Jim Sinclair’s Commentary
Any way they can get it. The more gold mining entities the Chinese own, the less gold that will come to market.
China National Gold Seeks Africa Investment as Bullion Trades Near Record
By Bloomberg News – May 29, 2011 8:02 PM MT
China National Gold Group Corp., the state-owned company that controls the nation’s largest gold deposits, wants to invest in projects in Africa as it expects bullion to trade near record levels for the next three years.
“We aim at large-scale mines with good potential in countries that have close ties with China and domestic stability,” President Sun Zhaoxue, 48, said in an interview in Shanghai. “Gold prices will foreseeably fluctuate at historically high levels for another three years.”
Gold jumped to a record $1,577.57 an ounce this month, helping make this year among the busiest for gold deals since 2006. Citic Group, China’s biggest state-owned investment company, and partners agreed this month to buy Gold One International Ltd. for about A$444 million ($469 million) to gain assets in South Africa.
The value of announced gold deals so far this year stands at $16.8 billion, more than the totals for the entire year in 2009 and 2008, according to data compiled by Bloomberg.
China National, owner of the Yangshan deposit in Gansu province, may also invest in Southeast Asia and Central Asia, Sun said. It currently doesn’t operate any mines outside China.
The company is also reviving mines that were uneconomical in China’s western provinces as record prices make it profitable to mine them, Sun said, adding that it’s also increasingly exploiting lower grade deposits near existing mines because of higher prices.
Jim Sinclair’s Commentary
When and where have you heard this?
Mobius Says Financial Crisis ‘Around The Corner’
By Kana Nishizawa – May 30, 2011 5:10 AM MT
Mark Mobius, executive chairman of Templeton Asset Management’s emerging markets group, said another financial crisis is inevitable because the causes of the previous one haven’t been resolved.
“There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis,” Mobius said at the Foreign Correspondents’ Club of Japan in Tokyo today in response to a question about price swings. “Are the derivatives regulated? No. Are you still getting growth in derivatives? Yes.”
The total value of derivatives in the world exceeds total global gross domestic product by a factor of 10, said Mobius, who oversees more than $50 billion. With that volume of bets in different directions, volatility and equity market crises will occur, he said.
The global financial crisis three years ago was caused in part by the proliferation of derivative products tied to U.S. home loans that ceased performing, triggering hundreds of billions of dollars in writedowns and leading to the collapse of Lehman Brothers Holdings Inc. in September 2008. The MSCI AC World Index of developed and emerging market stocks tumbled 46 percent between Lehman’s downfall and the market bottom on March 9, 2009.
“With every crisis comes great opportunity,” said Mobius. When markets are crashing, “that’s when we’re going to be able to invest and do a good job,” he said.
