I've written stuff that I feel may hurt some people's feelings. Even if the comments I've made were true, it's no point talking about the past but to look forward. I'll forgive and forget. If I've offended anyone, I hope I'll be granted the same mercy too. I'm amending this post to prevent any hurt that I may create from my comments.
I realise that I need both engines (EQ and IQ) to fire. An ex-boss once told me, "why bother to do CFA, you're now so old". He could not even clear level 1. This is the kind of people that harms others. Some bosses use their charm and nothing else... It's a shallow world and the likeable people get the rewards.
Where's the justice?
Sometimes I wished that I'm a charmer as well. But I am different. I am capable of driving the business side of things. I am capable of handling people. I am capable of looking at the markets and making a call.
I wish to have a heart as well. I want to have patience, to listen more, to analyse more before judging. to have compassion, to empathise. I need sharpness to hit the problem at the nail and at the same time leave room for doubt. I have to change my approach to talking to people... to know what's on their minds, their worries, their agenda, so that I can forge a win-win solution.
Indeed, I will love all, serve all.
Saturday 30 April 2011
Gold-Buying Central Bankers May Extend Record Rally
My opinion is: gold is likely to shoot up at least another 10 - 20%, reaching USD1600 - 1700/oz before pausing in 3rd or 4th quarter 2011 when the Fed starts to hike rates. It may correct to USD1500 for half a year before resuming its rise in first half of 2012 when inflation spirals out of control worldwide. It could hit USD1800 - 1900/oz, suggesting a 25% upside before the world's stock markets start to fall in 2nd half 2012. Gold will probably correct 35% to around USD1400 oz in 2013.
Gold-Buying Central Bankers May Extend Record Rally
By Pham-Duy Nguyen - Apr 29, 2011 12:00 PM GMT+0800
Gold prices reached a record 14 times this month on demand from investors seeking an alternative to the dollar after the currency slumped to the lowest since 2009, U.S. debt widened, and the Federal Reserve signaled April 27 that borrowing costs will remain near zero percent for an extended period.
Central banks that were net sellers of gold a decade ago are buying the precious metal to reduce their reliance on the dollar as a reserve currency, signaling demand that may extend a record rally in prices.
As developing countries accelerate purchases, gold may reach $2,000 an ounce this year, compared with a record of $1,538.80 yesterday in New York, said Robert McEwen, the chief executive officer of producer U.S. Gold Corp. Euro Pacific Capital’s Michael Pento, who correctly predicted gold’s highs for the past two years, forecast a 2011 high of $1,600.
Prices reached a record 14 times this month on demand from investors seeking an alternative to the dollar after the currency slumped to the lowest since 2009, U.S. debt widened, and the Federal Reserve signaled April 27 that borrowing costs will remain near zero percent for an extended period. The economy in China, the biggest foreign holder of U.S. Treasuries, grew 9.7 percent in the first quarter.
“China is out to have more gold than America, and Russia is aspiring to the same,” McEwen said yesterday in an interview in New York. “When you have debt, you don’t have a lot of flexibility. China wants to show its currency has more backing than the U.S.”
In 2010, central banks became net buyers for the first time in two decades, adding 87 metric tons in official-sector purchases by countries including Bolivia, Sri Lanka and Mauritius, according to World Gold Council data. China, with more than $3 trillion in foreign-currency reserves, plans to set up new funds to invest in precious metals, Century Weekly reported this week. Russia purchased 8 tons of gold in the first quarter.
China’s Gold Reserves
China, which has just 1.6 percent of its reserves in gold, may invest more than $1 trillion in bullion, Pento said. “China wants to be an international player, and they need to own more gold than they currently have.”
The U.S. Treasury Department projects the government could reach its debt ceiling of $14.3 trillion as soon as mid-May and run out of options for avoiding default by early July. The Fed has kept its benchmark rate between zero percent and 0.25 percent since December 2008 to help stimulate the economy, driving the dollar down 11 percent against a basket of six major currencies during the past year.
“Until monetary policy changes, you’re going to continue to see gold go up,” said Michael Cuggino, who helps manage $12 billion at Permanent Portfolio Funds in San Francisco.
“Ultimately the best thing we can do to create strong fundamentals for the dollar in the medium term is first, keep inflation low, which maintains the buying power of the dollar, and second, create a stronger economy,” Fed Chairman Ben S. Bernanke said on April 27.
U.S. Reserves
As of April, China was the sixth-largest official holder of gold, with 1,054.1 tons, according to World Gold Council estimates. The U.S. has the most, with 8,133.5 tons, or 74.8 percent of the nation’s currency reserves, council data show.
Central-bank buying may have the same impact on gold as the introduction of exchange-traded funds, Cuggino said. Prices have more than tripled since the SPDR Gold Trust, the biggest ETF backed by bullion, was introduced in November 2004.
Central banks in emerging markets may aim to hold 2 percent to 8 percent of their foreign-currency reserves in gold, Francisco Blanch, the head of commodities research at Bank of America Merrill Lynch in New York, said in an interview.
Gold is “close to” its cyclical high, said Blanch, who expects the metal to average $1,500 this year.
Gold’s Enemies
“The enemies of gold are rising interest rates and a balanced budget,” said Pento of Euro Pacific Capital in New York. “I look for a summer swoon once Bernanke exits the bond market. You’re going to have a temporary rise in real interest rates.”
The Fed said it would buy $600 billion in U.S. Treasuries through June.
The Federal Funds rate would have to rise to “Volcker” levels before gold enters a bear market, said Gold Corp.’s McEwen, who expects the metal to rise to $5,000 over three to four years.
Prices have advanced 7.7 percent this year, extending a decade of gains in which gold jumped sixfold from a low in 1999. The all-time inflation adjusted record is $2,338.92, based on the value on Jan. 21, 1980, according to a calculator on the Web site of the Federal Reserve Bank of Minneapolis.
Former Fed Chairman Paul Volcker ended gold’s rally to a then-record $873 by raising borrowing costs to 20 percent in March 1980.
To contact the reporter on this story: Pham-Duy Nguyen in New York at pnguyen@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net. .
Gold-Buying Central Bankers May Extend Record Rally
By Pham-Duy Nguyen - Apr 29, 2011 12:00 PM GMT+0800
Gold prices reached a record 14 times this month on demand from investors seeking an alternative to the dollar after the currency slumped to the lowest since 2009, U.S. debt widened, and the Federal Reserve signaled April 27 that borrowing costs will remain near zero percent for an extended period.
Central banks that were net sellers of gold a decade ago are buying the precious metal to reduce their reliance on the dollar as a reserve currency, signaling demand that may extend a record rally in prices.
As developing countries accelerate purchases, gold may reach $2,000 an ounce this year, compared with a record of $1,538.80 yesterday in New York, said Robert McEwen, the chief executive officer of producer U.S. Gold Corp. Euro Pacific Capital’s Michael Pento, who correctly predicted gold’s highs for the past two years, forecast a 2011 high of $1,600.
Prices reached a record 14 times this month on demand from investors seeking an alternative to the dollar after the currency slumped to the lowest since 2009, U.S. debt widened, and the Federal Reserve signaled April 27 that borrowing costs will remain near zero percent for an extended period. The economy in China, the biggest foreign holder of U.S. Treasuries, grew 9.7 percent in the first quarter.
“China is out to have more gold than America, and Russia is aspiring to the same,” McEwen said yesterday in an interview in New York. “When you have debt, you don’t have a lot of flexibility. China wants to show its currency has more backing than the U.S.”
In 2010, central banks became net buyers for the first time in two decades, adding 87 metric tons in official-sector purchases by countries including Bolivia, Sri Lanka and Mauritius, according to World Gold Council data. China, with more than $3 trillion in foreign-currency reserves, plans to set up new funds to invest in precious metals, Century Weekly reported this week. Russia purchased 8 tons of gold in the first quarter.
China’s Gold Reserves
China, which has just 1.6 percent of its reserves in gold, may invest more than $1 trillion in bullion, Pento said. “China wants to be an international player, and they need to own more gold than they currently have.”
The U.S. Treasury Department projects the government could reach its debt ceiling of $14.3 trillion as soon as mid-May and run out of options for avoiding default by early July. The Fed has kept its benchmark rate between zero percent and 0.25 percent since December 2008 to help stimulate the economy, driving the dollar down 11 percent against a basket of six major currencies during the past year.
“Until monetary policy changes, you’re going to continue to see gold go up,” said Michael Cuggino, who helps manage $12 billion at Permanent Portfolio Funds in San Francisco.
“Ultimately the best thing we can do to create strong fundamentals for the dollar in the medium term is first, keep inflation low, which maintains the buying power of the dollar, and second, create a stronger economy,” Fed Chairman Ben S. Bernanke said on April 27.
U.S. Reserves
As of April, China was the sixth-largest official holder of gold, with 1,054.1 tons, according to World Gold Council estimates. The U.S. has the most, with 8,133.5 tons, or 74.8 percent of the nation’s currency reserves, council data show.
Central-bank buying may have the same impact on gold as the introduction of exchange-traded funds, Cuggino said. Prices have more than tripled since the SPDR Gold Trust, the biggest ETF backed by bullion, was introduced in November 2004.
Central banks in emerging markets may aim to hold 2 percent to 8 percent of their foreign-currency reserves in gold, Francisco Blanch, the head of commodities research at Bank of America Merrill Lynch in New York, said in an interview.
Gold is “close to” its cyclical high, said Blanch, who expects the metal to average $1,500 this year.
Gold’s Enemies
“The enemies of gold are rising interest rates and a balanced budget,” said Pento of Euro Pacific Capital in New York. “I look for a summer swoon once Bernanke exits the bond market. You’re going to have a temporary rise in real interest rates.”
The Fed said it would buy $600 billion in U.S. Treasuries through June.
The Federal Funds rate would have to rise to “Volcker” levels before gold enters a bear market, said Gold Corp.’s McEwen, who expects the metal to rise to $5,000 over three to four years.
Prices have advanced 7.7 percent this year, extending a decade of gains in which gold jumped sixfold from a low in 1999. The all-time inflation adjusted record is $2,338.92, based on the value on Jan. 21, 1980, according to a calculator on the Web site of the Federal Reserve Bank of Minneapolis.
Former Fed Chairman Paul Volcker ended gold’s rally to a then-record $873 by raising borrowing costs to 20 percent in March 1980.
To contact the reporter on this story: Pham-Duy Nguyen in New York at pnguyen@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net. .
People's Bank of China Looking to Diversify into Precious Metals?
People's Bank of China Looking to Diversify Into Precious Metals?
by: Avery Goodman April 28, 2011
Share0 The China Daily, citing another newspaper, the New Century Weekly, says that the Chinese government will diversify its massive $3 trillion dollar foreign reserve stockpiles into investment funds designed to invest in precious metals and oil. New Century says that it got this information from confidential sources inside the Chinese central bank, which is concerned about the continued devaluation of the U.S. dollar and wants to preserve the future buying power of its reserves.
Because a large part of China’s economy is based upon exports, it has been engaged in years of currency debasement of the yuan against the dollar. Successive U.S. administrations, both Democrat and Republican, have uniformly demanded an end to artificial support of the dollar against the yuan and, apparently, the demand has finally been accepted. People really need to be careful what they wish for.
It was, of course, inevitable that the Chinese would wean themselves from over-dependence on exporting to the West. There is no reason to impoverish your own people and restrict their purchasing power for years while using the consequent cheap labor to import technology and know-how, if you never intend to use it.
Ben Bernanke’s bid to out-debase the Chinese has finally borne fruit. China has taken delivery of most of the technology and know-how it is going to get. It is already the factory of the world, producing everything from Barbie dolls to sophisticated automobiles and computers. The remaining technology it would like to import from the West is classified by the military, and America and Europe won’t share it with the Chinese.
China apparently has weighed the alternatives and decided to strike out on its own. It will do everything that it can to become more dependent upon internal, rather than external, demand. It will allow the yuan to rise against the dollar in order to slow down inflation imported from America, and it will make an attempt to salvage whatever value it can from dollar reserves before they become worthless. The plan will come as a surprise for many in the West who assumed that China would not and could not get rid of its dollars, and we do not doubt that many will be in denial until the impact of China’s next move becomes crystal clear.
If China's central bank starts to buy gold, silver, platinum, and palladium on the world market with even a small fraction of its dollar reserves, the impact will be enormous. It means that the demand for U.S. Treasuries as well as European sovereign bonds issuances will fall. That means the U.S. dollar and the euro are going to be deeply declining in their buying power. It also means that the demand for oil and precious metals is going to skyrocket.
Let’s say that China uses 10% of its $3 trillion worth of currency reserves to buy gold. That’s $300 billion. It will buy over 6,000 metric tons of gold at $1540 per ounce. It is interesting to note that, with the gold it already has, plus about 7,000 metric tons more, Chinese gold reserves would equal those of the United States of America.
But the price of gold won’t stay at $1,540 per ounce if the Chinese enter the market in a big way. Nor will the price of silver, platinum and palladium stand still. They will all rise astronomically. Tiny supplies of platinum and palladium, and the fact that both have always been more popular in Far Eastern jewelry than in the West, will conspire to explode those prices if even a small portion of that $300 billion is spent on them.
by: Avery Goodman April 28, 2011
Share0 The China Daily, citing another newspaper, the New Century Weekly, says that the Chinese government will diversify its massive $3 trillion dollar foreign reserve stockpiles into investment funds designed to invest in precious metals and oil. New Century says that it got this information from confidential sources inside the Chinese central bank, which is concerned about the continued devaluation of the U.S. dollar and wants to preserve the future buying power of its reserves.
Because a large part of China’s economy is based upon exports, it has been engaged in years of currency debasement of the yuan against the dollar. Successive U.S. administrations, both Democrat and Republican, have uniformly demanded an end to artificial support of the dollar against the yuan and, apparently, the demand has finally been accepted. People really need to be careful what they wish for.
It was, of course, inevitable that the Chinese would wean themselves from over-dependence on exporting to the West. There is no reason to impoverish your own people and restrict their purchasing power for years while using the consequent cheap labor to import technology and know-how, if you never intend to use it.
Ben Bernanke’s bid to out-debase the Chinese has finally borne fruit. China has taken delivery of most of the technology and know-how it is going to get. It is already the factory of the world, producing everything from Barbie dolls to sophisticated automobiles and computers. The remaining technology it would like to import from the West is classified by the military, and America and Europe won’t share it with the Chinese.
China apparently has weighed the alternatives and decided to strike out on its own. It will do everything that it can to become more dependent upon internal, rather than external, demand. It will allow the yuan to rise against the dollar in order to slow down inflation imported from America, and it will make an attempt to salvage whatever value it can from dollar reserves before they become worthless. The plan will come as a surprise for many in the West who assumed that China would not and could not get rid of its dollars, and we do not doubt that many will be in denial until the impact of China’s next move becomes crystal clear.
If China's central bank starts to buy gold, silver, platinum, and palladium on the world market with even a small fraction of its dollar reserves, the impact will be enormous. It means that the demand for U.S. Treasuries as well as European sovereign bonds issuances will fall. That means the U.S. dollar and the euro are going to be deeply declining in their buying power. It also means that the demand for oil and precious metals is going to skyrocket.
Let’s say that China uses 10% of its $3 trillion worth of currency reserves to buy gold. That’s $300 billion. It will buy over 6,000 metric tons of gold at $1540 per ounce. It is interesting to note that, with the gold it already has, plus about 7,000 metric tons more, Chinese gold reserves would equal those of the United States of America.
But the price of gold won’t stay at $1,540 per ounce if the Chinese enter the market in a big way. Nor will the price of silver, platinum and palladium stand still. They will all rise astronomically. Tiny supplies of platinum and palladium, and the fact that both have always been more popular in Far Eastern jewelry than in the West, will conspire to explode those prices if even a small portion of that $300 billion is spent on them.
Game Plan
Second half of 2011: Overweight commodities, starting energy, base metals, agriculture and precious metals in order of importance.
First half of 2012: Start to diversify into alternatives, commodities and reduce equities. You may wish to buy some investment grade bonds of longer durations.
Second half of 2012: You may need to start shorting equities, go for CTA alternative funds and investment grade bonds of longer duration.
First half of 2013: The blood bath may have started and you may wish to gather ammunition (cash) to buy up residential properties at 30% discount to today's prices.
First half of 2012: Start to diversify into alternatives, commodities and reduce equities. You may wish to buy some investment grade bonds of longer durations.
Second half of 2012: You may need to start shorting equities, go for CTA alternative funds and investment grade bonds of longer duration.
First half of 2013: The blood bath may have started and you may wish to gather ammunition (cash) to buy up residential properties at 30% discount to today's prices.
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