Asia Needs Deal to Prevent Panic Selling of U.S. Debt, Yu Says
By Kevin Hamlin
Sept. 25 (Bloomberg) -- Japan, China and other holders of U.S. government debt must quickly reach an agreement to prevent panic sales leading to a global financial collapse, said Yu Yongding, a former adviser to the Chinese central bank.
``We are in the same boat, we must cooperate,'' Yu said in an interview in Beijing on Sept. 23. ``If there's no selling in a panicked way, then China willingly can continue to provide our financial support by continuing to hold U.S. assets.''
An agreement is needed so that no nation rushes to sell, ``causing a collapse,'' Yu said. Japan is the biggest owner of U.S. Treasury bills, holding $593 billion, and China is second with $519 billion. Asian countries together hold half of the $2.67 trillion total held by foreign nations.
China, Japan, South Korea and others should meet soon to seal a deal, said Yu, a former academic member of the central bank's monetary policy committee. The talks should involve finance ministers, central bank governors and even national leaders, he said.
``Whether some kind of agreement between them to continue to hold Treasury bills is viable, I'm not sure,'' said James McCormack, head of sovereign ratings at Fitch Ratings Ltd in Hong Kong. ``It would be unusual. If it became apparent that sovereigns in Asia were selling Treasuries the market would take that quite badly, it's something to be avoided...''
China's huge holdings of U.S. debt means it must bear a large proportion of the ``burden of sorting things out'' in the U.S., Yu said. China is not in a hurry to dump its U.S. holdings and communication between the two nations every ``couple of days'' is keeping Chinese leaders informed and helping to avoid a potential panic, he added.
``China is very worried about the safety of its assets,'' he said. ``If you want China to keep calm, you must ensure China that its assets are safe.''
Bear in mind how tiny a market segment Gold is and what a comparatively small amount of investment from somewhere like China could do to the market. Then watch:
http://www.cnbc.com/id/15840232?video=865880359&play=1
This is an interesting interview.
Bloody CNBC must be a slave dog for those who pay them to talk down gold anywhere they can.
Funny though, JPMorgan Securities is also a big shorter of gold. So Jing was saying something AGAINST the interest of her company.
Do anyone feel the reaction from Amanda?? Or it's just me?
The work of Adrian Douglas, GATA consultant and frequent contributor to LeMetropolecafe.com. Douglas’ work follows the Gold position of Goldman Sachs [a surrogate of the Federal Reserve] on the Tokyo Commodities Exchange [TOCOM].
Douglas has reported on Goldman’s daily TOCOM gold futures position changes for almost 3 years.
With Goldman Sachs representing a defacto surrogate of the Federal Reserve, it is clear that the Fed is moving from being “overextended short” to flat – or possibly going long gold.
I believe this transition is critically important, much like a fuse burning toward explosives.When this position crosses over from short to long, as I expect it will sometime this month, I expect that some large deafening bells will be ringing – somewhere.
Well, I’d like to report that last night [as of Sept. 24, 2008], Goldman Sachs has further reduced their “short gold position” by over one thousand contracts on TOCOM to “net” 624 contracts short – from a high water mark of more than 50,000 contracts short a couple of years ago.
I now surmise that the “lit fuse” referred to above, is actually a count-down to the imminent imposition of “RECEIVERSHIP of the U.S.A” by a multi-national group of creditors.
Gold and silver dealer reports an ‘unprecedented’ shortage of metals
Sunday, September 28, 2008 By David Clerkin, Markets Correspondent
A surge for demand in gold and silver has resulted in an unprecedented shortage of the metals for retail investors in recent days, according to Gold and Silver Investments, a Dublin-based firm that allows retail investors to speculate on movements in the value of precious metals.
Gold and Silver Investments director Mark O’Byrne said the supply of gold and silver available for small retail investors suffered a dramatic deterioration within hours on Friday, as wholesalers reported that government mints and refiners, the primary suppliers of the metals, had stopped offering new supplies.
‘‘It’s absolutely unprecedented,” said O’Byrne, who said the shortages were likely to drive up the costs of gold and silver in the secondary market.
‘‘This did not happen even in the 1930s and the 1970s, and will result in markedly higher prices in the coming months.”
According to O’Byrne, gold and silver were now only easily accessible in the primary market, which consisted of central banks and other major traders of the precious metals.
However, he said that minimum transaction sizes in this market were out of reach for most retail investors - at approximately $350,000 for gold and $135,000 for silver.
Some things just are not adding up? Constant, almost daily information alluding to the scarcity of physical, yet the gold price just biding it's time. It's either going to do a moon shot or gather dust as a relic of the money/fiat currency wars for the rest of time - this week will be interesting.
http://www.thepost.ie/post/pages/p/story.aspx-qqqt=MARKETS-qqqm=nav-qqqid=36223-qqqx=1.asp
Some things just are not adding up? Constant, almost daily information alluding to the scarcity of physical, yet the gold price just biding it's time. It's either going to do a moon shot or gather dust as a relic of the money/fiat currency wars for the rest of time - this week will be interesting.
http://www.thepost.ie/post/pages/p/story.aspx-qqqt=MARKETS-qqqm=nav-qqqid=36223-qqqx=1.asp
European central banks have cut their sales of gold to the lowest level in almost a decade, reversing the practice of recent years when hefty sales helped depress prices.
Institutions bound by the Central Bank Gold Agreement – the banks of the eurozone plus Sweden and Switzerland – sold about 343 tonnes of gold in the year that expired on Friday, the lowest amount since the first CBGA was signed in 1999.
Just to be clear, oil is in primary uptrend, with a short term retrace.The gold chart is less clear, but taking a lead from oil, I think a little kick in gold over 900 again corresponding with the spike in oil, before oil continues it's primary downtrend and gold has a minor correction before resuming the primary uptrend later on lack of supply.
Gold defy common sense today! After reading the bailout plan being rejected, I was expecting a huge rise in USD and a corresponding drop in POG.
Interesting time indeed.
Do not get your rationale. I have found that in uncertain times gold goes up as it did, some people see it as a safe haven. There will of course always be those who dont' but the ones that do will drive the price as the gold market is but a small one.
Would be interested in the reasons for your statement Temjin ?
Visited a Pawnbroker I know in the City (Melb) at the weekend. He told me to forget gold. Silver will leave it in its tracks when it all moves up. Apparently supplies are virtually non-existent against an enourmous demand both industrially and investment wise. And the cartels are loaded to go long. He says a 5 to 1 ratio for gold silver will occur soon. Not sure if that means gold down Uncle but gold in the last month has been about the only thing to go up.
Your wave count on gold makes no sense as always Whiskers.
Even to a casual oberserver of EW.
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