GOLD - After Dumping UST Bonds, Russia Buys 900,000 Ounces Of Gold Worth $1.17 Billion In April

Russia Buys 900,000 Ounces Of Gold Worth $1.17 Billion In April
For anyone who wondered what Russia was doing with the $21 billion in US Treasury bonds it dumped in March alone, we now have the definitive answer.
http://networkedblogs.com/X4qyM
From Goldcore:
Today’s AM fix was USD 1,292.00, EUR 942.65 and GBP 764.81 per ounce.

Yesterday’s AM fix was USD 1,291.50, EUR 943.46 and GBP 767.56 per ounce.

Gold climbed $1.10 or 0.08% yesterday to $1,294.70/oz. Silver rose $0.03 or 0.15% to $19.42/oz.

Gold is marginally lower today at $1,293.50/oz and remains in lock down in an unusually tight range between $1,287/oz and $1,306/oz this week. Gold in Singapore, which often sets the price trend in Asia, traded at $1,292.23/oz prior to a bounce to just over $1,295/oz.

Gold has been in a very narrow range between $1,283/oz and $1,310/oz for a month now. There are a lot of things going on underneath the surface of the calm gold market this month. That superficial calm is likely to give way in the coming days as we appear on the verge of a sharp move to the upside or downside once gold breaks out of the recent range.

A break below $1,283/oz is possible and this could see gold quickly fall to test longer term support at $1,200/oz. This is likely if the technical traders and computer manipulations continue to dominate. However, should physical demand pick up on rising geopolitical tensions and the return of Indian demand with the easing of import duties, gold should quickly challenge resistance at $1,385/oz and $1,418/oz.

Russia Buys 900,000 Ounces Of Gold Worth $1.17 Billion In April
The Russian central bank has again increased its gold reserves by another 900,000 ounces worth $1.17 billion in April.

Russia’s gold reserves rose to 34.4 million troy ounces in April, from 33.5 million troy ounces in March, the Russian central bank announced on its website yesterday. The value of its gold holdings rose to $44.30 billion as of May 1, compared with $43.36 billion a month earlier, it added.

The following is a summary from Bloomberg of the April data template on international reserves and foreign currency liquidity from the Central Bank of Russia in Moscow:

Bestand: Währungsreserven und Goldbestände Russland
http://dzswc0o8s13dx.cloudfront.net/goldcore_bloomberg_chart2_21-05-14.png
 
Veränderung: Währungsreserven und Goldbestände Russland
http://dzswc0o8s13dx.cloudfront.net/goldcore_bloomberg_chart3_21-05-14.png

Russia’s gold & foreign exchange reserves remained virtually unchanged at USD 471.1billion in the week ending May 9. Russia’s reserves have fallen since the crisis began but remain very sizeable. The reserves include monetary gold, special drawing rights, reserve position at the IMF and foreign exchange.

The 900,000 ounce purchase is a lot of physical gold in ounce or tonnage terms but as a percentage of Russian foreign exchange reserves it is a very small 0.24%.

Gold as a percentage of the overall Russian reserves is now nearly 10%. This remains well below the average gold holding as a percentage of foreign exchange reserves of major central banks such as the Bundesbank, Bank of France and the Federal Reserve which is over 65%.

The Russian central bank has been gradually increasing the Russian reserves since 2006 (see chart above). On average they have been accumulating 0.5 million troy ounces every month. Therefore, the near 1 million ounce purchase in April is a definite increase in demand.

This was to be expected given the very pronounced geopolitical tension with the U.S. and west over Ukraine. Indeed the TIC data shows that Russia has been aggressively divesting themselves of U.S. Treasuries.
Russian holdings of U.S. Treasuries fell very sharp, by nearly $50 billion, between October and March 2014 or nearly a third of Russia’s total holdings. Over half of the plunge came in March, when $26 billion was liquidated as western sanctions were imposed. TIC Data for April won’t be available until June and will make for very interesting reading.

Especially given the mysterious huge U.S. Treasury buying that is being done by little Belgium. This has analysts scratching their heads and has aroused suspicions that the Fed and or the ECB may be behind the huge Belgian purchases.

Graphik Goldbestand Russland

Russian Gold Reserves in Million Fine Troy Ounces – 1995-2014 – Monthly Chart (Bloomberg)
Russia has already made their intentions regarding gold very clear. Numerous high ranking officials have affirmed how they view gold as an important monetary asset and Putin himself has had many publicised photos in which he very enthusiastically holds large gold bars.

On May 25th 2012, the deputy chairman of Russia’s central bank, Sergey Shvetsov, said that the Bank of Russia plans to keep buying gold in order to diversify their foreign exchange reserves.
“Last year we bought about 100 tonnes. This year it will be less but still a considerable figure,” Shvetsov told Reuters at the time.

The World Gold Council reported yesterday that central bank purchases were 70% above their 5-year quarterly average, led by Iraq and Russia. The Eurozone actually became a net buyer thanks to Latvia joining the single currency union, adding its gold to the Eurozone reserves as part of the Euro treaty.
Russia may be planning to give the ruble some form of gold backing in order to protect the ruble from devaluations and protect Russia from an international monetary crisis and the soon to return currency wars.

Russian central bank demand and indeed global central banks demand is set to continue as macroeconomic, monetary and geopolitical uncertainty is unlikely to abate any time soon. Indeed, it may escalate substantially in the coming months as we move into the next phase of the global debt crisis.

UBS-debacle: Arena - but a palaver - how to ru(i)n a country

© Thomas Ramseyer-Volkart
http://www.xing.com/profile/Thomas_RamseyerVolkart
14. Februar 2009
Arena of Friday 13, 2009
UBS-debacle: how much government do we need?
http://www.sf.tv/sf1/arena/index.php
Participants:
Simonetta Sommaruga: upper house | Social Party Berne|President of consumer protection foundation
Toni Brunner: lower house | Swiss People Party Thurgau|President (SVP)
Ruedi Noser: lower house | Liberal Democtratic Party (FDP)|Vice President FDP

Appraisal
FDP's Vice President cannot listen to other people's speeches. He persitently and impolitly pesters other parties' speekers. Tries to apply unfair dialectics.
His one and only real true remark was that he as well as the whole audience do not know what they are talking about.
No offence from any corner this meaning that everybody agreed being ignorant about the problem.

SVP's President has realised that roughly 80 % of the jobs are granted by the KMU (small and middle size enterprises). It is well known that KMU's tend to not lay-off their employees which almost are members of their families; the take responsibility whereas big worldwide firms such as UBS, CS, HoffRoche, Novartis, Ciba and similar sack people for whatever stated reason. They just consign the surplus workers - white as well as blue collars - to the government which means to the remaining employees - white as well as blue collars -. By the way SVP's President is able to listen to other's remarks.

Consumer protection foundatios President is able to maintain a concise speech and does not loose their temper which as a mother she should have done already at the start. She can feel the real problem; bankers' selfcontrol being nothing but sweetening words. She wants the government to take over thus always being hooted down by help- and ruthless liberal defending their establishment and sincecure.

Facts
The Arena - another collateral fuss.
Never they discuss the real thing - work for the benefit of the people - getting stuck on minor interests led by ignorant moderators.

It is never the medias' goal to back the souvereign - people, citizens, fathers, mothers, children, COSUMERS and MANUFACTURERS, SAVERS of the money, SAVERS of the economies, real drivers in the seats, together they but scattered.

Most members of the establishment only team up with their owner pockets. It is but as easy as that.

Conclusion
The Swiss and other countries' leaders going on by collaterally fuss about the worldwide economy is to go down the drain. Unusual occurrence demands unusual remedy.

Remarks
Governments are not able to sort it out. They just are fighting with the ancient tricky measures; pimping up the markets by pumping in liquidity thus to furnish people with low rate credit having them indebt up to over the brim of
their hats thus depriving them of real goods such as houses and other durables.
http://ramseyervolkart.blog.ch/?s=government+to+fight+faltering+economy

Suggestion: mature souvereign to take over from the ignorant
Let people take over by simply inviting them to reduce debt - even so called eternal mortgage - of all kind with all the consequences for only a fistful enterprises representing some 200'000 white collar workers. (Total people employed: roughly 3'800'000)

Effect: the equity of the financial intermediaries increase relativ to their debt (debt/equity ratio) by forced shortening of their balance sheets because of people paying down their debt. Collateral effect: savings accounts and wealth diminish by the amount of paid down mortgage debt and other.

Debt: driver for fancy products leaving everybody helpless
As all the financially creative banks' acrobats base on debt only, debt has to be forbidden with all consequences to the intermediaries. Bankers, regulators, politicians, people thus all citizens are no longer overstrained. Life will be easier but more sustainable.

Central banks to get back full control
Have central banks get back full control over the central bank money by simply burn all the heap of ancient paper. Than establish payment only possible by debitcards not bills nor coins.
Rule: no deposit no consumption (no small loans allowed) austerity and saving first only then consume or invest)

Regulators to get back control
over financial intermediaries such as banks, insurances, investment managers as well as exchanges by simply asking them to fully consolidate all their exposures. Also dig in the asset re-establish cost of derivatives and passiv re-establish cost of derivatives, have them state the notional. Get thourough knowledge about booking rules used to outwit almost everyone. Aks for "available for sale", "hold to maturity". What can be done with such classification. Only roughly CHF 35 Billion instead of CHF 68 Billion needed to take over toxic assets from UBS's and others' balance sheets by changing the rules of decent booking maybe by reclassification of assets the latter formerly forbidden.

Demographics: have a look at the long term development demographics and act upon elucidation, get the contact.
http://ramseyervolkart.blog.ch/?s=demographics+foreseeable+future

Diplomacy
Educate all people involved with diplomacy about culture, ethnics, history, religion, psychology, evolution, economy, dialectics, demographics and language. Have them talk openminded thus not hooded nor contorted.

Do not have other countries blackmail switzerland. Just look for alternatives; there always are. We do not crawl in vain.

Anybody threatening to leave the country just let him pack his things and go. The bigger they think they are the rather let them clear away not allowing them to dump their garbage.
Do not have them treat you bullshit and inferiour. Just proceed like Switzerland's delegation to palaver with the US at the WEF. Do not accept, leave them alone.

Politicians
Have them educate themselves in all the above-stated focussing on economy and business administration as well as languages.

Daily business
Run governments of all the sort just like a commercial business. Get rid of fancy exotic expressions such as Vorschlag, Rückschlag, Abschlag, Rechnung, Fahrhabe, Schulgut, Kirchengut used but for unsettling people.

Government, Parliament
Let people vote on easy drafts. E.g. voting participation more than 50%, free movement of persons: only one question! Result very reasonable despite both campaigns being worthless.

Do not let politicians have sovereign vote on complex drafts pretending citizens being mature enough to understand complexity not understood by all sort of politicians counsellors included.

Conclusion
Pioneers needed rather than outdated overdue administrators
Run the country just like a business, think widerange and openminded, have flexibility and innovative power.

Be pioneers rather than administrators.

© Thomas Ramseyer
http://www.xing.com/profile/Thomas_Ramseyer5?sc_o=mxb_p

SNB - Economy: Central Bank action Switzerland - March 2008

© Thomas Ramseyer

March 2008
Central Banks to pump in billions of USD

Lead by the FED major central banks pour liquidity into monetary system.

FED: USD 200 bio. SNB USD 6 bio. (see tender of USD 4 bio.) Major names to swallow the lure. FED may buy USD abroad to flood foreign economies with liquidity.
SNB already has partly neutralized this effect by raising USD 4 bio by having investors tender.

FED will pump USD into the US at cheap level.
This is meant the monetary system as well as the economy to pick up the pace again. As it is known right now banks are afraid to lend money to other banks. So they will use the funds available to the benefit of their own balance sheets. Also we know that in credit markets spreads are only possible if high quality banks give money to lower quality market participants and so on.That cascade has been working for years and will go on working in the future.

The first time I got acquainted with such passages in Switzerland was 1978. E.g. Institutional investors give to cantonal bank which gives to smaller big bank passing the money to some foreign bank located in switzerland and so on only for the money to finally arrive somewhere in Turkey. Along this passage normally set up by some moneybroker earning 1/16% per year upfront from each of the chain’s members the interest rate become gradually higher to reach the highest level in Turkey.

It can be reckoned where the money then flew. Thus in fact only the more or less skilled and regulated banks of the chain established gave comfort to the initial investors. The proverb „ a chain is as strong as its weekest chain link „ is highly accurate. One link breaking may impact
even the safest institution. E.g. UBS and all the other sort of experts.

Deterioration staggers up the ladder to even reach the initial investors such as funds, pension plan funds, individuals as well as investment bankers having been too slow to get rid of the risks.

Presently the money flooding the market will apparently not flow to the weakest participant of the actual chain. It will depend on the recovery of the United States’ real estate market. As a lot of the houses for sale being the reason of the actual crisis are familiy houses meant for individuals – the latter being executed because of mortgage, credit card debt, car loans – a recovery of the real estate market will depend on the condition of the economy’s labour market. In first place the economic growth rate is going to slow down. Already now the market is talking about an upcoming recession. The ugliest outcome could be stagnation or stagflation. Recession – most recent newspaper are reading some 25'000 workers to be sacked in the banking business as a start – normally leads to heavy layoffs. The consequences thereof being lower consumption with all the consequences. 

Once the market will have recovered a new generation of sales people as well as fund managers are going to trade the former junk again. As time goes by everybody will have forgotten.

All the three-letter vehicles (TLVs) are going to be declared first class by holders supported by the rating agencies which want to realise profit thus transferring former writeoffs into realised gains.

It will be wise to remind oneself of the history of such TLVs letting shake and even tumble the world financial system in the early 2000s. 

copyright Thomas Ramseyer
http://www.xing.com/profile/Thomas_Ramseyer5?sc_o=mxb_p