Investment/Trends

China’s gold imports still at unprecedented highs

"China will certainly become the world’s No. 1 gold consumer this year – if indeed it was not already. So far net imports through Hong Kong for the first five months of the year have totalled over 413 tonnes – double those of a year earlier when China imported just over 830 tonnes in the full year. China’s own gold production from its mines and as a byproduct from its smelting and refining sector exceeded 400 tonnes last year and is heading to between 420-450 tonnes by 2015 according to official estimates. This suggests Chinese gold imports plus its domestic production will, this year, account for comfortably over 50% of global new mined gold output." Continue reading →

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Third-Largest US Futures Broker Newedge Fined for Lax Oversight of Manipulative Trades

"The brokerage allowed potentially manipulative trading such as 'spoofing,' in which firms place orders designed to trick other firms into buying or selling stocks. Finra said clients also engaged in multiple 'wash trades,' in which a firm acts as buyer and seller in the same trade, creating the illusion of heavy trading volume that lures firms that are tracking for such activity. Finra last August implemented a sophisticated market-surveillance system that already has sparked nearly 300 investigations. The SEC is using a new market-monitoring system called Midas to track trading across stock exchanges." Continue reading →

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Bitfinex: Bitcoin Margin Trading

"The idea behind margin trading is simple. If you have an account at a traditional Bitcoin exchange like BitStamp of MtGox, you have two balances: a BTC balance and a USD balance. Apart from depositing and withdrawing, the only operation available to you is trading one currency for another. If you are participating in the exchange as a trader, your goal is to convert to BTC before the exchange rate goes up, and convert to USD before the exchange rate goes down, slowly increasing the net worth of your account over time. Margin trading services add only one feature to this model: the ability to have one of your balances go negative." Continue reading →

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Germany’s Bitcoin.de and Fidor Bank AG form partnership

"German bitcoin marketplace bitcoin.de and Fidor Bank AG have formed a large-scale partnership, with the online bank agreeing to provide a ‘liability umbrella’ to the marketplace operator Bitcoin Deutschland GmbH. This means the marketplace can prove it is officially following financial market regulations, such as anti-money laundering legislation. bitcoin.de hopes to lead the way as an EU-regulated trading platform with an EU deposit guarantee (up to 100,000 EUR per customer)." Continue reading →

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Rising Lease Rates Show Demand For Physical Gold Remains Strong

"Although the price of gold remains weak, retail investors and industries continue to pay a premium to buy the physical metal now. What appears to be occurring is gold is moving from weak hands, ETF holders and etc, to strong holders, that is physical holders. On Tuesday, one-month lease rates for gold hit a four-year high and rose to 0.3%. The lease rate is important because it in an indication of industry demand. Jewelry stores will borrow gold, which is backed by the future sales of their products. Mining companies will also borrow gold at the lease rate and then pay back the loan with future production." Continue reading →

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JP Morgan is Taking Delivery of Silver. Why?

"The commodity futures market allows speculators to bet against each other on where the prices of commodities are headed. Participants make money by out-guessing their competitors. Only about 3% of the contracts ever result in delivery of the physical commodity. The speculators don’t want the commodities. They just want the price action. All of a sudden, without warning, JP Morgan is demanding delivery of silver — not money. This is never done. Well, almost never. Bunker Hunt tried that in 1979, and the COMEX changed the rules. He was trying to squeeze the silver market. The COMEX opted out. Hunt lost billions of dollars." Continue reading →

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Beauty Offshore: A Caribbean Passport For A Chinese Restaurateur

"When Zhang Lan decided last year to file for an IPO in Hong Kong for her restaurant group South Beauty, she reorganized her holdings under an entity in the Cayman Islands. However, she didn’t just move her company offshore. She did the same to herself, applying for fast-track citizenship in the Caribbean state of St. Kitts & Nevis (pop. 50,000) under an investment scheme. Three months later a passport was delivered to her office in Beijing. In June 2012 Zhang filed for a share offering in Hong Kong as the foreign principal of South Beauty Investment Co. Ltd., a Cayman-registered company that earns its revenues in mainland China." Continue reading →

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Shanghai sees global status via new free-trade zone

"Under the plan, endorsed by the State Council on Wednesday, Shanghai is expected to allow companies to freely convert foreign exchange within specified areas of the city while allowing free capital and commodity inflow for the entire city. Mayor Yang Xiong said Shanghai’s future hinged on the free trade zone, which could give the city a leg-up over rivals. Shanghai’s ambitions to become the nation’s economic engine, leapfrogging Hong Kong as the dominant financial hub in the region are an open secret. The long-awaited policy incentive granted by the cabinet will only add heft to the city’s attempts to attract global capital and talent." Continue reading →

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Bill Bonner: The End of the World As We Know It

"People become 'educators' and never teach a single student. They go on 'disability.' They turn whole industries – defense, health, finance – into vast wealth transfer schemes that produce little or no net benefit for the people they are supposed to serve. In short, zombies consume more than they produce; they are a net negative for society. But Hadas is right about the effects of lower birthrates. They also lower 'growth.' And without substantial growth, life as we have known it will come to an end. Stocks will fall, creditors (bondholders, for example) won't be paid, and governments must cut back on their expenses... or go broke." Continue reading →

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IRS Reporting Rules for Cash Transactions and Precious Metals

"As you can tell by the title this commentary is our third revision at understanding what the government had in mind when IRS reporting rules for cash transactions came up on the radar screen more than 30 years ago. This subject has to be one of the most misunderstood and misrepresented in the trade today so I can’t figure out why you don’t see more about these rules? The reason might be that these mystical directions while holding sway over dealers are a poorly written mess which should have been avoided or at least provided with updating options. With mistrust of government reaching new highs these famous reporting rules become more important." Continue reading →

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