The Son of Finance of the Great Age

  Chapter 836 The Second Ultimate Move

  Starting from July 31, major media outlets in the United States have followed up on reports on the debt ceiling. This time they directly targeted the former president in 2008, clearly stating that the rescue plan of up to 750 billion US dollars was the most direct cause of accelerating the deterioration of the debt situation.

  The "Wall Street Journal" reported that according to the growth rate of the original fiscal deficit, the US government's debt ceiling will not break out until at least 2013. But because of the occurrence of the subprime mortgage crisis, this situation has been greatly advanced. Rescuing the economy is necessary, but the debt ceiling cannot simply be put on the shoulders of this administration, and there is bipartisan responsibility for it.

  The "Washington Post" unceremoniously pointed out that in the midst of a huge crisis in operating companies, those Wall Street giants who have been rescued still have the mind to pay high salaries and bonuses. This is simply a provocation to American taxpayers. Compared to a party that doesn't plan to raise taxes on the rich, that's a blatant affirmation that's unimaginable in a society like America today. It is unreasonable, even criminal, to use taxpayer money to subsidize some wealthy Americans and then let all taxpayers bear the consequences of the debt ceiling.

  In the report, they appealed that the U.S. Congress should conduct an in-depth investigation into this to eliminate the serious harm caused by this unfairness.

Bloomberg said that the issue of the U.S. debt ceiling has once again pushed the wealthy class in the United States to the fore. Fundamental changes, and thus street movements such as Occupy Wall Street. How to deal with the inequality of distribution will be a long-term task for the US government, no matter which party is in power.

  In addition to mainstream newspapers, other smaller media also published similar arguments, and the emotions of the entire American society were ignited for a while.

   This is exactly the counterattack of the Democrats. When the debt ceiling finally came, it dealt a heavy blow to the Republicans and burned the flames of war directly on the previous administration.

  $750 billion is an unavoidable hurdle for the debt ceiling. In fact, the perennial US international trade deficit has caused the fiscal deficit to grow year after year. This is the main reason for the continuous accumulation of US debt. But the fact that the international trade deficit cannot be changed, and the $750 billion plan to save the economy is the focus of debate.

  If the U.S. government only throws out an economic rescue plan of 300 billion U.S. dollars or less, it is unlikely to become the focus. After all, compared with the debt scale of 13 trillion U.S. dollars, this is simply insignificant. But the scale of 750 billion US dollars is close to one trillion, equivalent to 10% of the total debt, which greatly stimulates the nerves of the American people.

  Public opinion was instantly reversed. People no longer stared at the current government, but pointed their finger at the former US government and the political party behind the former president.

  The Republicans did not seem to have expected the opponent's move, and there is not much time left for them to refute. Even if they want to do something, two days later is the final period of the debt ceiling. If an agreement cannot be reached by then, the focus of the entire public opinion will be on them.

  Under such circumstances, they had no choice but to choose a temporary compromise. On the final day, they chose to raise the upper limit of 2 trillion U.S. dollars, keeping the fact that the U.S. debt will not default.

However, the mere 2 trillion US dollars amount can only maintain the expenditure of the US government for about two years. In 2013, the debt ceiling crisis broke out again in the United States, and that time was even more serious, which directly caused some departments of the federal government to shut down.

But all of this is something for later. Finally, on August 2, 2011, the two parties in the U.S. Congress chose to compromise under pressure, and finally reached an agreement to raise the debt ceiling. This time, the U.S. debt crisis was finally smooth. Pass.

This kind of compromise was soon reflected in the capital market. After a brief rise, the COMEX gold index experienced a rare decline in the near future on August 4. At the end of the session, it suddenly rose again, narrowed the narrow range, and finally fell only 7.3 US dollars.

  Gold futures opened lower on August 5. Although it opened a positive line, it finally fell by $7.2 from the previous day, and overall fell by 0.43% from the previous day.

  Looking at this situation, it is impossible to avoid a pullback in gold prices, because the biggest news in the near future has been fully digested by the market. Although the cloud of the debt crisis in Europe is still there, for the gold market, expectations have been fully met.

  But in the middle of the night in the United States on this day, a sudden news came, which immediately broke the market's expectations.

The world's third largest gold producer, South Africa's AngloGold, has urgently announced that its mine in the east of Johannesburg has been attacked by unknown armed forces. The current situation is unknown, but what is certain is that gold production there will come to a standstill. .

  A part of the border in the northeast of South Africa borders Mozambique, Zimbabwe and Botswana successively. It has been chaotic and complicated since ancient times, and various forces have intervened in it. Among them is a smuggling zone where ivory, rhino horn, gold and even diamonds from all over the world are illegally traded here.

   AngloGold has a large mining area right here. Originally, they hired a professional mercenary group, but nothing happened. But recently, I don’t know if it’s because of the skyrocketing gold price or some other reason. Suddenly, this place was attacked by a well-equipped armed force. The defense force was caught off guard and all fell, and finally this force occupied the mining area.

  In the statement, Anglo announced that it had sent a special representative to deal with the matter. However, the loss of production is inevitable. It is expected that during this period, Anglo's gold production will be cut by at least 20%.

   And on this day, an article about gold consumption was also published in the Wall Street Journal. In this article called "Strong Consumption in Emerging Markets, Gold Hit New Highs in Off-season", the author described: "In emerging countries represented by China and India, gold consumption has become the most eye-catching growth point of the jewelry industry. Among them, in China , the gold consumption in the first quarter was close to the level of the whole year of last year, and the rise in gold prices did not hinder the growth of gold consumption, but to a certain extent contributed to the increase in gold consumption.”

"In India, gold demand accounted for 32% of global consumption in 2010, about 963 tons, of which 75% came from the consumption of jewelry industry, an increase of 89% over last year. Although the price of gold this year continues to rise, the rapid growth in GDP Driven by a combination of factors such as growth, urbanization, the emergence of the middle class, and high savings rates, gold consumption is still growing strongly, and it is expected that India’s gold consumption will rise by at least 30% throughout the year.”

In the article, the author also said, "The enthusiasm of institutions for gold is also on the rise. In the past mid-July, SPDR's ETF gold fund holdings increased by more than 43 tons. In addition, the reserves of central banks in various countries include gold. The role of gold is also becoming more prominent year by year. According to incomplete statistics, the central bank gold reserves of more than 80% of the countries in the world have increased in the past three quarters.”

   These two pieces of news basically represent two aspects of the gold market, namely supply and consumption. On the one hand, it is the force majeure reduction of production, and on the other hand, it is the strong growth of demand. As soon as the two news spread, they immediately aroused strong reactions from the market.

  As soon as the market opened on August 8, affected by these two pieces of news, the price of gold immediately showed a momentum of rapid growth. The momentum of opening high and going high remained unchanged throughout the day, and finally on this day the price of gold soared by $61.5, not only breaking through the $1,700 mark, but also firmly standing above $1,710.

  Gold hit new highs again.

  In the following two days, the price of gold rose again by 1.74% and 2.37%, and once reached the mark of 1,800 US dollars, but the market outlook was somewhat restrained, and finally stayed at the level of 1,784 US dollars per ounce.

  In just three days, the price of gold has risen to a level close to 200 US dollars. This is a market that no one has guessed. The crazy upward momentum not only stunned the market, but also made many people on the sidelines feel incredible.

Next, on the 11th and 12th, with the profit taking, the price of gold experienced a short-term decline, and there was a certain decline, but the price remained stable at around 1,750 US dollars, which made the waiters see the possibility of continuing to rise hope.

  However, just when the downward momentum was picking up, Barrick, the world's largest gold producer, announced on the 15th that their gold production in Chile would be stagnant for a period of time due to mechanical failure.

  According to publicly disclosed information, a batch of new mining machinery ordered by Barrick has just been delivered to Peru. The operators have just been trained and are not very familiar with the operation of the machinery. Coupled with the complex geographical environment of the mining area, it eventually led to a batch of new machinery malfunctioning.

  Barrick Gold Corporation also stated that it has urgently contacted the machinery manufacturer, and they will send a commissioner to Peru to check the failure. All issues are expected to be resolved within a week, if the failure turns out to be no major issue.

  In the announcement, Barrick Gold Corporation also stated that Peruvian mining areas do not occupy a large proportion of Barrick’s gold production map, and it is expected that gold production will decrease by about 5% in the near future. But once production resumes, Barrick will make up for this part of the production as much as possible, and strive to complete the production task for the whole year.

  No matter what the market guesses, but the world's No. 1 and No. 3 gold producers have problems at this time, which undoubtedly greatly accelerated the rise in gold prices. So on the day of August 15, the price of gold, which opened low, rebounded under the stimulation of this news, and finally rose by US$15.4 throughout the day, closing at US$1,758 per ounce. The decline stopped.

   "Gentlemen, it's time to close your positions!"

  After the market closed for the day, Zhong Shi called everyone over, and after they sat down, his first sentence surprised everyone.

   "Close the position now?"

   Paulson said somewhat unwillingly, "The current momentum is soaring, and the price of gold still has at least some room to rise. Isn't it too early?"

   Several people understand what happened in the market in the past two days, but they still have a lot of hesitation in the face of the huge temptation of profits.

  Although the others did not speak, their blinking eyes still expressed their doubts.

   "No, there is only one good thing about QE3 in the future!"

Zhong Shi said categorically, "And the chairman of the Federal Reserve will not make a statement easily, because the price of gold has already appeared unreasonable, and he will not add fuel to the fire at this time. So if I predict, even if they may implement QE, they will not choose Speak up at this time."

   "If the guess is correct, the bears have suffered heavy losses during this period, and are very likely to be planning a counterattack. If we don't have follow-up news support, we will soon be defeated!"

   "In addition, gentlemen, starting from the original price of 1,100 US dollars per ounce, and now making more than 50% of the profit on the market, can't you still be satisfied?"

  Zhong Shi spread his hands, and said rather helplessly.

   Thanks to the book friend cpower for voting for the monthly ticket! Thank you gengsu for your tip! When the situation is basically satisfactory, I feel that time flies by, and when I am too busy every day, I also feel that time flies by~ It will be the weekend again in two days, and now I am starting to feel a little bit confused Yes, I am very pleased that there was no big disappointment last weekend. I hope this weekend will not be too miserable, so I hope everyone will continue to vote actively. If you don’t have a monthly pass, you can vote more recommended votes. I am very grateful~

  (end of this chapter)