Alex Stanczyk will be speaking at THE 5th ANNUAL CONFERENCE ON ANALYSIS OF INTERNATIONAL FINANCIAL MARKETS

Attendees for this meeting will be ministry level government officials, directors or senior managers from Chinese banks, investment companies and state-owned enterprises.

This is event is by invitation only (P.R.C.)

China’s Policy Choices and Overseas Investment Strategies under Threat of New Global Recession
批准单位 国务院发展研究中心
Authorized by Development Research Center of the State Council, PRC
主办单位 国务院发展研究中心金融研究所
Organized by Financial Research Institute of the Development Research Center
State Council, P. R. China
时间地点 2012年1月7-8日 北京国宾酒店
Date and Place Jan.7-8, 2012，Presidential Beijing hotel，China
会议语言： 中文/英文
Language： Chinese/English

We are currently seeing a deep correction in the gold price since recent highs this fall. This correction comes as the Eurozone’s credit crisis deepens and capital flees the Euro thereby pushing up the USD.

The strength of the USD gain over the short term has been a powerful driver forcing most commodities downward.

Copper        -20.15% YOY
Cocoa         -28.71% YOY
Cotton      -43% YOY
Lumber      -21.35% YOY
Soybeans      -12.53% YOY
Sugar         -29.8% YOY
Wheat         -20.55% YOY
Natural Gas      -24.17% YOY

One of the few gainers in the commodity space is oil, at +15.33% YOY for Brent Crude.

Globally, major stock markets have also been hit hard this year.

USA S&P 500     -8%
UK FTSE        -13%
France CAC 40    -25%
Germany DAX 30    -21%
Switzerland SMI    -15%
Sweden OMX    -22%
Japan NIKKEI225    -19%
Australia ASX    -15%
Hong Kong     -22%

Gold is one of the few assets this year that is up YOY with current gains of 15.56%.

The current push of the USD upwards to over 80.10 cannot be sustained as the US requires a weaker dollar to stimulate GDP growth through exports. This portends more Quantitative Easing (printing money).

Combine this with the current massive round of QE (Printing) in Europe, and we have the foundation for higher prices of commodities globally over time.

In this edition of our Global Insider, Duncan Cameron and I provide a firsthand view of what is happening in the Chinese gold market as we report from the 6th Annual China Gold and Precious Metals Summit.

From my experience at this conference, the appetite for gold among Chinese investors is just getting started. With China gobbling up close to 750 tons of gold this year, it is proving to be a source of demand that has exceeded annual Gold ETF investment globally. Personal conversations with Chinese Government Officials indicate that the policy direction will be away from real estate and equities, and the Chinese people will be encouraged to buy long-term wealth-preserving assets. This means gold, among other possibilities.

Please enjoy this month’s Global Insider with our compliments, and our wishes for a Merry Christmas and New Year.

You can download this months edition of the AFE Global Insider here: http://www.anglofareast.com/downloads/global-insider/afe_december_2011.pdf

Duncan Cameron and myself are in China for the 6th Annual Gold and Precious Metals summit where I will be speaking, and then attending meetings with Chinese Government Officials and heads of Chinese Fund Management companies.

The view from China is one of dis-belief, that it is possible the governments of the western world have allowed themselves to get into such an incredible financial mess. On the one hand, China wants the west to succeed because China’s massive export sector relies upon both Europe and the US to have strong economies and lots of happy consumers to buy Chinese goods. On the other hand, highly placed members of the Chinese government are fully aware that depending on the west may be a fools errand and are actively taking steps to become less dependent on exports and further develop the domestic economy.

It is refreshing to see that instead of un-realistically assuming that a never ending series of budget deficits will somehow pay for retirees for ever, they are taking a very practical approach and advocating their citizens invest in long term wealth protection to provide for citizens future retirement. This is critical to the social stability of what is emerging as the new super-power of the world. There is perhaps the highest level of acute attention to this here in China as anywhere else in the world. The last thing China wants is after 20 years of incredible progress, to have it come unwound because of pie in the sky expectations that stock markets or ponzi scheme government retirement plans will prevent social unrest if these systems fail. The Chinese have seen how the western financial models ends up, and they don’t want to copy them.

In this edition of the AFE Global Insider, Duncan does an excellent job of assessing the Geo-political spectrum. He covers the topics of MF Global, Golds performance versus other currencies, his view on the Sydney Gold Symposium which includes an interesting entry on the “Moses Principle”, as well as the evolving situation in the Eurozone.

You can download the latest GI from this link: http://www.anglofareast.com/downloads/global-insider/afe_november_2011.pdf

Perspective is seeing the bigger picture, not the nuances of daily gyrations.  In the last week we have seen the Vatican call for a world central bank administered by them. They deem nations can’t be trusted to sort out the financial mess; hence, a greater and more worthy administration needs to tell you what to do with your money.

Perspective is seeing 250 billion Euros (that is in itself a derivative of even less real money) leveraged up to create 1 trillion Euros. Yet, in fact, most economists are saying nothing short of 3 trillion Euros will be required to cauterize the failing nation of Greece with its huge exposure to European banks, much less the others in line like Portugal, Spain and Italy. No wonder the Vatican thinks they need to get involved.

Perspective is seeing the global population rush towards 7 billion in number this year while global money supply expands exponentially as well ,and yet being told that tangible wealth like gold and silver are in a bubble with their best days behind them. If anything, the world’s most ancient money is becoming less and less of a percent of population while we struggle to dig it up in any quantity with large discoveries a thing of the past.

At Anglo Far-East we have never said the road up in gold and silver would be a benign curvy line; far from it. It has been violent in the past and it will get even more violent both up and down in the times ahead, thus the need for perspective and a cool head is paramount.

With compliments,
Duncan Cameron
Senior Relationship Manager
The Anglo Far-East Company

You can download this edition of the AFE GI free of charge here:
http://www.anglofareast.com/research/global-insider/gi-archives/?did=58

You may download the report free of charge here: http://www.anglofareast.com/research/global-insider/gi-archives/?did=57

This is in effect a policy statement of a Franc to Euro peg at 1.2.

Further, the SNB has stated “The SNB will enforce this minimum rate with the utmost determination and is prepared to buy foreign currency in unlimited quantities.”

With the Swiss Franc no longer the last currency safehaven, the short term effect we are witnessing is a massive rush into USD, however over time as the Eurozone’s financial situation continues to deteriorate capital will flow strongly into gold.

Gold is now the LAST MONETARY SAFEHAVEN. It will of course be interesting to see if the SNB can actually pull this off. This statement of “Prepared to buy foreign currency in unlimited quantities” may be the equivalent of a massive bluff at the poker table. Should the Eurozone collapse, the Swiss may be absorbing huge currency flows.

You can download the original press release here: http://www.anglofareast.com/downloads/swiss-pegs-to-euro-at-1.2.pdf

This is a pretty important development, as the last market crash of 2008 took gold down with it. This time around, it seems that regardless of damage in the markets gold is still rising.

Gold performance today so far is high of $1902.70

DOW -253.31 -2.20%

S&P 500 -30.45 -2.53%

FTSE -189.45 -3.58%

Nikkei -166 -1.86%