Sept. 5 (Bloomberg) -- The diplomatic dialogue between President Barack Obama and Russian President Vladimir Putin has featured the U.S. president comparing Putin to a bored schoolboy and the Russian leader forcing an irritated Obama to wait a half-hour for a meeting. Ryan Chilcote reports on Bloomberg Television's "Countdown."
Friday, September 6, 2013
Keiser Report: Prison Paradise
From RT
Published on Sep 5, 2013
In this episode of the Keiser Report, Max Keiser and Stacy Herbert, discuss an economy in which everyone is an Avon Lady in which you've got to get into prison to get the most out of life. They also discuss the trilemma of international finance. In the second half, Max talks to Charles Hugh Smith of OfTwoMinds.com about debt, bubbles and media induced financial ignorance.
Published on Sep 5, 2013
In this episode of the Keiser Report, Max Keiser and Stacy Herbert, discuss an economy in which everyone is an Avon Lady in which you've got to get into prison to get the most out of life. They also discuss the trilemma of international finance. In the second half, Max talks to Charles Hugh Smith of OfTwoMinds.com about debt, bubbles and media induced financial ignorance.
Thursday, September 5, 2013
India thinks of buying gold off its citizens - good luck!
From Reuters.comArticle link
India is considering a radical plan to direct commercial banks to buy gold from ordinary citizens and divert it to precious metal refiners in an attempt to curb imports and take some heat off the plunging currency.
A pilot project will be launched soon, a source familiar with the Reserve Bank of India (RBI) plans told Reuters. India has the world's third-largest current account deficit, which is approaching nearly $90 billion, driven in a large part by appetite for gold imports in the world's biggest consumer of the metal.
Any talk of using the country's gold to help meet India's international obligations revives memories of a 1991 balance of payments crisis - when India flew 67 tonnes of gold to Europe as collateral for a loan to avoid a sovereign debt default.
Selling gold reserves may sit badly with Indians, many of whom saw the 1991 sale as a public humiliation. The secret operation was only exposed after a vehicle carrying the first consignment of bullion broke down on its way to the airport from the central bank.
Read in full
Gold and War
With all the talk of war in Syria at the moment I thought I would try to find some historical precedents for the gold price and war, particularly wars in which the US and Russia (or USSR) were diametrically opposed.
The most obvious parallel to today's tensions I could find was the proxy war between the US and the Soviet Union over Afghanistan from 1979 - 1989.
Background (from Wikipedia)
On December 27, 1979, 700 Soviet troops dressed in Afghan uniforms, including KGB and GRU special forces officers from the Alpha Group and Zenith Group, occupied major governmental, military and media buildings in Kabul, including their primary target – the Tajbeg Presidential Palace.
That operation began at 19:00 hr., when the KGB-led Soviet Zenith Group destroyed Kabul's communications hub, paralyzing Afghan military command. At 19:15, the assault on Tajbeg Palace began; as planned, president Hafizullah Amin was killed. Simultaneously, other objectives were occupied (e.g. the Ministry of Interior at 19:15). The operation was fully complete by the morning of December 28, 1979.
The Soviet military command at Termez, Uzbek SSR, announced on Radio Kabul that Afghanistan had been liberated from Amin's rule. According to the Soviet Politburo they were complying with the 1978 Treaty of Friendship, Cooperation and Good Neighborliness and Amin had been "executed by a tribunal for his crimes" by the Afghan Revolutionary Central Committee.
And so what happened to the gold price during the first month of the Soviet's "Shock and Awe"?
Personally I think a US or Russian nuclear powered warship sinking to the bottom of the Med would count as a really, really bad outcome of the Syrian conflict.
The most obvious parallel to today's tensions I could find was the proxy war between the US and the Soviet Union over Afghanistan from 1979 - 1989.
Background (from Wikipedia)
On December 27, 1979, 700 Soviet troops dressed in Afghan uniforms, including KGB and GRU special forces officers from the Alpha Group and Zenith Group, occupied major governmental, military and media buildings in Kabul, including their primary target – the Tajbeg Presidential Palace.
That operation began at 19:00 hr., when the KGB-led Soviet Zenith Group destroyed Kabul's communications hub, paralyzing Afghan military command. At 19:15, the assault on Tajbeg Palace began; as planned, president Hafizullah Amin was killed. Simultaneously, other objectives were occupied (e.g. the Ministry of Interior at 19:15). The operation was fully complete by the morning of December 28, 1979.
The Soviet military command at Termez, Uzbek SSR, announced on Radio Kabul that Afghanistan had been liberated from Amin's rule. According to the Soviet Politburo they were complying with the 1978 Treaty of Friendship, Cooperation and Good Neighborliness and Amin had been "executed by a tribunal for his crimes" by the Afghan Revolutionary Central Committee.
And so what happened to the gold price during the first month of the Soviet's "Shock and Awe"?
Yes, gold hit its highest price ever to that date of $850-$900, even the shoulders of the spike were a very respectable $650/oz. Amazing considering the gold price was less than $100 only seven years earlier.
Could a similar spike occur in the gold price in this latest conflict? Well there are many factors that could cause the world and the markets to have a collective intake of breath. One in particular is the increase of the Russian fleet near Syria and currently rushing to the scene is the flagship of the Russian Black Sea Fleet, the missile cruiser Moskva and its associated support vessels (no doubt including submarines), see the story here. These ships will join the mix in the Eastern Med of at least 4 US destroyers, see story here. Whilst at the moment it is inconceivable that Russian or US naval or air forces would engage each other directly, in the fog of war mistakes can happen and there is nothing the markets hate more than surprises.
So let me end with some sage advice from Ben Bernanke: "the reason people hold gold is for the protection against tail-risks - really, really bad outcomes"
Personally I think a US or Russian nuclear powered warship sinking to the bottom of the Med would count as a really, really bad outcome of the Syrian conflict.
Tweet of the Week
Just bought some more stupidity insurance: gold and silver. #Syria
— Max Keiser (@maxkeiser) September 4, 2013
Spring is Sprung in Sydney
Amazing roses for sale in Martin Place, Sydney this morning. The blue and purple roses are created by placing cut white roses in a dyed solution.
Dr. Paul Craig Roberts - A Real Collapse in the Dollar, Gold Could Be $30,000 an Ounce
From Greg Hunter
Published on Sep 3, 2013
When it comes to war in Syria, economist Dr. Paul Craig Roberts says, "This time the big lie didn't work like it did in Iraq." On fallout of a possible Syrian war, Dr. Roberts worries, "If they start abandoning the dollar, the collapse of the exchange rate will bring down the whole house of cards in the United States. The Fed will lose control. The banks will fail. Prices will rise dramatically. People will essentially not be able to pay their bills. It will be an unbelievable mess." What would happen to gold with a Syrian war? Dr. Roberts says, "If you get a real collapse in the dollar, gold could be $30,000 an ounce. Who knows?" Join Greg Hunter as he goes One-on-One with former Assistant Treasury Secretary Dr Paul Craig Roberts.
Published on Sep 3, 2013
When it comes to war in Syria, economist Dr. Paul Craig Roberts says, "This time the big lie didn't work like it did in Iraq." On fallout of a possible Syrian war, Dr. Roberts worries, "If they start abandoning the dollar, the collapse of the exchange rate will bring down the whole house of cards in the United States. The Fed will lose control. The banks will fail. Prices will rise dramatically. People will essentially not be able to pay their bills. It will be an unbelievable mess." What would happen to gold with a Syrian war? Dr. Roberts says, "If you get a real collapse in the dollar, gold could be $30,000 an ounce. Who knows?" Join Greg Hunter as he goes One-on-One with former Assistant Treasury Secretary Dr Paul Craig Roberts.
Wednesday, September 4, 2013
Asia’s Richest Man, Li Ka-Shing, looking to make Gold Investments
According to Bloomberg, Asia’s richest man, Li Ka-Shing, is looking to make gold investments.
The Chinese born, Hong Kong business magnate, investor, and philanthropist is considered to be the richest person in Asia and the richest person of Chinese descent in the world. Forbes estimates he is the 11th richest person in the world with a net worth of $27 billion in U.S. dollars. Two of his sons are believed to be billionaires in their own right.
His primary operating company is Hutchison Whampoa Limited, owner of the mobile phone network, Three.
CEF Holdings Ltd., a venture between Li Ka-shing’s flagship company and Canadian Imperial Bank of Commerce, is looking to acquire gold assets after a slump in prices created buying opportunities.
“Long term, gold is a good place to be,” CEF Chief Executive Officer Warren Gilman, 53, said in an interview in Hong Kong.
Cheung Kong Holdings Ltd, controlled by Li, Asia’s richest man, and CIBC each own 50% of CEF. The venture is focused on owning gold mining companies globally.
Gilman previously co-founded Canadian Imperial Bank of Commerce’s (CIBC) global mining group and was later vice chairman of the bank’s CIBC World Markets.
“I was a little uncomfortable making investment in gold at $1,700 and $1,800 an ounce,” Gilman said yesterday. “The correction we’ve had this year from my perspective is great because we can hopefully fulfill that objective of making some gold investments.”
Li, 85, has an estimated net worth of $27 billion, according to the Bloomberg Billionaires Index.
CEF Holdings was established in 1974 by Cheung Kong and CIBC, Gilman said.
“It’s tougher and tougher to find economic gold deposits in safe jurisdictions,” Gilman said. “You see mine supply struggling to keep up with demand long term. That’s a great recipe for higher prices in the longer term.”
Ka Shing is known to have a penchant for hard assets and owns infrastructure, shipping, energy and real estate assets, but it is not known if he owns physical gold. Li Ka Shing charity foundation is called the “Heart of Gold” and has recently been extended from Mainland China to Hong Kong.
It is likely that he does, as most very wealthy people, especially in Asia, own some physical bullion for financial insurance purposes. Increasingly, high net worth individuals and family offices are investing in gold as means to protect wealth from currency devaluations.
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