Daily Digest 1/2 - Gold and Silver Stocks in New Year, Australian Debt, China Manufacturing
- Bill Gross Tells Bloomberg To "Avoid Dollar Denominated Government Debt"
- Gold, Silver and Stocks: What does the New Year Hold?
- Australians Sinking Under Debt Burden
- China Dec Manufacturing Eases On Tightening Moves
- Treasuries Gain on Speculation Snow Will Slow Economic Growth
- Beijing Residents Rush to Register New Cars to Meet China's Quota System
- Are Oil Prices Are About To Wake Up To Peak-Production Realities?
When Nassim Taleb and Marc Faber say that US government debt is a suicide investment, one can be allowed some skepticism. After all, they are likely just talking their book. On the other hand, when the manager of the world's biggest bond fund, whose flagship fund Treasury holdings amount to almost $80 billion goes on Bloomberg and says to "avoid dollar-denominated government debt" better known as US Treasuries, and instead recommends viewers invest in "stable" currencies like the Peso, the BRL or the CAD, then you know the bottom in bonds is in.
Do precious metal prices reflect economic fundamentals or perceptions of price trend prospects? Silver sells around $30 an ounce and is near a 30-year high. Gold sells for more than $1,400 an ounce. Can gold and silver double from here, with silver already selling for more than five times typical producer costs? (Yes, the prices can double, but not likely.) Just what were J.P. Morgan analysts thinking in June 2010 when, with silver around $18 an ounce, they gave a long-term silver price forecast of $13 an ounce? Were they trying to turn the market? Or did they misunderstand the times?
According to the Reserve Bank, Australians have added almost $220 billion to household debt levels since the beginning of 2008, taking our borrowings to a record $1.3 trillion. Despite more cautious spending in recent months, household debt is still up by 5.8 per cent on a year ago and a recent survey by Westpac found only about 20 per cent of people thought paying off debts was the best use of their money. Most households in the US, UK and much of Europe are still busily paying down their borrowings, particularly unsecured debts such as personal loans and credit cards.
The state-affiliated China Federation of Logistics and Purchasing said Saturday that its purchasing managers index, or PMI, dipped to 53.9 last month from 55.2 in November and 54.7 in October. It was the first decline in five months but the 22nd straight month that the reading has stayed above 50, the benchmark for expansion.
“Treasuries will rally in January,” said Zeal Yin, who helps oversee the equivalent of $51.4 billion as a bond investor at Shin Kong Life Insurance Co., Taiwan’s second-largest life insurer. “The extremely cold weather will affect the U.S. economy.” U.S. 10-year rates dropped two basis points to 3.35 percent as of 8:10 a.m. in London, according to BGCantor Market Data. The price of the 2.625 percent security maturing in November 2020 climbed 5/32, or $1.56 per $1,000 face amount, to 93 31/32.
China surpassed the U.S. last year to become the world’s biggest car market as tax cuts and government subsidies aimed at spurring auto sales fueled a surge in traffic. Beijing tied with Mexico as having the world’s worst traffic, according to a survey by International Business Machines Corp. last year. The Beijing Municipal Commission of Transport opened a website yesterday to accept online applications from people wishing to buy a car. Those without Internet connections can register on sites from Jan. 4.
Somehow the government is sticking with an outlook that sees crude prices not hitting triple digits until 2015. It is an estimate that would get smirks on Wall Street and get you laughed out of the room at the peak oil conference in D.C.
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