LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

COT Gold, Silver and US Dollar Index Report - May 17, 2019
By: GoldSeek.com

Gold Minersí Q1í19 Fundamentals
By: Adam Hamilton, CPA, Zeal Research

Three safe-haven reasons to own gold
By: Richard (Rick) Mills, Ahead of the herd

Trumpís China Blunder
By: Peter Schiff, President and CEO Euro Pacific Capital

Is the Trade War a Catalyst for Gold?
By: Jordan Roy-Byrne CMT, MFTA

Bitcoin Mania Is Back! Are You Ready to Rumble?
By: Rick Ackerman, Rick's Picks

Precious Metals Update Video: Gold support around $1,282
By: Ira Epstein

Asian Metals Market Update: May-17-2019
By: Chintan Karnani, Insignia Consultants

GoldSeek Radio Nugget: Louis Navellier
By: Chris Waltzek, GoldSeek Radio

Gold: Ratio Charts Offer the Key to the Bull
By: Rambus

>
 
Search

GoldSeek Web

 
Gold-buying Chinese aunties proven right as China loses control of its bond markets with yields at a nine-year high



-- Posted Tuesday, 26 November 2013 | | Disqus

By Peter Cooper

If Chinese borrowing costs donít fall soon from nine-year highs it is doubful whether the real economy will be able to take the strain. The economy has already been close to zero growth this year with purchasing manager indices showing almost no change and failing to confirm astonishing GDP figures that simply do not adjust properly for high domestic inflation.

Indeed the higher and higher interest rates paid in the Chinese bond market are a reflection of this inflation. Higher interest rates are a tax on business expansion and constrain growth which has slowed to almost nothing this year whatever the official statistics claim.

Monetary tightening

The spike in yields has come as the government tightens monetary policy in order to try to rein in soaring lending and high inflation rates. The trend has led to increased borrowing costs in the wider economy and made it more difficult for business and government to tap the bond markets.

Chinese government-bond yields have continued to ease after hitting a nine-year high last Wednesday, when the rate on 10-year bonds reached 4.72 per cent and stood at 4.66 per cent today. A slow unravelling of Chinese debt markets is one of the most feared events among emerging market analysts.

China carries a huge debt burden in off balance sheet and shadow banking vehicles and so every percentage point rise in yields carries the risk of sending the market over the edge into a major downturn.

A financial crisis in the worldís second largest economy has been expected for a couple of years by the hedge fund billionaire Jim Chanos who has been on a losing wicket in shorting Chinese-related stocks. It could be his timing that was out, not his market prognosis.

Real estate bubble

The overbuilding in Chinese cities and high apartment prices are a massive bubble waiting to burst in the opinion of Mr. Chanos. In recent statements he said the situation now is far worse than anything he reported two or three years ago.

ArabianMoney has also long been on the record as expecting the next financial market implosion to start in the East this time. Japanís Abenomic money printing is deeply destablizing and an additional catalyst waiting to reek havoc.

Chinese bond market yields are a canary in the Eastern coalmine. Watch those gold-buying Chinese aunties smile as paper money goes up in smoke!

http://www.arabianmoney.net/


-- Posted Tuesday, 26 November 2013 | Digg This Article | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2019



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.