Commodity Trade Mantra

Posts Tagged ‘People’s Bank of China’

China Stands Ready to Re-Inflate Bubble: Michael Kosowan

Will China, the “engine” of the world’s great economic machine, come chugging to a halt? Not likely. In the weeks ahead, China is likely to experiment with cutting interest rates and further devaluing its currency in order to stabilize the stock market. They may shuttle the bad debt off to warehouse-like institutions while they re-inflate their markets.

China: QE, Printing of Cheap Money, Currency Devaluation and Gold

To the extent that it weakens its own currency, China exports deflation to the U.S. and can help the dollar’s strength. Lower inflation and a stronger dollar reduce the incentive or rationale for any imminent Fed rate hike. So yes, you can almost say this is China’s silent protest against the widely anticipated September hike.

China Destroys the “August is a Quiet Month Myth”

After a long period of pegging the Chinese yuan to the US dollar at about 6.1-to-1, China devalued the yuan in a sneak attack on August 11, devalued again Wednesday & Thursday. The total devaluation is almost 5%, the biggest devaluation in over 20 years. Normal daily volatility in foreign exchange markets is measured in 5 decimal places. 0.05% is a choppy day. 5.0% is an earthquake.

Chinese Devaluation Extends To 3rd Day - Yuan Hits 4 Year Low

Having devalued the Yuan fix by 3.5% in the last 2 days, China did it again, shifting Yuan to 4 year lows. While confusion reigns over why PBOC would intervene at the close to strengthen the Yuan last night, the reality is the commitment isn’t to a devaluation for China’s exports, but its actions are directed toward trying to keep the wholesale finance interfaces somewhat orderly.

China’s Master Gold Plan, Restated

“China increased its gold reserves 57%,” reports Bloomberg this morning. While tapping this reckoning out, Jim called from the road. “China is feigning transparency with a ‘don’t rock the gold boat’ strategy,” he said in reaction to today’s announcement. “It’s a misrepresentation of the facts. They absolutely have more gold than they’re reporting.

China’s Gold Hoard Will Slay the Mighty Dollar — Here’s Why

China is soon going to want to disclose its gold holdings in an effort to have the yuan join the IMF’s currency basket – the SDR, currently having only the dollar, euro, yen & British pound. If China’s gold reserve is revealed this year and the size of the addition surprises to the upside, it is going to be a major shot across the bow of the U.S. dollar.

China's Massive Debt Problem Is About Get Much Massiver

PBOC has announced that regulatory approval will no longer be required to issue ABS. Market players now expect ABS issuance to more than triple to 1 trillion yuan ($161 billion) this year. This means China’s massive debt burden is about to get massiv-er, as banks use ABS issuance as a pressure valve to free up lending capacity.

China Cuts Interest Rates - 21 Central Bank Easings In 2015 Till Now

The decision to cut benchmark interest rates again has been widely expected by the market. There was also some speculation that the deposit rate ceiling would be increased. The cut to the benchmark lending rate is also smaller than the last cut in November (40 bps). This may make some observers view the move as cautious.

3 Important Gold Charts - Bullion Goes East To Russia and China

The charts are very illuminating and provide great insight into how gold has shifted between non public sources and public sources over the last 10-12 years. Mobilisation of gold at its peak was somewhere between 90 million and 100 million ounces (2800 tonnes – 3100 tonnes). The question is where did all this gold come from?

SGE Chairman: China Should Become First Class International Gold Market

Xu Luode, Chairman of the Shanghai Gold Exchange said the Chinese gold market is an important force, a positive energy in the international gold market but its influence does not correspond to its mass & scale. Therefore to accelerate the development of China’s gold market, he proposed building China’s “Shanghai Gold”.

Shanghai Gold Exchange International Board Another Blow To US Dollar

In the fourth quarter of this year the Shanghai Gold Exchange (SGE) will launch an international board in the Shanghai Free Trade Zone (FTZ) for investors worldwide to trade gold spot contracts denominated in renminbi. We can see power shifting from West to East on a daily basis now.

China may have 1,000 tonnes of Gold tied in Financing - WGC

Chinese firms could have locked up as much as 1,000 tonnes of gold in financing deals, indicating a big slice of imports has been used to raise funds due to tight credit, rather than on consumer demand. Gold prices could come under pressure if imports are hit by a broader crackdown on using commodities for finance.

Renewed Estimates of Chinese Gold Demand

For its geopolitical strategy to work China must accumulate large quantities of bullion. Western analysts have always lagged in their understanding of Chinese gold demand & there is now evidence China is deliberately concealing its scale from us & is also happy to let us accept the lower estimates.

Dark Gold: Shedding Light On A Mysterious Market

Once an individual locks his or her safe, that gold effectively disappears from the market at large. Unlike bank deposits or stocks, there is no way to tally the total amount of gold held by individual investors. I like to call this concept “Dark Gold.”

The Chinese Government’s Gold Policy - From The Horse’s Mouth

This is a detailed policy memo from the China’s highest government to let the various ministries & department know of the direction, intentions, progress & steps of development of the many facets and components of the gold market that serves both the gold industry and other areas of finance.

China Bails Out Money Markets Following Repo Rate Blow Out

China said it injected over 300 billion yuan ($49.2 billion) into the nation’s money markets over a three-day period as interbank interest rates surged to their highest levels since June – Perhaps the PBOC hinting at tapering at a time when the Fed is actually doing so is not the smart choice…

Fed Ben's Rocket to Nowhere - Peter Schiff

Fed Ben likened QE to the first stage in a multiple stage rocket that gets the spacecraft off the ground – But the Fed can’t stop accumulating and dispose of its inventory without creating major market disruptions even if the economic rocket were actually approaching escape velocity.

How to Be Your Own Central Bank

If we were to cobble together the advice from Mr. Mminele, Mr. Draghi and the ‘Nospeak’ implications from the Chinese, we can create a ‘how-to-manage’ your own portfolio manual just as central banks do.

China, Gold Prices And US Default Threats

Just when a possible US government debt default would send investors in a panic rush to the safety of gold, prices plunged $30 to a three-month low. There is reason to believe it was manipulation – The stakes for US in depressing the gold price are staggering.

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