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Greek Euro Exit Likely Within Days

admin — Tue, 06 Sep 2011 07:50:46 +0000

The game is up for Greece as there is surely no way back for the country and a rapid Euro exit is increasingly likely. Without decisive action, the Euro is also likely to come under increasingly severe selling pressure as the financial crisis spreads. In theory, the EU and IMF can continue to provide the funds agreed under the existing bailout programme, but this will only delay the inevitable as on the current trajectory Greek public debt is likely to be at least 180% of GDP next year. The collateral row also illustrates how difficult it will be to keep EU members on board and willing to contribute to the planned second bailout package. Indeed, there is a high risk that the second bailout will unravel within the next few days.

Greece will have to reflate its economy and default on its sovereign debt to help secure a medium-term recovery and this will not be possible within the Euro-zone. It is increasingly likely that Greece will be sacrificed politically and economically in an attempt to keep the rest of the Euro area intact and aim for a more orderly move towards greater fiscal union even though this may be politically impossible.

The market’s vote of no confidence in Greece and the bailout package could hardly be clearer as Greek bond yields rise exponentionally, at one point the 2-year yields rose to a staggering 55% on Monday. The only question now appears to be the timing and method of Euro exit. Greece can either make the decision itself or it will effectively be forced out by the other members.

The decision could be taken out of Greece’s hands by the German constitutional court which will rule on Wednesday whether the EU bailouts were legitimate under German Law. If the court rules unambiguously that the bailouts were unconstitutional then the Euro-zone in its current form would have no chance of survival as the peripheral countries would come under immediate and terminal attack. A more complex and less clearly defined ruling looks the more likely outcome which would demand additional guarantees for future aid.

Such an outcome would also create market uncertainty and confusion. It would also make life even more difficult for Greece, but would not be decisive enough to force am immediate exit. More importantly, it would intensify political tensions in Germany as Chancellor Merkel would find it even more difficult to gain parliamentary support for an expanded EFSF as domestic opposition would increase further.

Tensions are flaring throughout the Euro area as Italian bond yields rise even with the support of ECB buying. Last week, the ECB almost doubled its buying of peripheral bonds as they bought EUR13.3 compared with EUR6.7bn the previous week. Italian yields have still increased back to the 5.50% area and credit-default swaps also rose sharply on Monday. European banking stocks were also sold very heavily during Monday.

The ECB is clearly extremely frustrated with the situation and has warned Italy not to slide on austerity measures in expectation that the ECB will prevent any market fall-out. The Italian government will continue to debate austerity measures on Tuesday at the same time as a General Strike has been called and the domestic willpower looks shattered.

The political and economic developments appear to have a surreal quality with key political players calling for action to stem the crisis, but simply insisting that measures agreed previously need to be implemented in full and more quickly. The calls for austerity in the face of recessionary conditions and rising debts will simply not work as the outcome will be for a further increase in debt and even weaker growth while political support will crumble.

In this environment, it is far from clear that the European authorities will be able to prevent a more substantial break-up of the Euro area. If Greece leaves the Euro, Portugal and Ireland would have great difficulties staying in while Italy would also be extremely vulnerable.

The only logical policy is for Europe to chop away as much of the periphery as is required to stop the infection from destroying the core. If they act quickly and promise more fiscal co-operation, then the casualty list may be small. The longer a decision is delayed, the more likely it is that countries such as Italy will also be forced out of the Euro area with the emergence of a two-tier Euro area.

China to Have Half of Asia’s Millionaires by 2015

admin — Thu, 01 Sep 2011 05:35:14 +0000

China’s millionaires will account for about half of Asia’s rich and hold more than half of the region’s wealth by 2015, according to a study by Julius Baer Group and CLSA Asia Pacific Markets.

Asia’s millionaires will more than double in number to 2.8 million, with 1.4 million high net worth people in China, according to the Asia Wealth Report released yesterday. Chinese millionaires will hold $8.76 trillion of the $15.81 trillion that the region’s millionaires are expected to have, it said.

“In terms of the overall amounts of wealth that will increase, it’s very much a China story,” Stefan Hofer, emerging market equity strategist at Julius Baer, said yesterday at a press conference held for reporters in Singapore and Hong Kong.

Expansion in the world’s fastest-growing major economy created 502,000 millionaires in the country last year, according to the report. State and private investments helped drive a 9.5 percent gain in second-quarter gross domestic product from a year earlier, the government said in July, faster than estimated as growth in industrial output and retail sales accelerated and copper and aluminum production reached records.

The tripling of Asian millionaires’ assets from $5.6 trillion in 2010 will be also driven by currency appreciation in the region, according to the report, adding to the economic growth and gains in asset values.

The currency gain may create 600,000 new millionaires — or individuals with more than $1 million of investible assets excluding their primary residence – - by 2015, it said.

India, South Korea

India will be the second-biggest market in Asia by 2015, with 403,000 millionaires and a combined $2.5 trillion net worth, the report said. South Korea will be ranked third.

Julius Baer, the Swiss private bank which has Asian offices in Hong Kong, Singapore, Jakarta, Abu Dhabi and Dubai, wants to expand further in the region, said Thomas Meier, the bank’s chief executive for Asia and the Middle East, calling it the company’s “second-home aspiration.”

The bank aims to have a fourth of its overall assets under management in Asia by 2015, he said. It now has about 10 percent to 20 percent of its 166 billion Swiss francs ($205.4 billion) in assets under management in Asia.

Wealth managers are looking to boost allocations to markets in the Asia-Pacific region in the next 12 months as they expect higher returns, according to a study by Scorpio Partnership Ltd. in July.

Eighty-four percent of investment professionals at wealth management companies are planning to invest more in the region, while 33 percent are considering increasing investments in Latin America, the Middle East and North Africa, the study showed. Managers catering to high-net-worth investors are turning to emerging markets and non-traditional asset classes for returns while reducing inflationary risks, the Scorpio study said.

The number of millionaires in China grew by 12 percent to 534,500 last year, according to a report by Capgemini SA and Merrill Lynch Global Wealth Management in June. China ranked fourth in the number of millionaires, trailing the U.S., Japan and Germany.

To contact the reporter on this story: Sanat Vallikappen in Singapore at vallikappen@bloomberg.net

The World’s Biggest Gold Reserves

admin — Wed, 31 Aug 2011 12:56:54 +0000

Who Has the Most Gold?

The price of gold eclipsed $1,800 per ounce in August, rising 26.0% in 2011, following uncertainty in the equity markets and the global economy as a whole.

The biggest individual holders of gold—central banks, international entities and governments—are believed to account for approximately 16.5 percent of the world’s gold, holding about 30,700 tons.

The numbers are taken from the monthly report produced by the World Gold Council, which is the gold industry’s key market development body. The holdings presented here are as of WGC’s August 2011 report, unless otherwise noted.

So, who holds the most gold? Let’s go to find out!

15. Portugal

Value of reserves: $24.6 billion
Holdings total: 421.5 tons

The westernmost nation in mainland Europe is home to the 15th largest gold reserve in the world. At 421.5 tons, Portugal’s holdings are overseen by Banco de Portugal and are valued at roughly $24.6 billion, accounting for 84.8 percent of the country’s foreign reserves.

14. Taiwan

Value of reserves: $27.2 billion
Holdings total: 466.8 tons

Renowned for its technology industry and robust economic growth, Taiwan also boasts one of the largest gold reserves in the world.

The Central Bank of the Republic of China (Taiwan) manages the island nation’s foreign reserves, which have been reported at 466.8 tons. These holdings are worth $27.2 billion at today’s prices and comprise approximately 5.0 percent of the country’s foreign reserves.

13. The European Central Bank

Value of reserves: $32.23 billion
Holdings total: 553.3 tons

Established in 1998 by the European Union, the European Central Bank (ECB) is responsible for the monetary policy of the member nations of the euro zone and is headquartered in Frankfurt.

The ECB’s 553.3 tons of gold accounts for 31.3 percent of the bank’s foreign reserves and would be worth $32.23 billion in today’s market.

12. India

Value of reserves: $35.79 billion
Holdings total: 614.6 tons

Shooting up in the rankings in the past few years is India. The second most populous nation in the world maintains the 12th largest gold reserves. The size of India’s holdings were bolstered in November 2009 by a $6.9 billion purchase of 200 tons of gold from the International Monetary Fund.

The Reserve Bank of India currently oversees the country’s 614.6 tons of gold, which are valued at $35.76 billion, comprising 8.7% of its foreign reserves. India’s current ranking may also continue to move upwards, as the government has asked the Geological Survey of India to mine previously untapped gold reserves in many of its states.

11. The Netherlands

Value of reserves: $39.3 billion
Holdings total: 674.9 tons

The Netherlands has the 11th largest reserve on the list, with 674.9 tons of gold. The Netherland Bank manages the country’s national finances, including the gold reserves, which amount to approximately $39.3 billion and account for 58.9 percent of the country’s foreign reserves.

10. Japan

Value of reserves: $49.11 billion
Holdings total: 843.3 tons

Although Japan is ninth on the list, its 843.3 tons of gold account for only 3.3 percent of total foreign reserves. On the open market, Japan’s gold reserves would be worth around $49.11 billion, and are overseen by the Bank of Japan.

9. Russia

Value of reserves: $53.7 billion
Holdings total: 922 tons

The Central Bank of the Russian Federation is in charge of the country’s 922 tons of gold, which are valued at $53.7 billion and comprise 7.7 percent of the country’s foreign reserves.

In 2009, Russia increased its gold production by 21 percent, due in part to the launch of several new mines. Last year, the country overtook Japan in total holdings, adding more than 140 tons to its stockpile in 2010 alone.

8. Switzerland

Value of reserves: $66.75 billion
Holdings total: 1,146.2 tons

The Swiss National Bank conducts Switzerland’s monetary policy and manages the country’s 1,146.2 tons of gold.

With the world’s eighth largest reserve of the precious metal, Switzerland’s supply is worth approximately $66.75 billion in today’s gold market. It accounts for 17.8 percent of the country’s foreign reserves, though this is down significantly from a year earlier.

7. China

Value of reserves: $67.65 billion
Holdings total: 1,161.6 tons

At 1,161.6 tons, the world’s most heavily populated country has the world’s seventh largest gold reserve. Expect it to be higher on the list? Well, bear in mind that China’s gold only accounts for 1.6 percent of its foreign reserves. With a population of 1.34 billion, the country holds about $50.49 worth of gold per person, totaling $67.65 billion.

6. SPDR Gold ETF (GLD)

Value of holdings: $70.7 billion
Holdings total: 1,213.9 tons

Unlike other major gold holdings, this is one that investors can actually buy in to. As the price of gold fluctuates, so does the value of SPDR Gold Trust, also known the GLD. The fund held 38,845,889 ounces, or 1,213.9 tons of gold as of its 10-Q filing on June 30, 2011.
Although gold is off it’s all time highs, during the week of August 22, 2011, the SPDR Gold Trust surpassed the heavily-traded S&P 500 SPDR (SPY) for the first time. Like many investors, the ETF has indicated they have increased their holdings of gold since their most recent filing.

Pictured: Gold bars are displayed at the GLD Fifth Anniversary Celebration Hosted By SPDR Gold Shares in New York

5. France

Value of reserves: $156.31 billion
Holdings total: 2,683.8 tons

The French National Bank, Banque De France, is home to the country’s gold holdings, which comprise 66.2 percent of its foreign reserves. With 2,683.8 tons of gold in reserve, France’s holdings are worth approximately $156.31 billion.

4. Italy

Value of reserves: $157.36 billion
Holdings total: 2,701.9 tons

The Banca D’Italia manages Italy’s foreign reserves, which have been reported at 2,701.9 tons by the World Gold Council and comprise the fourth largest gold reserve in the world.

These holdings are worth $138.33 billion and account for 71.2 percent of the country’s foreign reserves.

3. The International Monetary Fund

Value of reserves: $180.6 billion
Holdings total: 3,101 tons

The International Monetary Fund (IMF) oversees international economic operations of 185 member countries. Its gold policies have changed in the last 25 years, but the reserves remain to stabilize international markets and aid national economies.

In one such instance, the IMF sold a portion of its reserves in December 1999 to aid the Heavily Indebted Poor Countries Initiative. The 3,101 tons of IMF Gold would fetch roughly $180.6 billion in the open market.

2. Germany

Value of reserves: $218.28 billion
Holdings total: 3,747.9 tons

The Deutsche Bundesbank, Germany’s central bank, has 3,747.9 tons of gold reserves, which are valued at about $218.28 billion. According to the World Gold Council, Germany’s gold coffers account for 71.4 percent of total foreign reserves.

1. United States

Value of reserves: $522.16 billion
Holdings total: 8,965.6 tons

The United States Bullion Depository in Kentucky—otherwise known as Fort Knox—is the most famous gold stockpile in the world. It holds the majority of the nation’s gold reserves, the remainder of which is held at the Philadelphia Mint, the Denver Mint, the West Point Bullion Depository and the San Francisco Assay Office.

Altogether, the total gold reserves of the U.S. equal 8,965.6 tons and would be valued at approximately $522.16 billion in today’s market.

Source: World Gold Council, with conversions by CNBC | Photo: Cliff

The 10 Worst Central Bankers In The World

admin — Tue, 30 Aug 2011 06:02:35 +0000

Think your central bank might be messing around with your currency?

Global Finance magazine handed out grades to 36 of the world’s most influential central bankers, based on criteria like their ability to control inflation, stimulate growth, maintain a stable currency, and manage interest rates.

The bankers were given marks from “A” to “F.”

Only 6 received an A grade: Australia’s Glenn Stevens, Israel’s Stanley Fisher, Lebanon’s Riad Salameh, Malaysia’s Zeti Akhtar Aziz, the Phillipines’ Amando Tetangco Jr., and Taiwan’s Fai-Nan Perng.

Guest Who Is The Worst :

Rasheed Mohammed Al Maraj, Bahrain

2011 Grade: B-

Bahrain faces a shrinking economy and political unrest. The economy contracted 1.4% in the first quarter, according to Reuters. Emirates 24-7 reports that the country briefly suffered from deflation during the recession of 2008, and the Gulf Cooperation Council could someday threaten the central bank’s ability to make its own policy.

Jean-Claude Trichet, European Union

2011 Grade: B-

2010 Grade: A

The EU’s economic problems increase daily. Ominous signs that the sovereign debt crisis could result in global catastrophe threaten the success of the euro as a currency, and lack of growth throughout much of the eurozone doesn’t help. Trichet and his colleagues suffer partly from flaws in the EU system, but might also be doing too little too late.

Philipp Hildebrand, Switzerland

2011 Grade: B-

2010 Grade: B-

The Swiss National Bank has failed to keep its currency under control, as currency traders have turned to the franc as a safe haven. The franc’s appreciation has damaged the Swiss economy, which depends strongly on exports. Rumors of a peg to the euro have dissuaded investors from purchasing francs recently.

Duvvuri Subbara, India

2011 Grade: B-

2010 Grade: C

High inflation (over 9%) persists regardless of the fact that the central bank keeps raising interest rates, according to Dow Jones Newswires. Growth has slowed due to this fiscal tightening, yet Subbara and his colleagues remain fixated on trying to get inflation under control.

Ben Bernanke, United States

2011 Grade: C

2010 Grade: C

Critics have come out on all sides of Bernanke’s highly accomodative monetary policy. Quantitative easing had advocates and detractors alike. Bernanke’s decision to keep interest rates artificially low has resulted in the most divided Federal Open Market Committee in years. His detractors warn that such policies could produce runaway inflation.

András Simor, Hungary

2011 Grade: C

2010 Grade: C

High interest rates due to excessive public borrowing have stifled Hungary’s economic growth, according to Reuters. Critics of central bank policy argue that such rates are unwarranted as inflation remains reasonably under control.

Masaaki Shirakaw, Japan

2011 Grade: C

2010 Grade: C

Reuters reports that the Bank of Japan has recently stepped in to tame the appreciating yen, but it remains to be seen whether they will be successful as the eurozone crisis deepens. However, fiscal tightening threatens to derail Japan’s still fragile recovery after March’s earthquake.

Kim Choongsoo, South Korea

2011 Grade: C

Inflationary pressures could send prices out of control in South Korea, with a target inflation of 4% for the year. Price growth is likely to match or exceed GDP growth, despite one of the strongest years ever for the country in terms of exports. Though the central bank says it is taking measures to curb inflation, their efforts are not producing result.

Abdullah bin Saud Al-Thani, Qatar

2011 Grade: C-

Runaway non-rent inflation earlier this year led the Qatari government to peg the riyal to the dollar. Given the situation, the IMF argued that the peg was “appropriate,” and urged Qatar’s central bank to develop its technical and operational capabilities so that it could someday have its own currency.

Mercedes Marcó del Pont, Argentina

2011 Grade: D

2010 Grade: D

According to the Associated Press, Moody’s gave Argentina’s private banks a negative outlook earlier this month. The agency cited central bank policies that produced high inflation and negative interest rates as dangerous for the banks. WSJ reports that inflation stands above 20%.

Source : From businessinsider.com ..

The Art Of The Forex Scam 3

admin — Fri, 26 Aug 2011 04:46:13 +0000

Today, and over the next few weeks, I’m going to give you a few tips on how you can avoid getting scammed by those who make a living, not from trading, but from marketing a defunct product or service. I’ll also be discussing in more depth concerning the different types of scammers out there.

Today, we’ll be focusing on the no stop loss scam.

The first thing everyone is taught in forex trading, is to always have a plan. Have a plan to trade, and trade that plan. And it doesn’t even necessarily have to be a fully fledged system, but at least, have a clear indication what is the basis of your trading methodology. How to enter, how to exit. When to enter, when to exit.

You may have heard many times from other traders, that the exit is the most important part of trade. Entering is the easiest part apparently. Well, frankly, they’re both very important, and depending on how you trade, one could be more important than the other. However, one thing can’t be denied… new traders most often struggle when exiting a trade.

part of trade. Entering is the easiest part apparently. Well, frankly, they’re both very important, and depending on how you trade, one could be more important than the other. However, one thing can’t be denied… new traders most often struggle when exiting a trade.

And whenever there’s a sense of struggle, the forex scammer immediately smells the opportunity to “help” the struggling trader.

The scam artist tempts the noob. Why bother with exiting a trade? There’s no need to learn how to master an exit of a trade if you have a system that dismisses the whole concept of exiting, right? No need to put in the hard work if all of your trades are winners. Surely a winning concept!

Except of course, what the scammer won’t inform the noob, is that his equity is his stop loss. This information never gets passed on to the new trader. All that the new trader sees is winner after winner after winner. Not a single losing trade. Doubling the account in less than a month. Remarkable stuff.

For those of you who aren’t aware of this scam, honestly, that’s all there is to it. The scam artist uses no stop loss. And he uses a small profit target. For example 3 pips. So as soon as the trade goes his way, he closes out for a win. But when the trade goes in the opposite direction, he just waits. And waits some more. Still going the wrong way? No problem, just be patient! It will eventually turn round and you’ll make your 3 pips!

(Please note, there is a difference a trader not using an initial stop loss yet exiting based on discretion or changing circumstances, and between a bad trader who never exits a trade until it’s a winner.)

Based purely on probability, it’s not unheard of to have hundreds, even thousands of winners in a row, for weeks and months on end. New traders would think they’ve hit upon a gold mine!

Unfortunately for the new trader (well, for every trader), eventually a trade without a stop loss will go bad. By bad, I mean, the entire loss of your account. So, a bit more than just bad. Utterly disastrous.

Many a new trader fell for this scam in the earlier days of retail forex trading. And many a scammer had earned some dirty metal for their unethical practices. However today, fortunately, the “No Stop Loss” scam has gone into near

extinction, thanks to the vast amount of useful information posted in FX forums and portals.

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Steve Jobs Departure Heralds in New Apple Era

admin — Thu, 25 Aug 2011 20:08:37 +0000

Steve Jobs resigns as Apple CEO but named company chairman

admin — Thu, 25 Aug 2011 06:56:54 +0000

Steve Jobs, the visionary co-founder of Apple Inc. and driving force behind a string of products that revolutionized the consumer-electronics industry, stepped down as chief executive but was named chairman of the board, the company said late Wednesday.

His relinquishing of daily control had been widely anticipated since he took an extended medical leave earlier this year. Jobs, 56, had a liver transplant two years ago and underwent surgery for pancreatic cancer seven years ago.

“I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know,” he wrote in a letter to the board Wednesday. “Unfortunately, that day has come.”

Nevertheless, the announcement stirred doubts about Apple’s future, given Jobs’ deep personal association with its most successful innovations, including the Macintosh computer line, the iPod portable music player and the iPhone smartphone.

Apple shares dropped in after-hours trading by nearly $20, or about 5%, immediately after the news broke.

Apple named Tim Cook, the company’s well-regarded operations chief who had run the company in Jobs’ absence, as chief executive.

Though Apple has a deep reservoir of technological talent at its Cupertino, Calif., campus, investors have long worried that it could be impossible to replace Jobs’ intuitive ability to anticipate tech trends and craft products that resonate with consumers.

“He’s the head visionary,” said Jeffrey Fidacaro, an analyst at Susquehanna Financial Group. “Can you replace his vision, his passion for the products, his rigor in the day-to-day operations? That’s going to be hard, it’s undeniable.”

Others said Apple won’t have to grapple with that issue as long as Jobs remains chairman of Apple.

“He has this higher level of mind that he can see the future clearly in a way that few people can. That rubs off on people,” said Apple co-founder Steve Wozniak. “But Apple’s a lot of people. And in the meantime, he’ll still be there, still watching over it and within reach if needed.”

Under Jobs, Apple has become one of the most successful and recognizable companies in modern American history — and, in recent years, a closely watched weather vane of global consumer preferences and spending habits.

Jobs and Wozniak financed the original Apple Computer with $1,300 they raised from the sale of Jobs’ Volkswagen microbus and Wozniak’s Hewlett-Packard Co. scientific calculator. They built their first machines in Jobs’ family garage in 1976.

In 1984, they introduced the Macintosh, the first personal computer to implement features that are now commonplace on all personal computers, including the mouse and graphical user interface.

Jobs left in 1985 after losing a boardroom showdown with then-CEO John Sculley — later starting his own company dubbed NeXT. Wozniak also left that year. Jobs returned to Apple as an advisor in late-1996 when the company bought NeXT. He later became chief executive again, quickly setting out to remake a company that was close to bankruptcy.

His first innovation was the introduction in 1998 of the iMac, whose translucent blue exterior stood out from the legions of beige personal computers.

Apple introduced a blockbuster product in 2001: the iPod. Although not the first consumer MP3 player, Apple broke ground by integrating the device with easy-to-use software for organizing music playlists, as well as an online store for purchasing tracks. The powerful combination transformed the digital music market.

Beyond its technological prowess, Apple has consistently notched impressive profits that have propelled its stock price to astronomical levels.

Its stock price hit $403.41 in July — a near-60% gain from a year earlier — after executives released better-than-expected third-quarter earnings. That put Apple’s market value at $374 billion, briefly toppling Exxon Mobil Corp. as the world’s most valuable firm. A decade earlier the stock traded at $10.

On Wednesday, Apple’s shares rose $2.58 to $376.18. They fell to about $356 in after-hours trading.

Central Banks Seen Retaining Gold to Help Manage Debt as Bullion Advances

admin — Thu, 25 Aug 2011 06:34:30 +0000

Central banks, net buyers of gold for the first time in a generation, are likely to retain their holdings even if they need to raise cash to counter an escalating debt crisis, according to Morgan Stanley.

“Once they’ve sold, that’s it, and buying back would be extremely expensive,” Peter Richardson, chief metals economist at

Morgan Stanley Australia Ltd., said in an interview. “They would rather have the backing of a rising asset within their reserve portfolios than use it to reduce debt.”

Gold rallied to a record this week as rising government debt burdens and weakening currencies boosted demand for a haven. Central banks are the biggest gold holders, and Thailand, South Korea, Kazakhstan, Mexico and Russia added to reserves this year. The precious metal is the “currency of the world” amid the debt crisis, economist Dennis Gartman wrote Aug. 19.

“Under conditions of austerity we’re going to see a further deterioration of debt,” said Richardson, who has studied metals markets for 20 years. “Rising risk argues in favor of holding on to their gold reserves rather than selling them because they’ve only got one shot at selling.”

Immediate-delivery gold, which has rallied 30 percent this year, touched an all-time high of $1,913.50 per ounce yesterday and was at $1,846.07 by 12:02 p.m. in London. The metal may reach $2,000 by the end of the year, according to the median forecast in a Bloomberg survey of 13 traders and analysts at a conference in Kovalam in South India on Aug. 20.

Currency Credibility

“The European central banks won’t sell their gold because while it may be a means to raise cash, it definitely won’t be enough to settle their debts,” said Duan Shihua, head of corporate services at Haitong Futures Co., China’s largest brokerage by registered capital. “Besides, none of the central banks believe in the currencies of other countries.”

In 2010, central banks became net buyers for the first time in two decades, adding 87 metric tons in purchases by countries including Bolivia and Mauritius, according to World Gold Council data. In the second quarter of 2011, central bank and government-institution buying rose almost fivefold to 69.4 tons, taking the first-half total to 192.3 tons, the council said last week. The banks will remain net buyers this year, it said.

Central banks have been “active buyers” of gold in recent months, Edel Tully, an analyst at UBS AG, wrote in a note to clients on Aug. 8. The banks should also buy platinum as they boost gold holdings amid concern about the global economy, Citigroup Inc. said in a report the same day.

Credit-Rating Downgrades

The debt crisis in Europe that started in Greece has hobbled economic growth and prompted downgrades of the credit ratings of Greece, Portugal and Ireland. Still, the euro has strengthened against the currencies of 14 of 16 trading partners this year as the European Central Bank bought government bonds.

German Chancellor Angela Merkel yesterday rejected a call by Labor Minister Ursula von der Leyen for states to put up gold as collateral for emergency loans. That disagreement may underscore risks over a second Greek aid package.

In August 2009, central banks in Europe agreed to a third five-year cap on gold sales. The European Central Bank and 18 others agreed to sell no more than a combined 400 tons a year through September 2014. Germany, Italy, France, the Netherlands, the European Central Bank, Portugal, Spain and Austria are among the top 20 holders, according to council data.

IMF Sales

“Notwithstanding the worst sovereign-debt crisis, particularly in Europe, where there are very large, concentrated holdings of gold, the central-bank agreement has been striking by the fact the only people who have been selling has been the IMF,” said Richardson, referring to the Washington-based International Monetary Fund.

The IMF sold 403.3 tons between October 2009 and December 2010 as part of a plan to shore up its finances and lend at reduced rates to low-income countries. More than half of that was acquired by central banks, according to the fund.

The Bank of Korea, which purchased 25 tons over a one-month period from June to July, said “holding gold helps reduce investment risks in terms of reserve management,” according to a statement earlier this month after the move was disclosed.

To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

To understand how gold been traded, CLICK the button below to attend the gold trading talk …..

The Art Of The Forex Scam 2

admin — Thu, 25 Aug 2011 04:39:10 +0000

Today, we’ll be focusing on the repainting indicator scam.

When Metatrader really became mainstream, during the middle of the last decade, it helped spawn a whole new breed of new forex retail traders. There were so many people jumping on the forex bandwagon, thinking it was a slick way of making a lot of money. Internet forums were buzzing with many new methods. Call it a second wave if you like. And Metatrader was the platform which helped fuel that wave. Metatrader 3 was popular, but by 2006, it was pretty much obsolete, and Metatrader 4 was the most popular trading platform.

Suprisingly, it still is, to this very day.

But what Metatrader did for the birth of new wannabe traders, it also did for new wannabe scammers. And I’m not talking about EAs. A lot of scammers realized that even though noobs were suckers for an awesome looking backtested EA, advice was being given across the net to “trade manually”.

So what better way to convince new traders to trade manually, yet still make a thousand pips a month? The repainting indicator. Except of course, they didn’t call it that.

For those of you who don’t know what exactly is a repainting indicator – typically, it’s one which, when applied to a currency chart, displays buy and sell arrows. So, when you scroll back in time through the chart, you’ll see where the indicator would have told you to buy, and where to sell. The most fascinating aspect of all of this is, every one of the historic signals turns out to be a winner. Picking tops and bottoms now could never be easier! Forget your robot EA which might go belly up at any time. Now, you the trader is in control. You press the buttons. You click on Buy Eur/Usd, you close that beautiful Cable trade. Manual trading at it’s best.

Unfortunately, unbeknownst to the new trader, those arrows were not the same arrows you would have seen in real time. They “repaint” the past, redraw history. If you weren’t even aware of the concept of repainting, you would quite probably think you could make serious pips. Alas, many fell for this trap, especially over at eBay, where scammers sold “super accurate arrow indicator” to make you into an “overnight super trader”.

But hang on, at just $29.99, this couldn’t be the case, surely?

Well, it surely could be, if you looked at how many the scammers have been selling. And what’s even worse, the noob then fails to leave a negative feedback, through fear of himself receiving negative feedback from the seller, or through embarrassment.

Today thankfully, the repainting scammer has almost gone into extinction, thanks to the hard efforts of forex forums, and those experienced forex traders who expose these scammers.

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Gold Crashing On Risk Appetite, Rumors

admin — Wed, 24 Aug 2011 17:26:53 +0000

The prices of gold is now tumbling down and erasing the most recent rally, which was quite sharp – considered overbought by some. It is now trading at around $1775, down from around $1840 to $1850 earlier in the day.

The better than expected durable goods orders provided reasons for stock to smile, and for QE3 to fade further away. This means less appetite for the previous metal – a safe haven from currency printing.

Durable goods orders leaped by 4% and provided a very good surprise after so many economic figures disappointed. Also core order rose, amid expectations for a drop.

In addition, there is a rumor that troubled European countries are going to sell gold in order to combat their debt. The gold held by Spain, Italy, Greece, Portugal and Ireland is far from covering their debt, but is yet another tool for balancing the finances.

The sharp moves in gold prices are also related to the relatively low volume that is normal for August, although this is definitely not a normal August.