Jim Sinclair’s Commentary
The sheeple run as China’s public buys and Russia curtails supply to the market.
This is nothing new.
China buys gold and the world follows
The Chinese are building on a trend that’s likely to last
By Myra P. Saefong, MarketWatch
Jan. 21, 2011, 12:01 a.m. EST
SAN FRANCISCO (MarketWatch) — Gold prices have lost around $75 an ounce this year but analysts are unfazed by the drop, with many betting the slump in prices will soon be cut short as the Chinese New Year feeds an increase in global demand that’s destined to last.
“We are entering a period of strong seasonal growth in gold demand and Chinese New Year is a big part of that,” said Brien Lundin, editor of Gold Newsletter. “Physical demand has been supporting the gold prices on the downside even during the typical slack periods, and I expect that upcoming increase in demand will also support the price, but at higher levels.”
The Chinese New Year, also known as Lunar New Year, begins on Feb. 3 this year and ends with the Lantern Festival 15 days later.
“Chinese gold and silver demand has been phenomenal ahead of the New Year holiday,” said Adrian Ash, head of research at BullionVault.com, a leading online service for gold bullion trading and ownership, citing comments from dealers among others.
Shipments have been “heavy” and they began very early, in mid-December, he said.
Jim Sinclair’s Commentary
This is fancy accounting at the world’s major central bank to hide losses. What makes this any different, in intention, than what Greece did on OTC derivatives?
What are those OTC derivatives on the Federal Reserve Assets Balance Sheet crap worth if you had to mark to NO market them?
You do this only if you anticipate problems, or you are in trouble. Ron Paul is going to have a field day with this totally outrageous development.
Accounting Tweak Could Save Fed From Losses
Published: Friday, 21 Jan 2011 | 4:58 PM ET
Concerns that the Federal Reserve could suffer losses on its massive bond holdings may have driven the central bank to adopt a little-noticed accounting change with huge implications: it makes insolvency much less likely.
The significant shift was tucked quietly into the Fed’s weekly report on its balance sheet and phrased in such technical terms that it was not even reported by financial media when originally announced on Jan. 6.
But the new rules have slowly begun to catch the attention of market analysts. Many are at once surprised that the Fed can set its own guidelines, and also relieved that the remote but dangerous possibility that the world’s most powerful central bank might need to ask the U.S. Treasury or its member banks for money is now more likely to be averted.
"Could the Fed go broke? The answer to this question was ‘Yes,’ but is now ‘No,’" said Raymond Stone, managing director at Stone & McCarthy in Princeton, New Jersey. "An accounting methodology change at the central bank will allow the Fed to incur losses, even substantial losses, without eroding its capital."
The change essentially allows the Fed to denote losses by the various regional reserve banks that make up the Fed system as a liability to the Treasury rather than a hit to its capital. It would then simply direct future profits from Fed operations toward that liability.
