Thursday, May 28, 2015

De-Dollarization Accelerates: China And Chile Sign Multibillion Dollar Currency Swap Deal, Washington’s “Allies” Defect To China-Led Bank, Large Speculators /Traders Buying Gold & Silver At Fastest Pace In Over A Decade

Washington’s “Allies” Defect To China-Led Bank
South Korea called on Saturday for deeper cooperation with Japan on a China-led development bank, while Japan remained cautious about the lender, which it and ally the United States have held back from joining.
A meeting between the Japanese and South Korean finance ministers was “an impetus to deepen cooperative relations” regarding the Asian Infrastructure Investment Bank (AIIB), South Korea’s Choi Kyung-hwan told host Taro Aso.
The Beijing-sponsored $100 billion lender is seen as a rival to the U.S.-dominated World Bank and Japan-led Asian Development Bank.
Japanese Prime Minister Shinzo Abe countered China’s push on Thursday, announcing $110 billion in aid for Asian infrastructure projects over five years.
Aso and Choi “agreed on the importance of assessing enormous demand for infrastructure investments in Asia”, including through Abe’s new “Partnership for Quality Infrastructure”, both countries said in a statement.
Choi, whose government expects a 4-5 percent stake in the AIIB, did not elaborate on the China-sponsored bank in brief remarks, or speak to the media after the meeting of the two officials, who are also deputy prime ministers.
Asked about Choi’s reference to the AIIB, Aso told reporters only that he had explained Japan’s position that it was seeking more details from China about the transparency and governance of the AIIB, which is scheduled to begin operations next year.
China and Chile sign multibillion dollar currency swap deal
SANTIAGO — China and Chile on Monday signed a host of cooperation deals including a multi-billion-US-dollar currency swap pact as the two countries move to enhance their trade and financial ties.
The latest development came after a meeting between visiting Chinese Premier Li Keqiang and Chilean President Michelle Bachelet, who jointly witnessed the signing of a series of bilateral business contracts and governmental accords in areas including politics, trade, finance, mining, agriculture, production capacity and science and technology.
China agreed to grant a quota of 50 billion yuan ($8.1 billion) to yuan qualified foreign institutional investors in the Southern American country, according to a joint declaration issued here Monday after their meeting.
The three-year currency swap deal worth 22 billion yuan ($3.5 billion) signed between the central banks of China and Chile is aimed at promoting the bilateral trade and investment, according to a statement on the website of the People’s Bank of China, China’s central bank.
Large Speculators /Traders Buying Gold & Silver At Fastest Pace In Over A Decade
The last time large speculators were as aggressively buying silver as last week was September 1997. The net long non-commercial positioning in Silver futures, according to the CFTC rose almost 22,000 contracts last week to a 3-month high (which is closing in on the ‘longest’ since 2005). Gold, not be out-precious’d also saw major buying. Net speculative longs in gold added over 45,000 contracts – the most since July 2005 – lifting net long positions to their highest in 3 months. Perhaps, just perhaps, as Alhambra’s Jeffrey Snider notes, this is due to Yellen putting the ‘dollar’ back on suicide watch.

Large speculators increased Silver net long position to $4.4bn from $2.4bn notional.

Large speculators increased their net long gold exposure to $14.8bn from $9.2bn notional.
Charts: Bloomberg

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