China is Buying Record Amounts of Gold

As I already feared, China is scooping up all the gold in the world and is becoming the foremost gold buyer in the world. Trying to get more and more exposure to the reserve currency status.

Today it was released that China imported approximately 104 tonnes, a staggering amount of gold!

The chart looks something like this:

Chart 1: China Gold Imports

From Shanghai Daily:

GOLD imports by China's mainland from Hong Kong rose 65 percent to a record in April, up for a third straight month as investors sought a hedge against financial market turmoil and an economic slowdown.

Shipments totaled 103,644.5 kilograms in April from 62,913 kilograms in March, according to export data from the Census and Statistics Department of the Hong Kong government yesterday. In the first four months, imports were 239,174 kilograms from 27,114 kilograms a year earlier, according to Bloomberg News calculations. China doesn't publish such figures.

Increased imports by the second-largest consumer after India may help extend a rebound in the precious metal that's been driven by speculation the US Federal Reserve may add to stimulus this month to boost the recovery. Spot gold rallied 4.1 percent on June 1 after US jobs data missed hopes. China's central bank may also be boosting holdings, saidWang Xinyou, a senior analyst at the Agricultural Bank of China Ltd.

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World Market Window: New Tool to Monitor the Global Economy at A Glance

Look at the new tool I got:

=> World Market Window

Very interesting tool to monitor commodities, bonds and equity markets. Just like a real brokerage screen.

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USD VS. S&P VS. 10 Yr U.S. Bonds: Decoupling Monitoring Experiment

Peter Schiff told us that when the USD and the stock markets decouple (meaning U.S. dollar goes down and stock markets go down), U.S. bonds will plunge. I will now start to monitor this coming event.

Today we have the first day of the experiment and we already see that such event is happening.

- U.S. dollar declined against the euro: down 0.5%.
- Stock markets are down: S&P down 0.4%.

=> Resulting in a bond market plunge of: 3.5% to a 1.5% yield on the 10 year U.S. bonds.

Table 1: USD-S&P-Bonds Decoupling Monitoring Experiment

Charts will follow as we start monitoring this trend.

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Another Correlation: Case-Shiller Index VS. Housing Market Index

Recently, we saw bullish indicators for housing demand. At the same time we saw bearish indicators for housing prices. Let's take a deeper look at the overall trend of the two indices HMI and Case-Shiller Index and see which correlation can be found.

You can read the analysis here: Case-Shiller Index VS. Housing Market Index.

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Peter Schiff: When Will It Hit The Fan?

Here's an update from Peter. 

The most important sentence in this video was about decoupling of the U.S. dollar and stock markets.

Normally, stocks go lower and the U.S. dollar goes higher. But once the decoupling of this correlation occurs, then the *you know what* will hit the fan. After that event, U.S. bond markets will plunge.

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Is China Slowing Down?

These days, many commodity investors are living in uncertainty because they read on the internet that China, the largest consumer of commodities in the world, is slowing down. In this article I will take a look at the most important commodities consumed by China. We will see if our concern about China slowing down is validated.

China is already the world's largest consumer of the main industrial metals copper, nickel and zinc. In the energy space, China is the largest consumer of coal in the world. In construction, China is the largest cement (+ ceramics and plate glass) consumer in the world. In the precious metals industry, China is the largest gold and platinum jewelry consumer in the world. Indeed, a slowdown of China will have a large impact on commodity prices.

In the full version of this article I will go through the commodities listed above and we will see that China is indeed slowing down.

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How Gold Mines Will Benefit From the Second Great Depression

During the Great Depression in 1932, gold went up while utilities (energy, oil) went down. Oil companies were almost all going bankrupt. What happened to gold mines then?

Every company has revenue and costs. Revenue from a gold mine comes from the gold they mine and sell. This asset was very precious to people, so gold mines benefitted from the gold price going up. Costs were going down as oil went down due to the worsening economic outlook during the Great Depression.

So, when revenue goes up and costs go down, margins start to increase a lot. This is what happened during the Great Depression and this will happen once again now.

To find out, go to: How Gold Mines will Benefit from the Coming Depression

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