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CHINDIA – AS I SEE

The news of Chinese Army PLA moving, 19 kilometers deep, inside the Indian territory is old one. Now the new and important development is that since 1930 Hrs IST they started vacating their positions and till now (i.e., when you may be reading this article) would have nearly vacated.

I was always certain and specially turned more confident of my views on CHINDIA since 2001 onwards.  I saw the fact as if it were the destiny that were conspiring to keeps these two nations on the same side.

Though, I am not going to write much, so I am just attaching three separate comments and analysis I presented in response to two news items published 11 days ago, and one just 03 days ago. I knew that masses will not agree with my view point, but then this has been a history now. On the other side masses have never agreed with any one individuals. My comments/ analysis are serially numbered (in the way they were posted) at news sight:

 1.

Sometimes I doubt that Chinese army really has any bad intentions towards India, as this is something that will prove costly and lasting adventure for PLA. As India despite of lack of very good connectivity to borders via road and rail has the capacity to surprise Chinese Forces by its huge number alone, though cost of transportation may be higher for Indian when compared with that of China. The important aspect and insight that I am getting is, is that Chinese now want to block the infiltration of Uyghers and other trained militants from Pakistan. If this is the case then they should take Indian authorities into confidence and ask for a safe passage to execute its intentions. Any kind of mis-understanding would not alone dent Chinese Might (roughly 2/3 of India) and USA and Pakistan will stand to gain from it. If the issue is something else then I need to analyze further. Consequently one of its allies North Korea too will be slaughtered by South Korean Forces with various kind of aid from USA. Chinese should try to considered the border pact that too place between Indians and then Chinese Emperor in 1840 (approx). Hope Chinese are not deaf and idiots at same time. If they are then they should have an emergency plan (in case their forces engage with India) to take care of democratic revolt that would get a unfettered access and control at Tianmaan Square.

 2.

The militants trained by Pakistan after having turned Frankenstein monster for them, have also attempted to threaten Chinese sovereignty, specially vides on an ancient trade route connecting Ladakh to Yarkand in Xinjiang, China. Now its better for China to seek India’s co-operation in controlling the religion of terrorism and militancy, than thinking itself to be almighty to do what they want. Those 50 malnourished men of PLA are not being made to land in Jails in India for ever ( I do not suggest shooting those 50) due to patience and also due to it being a responsible power. As Chinese army (approx 8.5 in number) is no match for India’s (approx 16 soldiers). Anyway I do not want to talk this language till all the options are not exhausted, as even sacrifice of our one soldiers life is much costlier to their 50 and is no match in value terms. Chinese may be fed up with their population but Indians are not. I suggest them to recall preachings of their scholar who earned knowledge from Nalanda and Takshshila besides preachings of Prince Mahendra and Princess Sanghmitra about Buddhist ways of life.

 3.

Though it would be better for the Government of India starts considering bilateral relations between India and China in present context. If required Salman Khurshid should cancel his proposed visit citing the posture of PLA as reason. Government may further consider about not allowing the Chinese Premier enter into Indian Airspace or Ground Location based on such developments. It would be better to communicate it to Chinese at earliest time. Please do not use force immediately, as tensions between India and China on border issues will give USA Army and Navy a good advantage in case when it comes to tackling by North Korea, creating advantageous position in Yellow Sea, beside providing them with opportunity to promote and protect the heirs of Chinese Emperor (who was forced to flee by PLA in 1948) and provide them with all the support required to take control at least of Taiwan and Hong Kong. This would be in addition to funding of support required to be extended to Democratic Movement in China. China will automatically learn that how international diplomacy is handled.

I would love to hear the comments from audiences…

 

                                                                                                             …………… Always Yours — as Usual — — Saurabh Singh

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India and Italy – Taking a New Shape

Italian foreign ministry’s announcement on Monday, March 11, 2013, that the two individuals belonging to its marine corps (Massimiliano Latorre and Salvatore Girone, who had shot dead two unarmed Indian Fishermen in Cold – Blood perhaps for adventure  and were facing trail in India Court on the Charges of Murder) would not return to India once their leave expires in view of a “formal international controversy” between the two countries. This is a response to a humane and goodwill gesture shown by Indian Court, which permitted them a leave so that they can go to their country to cast their vote. Indian court had at an earlier occasion permitted the duo to visit their home for Christmas Celebration, after availing which they reported back.

Italian Government and its citizen have always been found grossly lacking in integrity and morality. This can be inferred from a  number of instance where Indian authorities were deceived and cheated by them. If one starts from issues, that probably one that could be easily recalled by masses, one can start with role of Italian businessman Ottavio Quattrocchi during Bofors gun contract in 1990  where kickbacks were paid to earn the contract, the same was followed by a recent deal in which Chief Executive and Chairman Giuseppe Orsi of Italian defence group Finmeccanica has been found to have paid kickbacks worth $68 million to secure the contract for the sale of 12 Agusta Westland choppers to India in 2010.  This has been followed by a very serious breach of integrity by act of Government of Italy, where the government of Italy has back tracked from its own guarantee or promise that it made to Indian Supreme Court in present case where its two mariners were being tried for murder committed by them of two unarmed Indian fishermen in coastal waters of India.

Probably – Indian authorities and Public too, would have learned till now that any and every kind of interaction with Italy has, irrespective of being business or political has caused a great deal of embarrassment to the country. So why do they repeat it? Italian Government and Citizens (as Government represents them) both lack seriously on the scale of integrity. Such country needs be socially politically and economically outcast by world community. One can understand when Terror Groups back track on their promise, but here this Country is behaving worse than terrorists. Now I comprehend why Roman Empire got lost into oblivion. I expect that Consequences as told prime minister will turn visible both to Indian Citizen as well as International Community. “Our government has insisted that Italian authorities… respect the undertaking they have given to the Supreme Court and return the two accused persons to stand trial in India,” Mr. Singh said in Parliament on Wednesday. “If they do not keep their word, there will be consequences for our relations with Italy,” he added, as lawmakers cheered.

At some points I feel that Indian Constitution by the way of providing Three Pillars for having Check and Balance over each other’s powers was really a very well thought of work, at least till time Indira Gandhi had not succeeded in snatching all the powers of decision making from The President of India or to say before turning the office in just a rubber stamp which needs to be put on legislation to accord them status of being Act. But then it were, the citizens, who permitted her to do this by giving her a majority of more than two – third.

Now as a consequence of legislature being fragment it’s the Judiciary that has got some breather to act in an independent manner. They are luckily not failing in their duty and are showing the courage to let the national and international community learn that it’s the constitution that is supreme in India and promises made by any authority are meant to be kept and not broken, meaning thereby that breach will not be tolerated.

The Supreme Court of India sought to restrain Italy’s ambassador from leaving the country in response to Rome’s declaration that two Italian marines will not return to India to stand trial on murder charges. The pair are accused of shooting and killing two Indian fishermen off the coastal state Kerala last year. They deny they committed murder. Italy and India disagree over where they should stand trial, an issue that has triggered a diplomatic dispute and polarized public opinion in both countries

In January, India’s Supreme Court said the two men, Massimiliano Latorre and Salvatore Girone, will face trial in a special court in Delhi. A month later, the court agreed to an Italian government request to allow the two men to leave India and travel to Italy for four weeks to vote in elections. At the time, Mr. Mancini, the Italian ambassador to New Delhi, guaranteed to the court the marines would come back to India.

In a notice, the court said Italian Ambassador Daniele Mancini is not allowed to leave India without its permission, said India’s attorney general, Goolam E. Vahanvati, in an interview. Some individuals doubt the court’s move to be compatible with the terms of the Vienna Convention on Diplomatic Relations, an international treaty that grants diplomats immunity from criminal, civil and administrative jurisdiction in the country that hosts them.

But the case here is very different. It is Mr. Daniele Mancini (who somehow happens to be Italian Ambassador to India) who stood in court as Guarantee to the court regarding the marines returning back to India after casting their votes. There court has asked Mr. Daniele Mancini to stay put in country till mariners do not return to stand the trail as he stood the guarantee. Court never wants’ the Italian Ambassador to India stay put. But certainly court is not interested in allowing Mr. Daniele Mancini to use his position of being Italian Ambassador to India to work as camouflage in escaping from his promise by forwarding the Vienna Convention in his defense. In fact there is no need to be worried about Vienna Agreement as Italy has itself by its act of not standing to promise made has violated more than a single international pact. If Indian Government feels like, it has all the freedom to launch a military offensive on Italy, as India needs to make sure that in and around Asian continent, rogue states and elements do not dare to raise their heads. Though I am not recommending a military action on Italy, here I am just talking about the rights of India to deal with a Rouge Government or a Government which fails in keeping its promise

Any way Diplomatic immunity is for crimes punishable with fine like parking, not for crimes punishable with jail terms. So there is no diplomatic immunity for the Italian ambassador in the Italian marine bail application. By subjecting himself to the Indian court jurisdiction Mr. Ambassador loses his stand as ambassador and has a role only as a foreign citizen.

                                                                                                                  ————— Always Yours — As Usual — Saurabh Singh

Source:[Website]

Food Price Shock May be in Wings

 

Consumers awoke this morning to a sharp rise in the price of gasoline. By next month, they may also be facing higher prices for two other everyday items – imported cooking oil and pulses – because of the weakness of the rupee.

India, the world’s largest importer of edible oil, has so far not felt the pinch as a fall in international prices for oil has largely offset the impact of the weakening currency. (A weak rupee means it takes more rupees to buy the oil, which is sold in dollars.)

However, with the rupee expected to slide further, analysts say it is just a matter of time before importers either hold off increasing imports even though the coming months are a time of peak consumption. They could even slow their imports, a move that would further tighten domestic supply. Either way, prices are likely to rise.

The rupee’s weakness “is definitely hitting us as it has increased our cost,” said B.V Mehta, executive director of the Solvent Extractors’ Association of India, a trade body for the edible oil industry. “Everybody will wait for the dust to settle on the rupee before increasing their imports.”

The total cost of cooking oil imports is expected to rise to about 500 billion rupees ($8.9 billion) in the year that began April 1, from 400 billion rupees in the previous 12 months, largely because of the fall in rupee value. Those higher costs are likely to be passed on to consumers.

A flattening or reduction of edible oil imports would be a sharp reversal. In the first six months of the marketing year that began Nov. 1, edible oil imports rose 31% from the same period a year earlier to 4.6 million tons.

Consumers also may be paying more for pulses, the main source of protein for a majority of the population, because of a similar dynamic.

“We have absorbed most the rising import costs so far, but if the rupee’s free fall continues we may have to stop imports or raise the prices,” said Bimal Kothari, vice president of the India Pulses and Grains Association.

The country imports around 3 million tons of the protein staple annually.

Prices of milk and poultry are also expected to rise because of a 50% jump in the cost of feed material.

One possible plus for consumers is that the monsoon rains are expected to be normal and that has brightened the crop prospects for other staples such as rice, oilseeds, sugar and domestically-grown pulses.

“The overall scenario doesn’t look too good in the coming months especially for the imported food items like edible oil and pulses,” said Naveen Mathur, associate director for commodities and currencies at Angel Broking. “The food prices may escalate further. It may go through the roof. [Compiled from DJ Reprints]

Always Yours — As Usual— Saurabh Singh

 

……..and Markets Came Tumbling Down ……..an attempt to explore the Cause..

……..and  Markets Came Tumbling After

Perhaps, both Dr. Manmohan Singh as Leader of Ruling Party in Power and Mr. Pranab Mukherjee, as Finance Minister went up there, this budget session, to specially put the Indian GDP in higher growth trajectory. Probably all went in vein. All accepted; but then what could be the reason at the route of it? Is anyone interested and involved in finding out the route cause or all are merely trying to make the smart, logical and rational guesses.

Many experts have been found blaming it on the variety of issues, and the sum of these issues is much larger number than all the experts giving their opinion put together. It signals an impression that now a doctoral thesis should be presented on ways of identifying that the individual, who is well dressed and has somehow made it to a position of power and claiming to be expert of domain, is really an expert or a garbage vomiting biological machine.

Pictorial Representation Market Crash

Market Crash of Two Different Centuries     1930 — &–2008

The reasons forwarded by expert for any wanted or unwanted oscillation in the national economy has as much probability of being found in few phrases mentioned below, as much is for any oscillation happening in mood of markets, in next day trading session.

An Attempt:

1. Probably this is an outcome of policy paralysis at the level of Government…

2. It is due to fear being felt by FIIs due to the possible provisions of GAAR on P- Notes…..

3. This is being reflected as the Rupee is getting weaker……

4. It is due stubbornness being shown by RBI Governor by not easing interest rate…

5. It is an outcome of inflationary pressure…..

6. Because European markets opened on lower side…

7. Euro zone crisis is having its impact felt… as all the economies are networked these days….

8. Prices of Crude Oil are moving northwards due to possible stance of USA on Iran’s nuclear issue..

9. The monsoon has cracked a joke on us….

10. The quarter -1 , 2, 3, 4 data for industrial output were not promising….

11. There is a growth being noticed in unemployment rate in USA….

12. Forecast of Chinese economy has taken the fizz out of the market….

13. All this is due to the nation’s money lying in the tax heavens abroad….

14. The growing fiscal deficit is responsible for it….

15. It is the burden of subsidy that is killing the government…..

16. Investors’ are fearful of risky assets and they going for Cash or preferring cash..

17. The Greece crisis has taken its toll….

18. The Spaniards are going uncontrolled……

19. It is due to the Vodafone issue..Where FM wants to put a tax with Retrospective effect..

20. Rupee falters on rupee outflow fear…..

21. Now markets are waiting for first signal of Mr. Hollande, the new President of France.….

…..

 

 

,,,,

 

                                                                                                                   

////

 

 

…..

N. The grocery seller was saying that Fed is in for an interest rate hike…..

N+1. I heard my taxi driver telling to someone that it is being stage managed by the government…

N+2. There is a foul smell of some foreign hands behind it…….

This is not the end of the list, and therefore just an illustrative one has been put up. Please feel free to add your suggestions. The names will be sent to Nobel Committee which supposed to announce the Current Years’ Nobel Prize Winner in Economics by conducting a free and fair lucky draw from it…..

                                                                                                                     Always Yours— As Usual —– Saurabh Singh

Economic Growth- But No New Jobs:Later Half of First Decade of 21st Century India

Have 20 years of economic liberalization been kind to the poor? In particular, how have India’s Scheduled Castes and Scheduled Tribes fared since the country opened up to the forces of economic reforms? Already politically empowered, have they also been economically empowered by liberalization?

Already politically empowered, have India’s Scheduled Castes and Scheduled Tribes also been economically empowered?

An important new study by economists Viktoria Hnatkovska, Amartya Lahiri and Sourabh B. Paul examines the economic performance of SC/STs by analyzing a large mass of data from five successive rounds of the National Sample Survey from 1983 to 2005.

The study is among the first to examine the behavior of wages, consumption, education and occupation choice for SC/STs compared with the rest of the population, exploiting the large and rich NSS data.

The study’s three principal findings are striking. First, it finds significant convergence in educational attainment and occupational choice over the period of the study. In 1983, non-SC/STs had, on average, 3.62 years of schooling, against 1.41 for SC/STs, a discrepancy of 157%. By 2005, non-SC/STs had 5.6 years of schooling on average, while for SC/STs it was 3.2 years, so the percentage gap had closed to 74%. Non-SC/STs still dominate white collar employment, which tends to be higher paying than blue collar and agricultural work, but the gap has narrowed from almost three times as many non-SC/STs in 1983 to about 1.5 times as many in 2005.

Second, the report finds a “statistically significant” movement towards convergence in wages between SC/STs and everyone else. A statistically significant finding is one in which we can have confidence that the results are genuine and not an artifact of measurement. In particular, the authors find that the “wage premium” – a ratio between the wages of non-SC/STs relative to SC/STs— has steadily declined from 36% in 1983 to 21% in 2005. To put things in perspective, the corresponding wage premium for white males over black males in the U.S. has stayed constant around 30% for the last several decades.

Third, the authors find that convergence in wage levels has been caused in large measure by educational attainment of SC/STs slowly catching up with the rest, although a gap remains.

But what explains these trends? Are wages converging principally because the education gap is closing (perhaps through caste-based reservation), or are other factors such as a lessening of discrimination against SC/STs responsible?

The authors show analytically that the majority of the wage gap can be explained by demographic characteristics, such as age, experience and whether people live in a rural or urban area. But the single most important determinant of the wage gap is the gap in educational attainment, the most important demographic difference. The implication is that the narrowing wage gap is indeed a result of the narrowing education gap.

The study also finds that caste-based reservation had a “negligible” effect on the wage gap. Because of its potential policy significance, this finding must be interpreted with caution. The finding is that reservation by itself cannot account statistically for much of the narrowing wage gap.  But that, of course, doesn’t mean that reservation isn’t important. One cannot rule out that reservation indirectly has led to a narrowing of the wage gap, working through the effect of allowing SCs/STs to catch up in terms of education and occupation choice.

There is corroborating evidence on the importance of reservation. For instance, the Indian Express reported recently that SC representation in upper-tier government jobs has increased almost eightfold, from 1.64% to 12.5% in the last 45 years. ST representation has grown almost 20 times. These figures reflect, in part, reservations of 15% and 7.5% for SCs and STs, respectively.

What lies behind these optimistic results? Leaving aside the debate about how big or small a role caste-based reservation has played, there are other market-based explanations that have played an important role, which the study highlights.

The most natural explanation, which is close to the heart of every free market economist, is that 20 years of economic liberalization have reduced the importance of caste and accentuated a move towards “market meritocracy,” where wages and incomes better reflect differences in education and other characteristics, not caste.

This reflects an idea proposed by the Nobel economist Gary Becker a half-century ago, that discrimination in any form becomes costlier when the market becomes more important, and so we will see less of it.

This is a plausible explanation but isn’t the only possibility. The study also flags the increased importance of community-based social networks bringing together SC/STs. Closer integration may lead to what economists call “network externalities,” so that every member of a group benefits more from interacting with their peers than if they were on their own.

The bottom line is that there’s convergence between SC/STs and everyone else, but convergence doesn’t mean they’ve completely caught up. Nor does it mean that caste-based reservation has not or will not continue to play a role.

 

Always Yours — As Usual — Saurabh Singh

Source: http://blogs.wsj.com/indiarealtime/2011/11/28/economics-journal-are-indias-poorest-catching-up/tab/print/

 

 

WISHING A VERY PROSPEROUS DEEPAAWALI

All The Regular Learned & Honorable Audiences of Portal / Blog and also the Less Frequent or First Time Visitors

ALL ARE WELCOME AT AAVESH [ADMINISTRATION & MANAGEMENT]. THE AUTHOR – CONTENT & THEME PROVIDER-MODERATOR; THANKS YOU ALL FOR YOUR CONTINUED SUPPORT & PATRONAGE. IT’S PRIVILEDGE, & THE SAME I AM TAKING,

WISHING YOU, YOUR FAMILY, & YOUR EXTENDED A VERY PROSPEROUS DEEPAAWALI. IN THE MEAN TIME YOU MAY NOT GET FREQUENT & NEW POST ON DAILY BASIS, AS I PLAN TO SERVE NEEDY IN THIS FESTIVAL TIME.

A FICTION: NOT FAR AWAY FROM RECENT FUTURE REALITY

A FICTION: NOT FAR AWAY FROM RECENT FUTURE REALITY

In late evening, when I had just pressed the shut down button of my workstation, a colleague of mine entered the office chamber (Officially allotted to me to work).Hello, was the first word uttered out by her and before I could ask the purpose, she herself expressed that she planned to have my company while walking back to home, at least the part of distance that was common to we both. I welcomed the idea and also thanked her for the same. Thus the journey homewards started. While on walk the momentary silence was done away by my colleague, when she requested the permission to ask question that was coming to her mind. I agreed to help her to the limited capacity of mine.Image- Bricks of Gold

 Probably it was the prices of yellow metal that were troubling her and my colleague wanted to know, where the prices are expected to move in future and why. This I am inferring from the talks that continued.

She started the conversation by posing her curiosity as ahead: “Where do you see the price of gold going in the days to come?”

Since, at that moment, I was not exactly focusing on ‘investment advisory’, so I responded by saying that “on a broad level, the price are supposed to continue their northward journey.”

It seems that my response confused her a bit, as she soon came up with another question that “what I mean, when I say a broad level.”

I got the point and then explained to her that “the prices of any commodity do not move in a straight line. When I say on a broad level, it means that the prices will keep moving northwards, but in between they may drop as well, but they will pick up again, and thus will continue to scale up.”

It seems, that she was not ready to buy anything that I said, therefore, she questioned that what lay behind my confidence, which she visualized while I was answering her first curiosity.

Suddenly I realized that majority of investors; rarely scan the external and vital economic variables that are often of political nature. This made me aware that now I need to go bit detailed and also in a manner that she could easily comprehend.

“Well, I was just reading through some material and I realized that there is another solid reason for gold prices to go up,” I told her.

“Is it something other than all the money printing that is happening and is likely to happen in the days to come, all around the world?” she asked.

“Yes”, I answered.

“So what is this new reason?” she was now more curious.Image - Gold with a Medival Painiting in Background

Now I started by posing a question as ahead “Ever heard of Hugo Chavez?” Pat came the reply, “nope” with a supplementary question that now who’s he?

He is the President of Venezuela, a country in South America.”                                

Probably she got a bit more confused and said that she knew that, but expressed her surprise on the issue that what “Venezuela” has got to do with the price of gold.

This made me aware that now my job was to explain history, international polity, and international trade, cost of transaction and accounting to her, and all this in very limited time of few minutes. I knew that I may be bombarded with whorls of questions.

 I started with letting her know that Venezuela has the 15th largest gold reserves in the world amounting to 401.1 tonnes. A lot of this gold is lying abroad in bImage - Golden Fairyanks in New York, London and Zurich.

“But why will a country keep its gold overseas?” she interrupted.

 I started to introduce her with history. I said that “a part of the reason comes from history. Till August 15, 1971, the world was on a gold standard. Paper currencies were ultimately convertible into gold. This meant that countries had to settle their deficits in gold.” I followed this by giving an instance from international trade. I asked her to assume that England and Germany are exporting and importing goods from each other. At the end if France exports more to England than England to France, there is a deficit.” This means that England had to pay France. This payment was to be made in gold. A look at her face made me feel that she has now started picking up what I was attempting to explain. I carried on by adding that “now this meant that gold had to be physically moved from England to France, which of course was a pain. Movement meant cost of insurance as well as security.”

Image - Gold being Transported via Air

She was prompt in asking that “what was the way out?”

 I added for these reasons “a lot of this gold is simply stored overseas at the Federal Reserve Bank of New York (a part of the Federal Reserve of the United States, the Central Bank of the US).”

“How do you think this is going to help?”

It’s simple; I added and just narrated what Peter Bernstein writes in his book “The Power of Gold”. For example, if England lost gold to France, a guard at the Federal Reserve had merely to bring a dolly to England’s closet, trundle the gold to the French closet, and note the change in the bookkeeping records.’

She got the point, and allowed my request to take her back to Hugo Chavez.

The deliberations continued further, certainly with some statistical inferences. Estimates suggest that nearly 211 tonnes of the 400-odd tonnes of gold that Venezuela has are with banks abroad. Chavez has asked this gold to repatriated back to Venezuela.”Image - Hugo Chavez Nationalises the Gold Mines

Now this brings a twist in the story, and the discussion to follow will also attempt to answer possible reason for Hugo Chavez’s such an act.

 “Chavez has had an anti-US stance for years and may feel that because of that Venezuela runs the risk of its gold being seized.”

“Gold Seized? Why would such happen and does the possibility of such an act exist?” was the latest in series of questions.

“It sure is. I explained the same by making her aware of the ongoing Libyan foreign exchange reserves crisis, which happens to be an outcome of its foreign reserves being seized by allied nations with declaration of war earlier this year.”

 “But what has all this got to do with the price of gold? To me it’s as simple as me wanting to have gold in my own locker rather than the bank locker.”

I agreed to her statement, while continuing to explain by adding that all is not that straightforward as concluded by her, though to some extent she was correct. The straight forward part of transaction would be limited to 99 tonnes of total 211 tonnes lying abroad, as this 99 tonnes are deposited with the Bank of England in London. Repatriating that back to Venezuela would be a straightforward process.”

Image - Gold Jewellary at Display

 Now comes the not so straight forward part, which happens to be of the tune of 112 tonnes of the gold and same is lying abroad with what are known as bullion banks. J P Morgan is one of them. Estimates suggest that Venezuelan gold worth $807 million (or around 450,000 ounces of gold) is lying with it.”

 She was instant, and argued that this should also be as straight forward as it is in the case of Bank of England, London, while simultaneously her facial expressions conveyed me that she wanted to know, if I dare to differ from her opinion. Certainly, I had to differ, and added that things are not always as simple as they seem to be. The statistics again came handy in quoting that “estimates suggest that the total amount of physical gold with J P Morgan currently stands at around 338,303 ounces (1 troy ounce equals 31.1 grams).”

Now, it seemed that she was out of reasons, as she expressed her ignorance about having to come across any news in media regarding, such a huge bank robbery in which approximately 1,11,697 ounce or 3473.8 kilo grams worth gold was looted.  I had to instantly chip in by saying that, this is not a case of bank lifting, but a way of functioning of financial system in general and banking sector in particular. Let me add an example to illustrate it? I sought her permission. The phenomenon goes as explained ahead [the attempt was to explain the process by making it as easy as possible, so that even a novice can understand].Image - Gold of Merchants in Various Weights put at London Central Bank

“Central banks around the world had a huge amount of gold lying in their vaults, not earning any return. The end of 2007 witnessed the stock of gold with central banks around the world rising to 32,000 tonnes of gold.”

 I requested her to be more attentive to whatever I was going to add now. Out of the 32,000 tonnes gold held, the Central Bank lent approximately 14,000 tonnes to Bullion Banks like J P Morgan. James Turk and John Rubino in their coauthored book The Collapse of the Dollar, have argued that “lending, for instance, involves the central bank transferring gold to a major private bank, known as bullion bank, which pays the central bank a small-but-positive interest rate, then sells the gold in the open market.”

In this manner “central banks convert the gold into cash and then deploy this cash, somewhere to earn some positive rate of return. This based on a very fundamental assumption that idle assets provide no return, and there is fair possibility that such assets may ultimately add up some cost to the holder.” These costs may range from cost of storage to cost of security. As per meaning conveyed by the operative word “lending”, since the gold has been lent, therefore, the central banks have all the rights to, and can demand it back, whenever they want.

She chipped in by adding that probably “this is what Venezuela is doing right now”; and thus conveyed me a feeling that she was sincerely following the every single word uttered by me. 

 I nodded in agreement and continued further by adding that, since, the bullion banks have promised to return the borrowed gold to the central banks so they will have to return the same. In prevailing situations these bullion banks are not having the volume of gold that was lent to them by Central Bank. In financial and monetary world, this position is conveyed by the term ‘short’, and this means that these bullion banks are ‘short’ gold.

Now comes a significant turn in events, that may work as catalyst to force the prices of gold to break the roof. As the situation deliberated above suggests that, in case, sometime in future, these bullion banks are asked to deposit the volume of  gold lent to them by central bank, they will be left with no choice and would be obligated to buy gold in order to repay the central banks’.”

“So, as I can get, it goes like, that in such a scenario the bullion banks like J P Morgan will now have to buy back gold from the market in order to repay the Venezuelan government, given the situation that Venezuela has around 450,000 ounces of gold deposited with J P Morgan, whereas J P Morgan at present has only 338,303 ounces of gold in its accounts/ record books,” she added.

Exactly, I said in agreement, and carried the deliberations forward by adding, that this buying will lead to the price of gold rising further. I knew that now she has got answer to her question, but then too, I continued it by saying that this is only one part of the story.

Much like a child, who is curious to know about everything, she was now eager to learn that what the remaining part of story was now. She requested me to unfold the other part of the story.

I continued by giving her a reference of a report titled “Thing That Make You Go Hmmm” , and told that this report points out, ‘Chavez’s move could set in motion a chain of events whereby Central banks who store the bulk of their gold overseas in ‘safe’ locations scramble to repossess their country’s true ‘wealth’. If that happens, the most high-stakes game of musical chairs the world has ever seen will have begun’,” I said.

“This sounds very scary”, she added.

Image - Gold derails the US $ and US Economy“Yes, you are very much correct while mentioning that the report further states that ‘any delay in repatriating Venezuela’s gold could potentially start a frantic scramble by central banks to claim their physical. God save the scenario, but if it actually happens, rest assured that gold price will be on fire. A scenario will take place, which has neither been seen in past, nor even imagined.

It will give birth to an economic tsunami of magnitude, which will turn the great economic recession witnessed by world or even the jasmine revolution and contribution of social media to same to seem dwarf.

Don’t be surprised if I that there is enough in media to believe U S Govt. Manufactured Fake Gold

Perhaps, there are only few who can imagine the magnitude of risk, specifically if they are not linked to foreign trade. Let me illustrate it. It’s one thing to counterfeit a twenty or hundred dollar bill. The amount of financial damage is usually limited to a specific region and only affects dozens of people and thousands of dollars. Secret Service agents quickly notify the banks on how to recognize these phony bills and retail outlets usually have procedures in place (such as special pens to test the paper) to stop their proliferation.

Image - U S Government Manufactured Fake Gold

This is the most sacred of all commodities because it is thought to be the most trusted reliable and valuable means of saving wealth.

A recent discovery — in October of 2009 — has been suppressed by the main stream media but has been circulating among the “big money” brokers and financial kingpins and is just now being revealed to the public. It involves the gold in Fort Knox — the US Treasury gold — that is the equity of our national wealth. In short, millions (with an “m”) of gold bars are fake!.Who did this? None, but the United States Government, as claimed by Chinese Authorities.

Background
In October of 2009 the Chinese received a shipment of gold bars. Gold is regularly exchanges between countries to pay debts and to settle the so-called balance of trade. Most gold is exchanged and stored in vaults under the supervision of a special organization based in London, the London Bullion Market Association (or LBMA). When the shipment was received, the Chinese government asked that special tests be performed to guarantee the purity and weight of the gold bars. In this test, four small holed are drilled into the gold bars and the metal is then analyzed.

Officials were shocked to learn that the bars were fake. They contained cores of tungsten with only a outer coating of real gold. What’s more, these gold bars, containing serial numbers for tracking, originated in the US and had been stored in Fort Knox for years. There were reportedly between, 5600 to 5700 bars, weighing 400 oz. each, in the shipment!

At first many gold experts assumed the fake gold originated in China, the world’s best knock-off producers. The Chinese were quick to investigate and issued a statement that implicated the US in the scheme.

 

What the Chinese Uncovered

Roughly 15 years ago — during the Clinton Administration [think Robert Rubin, Sir Alan Greenspan and Lawrence Summers] — between 1.3 and 1.5 million 400 oz tungsten blanks were allegedly manufactured by a very high-end, sophisticated refiner in the USA [more than 16 Thousand metric tonnes]. Subsequently, 640,000 of these tungsten blanks received their gold plating and WERE shipped to Ft. Knox and remain there to this day.

According to the Chinese investigation, the balance of this 1.3 million to 1.5 million 400 oz tungsten cache was also gold plated and then allegedly “sold” into the international market. Apparently, the global market is literally “stuffed full of 400 oz salted bars”. Perhaps, its worth is as much as, 600-billion U S dollars.

Always Yours — As Usual — Saurabh Singh

 RELATED LINKS FOR READERS WHO WANT TO GO IN MORE DETAILS TO BEFORE COMMENTING ON STORY
  1. http://etfdailynews.com/2011/08/17/venezuelan-president-hugo-chavez-sends-precious-metal-etfs-a-wakeup-call-gld-iau-slv-gdx-agq/
  2. http://philosophers-stone.co.uk/wordpress/2011/08/hugo-chavez-gold-runs-bank-runs-and-bank-holidays/
  3. http://profit.ndtv.com/news/show/chavez-officially-nationalizes-venezuela-s-gold-industry-174207
  4. http://notime4bull.com/aggregator/sources/13
  5. http://mikepiro.com/blog/as-chavez-pulls-venezuelas-gold-from-jp-morgan-is-the-great-scramble-for-physical-starting/
  6. http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/traders-brace-for-venezuela-gold-transfer/article2134031/print/
  7. http://www.bighaber.com/haber/chavez-to-nationalize-venezuelan-gold-industry-1072000.html
  8. http://www.advisorperspectives.com/commentaries/global_082611.php
  9. http://americasfinancialmeltdown.blogspot.com/2010/11/below-is-antiwar_4391.html
  10. http://mikepiro.com/blog/ron-paul-audit-federal-reserve-gold-stores/
  11. http://www.freedomsphoenix.com/News/061976-2009-11-26-us-govt-manufactured-fake-gold.htm
  12. http://www.the-boondocks.org/forum/index.php?t=msg&&goto=157202#msg_157202s

OIL POLITICS, SPECULATION, CHAIN REACTION AND MANAGEMENT

It requires quantum of intelligence, to infer from what is happening in the markets, or politico-socio-economic across the globe, to why it is happening. Things are never as simple as they seem to be. This would become comprehendible and evident as soon as one reads, relates and analyses the instances mentioned hereunder:

Crude oil prices peaked to US $ 100 – 115 a barrel in April and May 2011 and moved downwards after that to touch a rate of US $ 90 – 92 per barrel in June 2011. In such a scenario, price increase by the Union Government should have been announced in April – May 2011, but the same did not occur. The Government found June 2011 to be the auspicious time for announcing price hike when the prices had nearly normalized. What could have been the motive for doing so? Simple answer is that April – May 2011 was the time when five states were going to elect the assembly members. The states being, West Bengal, Tamil Nadu, Assam, Kerala and Puducherry.

If one goes by what the campaign managers of Congress had to say on the Rahul Gandhi’s much publicized kisan padyatra-(which as claimed was undertaken to champion the cause of the farmers of the region) –  was conceived to detract the public attention from the issue of hike in petroleum products and their possible spiraling effect on inflation. This yatra detracted the lot of electronic media attention from the campaign that opposition forces such as BJP and Left were seeking to build up on the oil price hike related issues.

Since the Oil shock of 1973, USA strategically took measures to control the oil market by keeping continued focus on West Asian Region. In 1980, Jimmy Carter, the then President of USA declared Persian Gulf an exclusive zone of American influence and created a rapid deployment of forces, which latter turned into what is known as US Central Command or CENTCOM. 

As is being believed by majority that skirmish in Libya is behind recent spurt in prices, should correct their facts. Libya produces less than 3 per cent of global petroleum output. Where as Saudi Arabia has already made up for the current shortfall and its excess stocks are more than that of Libya and Algeria put together. In fact in present situation too oil production at many of Libyan facilities continues even in civil war there.

The argument being forwarded by few is that rising demand from China and India has forced an upward trend in oil prices is also unjustified. Though these two countries do account for growing share of global demand, but then same is counterbalanced by slower demand from USA and Europe.

There is still a wide spread perception that cartel of Oil Exporting Countries can manipulate and influence the prices by changing the level of their supplies. Reality today is much different. The OPEC has turned from being a cartel to being a minor player today. Non OPEC countries now account for increasingly significant proportion of global supply. Russia has already snatched the title of being largest supplier of crude oil from Saudi Arabia since 2009. 

Many more such instances may be quoted. It’s not being quoted in anticipation that the variety of above instances is good enough to comprehend that nearly none of the factors assumed or arguments forwarded are capable of forcing any kind of hike in prices of the crude oil.

 

Then what is it, which is responsible for hike in crude oil price?

 

…….any guesses, if not, then storm your grey matter and keep visiting this place in hope of getting answer to this simple question.

 

Always Yours — As Usual —- Saurabh Singh

 

 

US Celebrates Osama Bin Laden’s Death while Allies Try to Keep Smile Intact

A firefighter waves to the crowd as people celebrate after Al Qaeda leader Osama bin Laden was killed in Pakistan, during a spontaneous celebration in New York’s Times Square, May 2, 2011

U.S. President Barack Obama was preparing to announce Osama bin Laden was dead when word got out and crowds started gathering late Sunday outside the White House in Washington and at Ground Zero in New York City.

From Times Square to Ground Zero to the White House, the familiar chant of “USA , USA” resonated as citizens learned that the Osama bin Laden was dead.

The announcement sparked immediate jubilation. In Time Square, people gathered around giant news tickers to see the latest updates. Pam Sather recalls the moment she heard the world’s most wanted terrorist was dead.

“It is just amazing, we were just walking out of a pizza joint,” she said. “And, all the sudden we saw in the bar on the television. We were just glued.”

At the White House, young Americans climbed trees, climbed light posts, donned American flags and sang the national anthem.

The feeling was euphoric as thousands of Americans gathered in front of the White House just hours after U.S. President Barack Obama made the announcement that Osama bin Laden was dead.

For many, including student Kathryn Costello, it became a moment of reflection, thinking back to the nearly 3,000 lives lost on September 11, 2001, an act of terror Osama bin Laden claimed responsibility for.

“I think a lot of us have grown up with the memory of 9/11 and sort of this constant notion of a threat and the danger of terrorism,” said Costello. “So this is a triumphant moment for all of us.”

For many U.S. soldiers, including U.S. Marine Jake Diliberto, this is a day they have been fighting for.

“We feel really really vindicated that we finally got him,” he said. “This is our generation’s VE, VJ. This is our generation’s victory and enduring freedom day.”  Celebrations

Patriotism filled the air outside the White House into the early hours Monday.

Two hours after the announcement, with celebrations still roaring, the U.S. Secret Service brought in barriers to push back revelers from the White House.

International student Sunny Shih said the importance of the historical moment reaches beyond the gates of the White House.

“This is a very important moment for not only the U.S.A., but for the entire world,” said Shih.

Many world leaders are praising the achievement of U.S. military forces Sunday in Pakistan, who killed Osama bin Laden, captured his body and buried it at sea. But they are cautioning bin Laden’s death elevates security risks around the world.

Back at the White House, the focus remains on the justice the president said was delivered.

Always Yours — As Usual — Saurabh Singh

Source: Voice of America

”Kayani feared condemning Guv murder may endanger army unity”

Pakistan”s army chief Ashfaq Parvez Kayani, who had “declined” to publicly condemn the January killing of Punjab Governor Salmaan Taseer, had told Western envoys that there were “too many soldiers” in the ranks who “sympathised” with the assassin, a noted author has claimed.

Punjab's Slain Governor Salmaan TaaseerFor its part, the army has so far failed to express regret on either Minority Affairs Minister Shahbaz Bhatti”s murder or Taseer”s, Lahore-based author Ahmed Rashid, also a senior journalist, wrote in ”The New York Review of Books”. Both Bhatti, the only Christian member of the Pakistani Cabinet, and Taseer were killed for opposing the controversial blasphemy law.

Kayani “declined to publicly condemn Taseer”s death or even to issue a public condolence to his family. He told Western ambassadors in January in Islamabad that there were too many soldiers in the ranks who sympathise with the killer,” Rashid wrote.

Photo of Pak Army ChiefThe army chief showed the envoys “a scrapbook of photographs of Taseer”s killer being hailed as a hero by fellow police officers. Any public statement, he hinted, could endanger the army”s unity,” Rashid said.

Behind this silence lies “something more sinister,” he wrote. “For decades the army and the ISI have controlled the extremist groups, arming and training them in exchange for their continuing to serve as proxy forces in Afghanistan and Kashmir. But in recent years, the army has lost control of them and they are striking targets of their own.”

“Yet the army has refused to help crack down on its rogue proteges despite the fact that extremists have increasingly attacked the army and the ISI itself,” Rashid said.

This is all the more ominous in view of the resources the military commands: half a million men, another half a million reserves, 110 nuclear arms, according to US media estimates, and one of the largest intelligence agencies in the world, the ISI, which has an estimated 100,000 employees, he noted.

“If the army has now surrendered any willingness to take on the extremists, the political establishment had already given up long ago,” Rashid wrote.

President Asif Ali Zardari, the husband of slain PPP leader Benazir Bhutto, is no stranger to extremism himself and his populist base has traditionally voted for the party”s “anti-mullah, anti-army and pro-people policies,” he said.

“Unfortunately those principles were abandoned by a series of corrupt and ineffectual leaders, and the PPP today is not even a shadow of what it once was,” he said, while noting that Zardari has also “backtracked” on foreign policy goals such as improving relations with India and Afghanistan.

Pak-army-Parvez with next in Command Kiyaani

“The security agencies have unleashed Lashkar-e-Taiba (LeT) — the largest and most feared extremist group in Pakistan, which was behind the 2008 Mumbai attacks — on to the streets of Lahore,” Rashid said.

“Right now Pakistan is becoming a place where there is an army without a country,”  wrote Rashid.

Always Yours — As Usual — Saurabh Singh

Source:http://news.in.msn.com/international/article.aspx?cp-documentid=4994774

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