Asia | - Part 3

Mutual Fund Song

This is about the most ridiculous thing that I think I’ve ever come across when it comes to shaping opinions about investing. Straight from India, where there’s been a concerted effort to get people to invest in stocks, bonds, and other paper promises rather than gold, comes this rap video extolling the virtues of mutual funds.

Granted, there are some pretty big cultural differences between the U.S. and India (think Bollywood vs. Dollywood, vs. Hollywood), but, still…

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At Least They’re Trying in China

From this China Daily commentary on bubbly home prices comes the cartoon below that depict the results of the Chinese government’s efforts so far to cool the property markets that, along with their shadow banking system, has much of the rest of the world worried.

Author Zhu Ning, deputy director of the Shanghai Advanced Institute of Finance at Jiaotong University, dismisses some of the concerns of Yale economist and Nobel Prize Winner Robert Shiller when it comes to housing bubbles in general and the one in China in particular.

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Steady as She Goes for the Bank of Japan

As Abenomics enters its second year and with central bank policymakers now halfway toward their goal of 2 percent inflation, the Bank of Japan made no changes to monetary policy today, leaving in place an asset purchase program that requires monthly money printing of 60-70 trillion yen (more than $50 billion) amid signs of an improving economy.

A big sales tax hike in March is expected to temporarily slow growth and erase some of the consumer price gains. Bank of Japan Governor Haruhiko Kuroda noted in a news conference, “Of course, there could be both upside and downside risks to the BOJ’s price forecast but such risks have not materialized, and if that’s the case, the current policy will continue.

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China Gold Imports Continue To Impress

More evidence of the record amount of gold (GLD) bullion flowing from the West to the East came earlier today when the Hong Kong Census and Statistics Department reported that net gold imports to mainland China totaled 111 tonnes in August.

China GoldThis was down slightly from 116 tonnes in July and below the record net imports of 136 tonnes in March, however, it keeps China on pace to shatter previous gold demand records this year.

As shown below, this gold buying was spurred by falling metal prices in the spring and, despite many predictions that China’s gold imports would fade over the summer, that has clearly not happened yet.

This marked the fourth straight month of demand exceeding 100 tonnes as China now seems all but certain to surpass India in 2013 as the world’s biggest gold buyer.

Through August, China’s net gold imports from Hong Kong were over than 700 tonnes – more than the amount of gold that has flowed out of Western gold ETF trusts – and this puts the nation on pace for net imports of over 1,100 tonnes this year.

Much of this metal has taken a familiar route in 2013 – from London (where gold ETF holdings are found), to Switzerland, to Hong Kong, and then into mainland China…

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