Tuesday, October 22, 2013

Gold catalyst: China aiming for 'de-Americanised world’ with renminbi replacing dollar GLD, MUX, TNR.v, GDX


  The Telegraph reports about the implementation of the China's long-term plan to diversify out of US Dollar denominated assets. UK trade delegation was recently visiting China and making a lot of deals with the message that "we would like to be the part of The Growing China Story". 
  It is interesting that Alasdair Macleod is quoted by the mainstream UK paper now. The mega trend and major geopolitical shift is making it to the surface now, US Dollar is losing its status of Reserve Currency Of Choice. With this perspective in mind China's appetite for Gold, Copper, Lithium and other commodities is making a lot of sense.

Max Keiser: Alasdair Macleod Investigates The $640 Million Sell Order Of Gold. GLD, MUX, TNR.v, GDX

"We continue to follow The Crime Of The Century - Gold market manipulations. Today we have Max Keiser who investigates with Alasdair Macleod the 640 million Sell order of Gold which disrupted the trading session on Friday 11th and was supposed to Kill the rest of the confidence in Gold safe heaven status. Chinese are not buying into it any more and moving fast now with their state level long term plan of diversification its Reserves out of US Dollar denominated assets."

Eric Sprott: "Gold And China To Dominate The World." GLD, MUX, TNR.v, GDX

 "Eric Sprott is very bold with his call for Gold at $2400 next year. He stands his ground and continues to talk about overwhelming demand for physical Gold from China. According to Eric, investing in the right Gold and Silver equities provides the opportunity of a life time for wealth creation now.
  Now after the Debt Ceiling can is kicked down the road for a few weeks without resolving anything, investors will be back to the analysis of the real economic situation. We can forget about Taper until the next year at least with the looming circus entertainment Debt Ceiling Increase 2.0. Default is avoided, but the damage is done. We are very positively surprised by the amount of US Dollar negative articles in the mass media these days. The story about the End of the Reserve Currency of Choice - US Dollar is making its way to the surface now.
  Last week US Dollar has printed the closing below the all important 80.00 level and is now below the 200MA. Gold on its part is in the break out mode, finally and has painted the set of very interesting charts."

McEwen Mining & TNR Gold: Las Bambas Copper Bidding From China Heats Up TNR.v, MUX, LCC.v, GDX, CU

“It is a good choice to invest in mining assets, which is a much better choice than investing in one government’s bonds – especially when this country cannot guarantee to pay even its own employees”

The Telegraph:

China aiming for 'de-Americanised world’ with renminbi replacing dollar

Given the scale of China’s consumption of fossil fuels and raw materials, it is only a matter of time before the renminbi replaces the dollar as the primary currency for trading commodities and resources

China has overtaken the US as the world’s largest oil importer and goods trading nation. 

China has overtaken the US as the world’s largest oil importer and goods trading nation. Over the next five years, it will surpass the rest of the world combined in its consumption of base metals.
Given the scale of the country’s consumption of fossil fuels and raw materials, it is only a matter of time before the renminbi replaces the dollar as the primary currency for trading commodities and resources such as crude oil and iron ore.
The debt ceiling farce in Washington and China’s growing reluctance to continue underwriting the US economy by buying up its bonds and adding to America’s near $17 trillion (£10.5 trillion) debt mountain suggests that this tectonic shift in the global trade system could be just around the corner.
Chinese state media are already calling for a “de-Americanised world”. Some experts say that China is plotting to usurp the greenback’s place in global commodities trade. Beijing’s strategy hinges on quietly encouraging traders to bypass New York through the creation of a network of interlinked commodity markets based in the global financial hubs of Hong Kong and London.
“There can be little doubt from these actions that China is preparing herself for the demise of the dollar, at least as the world’s reserve currency,” writes Alastair Macleod, head of research at GoldMoney. A further signal that policymakers are beginning to warm to the renminbi playing a greater role in the global economy came last week when Chancellor George Osborne unveiled a historic deal to allow British investors direct access to China’s markets and allow Chinese banks to expand operations in the UK.

The historic pact will also place the City, already the centre for global metals and foreign exchange trading, at the forefront of the race to capture more business denominated in the yuan.
In the world’s major mining hubs such as Australia, resource companies are already taking advantage of new legislation that allows invoicing and trade settlement directly in renminbi, a process which completely cuts the US dollar out of the equation.
HSBC predicts that the Chinese currency will be the third-largest unit used for trade by 2015 and fully convertible within the next five years as the People’s Bank of China gradually liberalises policy.
“The flow of transactions conducted in RMB [renminbi] will only continue to grow,” said Frederic Vilsboe, head of commodity and structures trade finance for Europe, Middle East and Africa at HSBC in London.
Among the Organisation of Petroleum Exporting Countries, which controls a third of the world’s supply of crude, members such as Iran – constrained by sanctions – are already agitating for a shift away from pricing in US dollars. China’s oil imports set a record last month, with official figures showing that 6.47m barrels a day of crude flowed into the country.
The scale of China’s existing and forecast demand for resources almost makes any attempt by the US to maintain the dollar’s status as the world’s primary trading currency for resources entirely nugatory. Wood Mackenzie estimates that China will account for 52pc of base metals demand by 2017, compared with 46pc of the 96m-tonne global market this year.
The Edinburgh-based company forecasts that the world’s second-largest economy, will be consuming more base metals than the rest of the world combined by 2017 as the process of urbanisation that started at the beginning of the last decade continues. Of course, there are risks, not least China’s ability to sustain the rapid rates of growth achieved since the country opened its economy after joining the World Trade Organization in 2001.
Politically, too, Beijing faces suspicion on the world stage but, if authorities in Beijing can continue to grow the economy, it is almost inevitable that traders will soon be quoting commodity prices in yuan not dollars.

Iranian energy: International oil companies prepare for lifting of sanctions

Iran is edging closer to restoring itself within the fold of the international community and behind the scenes a new regime in Tehran is turning to some old and trusted figures to revive the fortunes of its oil and gas industry.
Crucially, for the holder of the world’s third-largest proven oil reserves and second-largest stores of natural gas, the old guard, now fully restored, was a decade ago at the forefront of dealing with international oil companies (IOCs), who are already quietly making overtures about a return should sanctions be lifted.
The restoration of Bijan Zanganeh to the post of oil minister and Mehdi Hosseini as his deputy has sent a clear signal to the likes of Royal Dutch Shell, Total, Eni and Statoil that Iran is once again open to discussions about international help to tap its resources.
Both men, sidelined under the hardline regime of Mahmoud Ahmadinejad, were central to the creation of buy-back contracts whereby Tehran agreed to pay IOCs an agreed price for oil they produced.
Zanganeh has wasted no time laying the groundwork for a possible return of the IOCs. The oil ministry in Tehran is currently reviewing the terms of the controversial buy-back deals potentially to make them more attractive to foreign companies.
Pending a decision on sanctions, the race is now on among IOCs to reopen mothballed Tehran offices.

Iron Ore

Iron ore prices, a barometer for global trade, have held up well over recent months shaking off concerns over China’s economy and the impact of the US government shutdown. Despite major producers bringing more supply onstream, the price for ore used to smelt steel has remained firm above $130 (£80) a tonne.
Macquarie sees demand for iron ore remaining robust and Chinese mills building inventories. Moving into January and over the first quarter, the bank sees supplies of ore tightening as southern hemisphere producers struggle with the weather and mines in China shut down for Chinese New Year. Explosive supplies are also restricted around Chinese government events in March."

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