finance – Page 19617

China Opens Largest Private Gold Vault With Capacity For $82 Billion Worth Of Precious Metal

It was not enough for China to buy JPM’s landmark former downtown Manhattan headquarters, once the stomping grounds of David Rockefeller and the current location of the firm’s massive, and arguably largest in the world, gold vault (which, as Zero Hedge first demonstrated, is located just next to gold vault of none other than the NY Fed). It seems that for the nation that has unleashed the world’s biggest ever buying spree of physical gold -oblivious what the price of paper gold does on a daily basis – having purchased over 2000 tons of gold in the past two years as we showed recently…

… now the question is just where to store it.

Not surprisingly, in the Chinese bastion of capitalism, where there is demand, there will be supply. And in this case, the supply of gold storage is to be found in the Shanghai Free Trade Zone, where the physical gold ends up in custodial limbo as it is not considered “imported” by China. In fact, the gold is theoretically in no man’s land and as such can be reexported out of China, or sent deeper into the mainland, to China’s banks or private buyers, on a whim. Of course, all that is on paper. If and when the Communist Party says “enough” all the gold in the FTZ would be “reappropriated.”

Bloomberg reports, that a gold vault that can store 2,000 metric tons, double China’s projected consumption this year, opened in Shanghai this month as owner Malca-Amit Global Ltd. seeks to benefit from rising demand in Asia’s largest economy.

The facility is the biggest for the Hong Kong-based company, and it can also store diamonds, jewelry and art, Joshua Rotbart, precious metals general manager, said in an interview. The site could hold bullion worth about $82.5 billion at today’s price, Bloomberg calculations show. China’s total demand may reach 1,000 tons in 2013, the World Gold Council forecasts.

Someone should tell China that just because the price of gold is sliding, it should stop buying the inflation-protecting metal. Then again, perhaps China knows all about the gold price and is reacting accordingly:

Consumption in China may increase 29 percent to a record this year, overtaking India as biggest user as lower prices and higher incomes spur demand, according to the WGC. The investment in Shanghai’s new free-trade zone reflects a shift in world demand away from the U.S. and Europe toward Asia. Demand for gold jewelry, bars and coins in Greater China, India, Indonesia and Vietnam is now about 60 percent of the global total, up from 35 percent in 2004, according to HSBC Holdings Plc.

“Such a facility is a massive vote of confidence for the Chinese gold market,” said Philip Klapwijk, managing director of Hong Kong-based Precious Metals Insights Ltd. “The trend for demand has been very strongly positive,” said Klapwijk, who’s monitored precious metals since 1988.

This is just the beginning of the great physical gold warehousing:

“There’s going to be more gold coming to China,” Rotbart said on Nov. 5. “This place can be used as a trade hub basically, so foreign banks can trade with domestic banks within this facility, saving costs and time.”

Bullion has been flowing into mainland China even as local output increased. Net imports from Hong Kong more than doubled to 826 tons in the first nine months of the year, according to Bloomberg calculations based on government figures. Local output rose 8.2 percent to 270.2 tons from January to August.

Shanghai is home to the country’s biggest physical gold exchange, founded by the People’s Bank of China. Gold volume on the Shanghai Gold Exchange rose to a five-month high of 22,703 kilograms on Oct. 8.

So how is it possible that with all the massive Chinese demand, gold is sliding? Simple: levered paper positions via ETFs are being unwound, and the resulting gold ends up in China as physical.

“There’s been a lot of gold being sold out of ETFs, all of that is outside of China,” Victor Thianpiriya, a Singapore-based analyst at Australia & New Zealand Banking Group Ltd., said by phone today. “A lot of that has found its way to China via Hong Kong, attracted by demand for bullion bars.”

Which means that as levered paper trades are unwound, the underlying physical finds its way in China. For now, since the developed market has convinced itself there is no need for truly safe collateral, the premium on, and demand for, paper gold has tumbled, as has the associated rehypothecation velocity on the underlying. However, when demand for gold collateral surges once more, due to any of the types of events witnessed in 2010, 2011, or 2012, or inflation in China once again surges like it did in 2011, the story will change very quickly. Only this time, it will be China holding the apex of the “High quality collateral” pyramid.

And should the same level of demand for gold return as was seen in any of the prior years, then one will have to pay substantially more in fiat for the privilege of holding a truly safe asset. Especially since that actual physical asset will ultimately be located behind a massive safe door some 80 meters below the ground in Shanghai, which in turn will allow China to demand whatever fiat price it wishes for those once again scrambling into the safety of the yellow metal.

More on the Shanghai gold vault in the clip below:

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/9xilq-cBPtw/story01.htm Tyler Durden

"It's Not Just Harder To Get A Job – It's Harder To Get A Good Job"

For many in the US, as WSJ reports based on the bifurcated ‘recovery’ in the US, the recession never ended, “we’re still in it… it feels like like we’re still in it and it’s getting worse.” Simply out, America’s jobs recovery is proceeding on two separate tracks – a pattern that is persisting far longer than after past economic rebounds and lately has been growing worse. For those with decent jobs, wages are rising, albeit slowly, and job security is the strongest it has been since before the recession. But many others – the young, the less educated and particularly the unemployed – are experiencing hardly any recovery at all.

As we have vociferously explained, hiring remains weak, and the jobs that are available are disproportionately low-paying and often part-time.

Via WSJ,

Despite three years of steady job gains, and four years of economic growth, many Americans have yet to experience much that could be described as a recovery. That sort of pattern isn’t unusual in the aftermath of a recession, but it usually eases as growth picks up steam.

…

The two-track nature of the recovery helps explain why the four-year-old upturn still doesn’t feel like one to many Americans. Higher earners are spending on cars, electronics and luxury items, boosting profits for the companies that make and sell such goods. But much of the rest of the economy remains stuck: Companies won’t hire or raise pay without more demand, and consumers can’t spend more without faster hiring and fatter paychecks.

…

“If you look at guys with just a high-school diploma or less than a high-school diploma, those guys are still in a recession,” Mr. Porcelli said. The confidence figures, he said, “really drive home this idea of a bifurcation in the U.S. economy.”

…

Economists aren’t sure what is behind the trend, or how long it will continue. Low-wage sectors are often the first to hire during a weak recovery, and less desirable workers—whether because of their age, education or other factors—are the last people hired in almost any scenario.

“It’s not just harder to get a job – it’s harder to get a good job,” said Harry Holzer, a professor of public policy at Georgetown University who has studied low-wage jobs. “Companies are more willing to create jobs right now if they’re low-wage jobs and they don’t have to pay much in benefits or make a major commitment to their employees.”

…

Top-line measures such as jobs and GDP often obscure the uneven progress underneath. The long-term unemployed, for example, have seen hardly any improvement in their chances of finding employment, even as job growth has been steady. The unemployment rate for those with less than a high-school diploma is 10.9%, compared with 3.8% for those with a college degree, and the unemployment rate for those under 25 is over 15%, versus 6.1% for those 25 or older.

…

In the 1990s, the best job market of recent decades, “the situation of people at the bottom of the labor market improved but not dramatically,” Mr. Osterman said. “Median wages have been basically flat for 30 years.”

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/3oV3AEQuj7k/story01.htm Tyler Durden

“It’s Not Just Harder To Get A Job – It’s Harder To Get A Good Job”

As we have vociferously explained, hiring remains weak, and the jobs that are available are disproportionately low-paying and often part-time.

Via WSJ,

Despite three years of steady job gains, and four years of economic growth, many Americans have yet to experience much that could be described as a recovery. That sort of pattern isn’t unusual in the aftermath of a recession, but it usually eases as growth picks up steam.

…

The two-track nature of the recovery helps explain why the four-year-old upturn still doesn’t feel like one to many Americans. Higher earners are spending on cars, electronics and luxury items, boosting profits for the companies that make and sell such goods. But much of the rest of the economy remains stuck: Companies won’t hire or raise pay without more demand, and consumers can’t spend more without faster hiring and fatter paychecks.

…

“If you look at guys with just a high-school diploma or less than a high-school diploma, those guys are still in a recession,” Mr. Porcelli said. The confidence figures, he said, “really drive home this idea of a bifurcation in the U.S. economy.”

…

Economists aren’t sure what is behind the trend, or how long it will continue. Low-wage sectors are often the first to hire during a weak recovery, and less desirable workers—whether because of their age, education or other factors—are the last people hired in almost any scenario.

“It’s not just harder to get a job – it’s harder to get a good job,” said Harry Holzer, a professor of public policy at Georgetown University who has studied low-wage jobs. “Companies are more willing to create jobs right now if they’re low-wage jobs and they don’t have to pay much in benefits or make a major commitment to their employees.”

…

Top-line measures such as jobs and GDP often obscure the uneven progress underneath. The long-term unemployed, for example, have seen hardly any improvement in their chances of finding employment, even as job growth has been steady. The unemployment rate for those with less than a high-school diploma is 10.9%, compared with 3.8% for those with a college degree, and the unemployment rate for those under 25 is over 15%, versus 6.1% for those 25 or older.

…

In the 1990s, the best job market of recent decades, “the situation of people at the bottom of the labor market improved but not dramatically,” Mr. Osterman said. “Median wages have been basically flat for 30 years.”

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/3oV3AEQuj7k/story01.htm Tyler Durden

Guest Post: Meet One Of The Victims Of The "Economic Recovery"

Submitted by Michael Snyder of The Economic Collapse blog,

Have you ever cried yourself to sleep because you had no idea how you were going to pay the bills even though you were working as hard as you possibly could? You are about to hear from a single mother that has been there. Her name is Yolanda Vestal and she is another victim of Obama's "economic recovery". Yes, things have never been better for the top 0.01 percent of ultra-wealthy Americans that have got millions of dollars invested in the stock market. But for most of the rest of the country, things are very hard right now.

At this point, more than 102 million working age Americans do not have a job, and 40 percent of those that are actually working earn less than $20,000 a year in wages. If we actually are experiencing an "economic recovery", then why is the federal government spending nearly a trillion dollars a year on welfare? And that does not even include entitlement programs such as Social Security and Medicare. We live in a nation where poverty is exploding and the middle class is shrinking with each passing day. But nothing is ever going to get fixed if we all stick our heads in the sand and pretend that everything is "just fine".

What you are about to read is an open letter to Barack Obama that has gone absolutely viral on the Internet in recent days. It is a letter that a single mother named Yolanda Vestal posted on her Facebook page, and it has really struck a nerve because countless other young parents can clearly identify with what she is going through. The following is the text of her letter…

Dear President Obama,

I wanted to take a moment to say thank you for all you have done and are doing. You see I am a single Mom located in the very small town of Palmer, Texas. I live in a small rental house with my two children. I drive an older car that I pray daily runs just a little longer. I work at a mediocre job bringing home a much lower paycheck than you or your wife could even imagine living on. I have a lot of concerns about the new “Obamacare” along with the taxes being forced on us Americans and debts you are adding to our country. I have a few questions for you Mr. President.

Have you ever struggled to pay your bills? I have.

Have you ever sat and watched your children eat and you eat what was left on their plates when they were done, because there wasn’t enough for you to eat to? I have.

Have you ever had to rob Peter to pay Paul, and it still not be enough? I have.

Have you ever been so sick that you needed to see a doctor and get medicine, but had no health insurance because it was too expensive? I have.

Have you ever had to tell your children no, when they asked for something they needed? I have.

Have you ever patched holes in pants, glued shoes, replaced zippers, because it was cheaper than buying new? I have.

Have you ever had to put an item or two back at the grocery store, because you didn’t have enough money? I have.

Have you ever cried yourself to sleep, because you had no clue how you were going to make ends meet? I have.

My questions could go on and on. I don’t believe you have a clue what Americans are actually going through and honestly, I don’t believe you care. Not everyone lives extravagantly. While your family takes expensive trips that cost more than most of us make in two-four years, there are so many of us that suffer. Yet, you are doing all you can to add to the suffering. I think you are a very selfish and cold hearted man, who does not care what is best for the people he was elected by (not by me) to represent, but more so out for the glory of your name attached to history. So thank you Mr. President, thank you for pushing those of us that are barely staying afloat completely under water and driving America into the ground. You have made your mark in history, as the absolute worst and most hated president of the United States. God have mercy on your soul!

Sincerely,

Yolanda Vestal

Average American

These are the kinds of emotions that millions of American parents are wrestling with on a daily basis. Many of them are working as hard as they possibly can and yet still find themselves unable to adequately provide for their families.

And now that food stamps are being cut back, more of them than ever are going to be forced to turn to food banks for help. The following is what the head of a large food bank in Casper, Wyoming told one local newspaper about the increase in demand that he is witnessing in his area…

Across the state, food banks and other related programs aiming to feed the needy are worried the supply to meet the uptick in need during the holiday season won’t meet the growing demand for food caused by the expiration of SNAP benefits.

“People are scared to death of the lack of food availability,” Martin said.

Martin called Joshua’s Storehouse a reliable barometer for measuring the rate of need in Casper. The number of people using the food bank skyrocketed before the reduction in SNAP, he said.

Fewer than 2,000 people used the food bank in October 2012. Last month 2,500 people went there for help.

And of course this is not just happening in rural areas either. Margarette Purvis, the head of the largest food bank organization in New York City, says that she is anticipating a huge surge in demand and that veterans are being hit particularly hard…

"On this Veterans Day, when we’re waving our flags — I need every New Yorker to know — 40 percent of New York City veterans are relying on soup kitchens and pantries."

Purvis says that there are 95,000 vets relying on food banks in New York City alone.

That is a lot of people.

And while Barack Obama may trot out a few vets on
national holidays and promise that "we will never forget" them, the truth is that most of the time the federal government treats our military veterans like human garbage. If you doubt this, please see my previous article entitled "25 Signs That Military Veterans Are Being Treated Like Absolute Trash Under The Obama Administration".

Meanwhile, anger and frustration with the economy are starting to rise to very dangerous levels in this nation.

In a previous article, I noted that violent crime in America rose by 15 percent last year. One of the primary reasons for this is the economic despair that we see in our streets.

As the economy gets even worse, people will become even more desperate. We will start to see even more flash mob crimes like we saw in Chicago recently. Posted below is a video news report that shows footage of a flash mob in Chicago dragging entire racks of merchandise out of a Sports Authority store…

When you watch stuff like this, it helps to explain why demand for armored vehicles among the ultra-wealthy in America is skyrocketing.

Unfortunately, most Americans cannot afford armored vehicles and walled vacation homes in the middle of nowhere.

Most Americans are going to have to live right in the middle of all of this as it happens.

A volcano of anger, frustration and despair is simmering just below the surface in America.

When that volcano finally erupts, it is going to be a very frightening thing to behold.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/knVqVQ4yhPM/story01.htm Tyler Durden

Guest Post: Meet One Of The Victims Of The “Economic Recovery”

Submitted by Michael Snyder of The Economic Collapse blog,

Dear President Obama,

I wanted to take a moment to say thank you for all you have done and are doing. You see I am a single Mom located in the very small town of Palmer, Texas. I live in a small rental house with my two children. I drive an older car that I pray daily runs just a little longer. I work at a mediocre job bringing home a much lower paycheck than you or your wife could even imagine living on. I have a lot of concerns about the new “Obamacare” along with the taxes being forced on us Americans and debts you are adding to our country. I have a few questions for you Mr. President.

Have you ever struggled to pay your bills? I have.

Have you ever sat and watched your children eat and you eat what was left on their plates when they were done, because there wasn’t enough for you to eat to? I have.

Have you ever had to rob Peter to pay Paul, and it still not be enough? I have.

Have you ever been so sick that you needed to see a doctor and get medicine, but had no health insurance because it was too expensive? I have.

Have you ever had to tell your children no, when they asked for something they needed? I have.

Have you ever patched holes in pants, glued shoes, replaced zippers, because it was cheaper than buying new? I have.

Have you ever had to put an item or two back at the grocery store, because you didn’t have enough money? I have.

Have you ever cried yourself to sleep, because you had no clue how you were going to make ends meet? I have.

My questions could go on and on. I don’t believe you have a clue what Americans are actually going through and honestly, I don’t believe you care. Not everyone lives extravagantly. While your family takes expensive trips that cost more than most of us make in two-four years, there are so many of us that suffer. Yet, you are doing all you can to add to the suffering. I think you are a very selfish and cold hearted man, who does not care what is best for the people he was elected by (not by me) to represent, but more so out for the glory of your name attached to history. So thank you Mr. President, thank you for pushing those of us that are barely staying afloat completely under water and driving America into the ground. You have made your mark in history, as the absolute worst and most hated president of the United States. God have mercy on your soul!

Sincerely,

Yolanda Vestal

Average American

Across the state, food banks and other related programs aiming to feed the needy are worried the supply to meet the uptick in need during the holiday season won’t meet the growing demand for food caused by the expiration of SNAP benefits.

“People are scared to death of the lack of food availability,” Martin said.

Martin called Joshua’s Storehouse a reliable barometer for measuring the rate of need in Casper. The number of people using the food bank skyrocketed before the reduction in SNAP, he said.

Fewer than 2,000 people used the food bank in October 2012. Last month 2,500 people went there for help.

"On this Veterans Day, when we’re waving our flags — I need every New Yorker to know — 40 percent of New York City veterans are relying on soup kitchens and pantries."

Purvis says that there are 95,000 vets relying on food banks in New York City alone.

That is a lot of people.

And while Barack Obama may trot out a few vets on national holidays and promise that "we will never forget" them, the truth is that most of the time the federal government treats our military veterans like human garbage. If you doubt this, please see my previous article entitled "25 Signs That Military Veterans Are Being Treated Like Absolute Trash Under The Obama Administration".