China may import more gold Sources familiar with the gold industry predict imports to China to rise, according to today's China Business News. Zhang Weixing, an industry expert said gold in the Chinese market will be scarce next year due to investment and collection fever. "It is possible more gold will be imported from overseas," he said. He made the remarks in an investment forum held in Beijing on October 20. Zhang predicted the general civil gold reserve has reached 4,000 tons, while reserves at People's Bank of China total about 600 tons. Zhang said the price of gold has been pushed higher by a weakened US dollar, geopolitical concerns, and record high price. In China, more people are shifting to buying gold products on news of rising CPI and stock fever.
Gold Falls From 27-Year High as Stock Market Rout Spurs Selling Gold declined in London from the highest level since January 1980 as a decline in Asian and European stock markets spurred some investors to sell bullion. Silver also fell. European stocks slumped, following a drop in Asian and U.S. markets, after the Group of Seven finance ministers and central bankers said credit market turmoil will slow economic growth. Some investors ``are selling gold to pay margins on their equities,'' Bernard Sin, chief gold trader at MKS Finance, one of Switzerland's four precious-metals refiners, said in an interview from Geneva today. Imports of bullion by India, which uses more gold than the U.S. and China combined, traditionally peak in the fourth quarter as the local wedding season drives demand. Gold has gained every final quarter since 2002. Fed's Kroszner: Some credit markets still broken The markets from some complex derivatives remain broken and may recover only gradually, said Randall Kroszner, a governor of Federal Reserve Board on Monday. "I would suggest that....the recovery may be a relatively gradual process and these markets may not look the same when they re-emerge," Kroszner said in a speech to the Institute of International Bankers. Trading in some derivatives, such as collateralized loan obligations, or CLOs, and collateralized debt obligations, known as CDOs, has ground to a virtual halt since August. Some of these structured credit products packaged pools of subprime mortgages loans. As problems in the subprime mortgage market became more apparent over the summer, investors shunned these products and also became unwilling to purchase products that could have any exposure to housing-related assets and other structured products more generally.
Greenspan Says Dollar Drop May Reflect Falling U.S. Debt Demand Former Federal Reserve Chairman Alan Greenspan said the dollar's decline may reflect a growing unwillingness among foreigners to buy U.S. securities. ``Obviously there is a limit to the extent that obligations to foreigners can reach,'' Greenspan said in a speech in Washington yesterday. The dollar's decline to its lowest since 1997 may be ``an indication America is approaching this limit.'' Greenspan's warning came after the U.S. Treasury reported last week that international investors sold a record amount of U.S. stocks, bonds and other financial assets in August. Central banks and private funds are turning to currencies including the euro as financial markets outside the U.S. expand. Total overseas holdings of U.S. equities, notes and bonds fell a net $69.3 billion in August after an increase of $19.2 billion in July.
Money "Paul Robinson, one of [Barclays Bank's] strategists, said: 'We're dollar bears. The dollar is coming up for an important few weeks. We expect it to get quite a bit weaker.' The bank fears that the dollar could fall to as low as $1.50 against the euro." "The dollar may 'plunge' in 2008, prompting the U.S. , the European Union and Japan to intervene in foreign exchange markets, said Eisuke Sakakibara , Japan 's former top currency official." Could any prediction be more credible and certain today than the prediction of a falling dollar? Not that a falling dollar is anything new. When the Federal Reserve was unconstitutionally created in 1913, one dollar was worth, by law, one-twentieth of an ounce of gold (more precisely, the ratio was $20.67 per ounce). Is it Meltdown Time for the US Economy? On Friday the 19 October the Dow Jones industrial average plummeted by over 360 points. This immediately sent alarm bells ringing throughout the financial community -- along with nightmares of October 1929 when the Dow Jones dropped from 400 to 145 in November. This dramatic fall in share prices was not confined to America. From March 1929 to June 1931 the prices of Dutch shares dived by 60 per cent; for Germany it was 61.7 per cent from April 1927 to June 1931, and French share prices dropped by 55.7 per cent from February to June 1931. Unfortunately the somewhat limited world of the share market is not noted for its historical perspective. To begin with, most observers missed the fact that America was definitely sliding into recession in July 1929
Bankers Warn of Inflation Global economic leaders warned of inflation risks in advanced countries on the eve of the first World Bank meetings since Robert Zoellick took charge of an institution shaken by internal divisions and scandal. The International Monetary Fund's policy-setting committee on Saturday noted rising food and oil prices and other indications of inflation in urging finance ministers and central bankers to stay focused on achieving price stability as well as on smoothing global financial market turbulence. With meetings of the IMF and the Group of 7 industrialized countries over, attention turned to Sunday's meeting of the IMF's sister organization, the World Bank, and its policy-setting committee.
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