CHINA CONFIDENTIAL.
Sunday, December 21, 2008
Brightening Outlook for Gold
Foreign Confidential....
Bloomberg's Pham-Duy Nguyen reports:Gold may rise for the third straight week on speculation the dollar’s rally will stall, boosting the appeal of the precious metal.
Motley Fool says 2009 could be a vintage year for gold.
Thirteen of 25 traders, investors and analysts surveyed from Mumbai to Chicago on Dec. 18 and Dec. 19 advised buying gold, which rose 2.1 percent last week to $837.40 an ounce in New York. Seven said to sell, and five were neutral.The Federal Reserve estimates that in the past year losses in real estate, stocks and mortgages have sucked out some $7.2 trillion of wealth from the U.S. economy. Some are now putting the figure at $20 trillion. A massive recession is starting and will likely spread throughout much of the world. These forces have exerted their classic strong downward pressure on the price of gold.
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In addition, the $700 billion TARP fund to salvage the American financial system, and large amounts spent by other governments to protect their own banks, has greatly reduced the fear of a financial breakdown. As a result, the financial panic insurance value of gold was largely eroded, adding further downward price pressure.
2008 was a volatile year for gold. Prices have gyrated quite violently between the $700’s and $1,000, or by some 25 to 30 percent. This volatility alone acts as a depressing influence on gold prices as it discourages the belief that gold is a credible investment.
The world’s major governments long have sought to eradicate gold as a monetary measure in order to remove the last vestiges of monetary discipline and to clear the field for massive government over-spending and inflation.
In 1968, the London Gold Poll was abolished. In 1978, America forced a further move, via the IMF, to write gold out of the international money supply. In August 1971, President Nixon broke the U.S. dollar-gold exchange link.
In September 1999, the United States, while being careful to keep its own gold stocks intact, led other major nations, in the first of two so-called ‘Central Bank Gold Agreements’ to flood the gold market with sales of gold.
In 1999, the central banks held some 33,000 tonnes, or one quarter of all mined gold. The effect of government gold sales was potentially very bearish for gold.
Gold market observers, who have studied the pattern of IMF gold sales, allege that the sales are timed to cause the maximum volatility in the price of gold, to discourage investment.
More recently, there are allegations that the Government has allowed certain institutions to engage in massive naked short selling of gold and silver. This has caused distortions in the gold price that do not reflect genuine market pressures. In short, they amount to market manipulation.
A fair conclusion is that gold is cheap and that its present price does not truly reflect market conditions.Madoff Suspected of Skimming Hundreds of Millions
There is increasing speculation in New York and London that the con man Bernie Madoff siphoned off hundreds of millions of dollars from his global Ponzi scheme to manipulate the shares of listed companies for the benefit of himself and his family.Taliban Kill Two Afghans Accused of Spying for US
Foreign Confidential....
Pakistani police say Taliban militants killed two Afghan nationals for allegedly acting as spies for U.S. forces in Afghanistan.
Police say they found the bullet-ridden bodies of two brothers Sunday in a village located in Pakistan's lawless tribal region of North Waziristan.
Police say a note found with the bodies said the two men were spies from the neighboring Afghan province of Khost.
The United States plans to send 20,000 to 30,000 troops to Afghanistan in order to prevent it from falling to the Taliban.Uma Thurman Fiance Gave Madoff $220 Million
Foreign Confidential....
One of London's most celebrated hedge fund managers is a victim of Bernie Madoff's $50 billion global Ponzi scheme.
Arpad Busson, who is engaged to actress Uma Thurman, reportedly has up to $220 million exposure to Madoff through the EIM fund of hedge funds which manages about $11 billion.
Besson founded EIM in 1992. A business partner confirmed the exposure to Madoff's funds.
Busson is not alone. Madoff and his family used a complex web of wealthy individuals across Europe to introduce new investors into his funds. Those new investors enabled him to keep paying the healthy returns he had promised older existing investors.Japanese PM Sought US Nuke Shield Against China
Japan's longest-serving prime minister — a Noble Peace laureate — asked the U.S. in 1965 to deploy nuclear weapons against China if war broke out between the Asian rivals, according to newly declassified government files obtained by Kyodo news agency.
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During his first trip to Washington as the Japanese leader, Eisaku Sato told then-U.S. Defense Secretary Robert McNamara that American military forces could launch a nuclear attack on China by sea if needed, Kyodo said Monday.
Under its post-World War II constitution, Japan renounces war as a sovereign right and prohibits the use of force in international conflicts.
But the new details of Sato's discussions with the U.S. reveal a more complicated picture behind his strong public stance against nuclear weapons as well as his intense distrust of China.Saturday, December 20, 2008
Hamas Threatens New Suicide Attacks on Israel
Hamas has ended its truce with Israel. Rocket fire from Gaza is escalating. The Iranian-backed Islamist terrorist group is threatening to launch a new round of suicide attacks against the Jewish state.
Haaretz reports:The Israel Defense Forces is preparing to escalate its activities at the Gaza Strip border in response to continuing Qassam rocket and mortar fire into the western Negev.
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On Saturday alone 13 rockets and 20 mortar rounds were fired into Israel. No one was injured, but one rocket damaged a kibbutz building. The violence came after Hamas' official announcement that it would not extend its six-month cease-fire with Israel. Putin to West: Don't Try to Destabilize Russia
Oleg Shchedrov reports from Moscow:Prime Minister Vladimir Putin warned Russia's foes on Friday against trying to destabilize a country facing broadening economic crisis, Russian news agencies reported.
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Putin did not specify who might pose a threat to Russia's stability. But in the past, he has often blamed Western security services of trying to destabilize the country using opposition groups and non-governmental organizations as their instruments.
"Any attempts to weaken or destabilize Russia, harm the interests of the country will be toughly suppressed," they quoted ex-KGB spy Putin as telling an annual meeting of top spies and security officers ahead of their professional holiday.
Monday, 22 December 2008
Foreign Confidential...
Tomoko Hosaka reports from Tokyo:
Foreign Confidential....
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