Japan Pension Funds Go Gold

JulieW

JulieW

Well-Known Member
Silver Stacker
http://www.bloomberg.com/news/2013-...on-funds-as-government-pledges-inflation.html
Gold Lures Japan's Pension Funds as Abe Targets Inflation
By Aya Takada & Yasumasa Song - Jan 8, 2013 8:03 PM ET

Japanese pension funds, the world's second-largest pool of retirement assets after the U.S., will more than double their gold holdings in the next two years as the new government pushes for a higher inflation target, according to an adviser to the funds.

Assets held by Japanese pension funds in gold-backed exchange-traded products may expand to 100 billion yen ($1.1 billion) by 2015 from less than 45 billion yen at present, said Itsuo Toshima, who represented the Tokyo office of World Gold Council for 23 years through 2011.

New Prime Minister Shinzo Abe's pledge to spur inflation to 2 percent and end the yen's appreciation means Japanese pension funds now have to hedge against rising prices and a currency decline after two decades of stagnation. They're set to jump into gold after 12 straight years of gains with the precious metal now 14 percent below its all-time high reached 2011. Gold priced in yen reached a record a week ago.

"Bullion's role as an inflation hedge, long ignored by Japanese fund operators, has come under the spotlight thanks to Abe's economic policy," Toshima, who now works as an adviser to pension-fund operators, said in an interview today in Tokyo. "Gold may be a standard asset-class in the portfolio of Japanese pension funds as Abe's target is realized."
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In 2011 in Netherland government forbid a private pension fund to use gold. They forced it to sell it.
The difference between maybe, and reality.
 
Rinchin said:
Rediculous scaremongering. The lot of you should be ashamed. The increased inflation target is intended to add 2%to Japan's real economic growth.

http://www.stuff.co.nz/business/world/8168298/Fresh-stimulus-package-for-Japan
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No scare mongering...it's true!

Japan is taking exactly the same course as the USA! Printing
Their currency will be toast as well!
The japs are printing The Yen.

Have you noticed the relationship of the USD vs JPY vs world currencies? :|

H
 
This news does not get me excited in any way whatsoever.

Assets held by Japanese pension funds in gold-backed exchange-traded products may expand to 100 billion yen ($1.1 billion) by 2015 from less than 45 billion yen at present, said Itsuo Toshima, who represented the Tokyo office of World Gold Council for 23 years through 2011.
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What is an exchange-traded product (ETP)? Investopedia:

Definition of 'Exchange Traded Products ETP'
A type of security that is derivatively-priced and which trades intra-day on a national securities exchange. Exchange Traded Products are derivatively-priced, where the value is derived from another investment instruments such as a commodity, currency, share price or interest rate. Generally, exchange traded products are benchmarked to stocks, commodities, indices or they can be actively managed funds. Exchange traded products include exchange traded funds (ETFs), exchange traded vehicles (ETVs), exchange traded notes (ETNs) and certificates.
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No mention of actual real gold there.

In fact:

Gold exchange-traded products are exchange-traded funds (ETFs), closed-end funds (CEFs) and exchange-traded notes (ETNs) that aim to track the price of gold. Gold exchange-traded products are traded on the major stock exchanges including Zurich, Mumbai, London, Paris and New York. As of 25 June 2010, physically backed funds held 2,062.6 tonnes of vaulted gold in total for private and institutional investors.[1] Each gold ETF, ETN, and CEF has a different structure outlined in its prospectus. Some such instruments do not necessarily hold physical gold. For example, gold ETNs generally track the price of gold using derivatives.
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I'm not sure if there is any exposure to these, from the World Gold Council (at least they mention "gold backed"):

These securities offer investors a new, innovative, relatively cost efficient and secure way to access the gold market. All of the securities are backed by allocated gold held in a vault on behalf of investors. They are intended to offer investors a means of participating in the gold bullion market without the necessity of taking physical delivery of gold, and to buy and sell that interest through the trading of a security on a regulated stock exchange. The introduction of exchange-traded gold securities is intended to lower many of the barriers such as access, custody, and transaction costs, which have prevented some investors from investing in gold.
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Amusing. Retail investors have been investing in gold, but apparently some investors (I take that to mean institutional) have been prevented from investing because of access, custody or transaction costs? What? It's too expensive to buy wholesale? Bizarre.

I guess the most pertinent point is not that it is not a prima facie investment in gold because of any fundamental philosophical change methinks, but "to buy and sell that interest through the trading of a security on a regulated stock exchange." rather, jobs for the boys in the dying machinery of the stock exchanges.

And here I was thinking they wanted to diminish transaction costs.

I don't have a problem if anyone wants to trade on a stock exchange, but lets get the the facts straight and call it for what it is. If it falls out of your a$$ it's not gold, it's a turd. If you buy ETP's it's not because you are worried about the imminent collapse of fiat currencies. It's not gold.
 
Holdfast said:
Rinchin said:
Rediculous scaremongering. The lot of you should be ashamed. The increased inflation target is intended to add 2%to Japan's real economic growth.

http://www.stuff.co.nz/business/world/8168298/Fresh-stimulus-package-for-Japan
Click to expand...

No scare mongering...it's true!

Japan is taking exactly the same course as the USA! Printing
Their currency will be toast as well!
The japs are printing The Yen.

Have you noticed the relationship of the USD vs JPY vs world currencies? :|

H
Click to expand...

Japan is past the point of no return and will be toast before anyone else. I wonder if Abe has stopped to think that at 2% inflation, debt service on govt bonds will equal or exceed govt revenues? Anyone who doubts this scenario should listen to Kyle Bass.
 
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