ekonomi

Berita Ekonomi 14 September 2011

Central Banks Can Fail, Should Return To Gold Standard: Asset Manager

Published: Tuesday, 13 Sep 2011 | 12:12 PM ET

By: Katy Barnato
Assistant Editor, CNBC

The Federal Reserve and other central banks are able to go bust and may yet do so, Urs Gmuer, an asset manager at Dolefin, a Swiss investment advisor, told CNBC Tuesday.

Instead of printing more money when needed, he said central banks should return to using gold to back their currencies.

Gmuer contacted CNBC in response to comments by ING [ING  6.49    0.22  (+3.51%)   ] senior economist Teunis Brosens, who said central banks are technically unable to go bust.

“If the central bank needs money, it just turns on the printing press to buy whatever it needs,” Brosens told CNBC. “When the [U.S. Federal Reserve] wanted to buy assets as part of its [quantitative easing] programs, it did not first have to borrow the funds to do so, as an ordinary individual or company would need to.”

However, Gmuer said the ability to print money does not in itself save a central bank from insolvency, as purchased assets still need to generate sufficient interest to counteract the bank’s liabilities.

“Printing money has a cost for a central bank,” said Gmuer. “With rates being extremely low, the seigniorage [the difference between the value of money and the cost to produce it] is very small.” 

With base rates in many developed countries at historical lows, asset purchases are subject to significant interest-rate risk, when the value of investments is diminished by a later rise in absolute interest rates.

U.S. benchmark rates are currently at zero to 0.25 percent, while on Sept. 8 the European Central Bank announced it was holding rates at 1.5 percent. Base rates in Japan are 0.1 percent.

Gmuer said that for central banks with substantial amounts of risky assets on their balance sheets, such as the Federal Reserve, the Bank of England and the Swiss National Bank, getting out of the red could prove an impossible task.

CNBC.com

“The U.S. Fed currently has risky assets — from a debt point of view — amounting to $1 trillion in mortgage-backed and fellow [government] agency-backed securities," he said.

“If out of $1 trillion assets, 10 percent go bust, that is $100 billion assets you need to replace. The Fed would need to increase its balance sheet by such a huge amount, the risk would become enormous. You would need to buy $5 billion 10-year treasury bonds at 2.5 percent to 3 percent,” he said.

While central banks can increase the real value of their assets by increasing the money supply, this risks overshooting inflation targets.Instead, Gmuer advocated a return to the gold standard, with central banks backing their currencies with physical gold.

“The ultimate currency which has made the test of time is gold," he said. "In Victorian times there was complete price stability because of the gold standard.”

© 2011 CNBC.com

Gold rush leads to bank running out safe deposit box space

By RASHVINJEET S.BEDI
rashvin@thestar.com.my

PETALING JAYA: It's now near impossible to keep your valuables and important documents in banks.Banks have run out of safe deposit boxes, with those applying for the facility told to “wait indefinitely”. cThe problem has been made more acute with many people buying gold bars and jewellery to cash in on the rising price of the commodity and looking for places to keep them safe.

Checks by The Star with several banks revealed that the waiting list for safe deposit boxes had run into the hundreds, with a Maybank branch officer in Kuala Lumpur saying there were 700 people on the list.
“I am sorry, sir, but we have no more boxes to offer. We can't give you a timeframe of when you will be able to get one,'' said a bank officer .

Association of Banks Malaysia (ABM) executive director Chuah Mei Lin said the waiting list for safe deposit boxes depended on the suitability of the bank premises in terms of location, size and security.
“Banks also have to determine if there is a requisite demand for such services within the community they serve,” she said.

Due to the problem, many people are resorting to buying safes to store their valuables.
An employee of a popular DIY shop in SS2 said more safes were being bought by customers, who included those operating businesses.

“I can sell about 10 to 20 safes each week.“I have many people walking in to look for a good, dependable safe,” he added.

Depending on the size and make, the prices of safes start from RM500 to RM3,000 and above.
The rental charge for safe deposit boxes by banks are according to size.A shoebox-sized box is usually rented out for about RM200 a year.

Due to the inavailability of the safe deposit boxes in banks, many private companies have sprouted up over the past few years offering the service.

The Star Online

One company specialising in such services, the Malaysian Royal Safe Deposit Boxes (MSDB), said it was faced with increasing requests for safe deposit boxes.

“We have many walk-in customers daily and have to add new boxes due to increasing demand,'' said a spokesman who identified himself as Dhaliwal.

Most private companies offer insurance coverage of up to RM100,000 per box, compared with about RM10,000 by banks.The private firms usually charge higher rentals than banks for safe deposit boxes, with rent of RM290 for a standard-sized box a year.

Another such company official said the service it offered was better than banks.“We are open round the clock throughout the week while banks operate during office hours and are closed during weekends.”

Ekonomi dunia kekal lembap

WASHINGTON 13 Sept. - Presiden Amerika Syarikat, Barack Obama hari ini memberi amaran ekonomi dunia akan terus lembap sehingga krisis Zon Euro diselesaikan, kerana pasaran semakin bimbang dengan peningkatan hutang Greece, Sepanyol dan Itali.

Obama berkata, Amerika Syarikat (AS) sedang bekerjasama dengan negara-negara di Eropah dan pengawal selia untuk menangani keadaan ekonomi yang semakin buruk itu.

''Kami akan terus memantau keadaan ekonomi dunia yang semakin lembap, selagi isu ini tidak ditangani.
''Ia akan menjadi topik penting pada Mesyuarat G20 yang bakal berlangsung pada November ini,'' katanya merujuk kepada mesyuarat yang akan diadakan di Perancis nanti.

Obama menambah, Washington bekerjasama erat dengan negara-negara Eropah untuk membantu krisis Zon Euro bagaimanapun, negara-negara itu perlu sepakat untuk mencari jalan penyelesaiannya.
''Greece adalah masalah besar (dihadapi) sekarang dan kami sedang mengambil beberapa langkah untuk mengurangkan krisis dan bukan menyelesaikannya,'' ujar beliau.

Semalam, saham-saham Eropah menjunam dan euro menyaksikan kejatuhan paling rendah dalam tempoh 10 tahun berbanding yen ekoran spekulasi kegagalan Greece menangani hutang akan mengakibatkan berlaku satu lagi kemelesetan ekonomi.

Utusan Online

Tetapi, saham-saham di AS naik berikutan Laporan Financial Times yang mendakwa China kini berunding untuk membeli bon-bon kerajaan Itali.

Pada awal tahun ini, Greece diberi lampu hijau untuk bantuan kedua bernilai dua bilion euro (AS$2.7 bilion) dalam pengurangan bajet oleh Kesatuan Eropah (EU) dan Dana Kewangan Antarabangsa (IMF) bagi pakej bantuan untuk menangani kegagalan. - AFP