Baltic Dry Index. 681 +25 Brent Crude 63.76
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
“We are all failures- at least the best of us are.”
Mario Draghi, with apologies to Peter Pan.
We open for once with news that isn’t about Greece. China yesterday took
another giant 21st century step forward in challenging the USA’s
position in global dollar hegemony. In the Great Nixonian Error of fiat money, one
unbacked fiat is just like another. Worth only tangible value, i.e. zero, or
worth only what its issuer can enforce, or a wider public believes and trusts.
China is now jumping in the fiat game with both feet in the second decade of
the 21st century. China’s come a long way since Deng rode a
stagecoach in Houston, Texas in 1979. Any guesses as to what China’s role will
be in another 36 years? Gold’s role if Chinese investors find gold like they
seem to have found stocks?
When
our thousands of Chinese students abroad return home, you will see how China
will transform itself.
Deng Xiaoping.
Bank of China becomes first Chinese bank to help set gold price
Published: June 17, 2015 12:53 a.m. ET
A Chinese bank will for the first time join the group of lenders that sets
global gold prices, marking another step in China’s push for a bigger role in international financial markets.
Bank of China Ltd., 3988, +0.98% BACHY, -0.66% 601988, +3.31% one of China’s big-four state-owned lenders, will participate in the twice-daily electronic auctions that set the LBMA Gold Price benchmark, the London Bullion Market Association said Tuesday.
“Although ... the world’s largest gold producer and consumer, China has never played a major role in the global gold fixing,” said Yu Sun, Bank of China’s U.K. general manager. “Bank of China’s direct participation in the gold auction would reinforce the connection between the Chinese domestic market and overseas markets.”
China vies with India as the largest consumer of gold, and together the two countries make up more than 50% of global demand. China is the world’s biggest importer of the yellow metal, as it consumes more than three times the amount of gold it produces. Demand for gold in China fell to 273 tons in the first quarter, down 7% from the year before, as cooling economic growth and caution among bargain hunters curbed consumer appetite, according to the World Gold Council.
More
China, India are ‘changing the nature’ of gold bullion markets
Published: June 16, 2015 2:24 p.m. ET
There is a shake-up in the gold market—and emerging markets like China and
India are to blame.Emerging-market demand is ‘changing the nature of the bullion market,” HSBC analysts, led by James Steel, said in a note on Tuesday.
Investment demand was the primary driver of gold until recently, but “price-sensitive EM demand is an increasingly important driver of gold prices, they said.
EM buyers and sellers “largely define” the range for gold—with prices near $1,100 an ounce attracting buyers, but prices near $1,300 causing buyers to “shy away from purchases,” the HSBC analysts said. Gold futures GCQ5, -0.17% settled at $1,180.90 on Tuesday.
They also point out that emerging-market central banks have contributed to purchases and they expect official-sector buying this year to climb by 25%.
In China, gold demand has been hurt by a moderating economy, a pullback
in demand for luxury goods, a reduction in official gift giving and strong
domestic mine output—which all contributed to the nation’s slowing appetite for
imported gold, analysts at HSBC said.
But China’s imports are “still robust by any historical measure,” with
2014’s imports marking the second best year for bullion demand in the country’s
history, they said. And so far this year, imports are running well ahead of the
five-year average.
Consumers in important gold-consuming nations such as China, India,
Indonesia, Vietnam and other emerging markets, “may have fewer tools at their
disposal with which to protect savings and household wealth against rising
prices or low or negative real interest rates,” the analysts said.
More
Now back to the usual dismal,
dying, EUSSR news. Ding, ding, ding, round whatever, between Athens in the red
corner and tag team Berlin-Brussels in the blue corner. The IMF for now, has
gone back to sitting in the crowd of spectators. Wiser heads with no interest
in this spectacle, will be out of euro this weekend, and in continental Europe,
be long an extra amount of cash at home, in case this all goes spectacularly
wrong this coming weekend and into next week.
Athens, Berlin, and Brussels, all
seem to have a death wish for the Bilderberger, wealth and jobs destroying euro,
which by now was supposed, in the minds of its anti-American, dollar hating
founders, was supposed to have increasingly replaced the dollar as the world’s
reserve currency.
Keep a cool head and maintain a low
profile. Never take the lead - but aim to do something big.
Deng Xiaoping.
Europe Struggles Toward Solution as Tsipras Rips Into Creditors
June 16, 2015 — 1:32 PM BST Updated on June 16, 2015
European decision makers were at a loss over Greece’s fate as Prime Minister
Alexis Tsipras hurled insults at its creditors while Germany’s Angela Merkel
kept her cool.Wading in from a increasingly concerned U.S. was Treasury Secretary Jacob J. Lew, who got on the phone with Tsipras to tell him to get serious about reaching a compromise. This was after Tsipras went on a tirade against the International Monetary Fund and the European Central Bank. In Berlin, Merkel refused to take Tsipras’s bait, saying that she would do everything possible to keep Greece in the euro.
As a deadline for a solution approaches, the antagonism of recent days has rattled markets and left Greece watchers confused as to whether a default is at hand. Chancellor Merkel’s even-keeled tone is one indication that there may be a resolution after all, no matter how much Tsipras protests.
At stake is Europe’s drive to keep the euro indivisible. Greece needs to seal an accord or get an extension before the euro area’s bailout expires on June 30, or risk missing payments on its debt of about 313 billion euros ($352 billion).
More
Greece crisis: Tsipras rails against attempts to 'humiliate' his government, claiming IMF has 'criminal responsibility'
Wednesday 17 June 2015
Alexis Tsipras, the Greek prime minister, has railed against attempts to
humiliate his government by international creditors such as the EU and the
International Monetary Fund, claiming the IMF has 'criminal responsibility' for
the deadlock.
"The fixation on cuts...is most likely part of a political plan...
to humiliate an entire people that has suffered in the past five years through
no fault of its own," he said.
Tsipras said he wanted to strike a deal with creditors that could put an
end to fears that Greece will leave the euro. But he said his government had
been elected to end austerity – a position he has maintained since talks with
creditors broke down after just 45 minutes on Sunday – and that he could not
compromise that position by signing up to further cuts to the country's pension
system or greater VAT on basic goods.
"The mandate we have got from the Greek people is to end austerity
policy," he told his leftist Syriza party at a parliament meeting in
Athens, Reuters reports.
More
Greek exit real prospect as eurozone hardens towards belligerent Athens
Tuesday 16 June 2015 19.54 BST
Tsipras’s abrasive tone and accusations of ‘criminal conduct’ by IMF stokes
more anger as EU officials prepare to gather at Luxembourg last chance saloonFears that the five-year Greek financial crisis will culminate in debt default and exit from the euro have intensified as Athens hardened its rhetoric against its creditors and insisted it would miss a payment to the International Monetary Fund unless it received debt relief.
With just 48 hours to go before a meeting of eurozone finance ministers, seen as the last realistic chance to reach a deal before Greece has to pay the IMF at the end of June, Alexis Tsipras, showed no sign of bowing to demands for cuts in pensions and increases in VAT. Instead, the Greek prime minister accused the Fund of “criminal responsibility” for the situation and said lenders were seeking to “humiliate” his country.
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