 9 February 2012

Unemployment worse than stated - Bernanke

The US Federal Reserve chairman Ben Bernanke said the 8.3% US unemployment rate understates weakness in the labour market.  "We still have a long way to go

Wednesday, 8 February 2012

China's economic dominance is not guaranteed

Chinese commercial acumen contrasting with western over-indebtedness, and the demise of western currencies, will not guarantee China's eventual economic dominance.  China's gathering might over the longer term will not come without setbacks on the way, for at least three reasons.  Political risk will increase as a young and unwise minority born into great wealth increasingly flaunt their huge inherited riches.  Much wealth has been amassed through favourable Chinese Communist Party connections.

US currency will be under scrutiny next

Global focus will return to scrutinise the US currency after the euro crisis comes to a head.  Unsustainable US national, federal and state debts, and perpetual quantitative easing, I believe will demand the scrutiny of international markets.  This forecast is simply my opinion.

Euro collapse seems inevitable

The Greek government missed another deadline for spending cuts agreed for their next bail-out, as the public strikes and protests against austerity, according to Business Spectator's "Boiling point of a Greek bail-out", which I acknowledge.  Lurching towards default with untrustworthy national accounts, Greek maladministration will require the euro to be restructured or fail.

Tuesday, 7 February 2012

Saturday, 4 February 2012

Greek and Italian fiscal reform impossible

Culturally embedded "black" economies will require at least a generation to shift into the northern European style tax system demanded for the euro currency's survival.  The problem of shifting collective popular attitudes towards cash economies for the required fiscal reforms, is intractable.  Falsification of Greek national accounts prior to their first bail-out betrays acceptance of entrenched dishonesty to the highest level.

Thursday, 2 February 2012

International trade continues to decline

Shipping rates continue to fall, having never recovered after collapsing by 90% in 2008, measured by the "Baltic Dry Index" (BDIY:IND).  Low rates reflect market expectations that international trade will remain very low or decline further.

Wednesday, 1 February 2012

China building gold reserves

See "China enhances position as world No. 1 gold producer - but where's it all going?" published by Mineweb.  We have observed before that it would be to China's significant strategic advantage to participate strongly in any new world currency system, after

Euro exit would restore Greek sovereignty

Greeks clearly defend their sovereignty in strongly opposing ceding fiscal control to Europe.  Greece would achieve greater control over their sovereignty by withdrawing from the Euro.  Greece partially ceded

China bans Brazil's iron ore ships

China has banned Brazil's super large iron ore bulk carriers from delivering iron ore to China.

CDS insurance failure bankrupted MF Global

MF Global failed because a 50% bond "haircut" they suffered was deemed not to be a default, so their credit default swap (CDS) insurance against default did not deliver the promised cover, even though the issuers kept the premium.

Tuesday, 31 January 2012

Portugal is next Euro problem

Portuguese bond yields remain at more than twice sustainable levels:  19.3%, 22% and 16.3% for two, five and ten year maturities, far in excess of the 7% levels which trigger alarm bells for Greece and Italy.  On top of Italy's and Greece's needs for significant new borrowings, stabilisation of Portuguese debt will demand more of Europe's bail-out funds, further locking in the likelihood of massive global money printing, the ultimate effect of which will be very high inflation after the velocity of money increases again.

Equity bull market foundations forming

The impending Greek default is possibly laying the foundations for another equities bull market, argues Jim Sinclair in this interview, who predicts that Greek default will probably be deemed a "credit event" and not a default, to protect five major US banks against bankruptcy, who

Second Greek bail-out now too small

Greece now needs 145B euros to stay solvent through 2014, 15B more than the second bail-out package, according to Der Spiegel's article.

Friday, 27 January 2012

Stay alert Friday evenings for euro announcement

If Greece were to leave the Euro, or if a major decision were made which affected the Euro, the announcement would likely be made after the Friday close of markets in the USA.

Reasons against gold standard

There are calls for a return to the gold standard, to ensure that money retains its value.  Removal of the gold standard freed governments to print as much currency as they wished.

Thursday, 26 January 2012

Hedge funds stand to benefit from failed Greek debt negotiations

This seems to be running out of control.  Will the US cover any hedge fund owners should their "bets" lose?  See Der Spiegel's article, which I acknowledge.

The EU will pay even if Greece doesn't deliver

See Der Spiegel's article, which I acknowledge.

Greece likely to receive permanent bail-out, relieved of all obligations for financial prudence

If you bail someone out twice, they don't need to care anymore.  Greece can count on more bail-outs, indefinitely, should Greece want.  Europe's granting Greece a second, larger bail-out a year after the first bailout failed, and after it was revealed that Greece's national accounts had been falsified, relieved Greece of any serious incentive to reduce spending to less than income, and for financial prudence.  That second bail-out now appears to have failed.  Greece "struggles" to meet fiscal commitments agreed for bail-outs.  The US will likely prevent Greek default at any cost, because

Wednesday, 25 January 2012

Second Greek bail-out fails

"The IMF has concluded the €130bn bail-out plan for Greece agreed in October will no longer enable Athens to get its €350bn debt pile down to a sustainable level by 2020 – the plan’s principal goal", according to this Financial Times article.

European fiscal agreement "torpedoed"

Most of Europe wants Germany to contribute even more funds to rescue those countries which can't repay their huge debts, but they don't seem to want to agree that they should spend less than their income.

Tuesday, 24 January 2012

European economic self-sabotage

The collective European economy is desperate for revival.  Energy is the lifeblood of human and economic survival:-  restrict energy;  and restrict the economy.  It seems strategically unsound that Europe:  reduces oil, coal,

Oil price linked to gold price?

Iran's linking of oil to gold is an important development.  An increased correlation between the oil price and a rising gold price over the longer term could result, if oil trading becomes increasingly denominated in gold.

Surf report

The surf along Perth's beaches this morning is great:  clean good swell;  easterly (offshore) breeze;  warm water.  A few body surfs make a fantastic start to any day.

India to pay gold instead of US dollars for Iranian oil

Gold as a currency bypasses sanctions for suspected weapons of mass destruction in Iran.  Beijing and Moscow maintain top secrecy about alternative financial mechanisms established for Tehran.

Sunday, 22 January 2012

Greek default will not be a default.

The impending Greek default will not be deemed a default:

US $1 trillion QE money printing probable

The US is likely to print a further $1 trillion in a new quantitative easing (QE) program.  The first four QE programs failed to stimulate the US economy, so this time the cure will be applied a little more heavily.  A stock market rally might result.

Greek debt negotiations fail again

Greek bond holders failed again to agree to increase their "haircut" to more than the 50% losses they had already agreed.  Officials had hoped they would agree before Monday's (23 Jan) meeting of eurozone finance ministers, at which they had hoped "to set in motion the paperwork" for Greece's next bail-out payments.  See The Telegraph's "Greek debt deal hits setback", which I acknowledge.

Thursday, 19 January 2012

MF Global clients might lose

MF Global clients might not get all their money back, warns an administrator.  More people are "claiming segregated status than there is segregated money".  I acknowledge "Warning on returns from MF Global UK", Financial Times.  Also see "Don't let another MF Global ruin you!"

Greece threatens Greek bailout

Greek reforms are hardly making any progress at all, according to "Greece struggles to make necessary reforms".  Resistance is too great, and Greek politicians benefit from the existing system:  "no one likes to saw away at the branch they are sitting on".  Greek bailout, conditional upon reforms, thus remains tentative.

European Union fragmentation continues

EU legal action against Hungary confirms further disintegration of the European Union.  The EU is no longer a force for order in Eastern Europe:  from the Baltic States to Bulgaria, hardly an Eastern European country truly stands behind EU projects, according to Der Spiegel

Wednesday, 18 January 2012

Chinese gold market dominance forecast

Chinese gold consumption has sustained 7.5% pa growth over the last decade, according to Mineweb.  Significantly for the future gold price, Chinese investors avoid futures and other derivatives:  they buy real bullion, in sympathy with China's strategic aims to dominate the global gold market, and to play a significant global currency role after the impending debasement of the US dollar and Euro.

Current Greek debt status for March 20 repayment deadline

Negotiations for an increased haircut will resume;  Fitch Ratings claim Greece will probably default;   and European fiscal agreement is unlikely to be implemented, according to this Bloomberg article.

Monday, 16 January 2012

Resource based economies protected by totalitarianism

Resource based economies will be partially insulated against impending global financial crises because those with absolute dictatorial political control absolutely need to preserve themselves. Suppression of growing popular uprising and political dissent is more sustainably achieved by "making the populace happy": fostering domestic consumption.  Mainland China's Central Communist Party Committee is aware of this, obviously;  and they have more than three trillion US dollars in foreign exchange reserves.

How to capture trading profits

How many times have you let an unrealised profit turn into a loss? If that has happened to you, you might need to learn how to implement your trade exit strategy reliably.

Friday, 13 January 2012

Options trading volatility lesson

If you trade options, it is essential to understand how volatility affects option premiums and trading.  Click here for a one hour recording which explains some important concepts related to options trading and volatility.

Deep sea gold mine

Copper and gold will be mined from 1600 metre depths in the Bismarck Sea, Papua New Guinea, in one of the world's first commercial deep sea mining projects, by Nautilus MineralsConstruction contracts are now being awarded.

Gold price correction is over - Alf Fields

If you trade or invest in gold or gold stocks, you might find Alf Field's article: "Gold correction is over" of interest.

Wednesday, 11 January 2012

MF Global regulatory oversight failings kept secret

It is claimed that regulators and bankruptcy trustees are suppressing information about the MF Global failure, in the article "The neverending MF Global story:  regulators block the truth".

Bankrupt US municipality cuts pensions, saves financial institutions

Retired municipal employees in Central Falls, Rhode Island will have their pensions cut, as investors in US municipal bonds are spared a haircut, according to "Pensions chopped but investors paid".  The parallel with Greek default prevention raises questions.

US national debt now exceeds GDP

Greece and Italy are not the only nations with unsustainably high debt.  US national debt is now more than 100% of GDP,

Tuesday, 10 January 2012

Lenders pay to lend money to Germany

Lenders are paying Germany to lend money to Germany.  For the first time ever, Germany has sold short term debt with negative yield.  This indicates confidence in the German economy despite failing confidence in Germany's currency, the Euro. 

Friday, 6 January 2012

China - Europe air transport dispute

Mainland Chinese airlines will refuse to pay the European Union's aircraft emissions surcharge.