I have fallen behind again on material I want to cover. To catch up, I need to write:
1) An entry on Loan and money supply growth in China (in progress, will publish later today).
2) An entry on new round AIG bonuses ($235 million).
3) An entry on Commodity exchanges dumping gold obligations onto ETFs.
Commodity exchanges dump gold obligations onto ETFs
GATA board member Adrian Douglas discloses in the report below, titled "The Alchemists," that the New York and Tokyo commodity exchanges have been permitting their gold futures contracts to be settled not in real metal but in shares of gold exchange-traded funds (ETFs). This essentially allows the gold shorts (and the exchanges themselves, which guarantee futures contracts) to transfer their obligations to third parties that may not have the metal they claim to have and that, in any case, are operated by the investment banks running major short positions in gold. Thus it is probable that the paper claims to the world's supply of gold are far greater than even GATA has suspected -- that the gold supply is fantastically oversubscribed and that "paper gold" is being created at an ever more frantic rate to suppress gold's price.
4) An entry on why inflation isn't higher than it is. Basically, commodity prices peaked around August of last year and fell steeply in second half (see picture of pork prices below as an example). In year on year inflation in China fell only 1.4 percent in May, which means that prices are near where they were last year when commodity prices were peaking. As we move into the second half of the year, last year's prices, which are used to calculate CPI, will be falling (pork prices peaked in June of last year for example). This means if prices merely stay where they are now, we will be seeing double digit inflation by November. If this years prices go up (they will), we will be seeing double digit inflation even sooner.
5) An entry on social unrest and ethnic riots in China.
6) An entry on China's ambitious medical health plan.
7) An entry on yuan settlement taking off smoothly.
8) An entry on joblessness in the US.
9) An entry on the ongoing boom in the property and stock markets in China.
10) An entry on why US futures market have become useless in price discovery.
Futures markets, where they exist, can play a crucial role in determining the storage decision in the underlying spot (physical) market. The futures market acts as a conduit for market information and is a gatherer of agents' expectations about the future prospects for the spot market. As such, it is able to provide both price insurance and price discovery roles, the latter of which generates information for spot market traders and allows them to make rational storage decisions. If this were to be the case, then the efficiency of storage is improved which can potentially lead to a reduction in the volatility of spot prices over the marketing season. The existing literature is ambiguous as to whether futures markets can help spot markets price more efficiently. This paper seeks to examine whether this is the case in the British maincrop potato market by evaluating the volatility of spot prices over the period 1969—96 in a "before-after" analysis of the impact of the introduction of futures trading in 1980. The results suggest that the introduction of the futures market has led to a reduction in price volatility, despite some problems in the operation of the futures market itself.
11) Entry on the options, market makers, and manipulation.
I might do a couple of videos to cover everything quickly, seeing as I am so far behind.
Update on Russian Agriculture Fund
A fund name has been reserved:
Regia Russia Agro Fund
I am planning, if feasible, for the subscription and accounts to be in gold (via goldmoney and/or bullionvault). I will have more info on this next week, after we look into it.
(See *****Setting Up a Fund to invest in Russian Agriculture***** for more info on fund)
Visiting agriculture land in Russia
Several people have contacted me about coming to Russia look at the farming land that is for sale. This is a good idea, and I am planning on setting up something around August 25.
Please let me know if you are interested and what dates would work for you. (I will email a guide on getting Russian visa)
I will try to set some definite dates by the end of next week.