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Gold Update: The World’s Biggest Bond Fund Is Planning Asia’s First Inflation-Protected Fund, Russia, Korea And Central Banks Continue Accumulate Gold On Dip, China Warns Japan Against Using China As “Garbage Bin” In Race To Debase, Threatens Currency War Retaliation.


Pimco Plans Asia’s First Inflation-Protected Fund

Pacific Investment Management Co., which runs the world’s biggest bond fund, is planning Asia’s first fund to protect against inflation in the region.

The investment will aim to return 2 percentage points to 3 percentage points more than the average consumer price gains in Singapore and Hong Kong, said Michael Thompson, head of Pimco’s wealth-management group for the region excluding Japan. The company is also preparing an Asian local currency sovereign bond fund and plans to introduce both products in the second quarter, he said.

Assets linked to costs in the economy ballooned to $180.8 billion worldwide as of the end of last year, though there are no Asian inflation-protected products, according to Morningstar Inc. (MORN) in ChicagoBill Gross, who runs Pimco’s $288.2 billion Total Return Fund (PTTRX), has said unprecedented central bank stimulus efforts will drive up prices for goods and services.

 

Russia, Korea And Central Banks Accumulate Gold On Dip Below $1,600/oz

Central banks are among the shrewd investors who buy gold bullion on dips. It was reported that South Korea bought 20 tonnes of gold last month rumoured to be below the $1,600/oz mark. This is the first purchase this year for South Korea, after they purchased 30 tonnes in 2012.  Previously they purchased in July 2012 at the same price levels.

Smart, prudent money continues to accumulate, particularly on the dips, while the unfortunate ‘dumb’ money continues to sell on weakness as seen in the significant liquidation in ETF positions in recent days.

 

China Threatens Currency War Retaliation, Warns Japan Against Using China As “Garbage Bin” In Race To Debase

About a year ago we warned that in a world devoid of bond vigilantes, long emasculated by the Fed’s relentless attempt to bring inflation back or go bust trying, the only forces left willing to stand up to Bernanke are the Brent Vigilantes TM [16], who succeed in crushing every recent reflation attempt whenever Brent reaches $130 or above (and US gas at the pump rises above $3.80) yet which are rather leery and susceptible to the CME’s surprise margin-hike counterattacks, and of course China, the same China which every other lemming said last summer would scramble to join the global reflation except for us, as we made it very clear that all hopes of an RRR or interest rate cut are unfounded. Because all the inflation that China (did not) need would be exported to it courtesy of Bernanke and Company’s deliberate and now open-ended printing. For a long time China kept its mouth shut, however, when Japan also joined in this pathological central bank pumping, China may have just had enough. As the WSJ reports,”The president of China’s giant sovereign-wealth fund warned Japan against using its neighbors as a “garbage bin” by deliberately devaluing the yen, joining growing international griping about a potential currency war.

 

Gold Bears, Beware! Don’t Take On Central Banks

“When you see central bankers acquiring gold, you can kind of take it like this: You don’t fight in the stock markets when the Fed (U.S. Federal Reserve) is easing, so you wouldn’t want to fight the central banks when they’re buying gold, because the…

 

Are You Prepared for Hyperinflation?

As looming inflation, currency wars & a possible run on gold threaten to derail markets, In this interview with The Gold Report, Melman explains why gold & silver could do very well in the second half of 2013.

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