Month: November 2012

Source: ForexYard

The Japanese yen took additional losses against both the euro and US dollar in overnight trading, as speculations that the Bank of Japan will initiate a new round of monetary easing next month continued to weigh down on the currency.

The price of crude oil saw little movement last night, as a cease fire agreement between Israel and Hamas resulted in investor supply side fears decreasing. The commodity spent most of the night trading around $87.50 a barrel.

Today, traders will want to note that US markets will be closed in observance of the Thanksgiving holiday.

Main News for Today

Spanish 10-Year Bond Auction
• The euro could turn bearish if today’s bond auction shows that Spanish borrowing costs have gone up

Read more forex news on our forex blog

Forex Market Analysis provided by ForexYard.

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By MoneyMorning.com.au

We don’t know if it’s true or if it’s an urban myth.

But according to the tale, when a person turns up their toes to meet their maker (or fall to eternal damnation), shortly afterwards the body releases pent up gasses.

This can make it seem like the dead body is exhaling from the mouth or…hehem…from somewhere else.

In these moments, mourning relatives can wrongly think that their dearly departed loved-one has miraculously come back from the dead.

As we say, we don’t know if this really happens or whether it’s just an urban myth (although seeing as Money Morning is the undertaking profession’s financial newsletter of choice, we’re sure to get some feedback on this. Send your comments to [email protected]).

But it’s not only in dead bodies that you see this phenomenon. As we’ll show you today, the ‘death fart’ has fooled mainstream economic analysis into thinking an Australian housing recovery is on the cards…

As this report from the Smart Company website notes:

‘With the other major index providers now releasing their September quarter data, we can start to see a firm pattern of recovery emerging in Australia’s housing markets.’

It’s worth noting that Tim Lawless wrote the article. He’s the national research director for RP Data, a housing index firm.

Mr Lawless isn’t the only one excited by the Aussie housing ‘death fart’. Writing for Business Spectator, economist Stephen Koukoulas says:

‘House prices are climbing higher, reversing what were steady falls from early 2011 through to about May this year.

‘According to the RP Data series, house prices have risen 1.2 per cent so far in September to be 2.7 per cent higher than levels at the end of May…

‘There are good reasons to think that house prices will continue to move higher.’

Oops! What’s that sound we hear? Ooh, it’s unmistakable.

Here’s Why Mortgage Money is Dead Money

Just a month after Mr Koukoulas trumpeted the Australian housing recovery (he wasn’t the only one, even former housing bears are starting to get bullish), RP Data released its October data:

‘Dwelling values across all of Australia’s capital city housing markets, except Perth and Darwin, fell over October, interrupting a four month recovery.

‘The RP Data-Rismark Home Value Index result for October recorded the first month-on-month decline since May 2012, with the eight capital city aggregate index falling by -1.0 per cent over the month.’

So much for a recovery. In fact, according to RP Data, since the start of the year, Australian house prices in the five major Aussie capitals are down 0.2%, and down 1.2% since the same time last year.

That doesn’t sound like a big deal, but for homebuyers who expected 7-10% annual growth, and that Australian house prices would double every seven years, it is a big deal.

Because not only have Australian house prices not matched these gains…they’ve fallen. That has compounded the loss. And for each year prices don’t go up it means more interest payments down the drain.

The housing spruikers used to say that ‘rent money is dead money’. It turns out that in a falling housing market, ‘mortgage money is dead money’ too.

But look, we can’t really blame the housing spruikers. It’s the nature of markets. The market raises your hopes and then disappoints you.

You only have to look at a chart of the Aussie stock market over the past three years to see more false hopes than you can shake a stick at.

How Homebuyers Lost $65,000 Last Year

But the stock market is different to the housing market. The average Aussie has a much bigger exposure to Australian housing than they do to shares. And what’s most frightening is that whereas loans to buy shares have fallen off a cliff since 2008, the amount of mortgage debt has gone up.

But that’s not all. As Mr Koukoulas states in his article:

‘Let’s go back to early 2011. There was a $500,000 house that you wanted to buy and your annual household income of $100,000, but the house was just out of reach. Fast forward to the middle of this year and in that 18 month period, the house price has dropped to $465,000 while your income has risen to $106,000. Clearly, it is increasingly attractive for people to dive in and buy that house and that is happening now.’

We’ll make two comments on this lame attempt to talk up Aussie housing.

First, we don’t know a single person who would buy $465,000-worth of shares on credit in this market…especially not on a household income of $106,000 (we assume this is before tax income).

And yet that’s exactly what the housing spruikers want the average Aussie to do. Take out a half-a-million dollar loan to buy an asset that in all likelihood will be worth less in one year than it is today.

This brings us to the second point. Mr Koukoulos imagines the homebuyer who missed out on buying the $500,000 home. But what about the homebuyer who did buy the home?

One year later, the home is now only worth $465,000…plus they’ve paid interest on the mortgage (say a $450,000 mortgage) of about $30,000. So in the space of one year, the homebuyer has busted $65,000, wiping out the deposit money that may have taken them 10 years to save!

Call that an investment? Give us a break. We make no apologies for saying that is a rotten, rotten, rotten investment.

Australian Housing: Why You’ve Got to Stay Clear of This Stinking ‘Investment’

Of course it’s only natural for people to look on the bright side, and hope for a recovery. That’s true in stocks and it’s true in housing. But that doesn’t mean you should blindly throw all your cash (plus more that you’ve borrowed) into an investment just because you hope things will get better.

As a speculator, we know all about risk. We know that small-cap stocks in particular are as risky as heck. We would never dream of telling people to borrow hundreds of thousands of dollars for a risky investment.

Heck, we wouldn’t tell investors to borrow hundreds of thousands of dollars on the bluest of blue-chip stocks. In fact, if you’re patient, as Nick Hubble shows in his recent report, you can get the benefit of compounding returns without going into debt and without taking unnecessary risks.

Yet borrowing huge sums to buy over-priced housing is the kind of reckless behaviour and irresponsible advice you see in the mainstream press almost every day.

Bottom line: Investments should make you money. That’s not to say all investments will make you money, but that’s the goal. One thing’s for sure, borrowing to buy an expensive house is the easiest way to lose cash hand over fist.

Let’s make something clear. In terms of speculative growth the Australian housing market is dead. Full stop. You should ignore any tiny whimper or gust of apparent recovery you hear.

Don’t be fooled into think the Aussie housing market is still alive, because as you’ll see over the next 5-10 years, what you’ve heard from the housing market today is nothing more than a housing ‘death fart’…

And we’d recommend you avoid being in the general vicinity of one of those at all costs.

Cheers,
Kris

From the Port Phillip Publishing Library

Special Report:
Retire Rich, Happy and Free From Money Worries

Daily Reckoning:
The Pyramid of Real Wealth

Money Morning:
The Stock Market Gets Squeezed

Pursuit of Happiness:
The Right to Protect Yourself: Why the State Disarmed You

Australian Small-Cap Investigator:
Why Invest in Small-Cap Stocks?

Don’t be Fooled by Australian Housing’s Death Fart

By MoneyMorning.com.au

In 2010, China became the world’s biggest gold producer, mining 340 tonnes. This was an increase on the previous year, which itself was up on the year before that, and so on – as the following chart illustrates.

In 2011 (not on the chart) there was another rise to 361 tonnes.

This is a very different picture to the output of the other major gold producers: the US (peaked around 1997), Russia (peaked around 1958), Australia (1997), South Africa (1971) and Peru (2003).

Chinese gold imports are increasing as well. Most come through Hong Kong. Between 2010 and 2011 they tripled.

According to the World Gold Council, China’s gold demand has risen by 27% a year since 2007. Its share of world demand has doubled from 10% to 21%. Earlier this year, it replaced India as the world’s biggest consumer of gold.

On the Max Keiser show a fortnight ago, I mentioned a remark one of the senior executives in HSBC’s precious metals department made to me at a dinner a year or three back. Much of the world’s traded gold passes through the vaults at HSBC. Yet he rarely if ever sees bars with Chinese stamps on them.

The inference is that China is not exporting, but hoarding its gold.

This comment was picked up by Warren James, a blogger at the Screwtape Files, and analysed in a way I never expected (I’ll be more careful about what I say in future).

Exploring data, he found not one match for a Chinese-manufactured LBMA bar in the records for GLD (GLD is the world’s largest exchange-traded fund and the world’s largest repository of gold bars).

Nor in any of the other major ETFs, not in the Julius Baer Gold Fund, not at the Royal Canadian Mint, at the Perth Mint, nor at ViaMat (who store gold for the likes of BullionVault, Goldmoney, GoldMadeSimple and Goldcore) in London, Zurich and Hong Kong.

In 2009 there were reports of ads running on Chinese state TV recommending that citizens buy gold.

Last week, Xie Duo, director general of the financial markets department at the People’s Bank of China, endorsed this view at the London Bullion Market Association’s annual precious metals conference in Hong Kong. He said: ‘the central bank’s policy is to encourage residents to hold physical gold.’

Duo described how in 2004, China set out a ‘Three Transformations Strategy’ to gradually turn itself into a major gold player.

Xie says that the Shanghai Gold Exchange (SGE) is now the world’s premier spot and physical gold trading centre. Its futures exchange is the world’s number four, behind New York, Tokyo and Mumbai. More and more gold products are being devised and marketed.

SGE chairman and president Wang Zhe declared: ‘As the domestic market matures and opens up, the exchange will launch over-the-counter trading, gold ETFs, Friday night trading and improve the leasing market.’

‘Later on, we will further open up the market and quicken the steps to integrate into the international market,’ added Xie.

Expect China to Gather a Lot More Gold

Every few years China suddenly pops up and makes an announcement about its official gold holdings. The last time was in April 2009, when it said its holdings had reached 1,054 tonnes as of the end of 2008. This was an increase of 454 tonnes, or 75%, on 2003, making it the world’s sixth largest holder.

How much does it have now? We won’t know for sure until it makes its next announcement. But Bron Suchecki of the Perth Mint makes an educated estimate.

He looked at Chinese net imports and mine production between 2003 and 2009. He notes that about 26% of the total fell into official hands.

Net imports and mine production between 2009 and 2012 will be just below 1,955 tonnes, 26% of which is 508. Hence he suggests Chinese official holdings may now be around 1,560 tonnes.

This would still leave China in sixth place on the international league. This currently stands as follows, according to the World Gold Council.

What is so interesting about China is that, unlike the countries above it, China’s gold holdings make up such a small part of its foreign exchange reserves.

If it were to balance its portfolio up to 10% of its reserves, it would have to quintuple its holdings, assuming no other currency sales. That would mean buying more than Germany’s entire stock.

That’s got to be incredibly bullish for the gold price. No wonder they’re accumulating surreptitiously.

Which brings me to my next chart from Nick Laird. This shows China’s total net imports and production since 1930 – the cumulative amount of gold held in China.

You can see how gold holdings were negligible until 1980 and that China only really began importing in 2001. Its economic growth and significance as a world powerhouse is reflected by its cumulative gold holdings.

Here we see the last ten years in close-up.

Look at the growth in imports since 2004, when the ‘Three Transformations’ strategy was outlined.

If gold was a meaningless, antiquated metal whose only use is for jewellery, why would China be doing all this? That China is growing its gold holdings in such a dramatic way tells you about as much about the metal as it does about the country.

They say that he who owns the gold, makes the rules. It seems China could be doing that more quickly than we think. It takes gold seriously. We should too.

Dominic Frisby
Contributing Writer, Money Morning

Publisher’s Note: This article originally appeared in MoneyWeek

From the Archives…

Retirees and the Fed Face Off
16-11-2012 – Kris Sayce

Attention Investors: This Market is Worse Than it Looks
15-11-2012 – Kris Sayce

Avoid the Slaughter: Watch This Key Stock Market Pointer
14-11-2012 – Murray Dawes

Why Lithium is Another ‘Rare’ Element on China’s Radar
13-11-2012 – Dr. Alex Cowie

Who Says Gold Doesn’t Pay ‘Interest’?
12-11-2012 – Dr. Alex Cowie

Related Articles:
Five Reasons Why Gold Stocks Are Set to Rebound

China is Now the World’s Biggest Gold Producer – and Consumer

China has invaded the French wine market. Most folks would be happy about the wealth that’s changing hands… but not the French.

France’s biggest problem these days is not its role in a continent-wide fiscal meltdown. At least, that’s the case if you ask a handful of winos. They’re fretting about a Chinese invasion.

And, damn it, they want some state intervention.

It all started late last summer. A Chinese gambling tycoon swooped in and bought the chateau that produced Napoleon’s favorite red wine. It was one of Bordeaux’s top prizes… but now it’s in the hands of Chinese investors.

“I think France is selling its soul and that our politicians must react,” said Jean-Michel Guillon, a local winemaker. “We are starting to say to ourselves that our heritage is going out the window because it is not the only [foreign] purchase we’ve seen in the area. I’m afraid that within years, Burgundy will no longer belong to the Burgundians.”

He’s right. The Chinese are storming the region.

Over the past four years, some 30 French chateaux were bought by Chinese investors, and another 20 deals are currently in the works.

Thanks to growth of over 100% from China’s burgeoning middle class last year, the country is now the top importer of wine from France’s Bordeaux region. It bought more than 58 million bottles of the red wine in 2011.

China’s fresh love of wine has sent prices soaring. Over the weekend, Burgundy held its famous wine auction… with none other than Carla Bruni-Sarkozy at the gavel. The average bottle of wine sold for 380 euros.

That’s 54% more than last year.

Prices are up… but the French aren’t happy. They don’t like the surge in demand from Asia. The Chinese are distorting “their” market.

“After having made the market price of certain Bordeaux explode in an irrational manner, they’re now logically interested in Burgundy and its niche wines,” said Laurent Gotti, an expert on Burgundy’s wines. “They want everything that is the most expensive and are prepared to fork out incredible sums.”

It’s proof that even the over-cultured French are xenophobic.

“They never say hello or goodbye,” said one resident of the wine region. “All that matters is the price. If it’s 60 euros, they’re not interested. If it’s 250 euros, they take six. They don’t give a stuff about the wine itself.”

Most businessmen would relish such a quick spike in prices. Bubbles like these spawn millionaires.

But to so many of the French, wine isn’t a business. It’s a culture. It’s a way of life – their way of life. They don’t understand the Chinese are simply trying to make a buck.

Wine is a great place to make some money. And the Chinese know it. Collectible bottles have appreciated by an average of 16% each year over the past decade. But that figure – as the French auction last week showed – is rising fast.

It makes sense the Chinese are flocking to the market.

The country’s “conventional” markets are — dare I say it — even more manipulated than what we’re forced to endure here at home. Their currency is rigged. The econo-data is bogus. Taxes are high and unpredictable. And years of stimulus have masked the true health of the economy.

It is no wonder investors are doing whatever they can to ditch traditional assets. The Chinese are simply trying to get their money out of a rigged economy any way they can.

Using that same logic, we understand why so many American investors are ditching their Wall Street investments. What ails us is not all that different from what ails China. Between now and the end of the year, as Congress works to raise our taxes and hide its addiction to spending, we’re going to get an up-close view of what it looks like to flat-out manipulate an economy.

Bottom line… there are phenomenal moneymaking opportunities available to ordinary investors with the guts to stray from the herd. The wine market’s incredible surge over the past 24 months is proof conventional markets are dead.

Disclaimer

By Central Bank News
Here’s today’s Central Bank News link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don’t miss any important news.)

By The Sizemore Letter

The fiscal cliff has been getting most of the media attention these days.  And when not fretting over U.S. political gridlock, investors have turned their attention to Europe.

But the real crisis brewing—and the one that no one seems to notice—is in Japan.  The land of the rising sun is a ticking time bomb, and when it finally blows up it will make all the talk of Eurozone disintegration seem petty by comparison.

Japan is the most heavily-indebted nation in the world with government debts of over 220% of GDP and a gaping budget deficit of nearly 10% of GDP.

To put that in perspective, Greece, Spain and Italy—the European countries most viewed as being at risk of default—have debts equivalent to 160%, 68% and 120% of their respective GDPs.  The United States recently tripped over the 100% mark, but for all of the (completely justified) fretting about out-of-control debt in America, Japan’s debts are more than twice as big.

Once the statistics are released, we will most likely get confirmation that Japan spent a good part of 2012 in recession.  And already, the Japanese government is planning a 1 trillion yen ($12.3 billion) stimulus package to jolt the economy back into growth.

Seriously?  Japan has racked up the biggest debts in modern history trying to stimulate a dead economy, yet it has still been in and out of recession for the better part of the past two decades.  It’s hard to see that extra trillion yen making much of a difference at this point.

I know, I know.  Japan is different.  Unlike America and Europe, most of its debts are held by its own population, so there is little risk of international bond vigilantes punishing the country the same way they’ve punished Europe’s problem children.  Plus, you know the Japanese.  They are conservative and save a high percentage of their income.

If your money manager or financial advisor has told you this, pick up the phone right now and fire him.

I say this in complete seriousness.  Anyone who says something that phenomenally stupid should not be allowed to manage money professionally.  Yet there appear to be plenty of them out there, because the Japanese yen has been pushed sharply higher in recent years by investors who are delusional enough to consider the country a safe haven.

Think I’m being too harsh?

Let’s look at some very simple demographic math.  Those high savings rates we all heard so much about last decade were a product of Japan’s high-income earners in their 40s, 50s and early 60s socking away money for a retirement they knew was quickly approaching.

Well, it came.  Japan is the oldest country in the world with the highest percentage of its population beyond retirement age (roughly a quarter of the population).  And as Japan’s Post-WWII generation drops out of the workforce, they are starting to dip into those savings they spent the last three decades accumulating.  Japan’s savings rate is now just 2% and falling—a far cry from the 44% savings rate it recorded in 1990.  If it has not dipped into negative territory already, rest assured that it will soon. (The OECD estimates that Japan’s savings rate will be 1.9% next year; that may prove to be far too optimisitic.)

Figure 1: Japan Household Savings Rate (2012 and 2013 Forecasted)

Source: OECD

The legions of Mrs. Watanabes that Japan has depended on to buy its government debt are no longer saving and investing.  They are living off of their past savings and, given how low interest rates are, are probably going to be selling a good chunk of those bonds in the years ahead to make ends meet.

What then?  What do you expect will happen to Japanese government yields when the Japanese have to turn to the international bond markets for the first time?

They could turn to the Bank of Japan, of course.  And in fact, that is exactly what Shinzo Abe, the probable winner of Japan’s December election, is advocating.  Abe has called for “unlimited” bond buying, and not just in the secondary markets.  He wants the Bank to lend money to the government directly.

We have the pieces in place for a hyperinflationary meltdown.  This may sound impossible given that Japan has had on again / off again deflation for the past two decades, but it is hard to see any other outcome.  As Japan’s borrowing costs inevitably rise, it will have to fund more and more of its budget via the central bank.  And from that point, the path to hyperinflation becomes a slippery slope.

Investors will eventually lose their faith in the Japanese yen.  It is a little shocking to me that they haven’t already.  And when they do, the value of the yen will plummet and the prices that Japan pays for imported products and materials will soar…and will necessitate more money printing.

In Endgame, John Mauldin called Japan a “bug in search of a windshield,” and it’s an apt metaphor.  It’s just a question of when it will splat and what the particular windshield will be.

For now, it’s a waiting game.  When investor sentiment finally turns on Japan, I see it creating an incredible short opportunity in Japanese assets.  If you missed the opportunity in 2008 to short subprime lenders and banks, fear not.  You’ll almost certainly be able to make a bundle shorting the yen, Japanese bonds, and Japanese stocks.

In the meantime, keep an eye on Japanese interest rates.  When you see them starting to rise, you might want to start setting yourself up for the short opportunity of a lifetime.

SUBSCRIBE to Sizemore Insights via e-mail today.

The post Japan is the Next Shoe to Drop appeared first on Sizemore Insights.

Related posts:

• Japan’s Endgame Nears
• Perspectives on the Japan Earthquake
• The Economics of Japan’s Naughty Old Men

By Central Bank News
    The central bank of Georgia cuts its benchmark refinancing rate by 25 basis points to 5.5 percent to support economic activity with the inflation rate expected to remain below the bank’s target.
    The National Bank of Georgia, which has now cut rates by 125 basis points this year, noted that inflation in October rose an annual 0.1 percent, up from minus 0.10 percent in September, and inflation forecasts have been reduced.
     The central bank also said that preliminary data showed a weakening of demand in October, which would push prices further down, along with fiscal consolidation that will continue next year.
    “Given that the inflation is predicted to remain below the target in the medium term, the National Bank of Georgia decided to reduce the Monetary Policy Rate,” the bank said after a meeting of its Monetary Policy Committee.
     Georgia’s economy expanded by an annual 7.3 percent in the third quarter, down from 8.2 percent in the second quarter. The current account deficit widened in the first half of the year and continued to worsen in the third quarter due to lower growth in remittances, which is affected by Europe’s weak economy, the bank said.
    The National Bank of Georgia targets annual inflation of 6.0 percent. In 2011 inflation fell to 2.0 percent from 11.2 percent in 2010.

    www.CentralBankNews.info

David A. Banister- www.MarketTrendForecast.com

The SP 500 declined a perfect 61.8% Fibonacci retracement of the summer rally from the 1267 lows to the 1474 highs.  In our work we examine human behavioral patterns, sentiment, and Elliott Wave patterns to help with clues on market direction.  To be sure, there is no such thing as a perfect technical analysis methodology, so we do our best to mix up a home cooked recipe for assistance in getting as close as we can to calling the pivots up and down.

In the near term, we notice the market has rallied out about 45 points off the 1344 pivot lows last week to around 1390 today.  This retracement marks a normal 38.2% Fibonacci recovery of the most recent wave 3 decline to 1344.  Typically, this is a wave 4 mini-bullish pattern as washout lows get bought and then shorts cover fueling the rally a bit higher.  However, this is often when another sledgehammer comes out of left field and knocks the market down in what we would call a “Wave 5” decline to new lows on the downtrend.

Investors should watch both the 20 day moving average which is  declining and around 1392 or so, and the 1388-1392 38% Fibonacci retracement areas  for resistance. Only a strong close over 1392 can eliminate the potential for one more leg down to the 1316 areas on the SP 500 before the month of November comes to a close.  With that said, we expect a rally in December for the markets and hope to see this barrier taken out soon, but would advise traders to tread with caution until such time.

Consider joining us at www.MarketTrendForecast.com for occasional free reports and or a 33% discount to join and get regularly daily forecast updates on the markets and precious metals that are outside the box.

Article by Investment U

It’s hard not to be envious of Australians.

I used to travel “down under” every three months to pitch U.S. stocks to Australian banks, mutual funds and insurance companies. After a week in vibrant Sydney and historical Melbourne, it was always tough to get on the plane and head home.

The country is blessed not only with natural beauty, fun-loving people and tremendous resources, but by its geography, it’s also at the heart of Pacific trade flows. A smallish, energetic population coupled with a commodity boom has led to two decades of uninterrupted growth.

No wonder investors are in love with Australia, but why give the cold shoulder to another lucky country that’s equally blessed.

Get your head around this fact: Norway has the world’s largest sovereign wealth fund.

A Sort of “High-Tax Heaven”

With a population of only 4.9 million, there are more Norwegians in the Minneapolis area than in Norway. Yet the country is the largest oil producer and exporter in Western Europe and the world’s second-largest exporter of natural gas.

You might think that this petro wealth would translate into low taxes – but you would be dead wrong. Norway is a weird sort of high-tax heaven.

High-income Norwegians pay nearly 50% of their income to the federal government, along with a substantial additional tax that works out to roughly 1% of their total net worth. And that’s just what they pay directly. Payroll taxes in Norway are double those in the United States. Sales taxes, at 25%, are roughly triple. Plus, the highest income tax rates kick in at $124,000. From there, the income tax rate, including a national insurance tax, is 47.8%. Then there’s the wealth tax, a 1.1% annual levy on the entirety of a person’s holdings above about $117,000, including stock in private companies held by the owner.

Try getting that package through the U.S. Senate Finance Committee.

The flip side of this politically toxic cocktail of taxes is that at age 67, workers get a government pension of up to 66% of their working income, and everyone gets free education, from nursery school through graduate school plus free high-quality day care for the asking. Wow.

An A+ in Fiscal Discipline

Norway’s economy is not only driven by ample resources, as the rates of start-up creation here are among the highest in the developed world, and Norway has more entrepreneurs per capita than the United States. Economic growth is close to 4% and the unemployment rate is a rock bottom 3.1%.

The government gets an A+ in fiscal discipline, as it can only draw 4% of its $650-billion oil fund to support its annual budget, which probably makes Norway’s government balance sheet the best in the world.

The management of this gigantic fund, up 4.7% in the third quarter, may offer some lessons for us in our personal finances:

• First, it reduced its bond holdings in the U.S. dollar, euro and Japanese yen by 10% in the quarter.

• Second, bonds make up 40% of its oil fund with the rest in global equities. The yield on its bond portfolio is about 2%.

• Third, China exposure represents only 0.8% of the entire portfolio, but exposure to other emerging markets is growing.

Your best bet to enter high-tax, oil-rich Norway is through the gates of the Global X Norway ETF (NYSE: NORW), which has about half of its holdings in the energy sector and offers dividend yield of 2.4%.

But who knows, maybe it’s more than just luck…

Good Investing,

Carl

Article by Investment U

London Gold Market Report
from Ben Traynor
BullionVault
Wednesday 21 November 2012, 07:30 EST

WHOLESALE gold bullion prices climbed back above $1725 an ounce Wednesday morning in London, making up some ground lost the previous day, while stocks and the Euro recovered losses made in Asian trading immediately after the news that European policymakers had failed to reach a deal on Greece.

“Upside targets [for gold] are now found around the $1750 mark and then around the $1800 level where the gold price has stalled on three occasions in the past year,” says Axel Rudolph, senior technical analyst at Commerzbank.

Over in Asia, “physical [gold] demand is very, very bad,” according to one trader in Singapore quoted by newswire Reuters this morning.

“If prices drop another $30 to $50 [an ounce], we will probably see investors and physical buyers return.”

Silver prices hovered just above $33 an ounce for most of this morning, while on the commodity futures markets oil ticked higher but copper fell.

In the Middle East efforts to broker a truce in Gaza were dealt a blow when a bomb was detonated on a bus in Tel Aviv.

Wednesday also brought news that the central banks of Brazil and Kazakhstan were among those who bought gold bullion last month, while Germany reduced its official holding.

Eurozone finance ministers ended their latest meeting in the early hours of Wednesday morning without an agreement to pay Greece the next tranche of bailout funding.

“We are close to an agreement but technical verifications have to be undertaken,” said Luxembourg prime minister Jean-Claude Juncker, who chairs the Eurogroup of single currency finance ministers.
“There are no major disagreements…financial calculations have to be made and it’s really for technical reasons that at this hour of the day it was not possible to do it in a proper way.”

Juncker appeared to have a public disagreement over Greece with International Monetary Fund chief Christine Lagarde last week, when the latter disagreed with the idea of extending by two years the deadline by which to reduce Greece’s debt-to-GDP ratio to 120%, from 2020 to 2022.

The IMF managing director has said she would prefer to see further write downs of Greece’s debt, a position opposed by Germany and several other Eurozone nations.

“We discussed the issue very intensively, but since the questions are so complicated we didn’t come to a final agreement,” added German finance minister Wolfgang Schaeuble after last night’s meeting ended.

“We have a series of options on the table on how to close the financing gap.”

The Eurogroup is due to reconvene next Monday.

“No procrastination can be permitted,” Greek prime minister Antonis Samaras said this morning.
“Greece did what it had to and what it had committed to…our partners now have a duty to meet the responsibilities they have assumed.”

Earlier this month the Greek government narrowly won a vote in parliament to implement a further €13.5 billion austerity package, which Samaras said will be “the final one”.

The Euro fell against the Dollar immediately following the end of the Eurogroup meeting, although it had recovered most of its losses by Wednesday lunchtime in London.

“European policy makers raised expectations that something would happen on Greece and then they didn’t deliver,” says Ned Rumpeltin, head of G10 currency strategy at Standard Chartered in London.

“What we are seeing is European risk coming back on to the agenda. It does put downward pressure on the Euro.”

In the US meantime, Federal Reserve chairman Ben Bernanke said in a speech Tuesday that yields on corporate bonds and agency mortgage backed securities “have fallen significantly” since the Fed announced in September it will buy $40 billion of MBS a month until the labor market improves “substantially”.

Bernanke added however that the Fed “will want to be sure that the recovery is established before we begin to normalize policy”, reiterating that “a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens”.

At this month’s Bank of England Monetary Policy Committee meeting, eight of the nine members voted in favor of maintaining the size of the Bank’s quantitative easing program at £375 billion, the level of it reached last month, minutes from the meeting published Wednesday show.

The other MPC member, David Miles, voted in favor of extending QE by buying a further £25 billion of assets. The bulk of assets bought under the Bank’s QE programs have been UK government bonds.

Public sector net borrowing by the UK government was £8.6 billion last month, official figures published Wednesday show, a 46% rise compared to October 2011.

Brazil’s central bank increased its gold bullion reserve by 17.17 tonnes in October, taking the total to over 52.5 tonnes, data published by the IMF show.

Kazakhstan added 7.5 tonnes to its gold reserve, taking the total to 111.5 tonnes, while Germany sold 4.2 tonnes, taking its total to 3391.4 tonnes. Germany’s federal auditors last month asked the Bundesbank to regularly inspect Germany’s gold held outside the country.

Ben Traynor
BullionVault

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Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics. Ben writes and presents BullionVault’s weekly gold market summary on YouTube and can be found on Google+

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