Thursday, February 21, 2013

Paper Money Kaput?

From RussiaToday

The Economic Impact of a War Between Japan & China

A 5 min lecture on the economic and geopolitical consquencies of a shooting war between China and Japan, the world's No. 2 and No. 3 economies respectfully.

Even you are not interested in the topic, and damn it you should be, watch it for the amazing time lapse drawing , a very impressive way of conveying a message.

From MinuteMBA

Australian Share Market looses $35 Billion


Original source

The sharemarket has shed $35 billion in the biggest one-day loss in nine months as the strong surge of 2013 came to an abrupt end.

The benchmark S&P/ASX200 closed at the day’s low, down 118.6 points, or 2.3 per cent, to 4980.1, while the broader All Ordinaries dropped 115.8 points, or 2.3 per cent, to 4998.6.

All sectors finished lower, contributing to the biggest sell-off since May last year, with energy stocks slumping 4.6 per cent, materials sliding 3.4 per cent and financials falling 2.4 per cent.

‘‘I’m not overly alarmed, this is probably a healthy break for the market after a strong run,’’ said Mike Kendall, executive director JBWere.

‘‘Pretty much everyone knows that things just won’t go up in a straight line,’’ he said.

Another factor contributing to the sell-off was comments from the US Federal Reserve which, citing a risk of inflation, hinted at the winding back of its quantitative easing program.

Miners suffered heavy losses, with BHP falling 3.8 per cent to $37.17, Rio Tinto sliding 3 per cent to $67.30 and Fortescue Metals dropping 2.4 per cent to $4.80.

Read more:

Peter Schiff on Gold and QE

From Eduardo89rp

Published on Feb 18, 2013

Rick Rule on Precious Metals market

Rick Rule discusses the current moves in precious metals and in particular the attractive price point for Platinum and Palladium.

Brother JohnF - Silver Update: FED vs SILVER

From BrotherJohnF

James Turk on the Gold and Silver Markets

James Turk discusses the recent moves in the Gold and Silver markets and the dubious audit from the US Treasury on the US gold reserves.  Listen to the KWN interview here

Read US Treasury's audit here

Stocks Fall as Dollar Gains on Fed’s Easing Debate

Feb. 20 (Bloomberg) -- U.S. stocks retreated from five-year highs while oil, gold and silver led commodities lower as minutes from the Federal Reserve’s last meeting showed policy makers debated the risks and benefits of bond purchases. Matt Miller, Trish Regan and Adam Johnson report on Bloomberg Television's "Street Smart." (Source: Bloomberg)

Fed About to Take Away Punchbowl?

From CNBC: WED 20 FEB 13 | 05:00 PM ET

Australian Dollar falls one cent to USD


Original source

THE Australian dollar has fallen more than one US cent as it looks likely there could be an early end to the US Federal Reserve's stimulus program.

At 7am AEDT today, the local unit was trading at 102.44 US cents, down from 103.65 cents yesterday.

The currency reached an overnight low of 102.43, its weakest level since Tuesday of last week.

The minutes of the Fed's January policy meeting show that some members were worried that the bond-buying programs could eventually escalate inflation and unsettle financial markets.

Read more:

Chart from

Gold and Silver Decline on Fed Minutes Release

Gold and Silver have declined sharply overnight on momentum trading in New York after the release of the January Fed minutes. The minutes were perceived by the markets as a portend that the Fed may ease up on monetary policy accommodation - ie they might print a few less digital dollars and let interest rate rise a bit, maybe.

Gold fell through the US$1600 level down to $1559 before the decline halted. Silver fell through US$29.50 down to $28.29 before recovering slightly.

Relevant section of the Fed minutes and link follow the charts below.

Minutes of the Federal Open Market Committee

January 29-30, 2013

Link to full release

Committee Policy Action

Committee members saw the information received over the intermeeting period as suggesting that growth in economic activity had paused in recent months, in large part because of weather-related disruptions and other transitory factors. Employment had continued to expand at a moderate pace, but the unemployment rate remained elevated. However, members generally expected that, with appropriately accommodative monetary policy, economic growth would proceed at a moderate pace and the unemployment rate would gradually decline toward levels they judged to be consistent with the Committee's dual mandate. Although members saw strains in global financial markets as having eased somewhat, they continued to see an increase in such strains as well as slower global growth and a greater-than-expected fiscal tightening in the United States as downside risks to the economy. Members generally continued to anticipate that, with longer-term inflation expectations stable and slack in resource utilization remaining, inflation over the medium term would run at or below the Committee's longer-run objective of 2 percent.

In their discussion of monetary policy for the period ahead, members saw the economic outlook as relatively little changed since the previous meeting. Accordingly, all but one member judged that maintaining the highly accommodative stance of monetary policy was warranted in order to foster a stronger economic recovery in a context of price stability. The Committee agreed that it would be appropriate to continue purchases of MBS at a pace of $40 billion per month and purchases of longer-term Treasury securities at a pace of $45 billion per month, as well as to maintain the Committee's reinvestment policies. The Committee also retained its forward guidance about the federal funds rate, including the thresholds on the unemployment and inflation rates. Some members remarked favorably on the move away from providing calendar dates in the forward guidance and toward highlighting the economic conditionality of future monetary policy. One member dissented from the Committee's policy decision, expressing concern that the continued high level of monetary accommodation increased the risks of future economic and financial imbalances and, over time, could cause an increase in long-term inflation expectations.

In the statement to be released following the meeting, the Committee made relatively small modifications to the language of its December statement, including to acknowledge both the pause in economic growth during the fourth quarter and some easing of the strains in global financial markets. In light of the importance of ongoing U.S. fiscal concerns, members discussed whether to include a reference to unresolved fiscal issues, but decided to refrain. Similarly, one member raised a question about whether the statement language adequately captured the importance of the Committee's assessment of the likely efficacy and costs in its asset purchase decisions, but the Committee decided to maintain the current language pending a review, planned for the March meeting, of its asset purchases.