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90 seconds at 9am: Hide's embarrassment; Jobless stat due; Gold hits record
Watch video on Youtube here. Watch video on our video page here. Bernard Hickey details the key news overnight in 90 seconds at 9am in association with ASB, including news that Rodney Hide has let slip at a breakfast function that John Key is the 'do nothing' Prime Minister when it comes to reform. Nothing except the cycleway. This is embarrassing for Hide but says what many privately think inside the government. Meanwhile, NZ unemployment stats will be out at 10.45am. They are likely to show the jobless rate rose to 6.3% from 6% and are on track for a 7% peak, below the government's original predictions of a 8% peak, but also above Australia's expected peak of 6.75%. Also, Reserve Bank of New Zealand Governor Alan Bollard will talk around 1pm today about the differences between the NZ and Australian economies. Meanwhile, gold hit a record US$1,095/oz overnight on a weaker US dollar and on India buying gold. A statement from the US Federal Reserve will also be watched closely for signs it is about to slow or stop its money printing.
11 Comments
The gold buy by India
The gold buy by India is really interesting. The Chinese will be fuming that they got pipped. They won't want to miss out on the next 200 tonnes. Did interest.co.nz readers know that China is the worlds largest gold producer? and that they export none.
If you look back over the last couple of months there have been 3 examples now - where near the start of the month there have been USD$50 step rises in the price of an Ounce. Someone's buying bullion as quietly as they can.
And BAM - there you
And BAM - there you go - Gold just set a new record of USD$1096.10
And have just learnt that
And have just learnt that the gold that the Indians brought from the IMF was with SDRs and not US $$. !!!
So is the IMF now saying that right at this point - we don't want to touch US$$??
200 tonnes of gold ,
200 tonnes of gold , correct me if I'm wrong , is just $US 7.7 billion . Not a large sum to countrys such as India & China . And these are cultures with in endemic love of the stuff . They are welcome to it . Gold is an inflation hedge , nothing more . No cashflow , no growth , just the dream ( or gamble ) of a capital gain !
Roger, I tend to disagree.
Roger, I tend to disagree. Gold does have industrial uses and has universal appeal across many cultures as a store of value and means of exchange. Furthermore, the Japanese also have some of the largest private holdings of gold in the world. There are cultural attitudes towards gold, value and investment that most NZers will never understand or try to understand (which I think is to their own disadvantage). It is your choice to ignore history and the cultural attitudes that shape it.
Byt the way, Sumitomo Metal Mining, the world's largest producer of gold for industrial purposes, moved accordingly yesterday. It's a stock I've been overweight in for a number of years.
J.C. ( is that John
J.C. ( is that John Cleese , or the other son of God ) : I have worked on a gold " mine " , and appreciate it's history . Industrial usage of gold is minor , compared to the quantity of it stored as bullion , or processed into jewellery . And it probably will continue rocketing up , even from these rarified prices .
But I take Bernard's sage advice , and follow the charts . Check gold out for yourself . Over 1000 years it has tracked inflation ( sometimes calculated as a ratio to loaves of bread that an ounce of gold is worth ) . And it can over or under perform that average for decades at a time . But it always reverts to the mean , eventually .
Yes Roger, I also own
Yes Roger, I also own gold and check it out for myself regularly. It may have tracked inflation for 1000 years, which doesn't surprise me, but that goes back to my point about its universal appeal as a store of value or means of exchange. And yes, I agree, gold has relatively little use in industry, but there are also very few few producers of gold for industrial purposes making it a very secure and sometimes lucrative business for a select few.
Roger, My opinion: Gold is
Roger,
My opinion:
Gold is also an uncertainty hedge--against destabilization and currency volatility. When every asset is overvalued quizzically gold--while more overvalued--has less downside. So if it is a gamble, it may be the least worst. Every decision even status quo is a gamble. When owning cash is dangerous gold is reasonable.
The fact that gold trades way above its industrial value only means to me that there is no obvious ceiling. As an investor more concerned with making money than being "right," I have to consider that pension funds may start allocating assets to precious metals as may emerging market central banks. Obviously the tin-hat crowd and hedge funds are already in the trade. The more is rises with low volatility, the better it looks to the quantitative asset allocation models. Portfolio optimization will often include a low return asset if it offers protection against other assets. So like it or not it is hard not own some if merely to hedge other assets?.
<b>J.C. / Lew</b> : Excellent
J.C. / Lew : Excellent reposts . I have a small interest in gold myself . Simply as a part of a balanced portfolio . And higher weightings are warranted in these uncertain times . But you gotta be clever , to pick the top , and get out , before it " corrects " . I am useless at that , no sense of timing at all , as the squeeze tells me , daily .
<i>John Key is the ‘do
John Key is the "˜do nothing' Prime Minister when it comes to reform. Nothing except the cycleway
I hardly think the cycleway qualifies as "reform".
:-)
Kate,...quite.. Reform school for the
Kate,...quite..
Reform school for the WAYWARD in New Zealand.
This what they learn......How to misuse the systems 101 and PANDER to the ungodly..
Saying SORRY means you can get away with blatant misuse of your expense account and then have the gall to bite the hand that PAYS you.
This galls when especially, you hire a LAWYER to ensure that YOUR rights are met, not the PUBLIC'S.
(I hope we are NOT....PAYING again for this legal.....aid).
The DALAI LAMA. is coming, but MR KEY will not meet with him to say HELLO, even though he promised he would.
Tibet is not on our FREE TRADE list it appears, but then how could it be it is not FREE to TRADE, but we are.
Presumably promise is is another word for NOT EXPEDIANT in the Chinese diplomatic vocabulary on FREE TRADE.
Maybe we are still lucky to be FREE in New Zealand to choose our FRIENDS at a social level, below the RANK of prime minister.
(Yes small letters...are meant to be disrespectful as is the alternative meaning of RANK..)
It appears that Mr Key said he told Chinese President Hu Jintao of his decision when they spoke at the Apec summit in Singapore last weekend, but Mr Hu had not raised the issue. The inference being to save FACE, which in my BOOK, is LOSING FACE.
Was that he would meet with the Dalai Lama if his DIARY...or DAIRY...allowed.
Seems OBAMA was there at OPEC, losing FACE too. FACEBOOK has a lot to answer for.
Seems that we have another hero LOSING FACE...so to speak...or is that WRITE.
One of New Zealand's most respected authors has criticised Auckland University for minimising the seriousness of the Witi Ihimaera plagiarism controversy. Seems that $50,000 buys a lot of GALL....and the ability to BUY his own books back. After all it was only 16 mistakes. That is about 3 grand apiece by my reckoning. Seems un-fair to even mention it on the scale of things otherwise wrong. It is ACADEMIC.
However, Seems TWO wrongs do make a WRITE, if you know what I mean.
SEEMS that there is no-where to HIDE from the press these days.
Seems that everyone who can is dipping into the TROUGH, but REFORM is not on their AGENDA.
How can it be....TO MUCH MONEY AT STAKE.
GREED IS GOOD...for some....and not so small SUMS...
I will not even mention the fact that $37K spent on MINISTERIAL largesse is about the TAX TAKE from quite a few KIWIs. No reform, just their RIGHT. (YEAH RIGHT).
Wakey Wakey NZ.