1. I thought the weak Chinese yuan was stealing business from American firms:
Here’s yesterday’s report on the rising US stock market.
NEW YORK (Reuters) – Blue chips rose for a sixth day, capping their longest winning streak since August on Wednesday, as an upbeat forecast from a top homebuilder and data from China pointed to a strengthening global economy.
BTW, the US stock rally started in March. And the Chinese recovery? It also began in March.
2. I thought only right-wing Neanderthals opposed Medicare and Medicaid:
Here’s a report from Paul Krugman’s newspaper on a visit by the Dutch health minister to the US:
His first official visit to the United States as health minister came in 2007, and he came with the usual European preconceptions that this country had a wide open and fiercely competitive health insurance market with a myriad choices.
“And what struck me,” he said, “is actually the lack of competition you have.”
Mr. Klink pointed out that nearly 40 percent of the nation’s population gets care from Medicare, Medicaid and Veterans Affairs, all of which have significant restrictions on the choices available to patients. “We don’t have these kind of public insurance groups in our country,” he said.
And even among those in the United States who get insurance from their work, he went on, “it’s the employer who is making the choices of the health plans from which you can choose.”
Yes, some conservatives oppose any form of universal health care. But at this point would any conservatives/pragmatic libertarians prefer the US health care system we will have 5 years from now over the Dutch, Swiss, or especially Singaporean universal health care plans? And our “universal” plan will still have 20 million uninsured. So for how much longer can progressives claim that universal coverage is the issue separating the left and right?
3. I thought that high gold prices signaled US inflation:
This is from Britain’s Telegraph:
“There is a strong case to be made that we are already at ‘peak gold’,” he told The Daily Telegraph at the RBC’s annual gold conference in London.
“Production peaked around 2000 and it has been in decline ever since, and we forecast that decline to continue. It is increasingly difficult to find ore,” he said.
Ore grades have fallen from around 12 grams per tonne in 1950 to nearer 3 grams in the US, Canada, and Australia. South Africa’s output has halved since peaking in 1970.
The supply crunch has helped push gold to an all-time high, reaching $1,118 an ounce at one stage yesterday. The key driver over recent days has been the move by India’s central bank to soak up half of the gold being sold by the International Monetary Fund. It is the latest sign that the rising powers of Asia and the commodity bloc are growing wary of Western paper money and debt.
China has quietly doubled holdings to 1,054 tonnes and is thought to be adding gradually on price dips, creating a market floor. Gold remains a tiny fraction of its $2.3 trillion in foreign reserves.
Gold exchange-traded funds (ETFs) – dubbed the “People’s Central Bank” – have accumulated 1,778 tonnes, making them the fifth biggest holder after the US, Germany, France, and Italy.
Ross Norman, director of theBullionDesk.com, said exploration budgets had tripled since the start of the decade with stubbornly disappointing results so far.
Output fell a further 14pc in South Africa last year as companies were forced to dig ever deeper – at greater cost – to replace depleted reserves, not helped by “social uplift” rules and power cuts. Harmony Gold said yesterday that it may close two more mines over coming months due to poor ore grades.
Mr Norman said the “false mine of central banks” had been the only new source of gold supply this decade as they auction off reserves, but they are switching sides to become net buyers.
So western central banks have little more to sell, mines are almost tapped out, rapidly developing Asian countries want their share, and oh yes, there is some private demand for gold as an inflation hedge. Thanks, but if I want US inflation expectations I’ll take CPI futures contracts or TIPS spreads over that highly complex global market.
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