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Australia and China plan to trade directly in their own currencies

March 31, 2013 by · Leave a Comment 

GATA

PM Set to sign China Currency Deal in Boost to Exporters

By Rowan Callick
The Australian, Sydney
Saturday, March 30, 2013

http://www.theaustralian.com.au/national-affairs/foreign-affairs/pm-set-…

A currency deal enabling the Australian dollar to be converted directly into Chinese yuan, slashing costs for thousands of businesses, is set to be the centrepiece of [Prime Minister] Julia Gillard’s mission to China next weekend.

Australia would become the third country, after the United States and Japan, to secure such an arrangement from China, which is Australia’s top trading partner, with exports and imports totalling $120 billion last financial year.

At present, companies doing business with China must pay the added cost of converting their Australian dollars into U.S. dollars or yen and then into yuan.


Former ambassador to China Geoff Raby, now a Beijing-based business figure, told The Weekend Australian: “The value of such a deal would be substantial for exporters to China, especially those that import a lot from China like mining companies, as it would remove business constraints including exchange-rate risks and transaction costs.”

Businesses, like individuals when travelling, have to pay extra to convert currency since there are different rates for buying and selling.

So removing one step also cuts out the cost of paying for such a “spread.”

Australia has undertaken significant lobbying for the deal and the direct conversion of the yuan, also referred to as the renminbi (RMB), is identified as a priority in the government’s Asian century white paper.

“We have held preliminary discussions with the Chinese government to explore how soon direct convertibility can be practicably achieved,” the white paper says.

“We are continuing these discussions and exploring other opportunities to work with China to support the internationalisation of the RMB.”

A year ago the nation’s central banks signed a deal allowing a $30 billion currency swap lasting three years, through which the Reserve Bank of Australia and the People’s Bank of China make available the funds for business between the two countries via commercial banks in Australia and the state banks in China.

In addition, Australia’s banks increasingly arrange trade finance through Hong Kong, which has developed a special role as China’s chief international finance centre.

However, new President Xi Jinping, a former Communist Party secretary of Shanghai, is a champion of that city’s development as China’s finance hub, and it is believed that the prime minister may fly there to sign the currency conversion deal.

She will first attend the Boao Forum, intended as an Asian version of the World Economic Forum that is held at Davos, in Switzerland.

These Boao forums — of which former Labor prime minister Bob Hawke was a founder and remains closely involved — have been held annually for 11 years on subtropical Hainan Island in China’s south.

It is understood that Tony Abbott had planned to attend the forum this year, but opposition foreign affairs spokeswoman Julie Bishop will now go instead.

John Howard and Kevin Rudd both attended the forums as prime minister.

Ms Gillard is expected to go on from Shanghai to Beijing, where she will open the third Australia China Economic and Trade Forum organised primarily by the Australia China Business Council, which will be bringing about 100 people from Australia for the event. Participants are likely to include Andrew Harding, Rio Tinto’s new chief executive for iron ore; Warwick Smith, ANZ Bank’s chairman for NSW and the ACT; Australian Trade Minister Craig Emerson and Financial Services Minister Bill Shorten; Gao Hucheng, China’s Commerce Minister; and Gao Xiqing, the acting head of China Investment Corporation, the country’s vast sovereign wealth fund.

The ANZ Bank has been a strong advocate of direct convertibility between the [Australian] dollar and the yuan. Gilles Plante, the bank’s chief executive in Asia, said in a recent report that in the last financial year, China accounted for 29 per cent of all exports and 18 per cent of imports, but the value of that trade denominated in yuan was less than 0.3 per cent.

He forecast that cross-border flows of funds would be liberalised “to support Shanghai’s plan to build itself as a global financial centre. At the time the whole world is digging out opportunities from the rise of the yuan, Australia should not lag behind.”

Ms Gillard’s office had no comment to make last night.

It was significant the liberalising governor of the People’s Bank, Zhou Xiaochuan, kept his job during the reshuffle of China’s leadership. He said last year at a conference: “The next movement related to the yuan is going to be reform of convertibility. We are moving in this direction; we need to go further, we will have some deregulation.”

Beijing appears to have chosen Canberra as its partner in this next movement for straightforward economic reasons, as Australia has become China’s fifth-biggest source of imports and thus, the appropriate partner for the march of its currency.

Ms Gillard and President Xi Jinping may also during the visit establish a “strategic partnership” between the countries. This will enable Australia to catch up in status with a large range of nations.

* * *

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In Daily Reckoning interview, Sprott notes central banks’ deceptive accounting of gold

March 31, 2013 by · Leave a Comment 

GATA

8:45p ET Sunday, March 31, 2013

Dear Friend of GATA and Gold:

Interviewed by Alex Cowie of The Daily Reckoning’s Australian edition last week during the Mines and Money conference in Hong Kong, Sprott Asset Management Chairman Eric Sprott stressed the deceptiveness of central bank gold accounting, particularly the failure to distinguish gold in the vault from gold that has been swapped or leased into the market. This misleading accounting, Sprott says, is masking high demand for real metal around the world.

Sprott adds: “When Venezuela devalued by 40 percent, if the citizens had owned gold they would have lost nothing. When Iceland devalued, if the residents had owned gold they wouldn’t have lost 60 percent of their money. I don’t know how many more countries it takes to have these events happen to until the world finally clicks in to realising it’s better to own gold than it is to have a bank deposit.”

The interview is posted at The Daily Reckoning here:

http://www.dailyreckoning.com.au/on-gold-billionaire-investor-eric-sprot…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

Fed shorting gold to support dollar, former Assistant Treasury Secretary Roberts says

March 31, 2013 by · Leave a Comment 

GATA

8:36p ET Sunday, March 31, 2013

Dear Friend of GATA and Gold:

Interviewed this week by Chris Waltzek of GoldSeek Radio, former U.S. Assistant Treasury Secretary Paul Craig Roberts says he believes the Federal Reserve is surreptitiously shorting gold to support the dollar in the Fed’s low-interest-rate environment, which ordinarily would weaken the currency. The interview is 29 minutes long and Roberts’ comments about gold begin at about the 17-minute mark. You can listen to it at GoldSeek Radio here:

http://radio.goldseek.com/nuggets.php

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

Alasdair Macleod: Cyprus triggers preference for goods

March 31, 2013 by · Leave a Comment 

GATA

7:06p ET Sunday, March 31, 2013

Dear Friend of GATA and Gold:

GoldMoney’s Alasdair Macleod predicts tonight that the financial debacle in Cyprus will push preferences in Cyprus and throughout the euro zone away from holding money and in favor of holding goods. This, Macleod writes, is likely to push prices higher. “The question,” he adds, “then becomes: How will the European Central Bank respond? Will it raise interest rates to curb this unexpected price inflation, or keep them low for fear of precipitating a collapse of insolvent banks and governments?” Macleod’s commentary is headlined “Cyprus Triggers Preference for Goods” and it’s posted at GoldMoney’s Internet site here:

http://www.goldmoney.com/gold-research/alasdair-macleod/cyprus-triggers-…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

Cyprus Steal: The West’s Premeditated Bank-Robbery

March 31, 2013 by · Leave a Comment 

By Jeff Nielson, Bullion Bulls Canada

The veils have been removed. The open criminality of Western regimes is now on display for all the world to see. Bank robbery is now official government policy across the West with no debate, and (of course) no voting.

As was noted in my original commentary on this government-perpetrated crime; it was immediately obvious that this was an entirely staged/scripted event. To fully comprehend the premeditated nature of this crime requires a detailed examination of the chronology.

December 10th, 2012:

The U.S. Federal Deposit Insurance Corporation and the UK Bank of England jointly release a “position paper” titled Resolving Globally Active, Systemically Important, Financial Institutions. Sounds wonderful: “resolving.” They are finally coming up with a plan to put the “Too Big To Fail” fraud-factories out of our misery. Wrong.

This document is a blueprint for precisely the opposite: propping-up these TBTF monstrosities forever. This manifesto was simply coming up with new “proposals for financing” – i.e. feeding the Beast. And one of these proposals was the “bail-in.”

[Item 19] The introduction of a statutory bail-in resolution tool (the power to write down or convert into equity the liabilities of a failing firm)… [emphasis mine]

Why was there no rioting in the streets of the U.S. and UK? Why were there no scathing condemnations from our wonderful “free press”? In fact, why did the Corporate Media not even mention that the “bail-in” was now government policy for the U.S. and UK?

And what about our “representatives”; our “leaders” – the politicians? Why did not a single one of these Stalwarts in the U.S./UK utter so much as a “peep” about bank robbery becoming official government policy in the United States and United Kingdom?

Because when these Traitor Governments made this their “official policy” they never (fully) defined what they really meant by “bail-in”. Here is as close as the FDIC/Bank of England come to telling the truth:

A bail-in tool would enable the U.K. authorities to recapitalize an institution by allocating losses to its shareholders and unsecured creditors [emphasis mine]

Why were no UK politicians protesting the “bail-in”? Because when the Bank of England spoke of “allocating losses to…unsecured creditors” no one would have dreamed that what this central bank really meant was stealing the money out of peoples’ bank accounts.

It should be noted that while that provision was explicitly designated as applying (only) to “the U.K. regime” that it can be implicitly understood that it applies to the U.S. as well. While the provisions for “the U.S. regime” do not use the term “bail-in”; here is the vague language which was employed:

Title II [of the Dodd-Frank Act] requires that the losses of any financial company placed into receivership will not be borne by taxpayers, but by common and preferred stockholders, debt holders, and other unsecured creditors [emphasis mine]

The official policy of the U.S. government is precisely the same as that of the UK (hence the joint “position paper”); the FDIC simply didn’t articulate its own plans for bank-robbery to the same degree. Put another way; there were seven sections detailing how the UK would “resolve” these “systemically important institutions” (but no mention of bank-robbery) versus only two sections for the U.S.

Now we come to the remainder of the chronology, which not only proves that the Cyprus Steal was planned (at least) as far back as December 2012, but that “the fix was in”: our Traitor Governments had already reached agreement with the Traitor Government of Cyprus to perpetrate this crime.

More articles from Bullion Bulls Canada….

Is bitcoin a better hedge, freer from government market rigging than gold?

March 31, 2013 by · Leave a Comment 

GATA

8:23a ET Sunday, March 31, 2013

Dear Friend of GATA and Gold:

Is bitcoin a better hedge against currency devaluation than gold is because its issuance is tightly regulated and the market for it is less vulnerable to manipulation by government?

Some of gold’s friends seem to be starting to think so, like Trace Mayer, proprietor of RunToGold.com, who has written about bitcoin and GATA in the new issue of Bitcoin magazine –

http://www.amazon.com/Bitcoin-Magazine-Issue-February-2013/dp/1622096703…

http://bitcoinmagazine.com/

– and last week was interviewed about the digital currency on the BBC Newsnight television program –

http://bitcoinmagazine.com/bbc-newsnight-bitcoin-segment-daniel-knowles-…

– and on the Financial Survival Network’s Internet site:

http://financialsurvivalnetwork.com/2013/03/trace-mayer-kenton-ralph-toe…

Meanwhile, writing for Bloomberg BusinessWeek, computer programmer Paul Ford isn’t sure whether bitcoin is the currency of the future or a joke, but concludes that, for the moment, anyway, it works as a currency that requires no trust in government. Ford’s commentary is headlined “Bitcoin May Be the Global Economy’s Last Safe Haven” and it’s posted here:

http://www.businessweek.com/articles/2013-03-28/bitcoin-may-be-the-globa…

Of course if bitcoin continues to succeed, government isn’t likely to leave it alone in a free market for long. While GATA’s hands are more than full, maybe soon there will be a need for a Bitcoin Anti-Trust Action Committee as well.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

Is there a new niche emerging for gold hedging?

March 29, 2013 by · Leave a Comment 

As some worry that the gold rally may be stalling, a softer approach from analysts and miners towards hedging could be beginning to emerge.

Read more….

6 challenges facing the gold sector – Gold Fields

March 29, 2013 by · Leave a Comment 

In its Annual Review for 2012, Gold Fields recaps the biggest issues facing the sector and what they imply.

Read more….

Trafigura storage play, Chile strike boost EU copper premiums

March 29, 2013 by · Leave a Comment 

European copper premiums are pushing near-triple digit levels because of competition among warehouse companies and a Chilean port strike.

Read more….

Big iron ore handling systems orders for Sandvik

March 29, 2013 by · Leave a Comment 

Sandvik Mining has secured two major materials handling system contracts in the iron ore sector – one in South America and one in Australia.

Read more….

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