Tag Archives: Asia

Emerging market rout is too big for the Fed to ignore

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“Zero rates and quantitative easing were the cause of dollar liquidity flooding these countries. It was the biggest reason why net capitals flows into emerging markets doubled from $4 trillion to $8 trillion after 2008, much of it wasted in a late cycle blow-off.  One cannot blame the US for the failings of these countries, yet Ben Bernanke and his successor will still have to live with the consequences. Globalisation has entrapped the Fed. Like it or not, the Fed is the world’s monetary superpower. The exodus of money from emerging markets that we have seen so far is nothing compared with what could happen if this episode is mishandled.”

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/10272285/Emerging-market-rout-is-too-big-for-the-Fed-to-ignore.html

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Japan’s debt-funding costs to hit $257 billion next year

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“Japan expects to spend a record $257 billion to service its debt during the next fiscal year, a document obtained by Reuters showed, underscoring the huge burden created by the government’s borrowings.  That will be up 13.7 percent from the amount set aside for the current fiscal year, reflecting the ministry’s plan to guard against any future rise in long-term interest rates.  Years of fiscal stimulus to revive a stagnant economy and surging social welfare costs for a rapidly ageing population have led to Japan running a record 1,000 trillion yen ($10 trillion) in public debt, double the size of its economy and the biggest among major industrialized nations.”

http://www.reuters.com/article/2013/08/27/us-japan-economy-debt-idUSBRE97Q05H20130827

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As prices soar, Indians exchange gold for cash

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“Jewellery associations in Hyderabad said with the single day surge of Rs 2,500, customers were coming in droves from early morning to take back cash in exchange for their gold jewellery. Already reeling under protests and strikes over the bifurcation issue, the sudden increase in gold price has come as a death blow to the jeweler shops in Seemandhra areas. Jeweler shop owners in Tirupati, Visakhapatnam and Vijayawada said their existence would be doubtful if the present stalemate continued any further. With gold prices increasing, enquiries for gold loans are also on the rise, said Nagaraju Rao, a manager with one of the outlets of Muthoot finance group.”

http://articles.timesofindia.indiatimes.com/2013-08-29/hyderabad/41579538_1_gold-jewellery-gold-prices-10-gram

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Guarding Kerala’s Great Temple Treasures

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“How much is the treasure, which has been estimated at up to one trillion rupees ($19 billion), actually worth? ‘We have no idea because the digital inventory is going on,’ he says before giving a mini inventory of his own, listing the items he has seen in the vaults. Mr. Harikumar estimates that the inventory of Vault A will take another year to complete – it began in February, with 3D images taken of each artifact with equipment provided by state-owned Keltron, an electronics specialist. Five of the six chambers have been opened but Vault B remains closed after a submission to the Supreme Court from the Travancore royal family that said opening it could unleash a curse.”

http://blogs.wsj.com/indiarealtime/2012/10/22/guarding-keralas-great-temple-treasures/

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Can Indian Temple Gold Help the Rupee?

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“At a time when nothing seems to be able to stem the Indian rupee’s decline, a novel idea to boost the currency is doing the rounds: use the tons of gold stashed away in people’s homes and in temples.  There is no firm estimate of how much gold is held by Indian temples, but it is believed to be several thousand tons.  Jamal Mecklai said banks could pay interest for gold, and then sell a large portion of the stock in the domestic market. London Bullion Market Association Chairman David Gornall told The Hindu Business Line newspaper that the Reserve Bank of India could swap the 200 tons of gold that it had bought from the International Monetary fund in 2009, for dollars.”

http://blogs.wsj.com/indiarealtime/2013/08/26/can-temple-gold-help-the-rupee/

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India might buy gold from citizens to ease rupee crisis

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“The RBI will ask the banks to buy back jewelry, bars and coins for rupees. Lenders will have to offer better rates than pawn shops and jewelers to lure sellers.  Selling gold reserves may sit badly with Indians, many of whom saw the 1991 sale [of 67 tonnes gold] as a public humiliation. The secret operation was only exposed after a vehicle carrying the first consignment of bullion broke down on its way to the airport from the central bank.  The rupee, the worst-performing emerging market currency in Asia this year, rebounded from a record low on Thursday after the RBI said it will provide dollars directly to state oil companies to shore up the currency.”

http://www.reuters.com/article/2013/08/29/us-india-economy-gold-idUSBRE97S0IW20130829

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Turkey becomes partner of China, Russia-led Shanghai Cooperation Organisation

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[April 2013] “China, Russia and four Central Asian nations – Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan – formed the SCO in 2001 as a regional security bloc to fight threats posed by radical Islam and drug trafficking from neighboring Afghanistan.  Ankara began talks on joining the EU in 2005 but has only completed one of the 35 policy areas, or ‘chapters’, every candidate must conclude to be allowed entry due to disagreements largely over the divided island of Cyprus. While China vies with Russia and the West for access to Central Asia’s vast natural resources, some analysts view the SCO as a potential counter-balance to NATO.”

http://www.reuters.com/article/2013/04/26/us-turkey-shanghai-idUSBRE93P17720130426

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Worldwide loss of oil supply heightens Syria attack risk

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“Libya’s oil output has crashed to a near standstill over the past year as warlords and strikes paralyse the country, tightening the screws on global crude supply as the crisis in Syria comes to a head.  There are still pockets of rising oil output, notably in the US where shale oil is rapidly reducing US dependence on energy imports. The geo-strategic effect of shale is double-edged for the US: it lowers the incentive for Washington to commit forces to the Middle East, but it also means the US is better able to handle the consequences of any oil spike. The biggest losers would be those emerging economies such as India and China that rely on fuel imports and operate inefficient industries.”

http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/10274958/Worldwide-loss-of-oil-supply-heightens-Syria-attack-risk.html

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South Korea Toughens Up Rules On Overseas Accounts

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“In a bid to reduce the incidence of tax evasion, the National Tax Service (NTS) is to impose heavier fines on those South Korean residents who are found to hold substantial unexplained financial accounts in overseas jurisdictions. Beginning next year, South Koreans with overseas financial accounts worth more than KRW1bn (USD896,000) will be obligated to report the assets, and to explain the sources of the funds. Failure to do so will result in a 10 percent fine, which will be even greater if the source is found to be the result of tax evasion. The NTS’s plans are included within the Government’s new proposals to raise additional tax revenue for its welfare programs by improving tax compliance.”

http://www.tax-news.com/news/South_Korea_Toughens_Up_Rules_On_Overseas_Accounts____61782.html

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America’s Social Recession: Five Years and Counting

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CHS9a1

“What happens to the social fabric of an advanced-economy nation after a decade or more of economic stagnation? For an answer, we can turn to Japan. The second-largest economy in the world has stagnated in just this fashion for almost twenty years, and the consequences for the ‘lost generations’ which have come of age in the ‘lost decades’ have been dire. In many ways, the social conventions of Japan are fraying or unraveling under the relentless pressure of an economy in seemingly permanent decline.”

http://charleshughsmith.blogspot.com/2013/08/americas-social-recession-five-years.html

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