Chinese gold bugs take the lead

January 14, 2012 at 08:18


Did China just overtake India as the world's largest gold consumer? Little more than a year ago it would have been almost laughable to ask that question. In 2010 India's gold consumption was a full 46 per cent -- or 275 tonnes -- higher than China's, according to data from consultants GFMS published in the World Gold Council's quarterly reports. Even three months ago it would have been a stretch. In the first nine months of 2011, Indian gold demand totalled 743 tonnes, compared to 612 tonnes for China. But data released in the past few days suggests that China may have closed the gold gap, inching ahead of India in terms of overall gold demand in 2011. Some of u...

CFTC adds protections to customers' money

January 12, 2012 at 17:37


The futures regulator on Wednesday adopted new protections for customer collateral posted in swap trades, and said it plans a broader look into client safeguards, as the search continues for hundreds of millions of dollars in missing MF Global customer money. The Commodity Futures Trading Commission also proposed its draft of the Volcker rule that cracks down on banks' risky trading, a version similar to one introduced by four other regulators last October. The measure to protect swap traders' collateral used in trades to reduce risk was approved by a 4-1 vote. The rule was called for in the Dodd-Frank financial oversight law, but efforts to boost protection and ...

Forex trade emails cast doubt on SNB's Hildebrand

January 11, 2012 at 10:50


The supervisory council of the Swiss National Bank forced Philipp Hildebrand to step down as chairman after emails about a currency trade by his wife failed to clear him of involvement in the deal, newspapers reported on Tuesday. Hildebrand's wife Kashya, a former hedge fund trader who now runs a Zurich art gallery, bought 400,000 Swiss francs ($418,000) worth of dollars on August 15, three weeks before her husband oversaw steps to cap the rise of the safe-haven franc. She later sold the dollars at a higher rate. Hildebrand quit his post on Monday, saying he could not provide conclusive evidence that he had been unaware of the trade and that the intense public scrut...

Swiss central bank chairman quits over wife's currency trade

January 9, 2012 at 17:30


Swiss National Bank Chairman Philipp Hildebrand resigned with immediate effect today, saying he could not prove he had been unaware of a controversial currency trade made by his wife and wanted to protect the integrity of the central bank. Hildebrand's decision to relinquish one of the top 10 central banking jobs in the world came as Swiss parliamentarians met to discuss the scandal, which erupted last week after Sarasin bank sacked an employee who leaked details of the trade to a political opponent of the central banker. Until now, Hildebrand had resisted calls to step down, saying he learned of his wife's trade the day only after she made it and rejecting claims b...

Financial repression is here and may be helpful

January 9, 2012 at 14:50


"The existence of civilisation presupposes the repression of powerful instinctual urges." The words are from Sigmund Freud's "Civilisation and its Discontents." The father of psychoanalysis was not concerned with the discontents of investors, but his insight might be applicable to the instinctive urge to maximise profits. Sometimes a little financial repression can help make the economy more civilised. Financial repression is the name economists give to the various ways that governments encourage or force investors to buy sovereign debt at unattractive prices. Economists Carmen Reinhart and M. Belen Sbrancia have identified three varieties: First, caps on interest rate...

Tehran Says Russia Partly Replaced Dollar With Ruble In Iran Trades

January 7, 2012 at 17:50


Tehran has replaced dollars with rubles in some of its dealings with Russia, an Iranian official was quoted as saying Saturday, as the Islamic Republic take steps to mitigate the impact of sanctions on its central bank. Speaking to Iran's Fars news agency, Tehran's Ambassador to Moscow Seyed Reza Sajjadi said the proposal for replacing the U.S. dollar with the rubles and the Iranian rial was initially made by Russian president Dmitry Medvedev to his Iranian counterpart Mahmoud Ahmadinejad last June. "Since then, we have acted on this basis and a part of our interactions is done in ruble now," Sajjadi said. New sanctions approved by U.S. president Barack Obama las...

Gold bugs’ unmerry Christmas

January 2, 2012 at 16:18


Santa brought the gold bugs quite a present last week. It was very big and extremely nasty. But maybe they can send it back. From the previous Friday’s close to the low on Thursday, the CME February gold contract plunged $82.10 or 5.1%. The gold shares, as tracked by the NYSE Arca Gold Bugs Index (HUI), were down 6.6% at their worst. Recoveries into the week's end enabled gold to finish down only 2.44% and the HUI down 2.54%. But by then, no doubt, most gold bulls were disgustedly drowning their sorrows. This was the reverse of what was supposed to happen. Thus, on the Friday before Christmas, the Japanese bullion dealer Mitsui remarked: "The gold price has gone...