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Scooped by Hal onto Gold and What Moves it. |
Scoop.it!
As you know, the old Wall St. saying is that 'so goes January, there goes the rest of the year' or words to that effect.
The last chart shows that assets are having a very nice start. Silver is leading they way with stocks not far behind. Gold is still recovering from its end of year smash, which lasted into the first week in January. I suspect that if things hold together it will do well.
VIX is very low and complacency about the economic picture is the word for the day. ...
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Curious why nobody at the G-7 or G-20 had the gall to outright accuse Japan of currency manipulation? Simple: because everyone else in the G-7 and G-20 has been doing precisely what Japan only recently started doing a few months ago. As such, it would be outright "glass house" hypocrisy if there was a formal Japanese condemnation by the group of overlevered nations, which moments ago released its draft communique not naming the island nation outright as was widely expected. Of course, that the G-20 did notaccuse Japan of engaging in what everyone clearly knows is currency war, does not mean that everyone else is not doing this. To the contrary: they are, and the lack of a stern rebuke of Japan simply means the currency wars will now intensify, devolving into the same protectionism and trade wars as the first Great Depression was so familiar with, which to borrow a parallel from history again, will end with the kind of war that ultimately ended the first Great Depression. Nomura's Robert Koo explains: Currency devaluation the natural response for trade deficit nations
For example, US Treasury secretary Lawrence Summers reacted angrily when Japan’s Ministry of Finance ignored western government warnings in June 1999 and tried to push the yen lower with a ¥3trn intervention from a starting level of 117 to the dollar. When the US reaction was made known, the yen climbed sharply and stopped only when it had approached 100. Today, in contrast, Japan is running a trade deficit vis-à-vis the world and Europe (exports to the US still exceed imports). It is natural for a country running a trade deficit to reduce the deficit by devaluing its currency, and trading partners would have little justification for opposing such a move. ...
Hal's insight:
In a room full of theives, why should we expect them to get upset when theft is done? Let the currency wars continue. Delete the scoop?
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After a solid advance last week for gold and silver, today Michael Pento has written exclusively for King World News to let readers know about the exploding grenade which is going to send, “... increasing money flows into both gold and silver.” Here is Pento’s piece: “Japan has already suffered through 25 years of an economic malaise because they have refused to allow the free market to work its reconciliation magic. Their reliance on government borrowing and spending to rescue the economy has proven to be a miserable failure. Because of this fact, Japanese politicians have succeeded to increase the debt to GDP ratio to 237%, which should have already caused a collapse in Japanese Government Bonds (JGBs) and the Yen. However, JGBs have held their value for two reasons: The Japanese own 92% of their sovereign debt; And, up until now, deflation has reigned over the island. ..." Delete the scoop?
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GOLD PRICE NEWS – Gold prices remained in consolidation mode on Tuesday as investors and traders digested the impact of the Bank of Japan’s latest expansionary monetary policy decision. The spotprice of gold oscillated between gains and losses near $1,690 per ounce after the Japanese central bank announced yesterday that it would launch an unlimited quantitative easing program in January of 2014 and raise its inflation target from 1% to 2%.
The policy measures were consistent with proclamations made by Shinzo Abe, the recently-elected Prime Minister of Japan, who advocated for more aggressive measures to stimulate the nation’s stagnant economy. Following the central bank’s move, the U.S. dollar fell against the Japanese yen by 1.2% to 88.56. Commenting on the impact of the Bank of Japan’s decision for the gold price, David Govett – Marex Spectron’s head of precious metals – wrote in a note to clients that “This is seen as mildly bullish for gold, but has been mooted for a while and is fairly discounted.” ... Delete the scoop?
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Analysts said yen's retreat against the dollar has made the metal more expensive for buyers in Japan while global benchmark prices of gold in dollars are little changed this year.
TOKYO(BullionStreet): Japan continued to slash yen's value against the dollar which hiked gold prices to new highs in the Nippon nation.
According to major gold dealers in Tokyo, some gold holders may be preparing to cash out of some bullion due to the situation.
Japanese gold prices jumped 4.2% since the start of the year and about 10% since late November after authorities sparked a slide in the yen by pushing for further monetary easing to boost the sluggish economy. ... Delete the scoop?
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