China to deepen tax reforms

Tax systems concerning business turnover, consumption, resources and property will continue to be reformed in order to promote economic development, China's Financial Minister Lou Jiwei said on Wednesday.

The country will widen its pilot scheme of replacing turnover tax with value-added tax (VAT) to sectors including railway transportation, postal services and telecommunications, Lou said at the ongoing bimonthly session of the National People's Congress Standing Committee, which started on Monday and ends on Friday.

Started in January last year, the trials have benefited 1.34 million enterprises and helped save businesses 50 billion yuan (8.1 billion U.S. dollars) in the first half of 2013 in 12 provinces and municipalities. From Aug. 1, VAT reforms will expand nationwide to further reduce tax burdens on businesses.

VAT refers to a tax levied on the difference between a commodity's price before taxes and its cost of production, while turnover tax refers to a levy on a business's gross revenues.

Since Aug. 1, China has suspended VAT and turnover tax for businesses with monthly revenues below 2 million yuan, benefiting more than 6 million small and micro enterprises, according to Lou.

The expansion of the trials nationwide is expected to bring structural changes to the entire tax system and bolster economic reform, said Bai Jingming, deputy director of the financial sciences institute under the Financial Ministry.

China will also impose its consumption tax on goods that could cause severe environmental pollution and over-exploitation of resources. The tax will also be applicable to more luxury goods, Lou said.

It could help curb over-consumption of unhealthy goods including alcohol and cigarettes and promote energy conservation, said Zhang Bin, who is in charge of revenue research with the Chinese Academy of Social Sciences.

He suggested applying the taxation to high-end entertainment in addition to luxury goods.

Experts also warned that taxation could increase the price of taxed goods, leading to transfer of taxes to consumers and consumption abroad to evade high taxes domestically.

As part of efforts to enhance the efficiency of energy usage, China will extend resource tax to coal based on prices instead of sales volume, Lou said. The current tax covers crude oil and natural gas.

It was expected that the tax adjustment will drive the coal industry to enhance technologies, curb overcapacity and protect the environment.

The government is also mulling whether to expand property tax trials currently in place in Shanghai and Chongqing municipalities, Lou said.

The trial imposition of the tax is part of China's efforts to cool its property market in response to public concerns over runaway housing prices.

Source: Xinhua

Christine Legard: IMF do not suggest a rush to exit easy money policy

We need to work better together to understand more fully the impact of these unconventional monetary policies local and global and how that affects the path of exit. And, above all, we must use the time wisely and not waste the space provided by unconventional policies. Global policymakers—all policymakers, within countries and across countries have a responsibility to take the full range of actions needed to restore stability and growth, and to reduce imbalances.

Where do we stand with UMP today?

Let me say it up front: I do not suggest a rush to exit. UMP is still needed in all places it is being used, albeit longer for some than for others. In Europe, for example, there is a good deal more mileage to be gained from UMP. In Japan too, exit is very likely some way off.

The day will come when this period of exceptionally loose monetary policy, both conventional and unconventional, must end,in line with economic recovery and its impact on inflation. We need to plan for that day, especially since we do not know exactly when it comes.

One thing we can say for certain: the path to exit will and should depend on the pace of recovery, the latter mitigating the potential downsides of the former.

Together, we need to keep an eye on both financial stability and growth, watch whether the benefits of UMP are subject to diminishing returns, and analyze whether the financial side-effects get worse over time.

Just as with entry, exit will take us into uncharted territory.

So, the Fund and policymakers need to start thinking about what exit will eventually look like. That includes the implications for global economic and financial stability: the whole system, not just one part of it. This is an issue that the Fund has been watching and will continue to watch closely. It is, after all, the IMF’s raison d'être.

Federal Reserve Shouldn’t Ignore Emerging Market Crisis

  According to an article published today in the Wall Street Journal:
"Broadly, the thinking seems to be that emerging market economies brought their problems on themselves. By keeping their currencies undervalued in the aftermath of the global financial meltdown of 2008, even as their own economies performed robustly, they triggered massive hot-money inflows. The scale of these inflows is reflected in very large current-account deficits. The International Monetary Fund forecasts that Brazil will have a shortfall equivalent to 2.4% of GDP this year, after running surpluses before the financial crisis. Indonesia has swung to a deficit of 3.3% of GDP this year from a surplus of 2.7% in 2006. India’s deficit is seen at 5% of GDP, South Africa’s at 6.4% and Turkey’s at a whopping 6.8%.
Policymakers in these economies are just as quick to blame developed market central bankers for their woes. There was very little they could do in the face of the massive flood of liquidity pumped into financial markets by the European Central Bank, Bank of Japan, Bank of England and, especially, the Federal Reserve. Little, that is, short of allowing their currencies to appreciate so high and so fast, or tightening domestic fiscal or monetary policy so hard, that their economies would have been driven into a severe
downturn.

Wherever the responsibility for the recent mania for emerging markets happens to fall–on these countries or on developed economy central bankers–the end result was credit booms driven by hot-money inflows.

The problem with hot money is that as fast as it flows in one direction, the current can be even stronger in the other. As the1997 Asian crisis showed. Then too, hot money made for booming economies until investors got cold feet. The consequent crisis was crippling to a number of economies across the region.

But the pain didn’t end there. The 1997 Asian crisis was followed by the 1998 Russian crisis and together they combined to cause the spectacular collapse of Long-Term Capital Management.

What are the chances that some major developed-country bank, hedge fund or other financial institution is exposed to emerging markets in ways that perhaps even its risk officers aren’t completely aware of–be it through derivatives or counterparty deals with emerging market institutions that are themselves suffering serious problems. After all, that was one of the big lessons of 2008: no one’s really quite sure what their full exposures are until the dust settles".

  

Oil Adds To Emerging Market Problems

According to an article published today by the Wall Street Journal:
"By late June, the price of West Texas Intermediate was at $93 a barrel from just below $86 in April. It’s now hovering around $110 a barrel.
That the dollar price of oil is going up as many of emerging countries currencies are close to regular historic lows against the dollar, makes the local currency effects of the recent Syria-driven rises that much worse.
The rising panic is palpable. Losses on some of these currencies are accelerating away. The Indian rupee was at 54 against the dollar in May, was at 61 at the start of this month and has now breached 68.

The result is likely to be stagflation as the Indian industry reacts to climbing prices and rising interest rates with belt tightening and desperate efforts to preserve margins by marking up their own prices.

What’s more, the degree to which India’s boom was sustained by credit expansion will also determine how much interest rates cause default rates to rise.

And India isn’t alone. Turkey, Brazil, South Africa and Indonesia are all suffering similar(albeit not quite as immediately severe problems. With most of these countries dependent on imported energy, the rising oil prices will tend to push them towards stagflation as well''.

U.S. July Pending Home Sales Slip. National Association of Realtors Press Release

Pending home sales were down in July, with higher mortgage interest rates slowing the market, according to the National Association of Realtors.

The Pending Home Sales Index ,* a forward-looking indicator based on contract signings, declined 1.3 percent to 109.5 in July from 110.9 in June, but is 6.7 percent above July 2012 when it was 102.6; the data reflect contracts but not closings.  Pending sales have stayed above year-ago levels for the past 27 months.

Lawrence Yun, NAR chief economist, said there is an uneven pattern around the country.  “The modest decline in sales is not yet concerning, and contract activity remains elevated, with the South and Midwest showing no measurable slowdown.  However, higher mortgage interest rates and rising home prices are impacting monthly contract activity in the high-cost regions of the Northeast and the West,” he said.  “More homes clearly need to be built in the West to relieve price pressure, or the region could soon face pronounced affordability problems.”

The PHSI in the Northeast fell 6.5 percent to 81.5 in July but is 3.3 percent higher than a year ago.  In the Midwest the index slipped 1.0 percent to 113.2 in July but is 14.5 percent above July 2012.  Pending home sales in the South rose 2.6 percent to an index of 121.5 in July and are 7.7 percent higher than a year ago.  The index in the West fell 4.9 percent in July to 108.6, and is 0.4 percent below July 2012.

NAR projects existing-home sales to increase 10 percent for all of 2013, totaling about 5.1 million, and reach approximately 5.2 million next year.  With ongoing supply imbalances, the national median existing-home price is expected to grow nearly 11 percent this year, and moderate to a gain of 5 to 6 percent in 2014, with rising construction taking some of the pressure off of home prices.

Possible U.S. military strike in Syria pounds emerging markets assets

Emerging stocks,bonds and currencies took another hammering on Wednesday as mounting expectations of Western action against Syria pushed up oil prices and drove investors to seek shelter in dollar assets.
The Turkish lira and the Indian rupee  already under heavy pressure due to their large current account deficits and an imminent rollback in U.S. money printing - were at the forefront of selling, with both hitting new record lows as oil prices surged to six-month highs above $117 a barrel.
The higher cost of oil and the depreciation of their currencies, will make it even more difficult for the two energy importers to contain their current account gaps.
The Syrian crisis has aggravated a selloff in emerging market assets that was triggered by expectations the U.S. Federal Reserve will start scaling back its massive stimulus program, as soon as next month.

Losses on emerging currencies come as investors stampede to exit emerging stocks and bonds, raising concerns of a vicious circle that will induce more and more investors to sell out.

Dubai's stockmarket dived 7.5 percent at one point, after a 7 percent slide on Tuesday, although it later recovered.

Stocks in the Philippines tumbled as much as 6 percent, while Indonesian and Thai bourses fell 2.5-3 percent as Asian currencies suffered fierce selling, with the Indonesian rupiah touching a new four-year low.

Foreign investors sold $1 billion of Indian shares in the eight sessions through Tuesday while dumping almost $3 billion in debt over 13 successive sessions. Indonesia has seen equity outflows of $1.3 billion in the past seven sessions.

Precious Metals Prices 7.58 a.m Eastern Time

Gold Price Futures      3 months      US$  1,426.93

Silver Price Futures     3 months      US$      24.87

Precious Metals Prices 11.15 p.m. Eastern Time

Gold Price Futures   3 months     US$  1,416.40

Silver Price Futures  3 months     US$       24.59

Startups gain appeal as Japan Inc. names fade

In a shabby back-alley office in Shibuya, a Tokyo district known for youth culture and tech ventures, defectors from corporate Japan are hard at work for a little-known company they fervently believe will be the country's next big manufacturing success.

Like a startup anywhere in the world, its bare-bones setup crackles with an optimistic energy and urgent sense of purpose. What's different, for Japan, is that this startup's talent is drawn from the ranks of famous companies such as Mitsubishi, Michelin and Nissan.

Kohshi Kuwahara, 26, worked for more than two years at electronics giant Panasonic Corp. before hopping to Terra Motors Corp., a little-known venture that pays far less but is out to conquer the world with its stylish electric scooters. As with his colleagues at Terra, he recoiled from the hidebound culture of big Japanese companies and felt a deep sense of frustration at their eclipse by rivals such as South Korea's Samsung and America's Apple.

"If you're stuck in a system that promotes just by seniority, it's living a slow death like animals on a farm," said Kuwahara. "I wanted to be in a tough competitive place."

Despite having some of the developed world's least hospitable conditions for starting a new business, the nation's salaryman culture of guaranteed lifetime employment at a household-name corporation is no longer the unquestioned ideal.

Ventures are sprouting again after a decade marred by some high-profile failures and a striking aspect is their focus on manufacturing. Facebook and Google they are not. They are Sony and Toyota, all over again - but with young fresh faces.

Source: NewsOnJapan

Japan irritated by comments from UN's Ban Ki-moon

Japan voiced irritation on Tuesday over comments by UN Secretary-General Ban Ki-moon, who called on Tokyo to face up to the past and improve ties with its neighbours.

Chief Cabinet Secretary, Yoshihide Suga,said he doubted whether Ban was fully aware of the efforts Japan was making towards dialogue with China and South Korea, amid disputes over territory and historical differences.

Suga added that Tokyo would ask Ban, a former South Korean Foreign Minister, to explain what he meant when he urged Japanese leaders to conduct "very deep introspection".

"Prime Minister (Shinzo Abe) has called for dialogue with South Korea and China despite issues of concern," Suga told a regular press briefing.

"I feel a strong sense of doubt as to whether the remark was made with full understanding of our country's position."

Source: NewsOnJapan

Multilateral Effects of Gradual Ending of Bond Buying by U.S. Central Bank will be prominent discussion on G20 meeting

"Sluggish growth and spillovers of the U.S. Federal Reserve's plan to scale back its economic stimulus are expected to feature prominently in discussions at the upcoming leaders' summit of Group of 20 or G20, said Russian organizers of the event Tuesday.

At the St Petersburg summit slated for Sept. 5-6, policy makers will discuss ways to boost sagging economies in both developed and developing countries, which include creating favorable environment for private investment and scaling up investment in infrastructure, said G20 Sherpa Ksenia Yudaeva at a press conference here.

As for possible fiscal strategies G20 leaders would adopt to promote sustainable growth, Yudaeva said there will be "no unified approach" for all countries, as economic situation varies from country to country. But the ultimate goal is same, which is to " improve the fiscal situation in the medium term."

G20 leaders, she said, will adopt plans to assess global risks and set out actions regarding financial and structural reforms and job creation.

On the global financial and economic landscape, Yudaeva said one of the progress made since last year is a more stabilized Europe. Taking into consideration its economic growth momentum, " Europe seems to get out of the recession," she said.

As for the new formula of the International Monetary Fund (IMF) quotas, Yudaeva admitted it was the area where the least progress has been achieved".

China supports the UN investigation of reported use chemical weapons in Syria

Chinese Foreign Minister Wang Yi said on Monday that China supports the UN Secretariat in the investigation of reported use of chemical weapons in Syria.

Wang was responding to a question from Xinhua New Agency on the current situation in the war-torn country.

Syrian opposition groups have claimed that 1,300 people were killed in chemical weapons attacks by government forces on militant strongholds in the suburbs of Damascus last Wednesday. The Syrian government has denied the allegation.

A UN investigation team went to the al-Ghouta region to th east of the Syrian capital Damascus on Monday to start its investigation on the ground.

Wang said China takes a very serious view of the reported use of chemical weapons in Syria.

"China's position is that no matter who uses chemical weapons, we firmly oppose such an action," he said.

He said China supports the UN Secretariat to conduct an independent, objective, fair and professional investigation in accordance with relevant UN resolutions and find out the truth as soon as possible.

Political resolution is the only way out of the Syrian issue, he said, adding that the top priority is to convene a second Geneva conference on Syrian issue at an early date.

China: Important step to Reform Local Government functions

"The Political Bureau of the Communist Party of China (CPC) Central Committee Tuesday vowed to transform local government and push forward institutional reform.

The 25-member political bureau met on Tuesday, chaired by Xi Jinping, Chinese President and general secretary of the CPC Central Committee.

Local government functions are to be transformed and streamlined to establish an administrative system with Chinese characteristics and dovetail with the central government's efforts in this regard, according to a statement issued after the meeting.

The core of the proposed reform is to transform government functions,with the emphasis on further reforming the administrative approval system with the view of continuing to streamline government and delegate power to the lower levels. The institutional reform should focus on prominent issues concerning people's livelihood.

Violations in government staffing should be resolutely investigated and punished.

Effective measures should be taken to ensure various requirements on transforming and streamlining the local government are well implemented so as to let the people feel the actual effect of change brought by the reform, according to the meeting".

U.S. and allies have tough choices in Syria

"U.S. and allies prepare for probable military strike on Syria.Western envoys have told the Syrian opposition to expect a military response soon against President Bashar al-Assad's forces as punishment for a chemical weapons attack last week, according to sources who attended a meeting with the rebel Syrian National Coalition in Istanbul.

One participant said: "The opposition was told in clear terms that action to deter further use of chemical weapons by the Assad regime could come as early as in the next few days."

Obama, Cameron and Hollande face questions at home about how a military intervention would end and whether it risks bolstering Assad if he rides out the assault or empowering anti-Western Islamist rebels if the Syrian leader is overthrown.

Turmoil in Egypt, where the 2011 uprising inspired Syrians to rebel, has underlined the unpredictability of revolutions. The presence of Islamist militants, including allies of al Qaeda in the Syrian rebel ranks, has given Western leaders pause. They have held back so far from helping Assad's opponents to victory.

Syrian Foreign Minister Walid al-Moualem said U.S. strikes would help al Qaeda and called Western leaders "delusional" if they hoped to help the rebels reach a balance of power in Syria.

U. N. chemical weapons investigators put off until Wednesday a second trip to the rebel-held suburbs of Damascus where the chemical attack took place.

While evidence of chemical warfare could bolster an argument for intervention at the United Nations in the face of likely Russian and Chinese opposition, Western leaders and the Arab League have already declared Assad guilty.

Syria's government, backed by Iran, denies gassing its own people and has vowed to defend itself, but residents of Damascus are growing anxious.

Russia, Assad's main arms supplier, opposes military action and has suggested that rebel forces may have released the poison gas. China's state news agency recalled how flawed intelligence was used to justify the U.S.-led invasion of Iraq in 2003''.
Source: Reuters

Lybia's western oilfields closed.Armed Group shut pipeline.

 Libya's largest western oilfields closed when an armed group shut down the pipeline linking them to ports, its deputy oil minister said on Tuesday, reducing its oil output to a trickle.

Total Libyan oil output would be just under 200,000 barrels per day from pre-war levels of around 1.6 million bpd, according to a Reuters estimate, the worst disruption since the civil war in 2011.

The fields - El Feel and El Sharara - linked to the pipeline have a combined capacity of around 500,000 barrels per day.

In the east, striking workers, who had already cut Libyan oil output by over half, want more power for the eastern region, the oil minister said in a television interview earlier on Tuesday. Abdelbari al-Arusi said that output was at 665,000 bpd

Source: Reuters

UMP generated asset price increases and rising capital flows,and appreciation of local curriences in Emerging Markets

"Following the initiation of Unconventional Monetary Policies, we have seen episodes of asset price increases and rising capital flows by one measure, cumulative net flows to emerging markets rose by $1.1 trillion since 2008, squarely above its long-run structural trend by an estimated $470 billion. Corporate leverage and foreign exchange exposures also increased in several cases. Real estate prices have been buoyant, for example, in Brazil, Canada, China, Korea, and Thailand. Stock prices rebounded for a considerable time in China, Mexico and Russia. And credit expanded rapidly in Brazil, China, Korea and Turkey. In recent months, some of these developments have been partly reversed.

These positive trends, of course, are what we would expect, even with conventional policy. Again, it is the recipe of low interest rates and the hunt for return investors search for other opportunities, capital flows into emerging markets, with the usual potential for appreciation and credit growth.

We all know that the situation can turn quickly—as we have seen in recent days in some emerging market economies. These risks require constant monitoring and reassessment"

Christine Legarde

The risks of keeping a very loose monetary policy for a long period of time

 The balance of stability and risk-taking                                                                                  

 "The relationship between the two is not straightforward. Certainly, long periods of very loose monetary policy and ultra-low rates, mixed with the hunt for higher yields could prove to be a recipe for unhealthy risk-taking. At the same time, the absence of UMP could easily have resulted in worse growth outcomes, with even greater risk of financial distress.

 In particular, we will know whether the global market correction earlier this year was a useful reminder that exuberance can go too far, or if it is the start of a new period of choppy conditions and regular scares. We all hope for the former, but prudence suggests planning for the latter possibility.

Some modes of UMP affect the long end of the yield curve, perhaps more so than conventional monetary policy. That would tend to affect a broader range of assets and asset classes than we typically see with conventional monetary policy, and thus creates a risk-taking incentive that could prove worrying".

Christine Legard
Managing Director IMF

The Consumer Confidence Survey of July.Press Release

"The Conference Board Consumer Confidence Index^®, which had declined in July, increased slightly in August. The Index now stands at 81.5 (1985=100), up from 81.0 in July. The Present Situation Index decreased to 70.7 from 73.6. The Expectations Index increased to 88.7 from 86.0 last month.

The monthly Consumer Confidence Survey^®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was August 15.

Says Lynn Franco, Director of Economic Indicators: “Consumer Confidence increased slightly in August, a result of improving short-term expectations. Consumers were moderately more upbeat about business, job and earning prospects. In fact, income expectations, which had declined sharply earlier this year with the payroll tax hike, have rebounded to their highest level in two and a half years. Consumers’ assessment of current business and labor market conditions, on the other hand, was somewhat less favorable than last month.”

Consumers’ assessment of current conditions moderately declined. Those stating business conditions are “good” decreased to 18.4 percent from 20.8 percent, while those stating business conditions are “bad” was virtually unchanged at 24.8 percent. Consumers’ appraisal of the labor market was mixed. Those claiming jobs are “plentiful” decreased to 11.4 percent from 12.3 percent, while those claiming jobs are “hard to get” declined to 33.0 percent from 35.2 percent.

Consumers’ expectations, which had retreated in July, increased in August. Those expecting business conditions to improve over the next six months edged up to 20.1 percent from 19.9 percent. Those expecting business conditions to worsen declined slightly to 11.1 percent from 11.3 percent.

Consumers’ outlook for the labor market remained upbeat. Those anticipating more jobs in the months ahead increased to 17.6 percent from 16.7 percent, while those anticipating fewer jobs edged down to 17.3 percent from 17.7 percent. The proportion of consumers expecting their incomes to increase improved to 17.4 percent from 15.7 percent. Those expecting a decrease declined slightly to 13.5 percent from 13.7 percent".

Source: The Conference Board

Consumer Confidence Survey

Uncertainty of Western military action against Syria shakes world markets

Uncertainty about the possibility of Western military action against the Syrian government hit shares worldwide on Tuesday, sent many emerging market currencies to record lows and boosted assets such as yen and gold.
Dealers said the moves so far, spurred by reports from Washington that a strike may be imminent, were not yet on a huge scale as investors are waiting to see how the situation unfolds.
U.S. Secretary of State John Kerry said Obama was consulting with allies before he decides on any retaliatory strike. While Britain's Prime Minister David Cameron added to the growing sense of imminent action by recalling the country's parliamentarians from their summer break.
The Indian rupee lost as much as 2.5 percent to reach record low of 65.93 per dollar while Turkey's lira weakened to 2.03 to the dollar - both were record lows. Turkey's share index .XU100also slid to a year 
low.

European shares were down 1.2 percent by midday, matching an earlier drop across Asian markets outside Japan . Tokyo's Nikkei 225 ended 0.7 percent lower.

That left the MSCI all-country world equity index  down around 0.5 percent for a second day of falls, though it remains off its lows for the month.

Russia, which as the world's top energy producer normally benefits from stronger oil prices, saw the rouble hit a four-year low against the dollar-euro basket, on concern over the situation in Syria.

As Syria's key ally and arms supplier, Russia has urged Washington not to use military force against President Bashar al-Assad's government. Traders said its response to any U.S. move against Syria  would be key to whether the current shift into safer assets turned into a major flood.

Spot gold rose to its highest since early June around $1,420 an ounce. Gold has rallied more than $200 since late June when prices troughed at three-year lows.

Source: Reuters

Precious Metals Prices 8.56 a.m. Eastern Time

Gold Price Futures     3 months    US$  1,419.04

Silver Price Futures    3 months    US$      24.58

S&P Case-Schiller HPI 0.9% in June

S&P Case-Shiller HPI

Released On 8/27/2013 9:00:00 AM For Jun, 2013 Prior Prior Revised Consensus Consensus Range Actual 20-city, SA - M/M 1.0 % 1.0 % 1.0 % 0.6 % to 1.4 % 0.9 % 20-city, NSA - M/M 2.4 % 2.5 % 2.2 % 20-city, NSA - Yr/Yr 12.2 % 12.2 % 12.2 % 11.3 % to 12.3 % 12.1 %

Home price appreciation is very strong but is a bit less frothy than during the spring. Case-Shiller's 20-city adjusted index is up 0.9 percent in the June report vs an average monthly gain of 1.4 percent from January to May. But the year-on-year adjusted gain, at a very sizable 12.0 percent, is just off its best level of the recovery which is May at plus 12.2 percent. Monthly declines have been popping up in the data for the first time this year but are still isolated and mostly marginal. Year-on-year rates are strongest out West, around the 20 percent area led by Las Vegas at 24.8 percent and San Francisco at 24.4 percent. Note that West coast cities posted some of the sharpest declines during the 2008 meltdown. Cities showing the least gains this year are New York, at a year-on-year plus 3.2 percent, and Cleveland at 3.4 percent. Unadjusted data are followed closely in this report and tell the same story with the year-on-year rate at 12.1 percent for the 20-city index. The unadjusted monthly gain in June, a month when buyer traffic is strong and sellers have pricing power, is 2.2 percent vs a revised 2.5 percent in May. Prices for existing homes are very strong and remain a major plus for homeowners. Next housing data on the Econoday calendar will be tomorrow with purchase applications followed by pending home sales. Source: Bloomberg

Precious Metals Prices 7.15 a.m. Eastern Time

Gold Price Futures      3 months     US$  1,417.50

Silver Price Futures     3 months     US$       24.45

Japan: Consumption tax hike decided before APEC

A Japanese Cabinet minister says Prime Minister Shinzo Abe is likely to make a decision on the consumption tax increase before a summit of the Asia Pacific Economic Cooperation, or APEC, in October.

Economic Revitalization Minister Akira Amari made the comment on an NHK TV debate program on Sunday.

Referring to a consumption tax increase scheduled for next April, Amari said it's best to raise the tax as planned but repercussions should be considered. He said the government will think about temporary or other measures to address potential problems.

Amari said the decision will be made in late September or early October.

Source: NewsOnJapan

U.S. government's debt load is worse than Japan

The national media and economists say that Japan has the highest public debt of any developed nation, but the reality is the U.S. government's debt load is much bigger and much worse.

New research from Markus Jaeger, director of global risk analysis and Deutsche Bank observes: "When assessing public-sector debt sustainability, it would be negligent to disregard implicit government liabilities. Gross and net debt ratios provide merely a snapshot, failing to capture medium-and long-term fiscal dynamics. If one sums up government debt and the implicit debt arising from government pension and healthcare spending commitments (appropriately discounted), the U.S. government's debt is almost twice as large as Japan's and almost three times as large as Germany's."

Source: NewsOnJapan

Major Chinese industrial firms saw their combined profits rise 11.6 % YoY

Major Chinese industrial firms saw their combined profits rise 11.6 percent year on year in July, quickening from the 6.3-percent rate seen in June that points to further evidence of a firming economy, official data showed on Tuesday.

The profits of industrial companies with annual revenues of more than 20 million yuan (3.24 million U.S. dollars) hit 419.55 billion yuan in July, a National Bureau of Statistics statement said.

In the first seven months, their profits rose 11.1 percent to 3 trillion yuan.

Among the 41 industries surveyed, 27 posted year-on-year profit growth during the January-July period, while 11 saw profit decline. Two sectors reported turnarounds in profitability and one reported narrowing losses.

Breaking it down, private businesses led the growth, with their combined profits up 15.4 percent year on year in the first seven months, while state-run enterprises saw profits up 5.5 percent during the period.

Electricity, heat production and the supply industry saw profits jump 73.5 percent in the first seven months, and manufacturers of computers, telecommunication and electronics saw their profits rise 29 percent.

Tuesday's data came after a string of other economic indicators, from factory output and retail sales to foreign trade, showed the world's second-largest economy may be gradually stabilizing after a protracted slowdown. year on year in July, quickening from the 6.3-percent rate seen in June that points to further evidence of a firming economy, official data showed on Tuesday.

The profits of industrial companies with annual revenues of more than 20 million yuan (3.24 million U.S. dollars) hit 419.55 billion yuan in July, a National Bureau of Statistics statement said.

In the first seven months, their profits rose 11.1 percent to 3 trillion yuan.

Among the 41 industries surveyed, 27 posted year-on-year profit growth during the January-July period, while 11 saw profit decline. Two sectors reported turnarounds in profitability and one reported narrowing losses.

Breaking it down, private businesses led the growth, with their combined profits up 15.4 percent year on year in the first seven months, while state-run enterprises saw profits up 5.5 percent during the period.

Electricity, heat production and the supply industry saw profits jump 73.5 percent in the first seven months, and manufacturers of computers, telecommunication and electronics saw their profits rise 29 percent.

Tuesday's data came after a string of other economic indicators, from factory output and retail sales to foreign trade, showed the world's second-largest economy may be gradually stabilizing after a protracted slowdown.

Source: Xinhua