- The Taking of Iraq (quicktake.wordpress.com)
- Wars By Desert Bloc (behind2ndlook.wordpress.com)
- Faction Feuds of Desert Bloc – Should India Get Involved? (behind2ndlook.wordpress.com)
- Terrorism, waterboarding and CIA censorship: Ex-FBI agent Ali Soufan talks to The Star (thestar.com)
- CIA Heavily Edits FBI Agent’s 9/11 Book (newser.com)
Of mice and men
While the US dollar is weakening, by design, Greece, Ireland, Portugal and Spain are being bankrupted by a deliberately overvalued Euro.
an unexpected $7.3 billion trade deficit, the biggest in seven years. The nation’s (China’s) exports rose at the slowest pace since November 2009.
For Europe, the grand prix is to replace the dollar as the currency of international trade – especially oil trade. Euro as a international trade-currency-of-choice, will give the Euro region access to more than 1 trillion euros in zero-cost floating balances.
China is expecting the yuan to play a similar role. Such are plans made by mice and men.
Monsieur Murphy says
What can go wrong with these plans? Plenty.
The eternal enemy of currency manipulation – gold. As a million bureaucrats work on the mechanics of their plans,
Sales of gold coins are on track for the best month in a year amid the worst commodities rout since 2008, a sign that bullion’s longest bull market in nine decades has further to run, if history is a guide.
The U.S. Mint sold 85,000 ounces of American Eagle coins since May 1 as the Standard & Poor’s GSCI Index of 24 raw materials fell 9.9 percent. The last time sales reached that level, bullion rose 21 percent in the next year. Gold will advance 17 percent to a record $1,750 an ounce by Dec. 31 and keep gaining in 2012, the median estimate in a Bloomberg survey of 31 analysts, traders and investors shows.
UBS AG, Switzerland’s biggest bank, had its second-best day this year for physical sales on May 9, according to a report the following day. The bank’s sales to India, the world’s top bullion consumer, are more than 10 percent higher than in 2010. (via Gold Coins Show Bull Market Unbowed in Commodities Decline – Bloomberg).
You take free advice …?
Back in late January, as the world’s important people rubbed elbows in Davos, billionaire investor George Soros had some rather definitive thoughts to offer on gold, which he called “the ultimate asset bubble,” according to reports.
However, he neglected to mention that his hedge fund had been buying.
Another report points out that the liquidation (by people like Soros) of investments in public investment vehicles may be replaced by private investments.
The new filings from funds “may show that big names exited ETPs and this news may cause prices to slip in the very short term,” said Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland. Some funds switched to holding gold directly so they wouldn’t have to announce it publicly, he said.
Is gold a bubble?
A rather disbelieving journalist writes of the situation in the West
Gold is in a bubble. Anyone will tell you that. They’ve been saying it since gold was about, oh, $500 an ounce. But it’s a funny kind of a bubble. It’s the only one I’ve encountered where so few people seem to own the asset in question.
During the dot-com bubble, you met lots of people with tech stocks. Taxi drivers told you what dot-coms they owned. During the housing bubble you met normal, ordinary people who were trading up to expensive homes using adjustable-rate mortgages, buying new condos off plan to flip, and cashing out their fictional “equity” through a refinance mortgage.
But who actually owns gold? I keep hearing about the gold bubble, but every time I ask people if they own any themselves, they say, “no, no, of course not, it’s a bubble.”
Central banks around the world are printing more dollars, euros, pounds and yen. Gold may simply be a less awful currency than all the others. Banks can’t print any more of it, so its price should probably rise while other currencies fall.
For this year, the question in India seems to be, “Will gold cross Rs.25000, by 2011 Diwali?”
- Gold Coins Show Bull Market Unbowed in Commodities Decline (businessweek.com)
- Soros Sells Most of Gold ETP Holdings During First Quarter (businessweek.com)
- A closer look at George Soros’ big quarter of selling gold (financialpost.com)
- Why is George Soros selling gold, but John Paulson not? (theglobeandmail.com)
- China Is Now Top Gold Bug (online.wsj.com)
- Gold Investment Demand in China (lonerangersilver.wordpress.com)
- Chinese set new standard in buying gold (ft.com)
- Gold grand prix – The Chinese challenge (quicktake.wordpress.com)
- Shanghai Planning Gold Exchange-Traded Funds as Demand Jumps (businessweek.com)
- Oil, gold back in demand (news.theage.com.au)
Fat and lazy
Between 1875-1935, Britain was dependent on India for gunpowder, on USA and Iran for oil, on Malaya and India for rubber. British economy had grown fat and uncompetitive – unlike Italian, German and Japanese economies.
Even though Britain won WWII, their economy was a lost cause. Though Germany, Italy and Japan were losers, with their economy in shambles, they could make a brilliant recovery and vastly out-compete Britain.
The story of Middle East oil is similar for USA and West. The Welfare State, built on a diet of cheap oil, easy dollars, is now too expensive for the West to sustain. The above book extract gives an excellent snapshot of the oil industry in the 20th century.
And the shadow of oil on the 21st century.
- Onward, American Soldiers! Another million await death. (quicktake.wordpress.com)
- Out with the old? (bbc.co.uk)
- UK economy trailing (thesun.co.uk)
- Skidding Oil Prices: A Blip or a Trend? (green.blogs.nytimes.com)
United States is being subjected to an old-fashioned protection racket by Pakistan: pay up or things could go bad for you. Those making money out of extortion and blackmail always come back for more. It’s a measure of the US’s waning global strength that it seems to have no option other than to keep paying.US is paying for Pak protection racket | By SHAUN GREGORY |
Jinnah held the entire sub-continent to ransom. After 200 conflicts in 150 years, as the British with their backs to the wall, were walking away, Jinnah became a spoiler. The hour of triumph turned into moment of tragedy. A country born out of this blackmail, has now formalized blackmail as State Policy.
NATO, for the first time, officially claimed a role in the Arctic, when Secretary-General Jaap de Hoop Scheffer told member-states to sort out their differences within the alliance so that it could move on to set up “military activity in the region.”
“Clearly, the High North is a region that is of strategic interest to the Alliance,” he said at a NATO seminar in Reykjavik, Iceland, in January 2009.
Since then, NATO has held several major war games focussing on the Arctic region. In March this year, 14,000 NATO troops took part in the “Cold Response 2010” military exercise held in Norway under a patently provocative legend: the alliance came to the defence of a fictitious small democratic state, Midland, whose oilfield is claimed by a big undemocratic state, Nordland. In August, Canada hosted its largest yet drill in the Arctic, Operation Nanook 2010, in which the U.S. and Denmark took part for the first time.
Russia registered its firm opposition to the NATO foray, with President Dmitry Medvedev saying the region would be best without NATO. “Russia is keeping a close eye on this activity,” he said in September. “The Arctic can manage fine without NATO.” The western media portrayed the NATO build-up in the region as a reaction to Russia’s “aggressive” assertiveness, citing the resumption of Arctic Ocean patrols by Russian warships and long-range bombers and the planting of a Russian flag in the North Pole seabed three years ago.
It is conveniently forgotten that the U.S. Navy and Air Force have not stopped Arctic patrolling for a single day since the end of the Cold War. Russia, on the other hand, drastically scaled back its presence in the region after the break-up of the Soviet Union. It cut most of its Northern Fleet warships, dismantled air defences along its Arctic coast and saw its other military infrastructure in the region fall into decay.
The Arctic has enormous strategic value for Russia. Its nuclear submarine fleet is based in the Kola Peninsula. Russia’s land territory beyond the Arctic Circle is almost the size of India — 3.1 million sq km. It accounts for 80 per cent of the country’s natural gas production, 60 per cent of oil, and the bulk of rare and precious metals. By 2030, Russia’s Arctic shelf, which measures 4 million sq km, is expected to yield 30 million tonnes of oil and 130 billion cubic metres of gas. If Russia’s claim for a 350-mile EEZ is granted, it will add another 1.2 million sq km to its possessions.
A strategy paper Mr. Medvedev signed in 2008 said the polar region would become Russia’s “main strategic resource base” by 2020. Russia has devised a multivector strategy to achieve this goal. First, it works to restore its military capability in the region to ward off potential threats. Russia is building a new class of nuclear submarines, Borei (Northern Wind) that will be armed with a new long-range missile, Bulava. Navy Chief Admiral Vladimir Vysotsky said recently he had also drawn up a plan to deploy warships in Russia’s Arctic ports to protect polar sea routes. (via The Arctic’s strategic value for Russia By Vladimir Radyuhin.)
Thin ice …
Some sixteen months ago, 2ndlook speculated that West’s redemption may come from oil – from the Arctic. With receding Arctic ice-caps, the West may find itself sitting on large oil reserves. Production from these discoveries may take 10-25 years – climate permitting.
Climate change, I don’t believe in. How long will these weather patterns persist? The West is skating on thin ice – but then what can they do. Slavery is not an option – not for another 50-100 years at least. Dig mother earth, is the second and only option they have believed in.
For the last 3000 years at least.
- Russia and Norway resolve Arctic border dispute (guardian.co.uk)
- Russia, Canada in rivalry over Arctic resources (seattletimes.nwsource.com)
- Russia, Canada make competing claims to Arctic resources (foxnews.com)
- Russia to boost Arctic research (blogs.nature.com)
- Senior Nato commander warns of potential conflict over Arctic resources (guardian.co.uk)
- Russia, Canada in rivalry over Arctic resources (ctv.ca)
- Russia, Canada and Denmark to file Arctic claims to UN (theglobeandmail.com)
- Canada, Russia expect to win Arctic claims at UN (cbc.ca)
- Coast Guard: Russia makes inroads in Arctic, and we should, too (chron.com)
- Military forces ‘will keep the Arctic safe’ (telegraph.co.uk)
India and Honest Brokers
There is this Buddhist Jataka story which we have all heard.
Two cats go to a monkey for help in dividing some eatable equally. End result – the monkey gets everything. The cats, nothing. ‘Honest’ brokers are the monkey which leaves nothing for the cats.
Hillary Clinton assured a nervous gathering of Foreign Policy analysts that the world is counting on the USA today as it has in the past. When old adversaries need an honest broker or fundamental freedoms need a champion, people turn to us. When the earth shakes or rivers overflow their banks, when pandemics rage or simmering tensions burst into violence, the world looks to us. (via Remarks on United States Foreign Policy).
In real life
What is left of Pakistan after US finished with brokering Pakistan’s future? After the West carved up the Ottoman Empire, and divided the Turkish possessions among their puppets, what is left of the Middle East? With oil, Big Oil, oil politics, oil-dollar, oil prices at stake, can the US be a honest broker.
Tell that to the birds.
Can there be a ‘honest’ broker?
This idea that there cannot be ‘honest’ brokers, made Buddhism so popular all over the world. Not pretty statues and musical chants. In the last 200 years, भारत-तंत्र Bharat-tantra has gone into regression. But, in this period, the world has also learnt more about the limitations of the Desert Bloc ideology.
People get ready!
- Foreign Policy: Clinton’s Wake Up Call On Mexico (npr.org)
- United States is ‘best hope’ in a troubled world: Clinton (alternet.org)
- The Hill Poll: Most voters say Arab unrest bodes ill for the US – The Hill (news.google.com)
- A Salient Fact About US-Israeli Relations (Several Billion, in Fact) (outsidethebeltway.com)
- Barack Obama agrees to form joint national security body with UK (guardian.co.uk)
- A call for change – Obama has ‘failed,’ Pawlenty says (politico.com)