Arab Spring – Is the West After Gold?
(Cartoon courtesy - cagle.com; Cartoon by John Darkow, The Columbia Daily Tribune, Missouri.).
Rivers – shallow and dry
Arab Spring protests have petered out into directionless change – and the outlook seems bleak.
The unspoken element in these regime changes is the ‘personal’ wealth of the Egyptian and Tunisian rulers.
After Ben Ali, the Tunisian leader came to France, fleeing from his own country, the French Government seized a plane reputedly containing 1.5 tons of gold – that ‘belonged’ to the Tunisian ruler.
Gaddafi’s assets have been frozen in UK, USA and Switzerland.
Mubarak’s wealth
Estimates abound.
There is a lower range estimate of US$ 2-3 billion – which most reject as too conservative. CNN’s Tom Foreman puts in an astounding figure of US$40 billion-75 billion. Based on a video transcript, ‘Mubarak is worth somewhere between $40 billion and $75 billion, CNN’s Tom Foreman estimates’. An unsubstantiated report, estimates Mubarak’s gold holdings at US$ 9 billion.
Average prices of gold in February 2011, were in the region of US$45 million per tonne of gold. That would be 2000 tons – one of the largest hoards in the world. More gold than the national reserves of any country – except the Top 5 reserves.
Just carting around 2000 tons of gold – or its cash equivalent would be inviting trouble.
More on Egyptian gold
As the legs on Mubarak’s throne wobbled, gold prices also wobbled downwards – significantly?
Now why would that happen?
Egypt is not a major producer of gold. Production from the Sukari mines (started production in Jun 2009) is now at 1 ton – expected to go up to 14 tons (500,000 oz). Miniscule in comparison to global output at more than 2000 tons.
Alexander Nubia, a Toronto-based mining operator owns gold exploration properties at Abu Marwat that is expected to start production next year – with a potential of 500,000 oz – i.e. another 14 tons.
Total production in Egypt – less than 30 tons.
Egypt is also not a major buyer of gold. Total annual consumption of gold in Egypt is around 50 tons – about 3 weeks of India’s consumption.
Is it that players in the market expected Mubarak’s gold hoard to be dumped into the market?
Libyan Treasures
Libya’s official gold holdings are in the similar range as Egypt’s – some 143 tons. International bodies have estimated Libya’s reserves higher than 143 tonnes.
In March 2011, the IMF estimated Libya’s reserves even higher but the official amount remained 144 tons that were registered by Gaddafi-controlled Libya’s Central Bank.
This apart, Gaddafi surrounded himself with some gold trinkets – pistols, golf clubs, etc. After the capture and killing of Gaddafi, it is unclear the where and what of Libyan gold.
The Fall Of USSR
Western media has been tom-toming how Xerox and fax machines were behind the Soviet collapse.
Not quite. The real story …?
A lot of Nazi and Soviet gold came into the markets, it is surmised, during the 1999-2005 Central Bank Gold Sales agreement – which was put in place to depress gold prices. These depressed gold prices, that coincided with price declines in oil, platinum and other commodities, bankrupted the Soviet economy – and not Xerox and fax machines.
Is Arab gold the reason for this mayhem of regime changes?
Related articles
2ndlook posts
- Al-Ahram Looks Back At Arab Spring (quicktake.wordpress.com)
- ‘Progress’ in Libya (quicktake.wordpress.com)
- Can Arab Spring Be Successful? (quicktake.wordpress.com)
External posts
- Gold Prices Falter as Germany’s Merkel Dents Optimism (thestreet.com)
- World Demand for Gold Bullion Hits New Highs as Investors From China and India Increase Their Gold Ownership (prweb.com)
- After Arab Spring, US sees change in Mideast influence (worldnews.msnbc.msn.com)
- Arab uprisings reshape map of US influence (seattletimes.nwsource.com)
- Arab Spring: timeline of the African and Middle East rebellions (telegraph.co.uk)
- EU parliament awards Arab Spring activists (news.smh.com.au)
- Libya: ‘National liberation’ to be announced by new government (telegraph.co.uk)
- Revolution reality-check: West to reap fruit of Arab Spring (rt.com)
Exciting new series. From 1 Mar, 2010.
