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Albert Sung is the author of the Katchum Macro-Economic Blog, monitoring breaking economic news from a day to day basis. He started investing in 2008 because of the economic crisis and holds a masters degree in chemical engineering. Previously, he worked several years as a process engineer at... More
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  • Correlation: Shanghai Silver Premium Vs. Silver Price 2 comments
    Mar 13, 2013 4:17 PM | about stocks: SLV

    There is a potential for a new correlation here. Shanghai Silver Premium Vs. Silver Price.

    The premise is that when Shanghai silver premiums are high (against London Silver Prices), then we hit a bottom in the silver price.

    Let's see if this correlation makes sense, I need more data points.

    (click to enlarge)

    Chart 1: Silver Premium Shanghai Vs. London

    Disclosure: I am long AGQ.

    Stocks: SLV
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  • phdinsuntanning
    , contributor
    Comments (1347) | Send Message
     
    good correlation: Chinese with cash to invest are not buying the western funk to clean up the markets of weak hands. May I call it the Chinese PM decoupling? What is behind is

     

    China is getting QE3 greenbacks,
    and changing them for red-backs.
    BOJ starting to print Yen, China not buying much.
    So between November 2012 and March 2013:
    RMB/USD flat ~6,20 Yuan per Dollar
    USA and Japan prints, China grows,
    but this time will not work as usual:
    China RMB inflation is up after just 4 months of QE3

     

    Options:

     

    1. China accepts RMB inflation and parks USDs and Yens.
    Metals “investment demand “to continue growing.

     

    2. China stops parking greenbacks and yens:
    RMB appreciation hits down Chinese exports and jobs.
    Dollar inflation in copper , oil , food and CPIs ex-China.

     

    1 or 2?
    13 Mar 2013, 05:26 PM Reply Like
  • Katchum
    , contributor
    Comments (605) | Send Message
     
    Author’s reply » Japan is doing 1 and is very good at it. But they can't keep doing it because they already see high utility inflation costs. They need to start selling U.S. bonds.

     

    China tried 1 and upped bond holdings by buying USD and selling CNY.
    http://bit.ly/XJy43B

     

    but is slowly going back to 2 as the CNY is depegging from USD.

     

    This will revert inflation back to the U.S. soon.
    13 Mar 2013, 05:59 PM Reply Like
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