Socio-Economics History Blog

Socio-Economics & History Commentary

China Gold Reserves May Back Yuan Internationalization

  • This is interesting. A gold backed Chinese Yuan. We hear rumors of a gold backed GCC (Gulf Cooperative Council) currency called the Khaleeji earlier this year. Any gold backed currency will certainly garner more support than a ‘out of thin air’ fiat currency. The obvious question is: Does China have enough gold to do this? I doubt it. So, if they really intend to do so, they have to buy quite alot of gold. And gold price will rise significantly.
  • Dow Jones News Wires reports :
    SHANGHAI (Dow Jones)–China’s gold reserves may serve as backing for the yuan as Beijing promotes its use overseas, said Zheng Lianghao, managing director of the World Gold Council’s Far East division, the Shanghai Securities News reported Monday.
    Zheng, who was speaking at a forum over the weekend, said increasing gold holdings would provide China with a useful hedge as the dollar faced the possibility of depreciation, according to the report.
    In late April, the official Xinhua News Agency quoted Hu Xiaolian, the head of China’s foreign exchange agency, as saying China’s gold reserves had risen 454 metric tons since 2003 to 1,054 tons. 
  • See also :
    New Gulf currency ‘Khaleeji’ poised to be Gold backed – Another Nail in the USD Coffin?
    Single Regional Currencies – Gulf Cooperation Council and Latin America 


May 20, 2009 Posted by | Economics | , , , | 1 Comment

1300 Girls Harmed by HPV Vaccines in UK; Bizarre Side Effects Like Paralysis and Epilepsy

  • Big Pharma with their crappy vaccines are doing our children a whole lot of good. Natural News reports :
    More than 1,300 girls in the United Kingdom have experienced negative reactions to the government-mandated Cervarix vaccine for the human papillomavirus (HPV), according to adverse events reports collected from doctors by the Medicines and Healthcare products Regulatory Agency (MHRA).
    “When they introduced this new vaccine, we had major concerns about its safety,” said Jackie Fletcher of Jabs, a support group for those negatively affected by vaccines. “The current statistics detailing adverse reactions — including cases of epilepsy and convulsions — bears out that we were right to be concerned.”
    Cervarix, manufactured by GlaxoSmithKline, inoculates patients against strains 16 and 18 of
    HPV, which are believed to be responsible for 70 percent of cervical cancer cases. The British government began a program to vaccinate all secondary school girls in September 2008, and 700,000 have received the injections so far. The government’s plan is to have all girls under the age of 18 vaccinated by 2011.
    Critics have objected, however, that the government based its decision on studies of women under the age of 26, rather than studies conducted on school-age girls. In addition, while the vaccine has been shown to prevent against HPV infection in the short term, there is no evidence of its long-term efficacy or that it actually lowers cancer rates.
    The MHRA reports show a total of 2,891 adverse events reported in 1,340 girls. The majority were minor and short-lived problems, such as swelling, rashes, pain or mild allergies to the vaccine. A number of cases were more severe, however, including 20 cases of blurred vision, four cases of convulsions, one case of seizures and one epileptic fit. Five cases of partial
    paralysis were reported, including Bell’s palsy (face), Guillain-Barre syndrome (legs), hyopaesthesia (loss of sense of touch) and hemiparesis (severe weakening or paralysis of half the body).
    “The government needs to look at the future of this program given the number of side-effects coming through,” Fletcher said.


May 20, 2009 Posted by | Medicine & Health | 14 Comments

Dow Jones Stocks Bear Market 2,000 Target By Elliott Wave Disciple Prechter

  • I am in agreement with Robert Prechter’s view that the stock market is heading down. This is a bear rally and is near to the end. The lows in March 09 will be retested and broken. How low? I won’t bet against Prechter’s view of 2000 for the DJIA. I am not in agreement with him wiith regards to the price of gold though. I still see hyper-inflation and thus a parabolic rise in gold price.
  • Martin Hutchinson writes :
    To get the ultimate doom-laden view, I talked last week with Robert Prechter, who for 30 years has run an investment company based on the
    Elliott Wave Theory, propounded in 1948 by Ralph Nelson Elliott. I’d wanted to meet Prechter ever since I had seen ads he ran in Barron’s back in the bear market days of 1981-82. The Dow was around 800 at that time, and he forecasted that the U.S. stock market was about to enter a huge uptrend, which might last as long as 20 years, and for which 3,000 on the Dow was only the first stage.
    “Boy, he’s bullish,” I remember thinking – it was considered bold at that stage to forecast a Dow of 1,200, which would have been 15% above the index’s all-time peak set in 1972. But Prechter was right.
    He was also right in 1987, when he predicted the sharp bull market of that year would end, but that the pullback would be only a temporary problem before the market went on to greater things.
    In the late 1990s, Prechter turned bearish, explaining that the “fifth wave” of an
    Elliott Wave cycle – and therefore the bull market – was coming to an end. He was a few years early, but by following his advice after about 1998 you would have avoided a decade in which your money made an all-in return of approximately zero.
    He was still bearish in 2003 – as was I. In cash terms, we were both wrong and went on being wrong for the next four years, as the Dow zoomed from 8,000 to around 14,000. Of course, as he pointed out to me last week, if you accounted in gold, stocks had in fact declined somewhat between 2003 and 2007. It’s not the Elliott Wave system’s fault that the denominator in the equation – the U.S. dollar – fell out of bed through excessive money printing.
    Prechter even managed to call this year’s March bottom, expecting a substantial bear market rally at around 6,300 on the Dow, close to the bottom. However, he expects the market to resume its downward trend shortly, ending with a decline
    similar to the 86% in real terms of 1929-32 as we are in a long Elliott Wave downswing. That would take the Dow down to around 2,000.
    Where Prechter and I differ is on inflation. He sees a further collapse of asset prices and debt values, with consumer debt and commercial real estate wreaking more havoc on bank balance sheets. That could cause massive price deflation, and a decline – rather than an increase – in the price of gold.
    Personally, I look at the over-expansive monetary policy pursued by the Fed for a decade now,
    and its continuance, and see inflation ahead. Inflation would also help Uncle Sam finance those deficits, so it seems more likely than not.
    That difference in opinion aside, Prechter was both charming and fascinating. Maybe we can combine our views, and agree that the deflation will be of the dollar’s value, so that prices will inflate in dollar terms, but deflate in such other hard currencies as the euro, the renminbi (China’s yuan), or the Brazilian real. We shall see.
    The bottom line: While the market could go up a little further in the short term, it’s not the time to get aggressive.


May 20, 2009 Posted by | Economics | , | 1 Comment

Gold on the Cusp of a Significant Price Rise

  • I have been a gold bug since Oct 2008. I do not have confidence in the soundness of the monetary system. The central banks of the western world are debasing their currencies. They think they can control inflation. The people who brought the entire world economy into depression, who missed all the warning signs are telling us they can fix things by Quantitative Easing. I don’t think so.
  • Gold is about to rise significantly. The Gold Report interviews Roger Wiegand :
    The ‘Sell in May’ situation could arrive right on time this year, according to Roger Wiegand of Trader Tracks, who anticipates the next larger, extended rally in gold this fall. In this exclusive interview with The Gold Report, Roger suggests some alternate market plays for the lean summer months and explains why he believes “the deck is stacked against the stock market” and $1,375 gold appears in the cards. 
    TGR: You mentioned earlier in our conversation that a good thing for some investors to do would be to take some profits and to sell into the strength of the market. If we’re selling-off our current stocks, where should we put our money?
    RW: We like grain. Grain has the potential to have another record year. We’ve had open positions since March on a soybean spread and the first leg of that trade is now up almost 100%.
    Typically, the way we trade spreads is to take half off the table when we’ve got 100% or better, in an effort to recoup our initial trade investment holding the balance for higher prices. So far, that trade has gone very well. This is our fourth year on these and they have all been annual winners.
    Share traders and investors will have several new opportunities buying shares in grain and other food-related stocks. We’ve recommended some before and will have more of them this year. Shortages and other fundamentals forecast higher grain and food prices.
    We continue to like gold spreads for December, 2009. Our spread has been in place for weeks now, so I’d have to re-price it in the market for newer entries. We like gold long for December because we have been predicting a forecast price of $1,260 with a newer, higher projection announced six weeks ago to a potential $1,375 on December, 2009 futures. Gold might return to $850 before we settle down here and rally in the next leg, but on a cyclical basis gold has another chance to rally mildly this spring after a minor pullback.
    TGR: Doesn’t gold usually kind of go down or sideways during the summer?
    RW: Yes, it travels sideways for most of the summer. I would say that’s probably our trading action in the next two to four weeks. If gold sells down again, and I think it will, you could see a base-bottom somewhere between $850 and $885 and then a lot of chop and mild rallies. These channeled markets are difficult to trade. And, then into the fall we’re looking for the next larger, extended rally. I suspect other markets will have a negative influence on several things and, as a result of that, gold should rise significantly in the fall. I know manipulators will be trying to cap it and keep the lid on, but one of the keys could be a rally price break through $1,007—the former high. Then gold could run away to $1,150 and more, easily up to $1,260. Now the other event, depending upon manipulation, is the chance gold could rise as high as $1,375 on the December futures contract. That remains to be seen. If it happens, we should see several markets with new pivot moves depending on key events. But, technically, from where we are today and where we’ve been, $1,375 appears in the cards.
    TGR: That would be good news for a lot of those junior miners.
    RW: Absolutely. One of the bigger stocks we’ve recommended in the gold sector, of course, was
    Hecla Mining Company (NYSE:HL). It was down at $1.41 and we’re still recommending holding it with a stop, up 120%. They previously had a couple of problems we recognized were only temporary. Actually, HL has done so well it’s almost behaving, trading like a high-risk junior miner, which it’s not. Hecla is an NYSE-listed Blue-chip listed company with a beautiful balance sheet and a lot of great things happening. We plan to continue to recommend a hold through the rest of this year and probably into further-out years. Lower energy prices have played a major part in better mining profits.
    TGR: Any other interesting companies in the gold sector?
    RW:In the gold sector, we’ve recommended Miranda Gold Corp. (TSX.V:MAD), San Gold Corporation (TSX.V:SGR) and
    Bravo Venture Group (TSX.V:BVG). We also like Clifton Star Resources Inc. (TSX.V:CFO), and Canplats Resources Corp. (TSX.V:CPQ)in Mexico. Those are some of our preferred juniors. Our top seniors other than Hecla would be Agnico-Eagle Mines (TSX:AEM) and the other, of course, would be Goldcorp (TSX:G) (NYSE:GG), which is the Cadillac. Those would be our top three selections for the big boys.
    TGR: Thanks, Roger, as usual, this has been very interesting and informative.

Disclaimer – I am not a financial advisor. This is not an advice to buy, sell or hold any stocks or bonds or any precious metals.


May 20, 2009 Posted by | Economics | , | Comments Off on Gold on the Cusp of a Significant Price Rise

Dollar Stops Being Russia’s Basic Reserve Currency

  • Another sign of the growing lack of confidence in the viability of the USD. Many countries are now initiating steps openly to do away with the USD or minimize their exposure to it. Pravda reports :
    The US
    dollar is not Russia’s basic reserve currency anymore. The euro-based share of reserve assets of Russia’s Central Bank increased to the level of 47.5 percent as of January 1, 2009 and exceeded the investments in dollar assets, which made up 41.5 percent, The Vedomosti newspaper wrote.
    The dollar has thus lost the status of the basic reserve currency for the Russian Central Bank, the annual report, which the bank provided to the State Duma, said.
    In accordance with the report, about 47.5 percent of the currency assets of the Russian Central Bank were based on the euro, whereas the dollar-based assets made up 41.5 percent as of the beginning of the current year. The situation was totally different at the beginning of the previous year: 47 percent of investments were made in US dollars, while the euro investments were evaluated at 42 percent.
    The dollar share had increased to 49 percent and remained so as of October 1. The euro share made up 40 percent. The rest of investments were based on the British pound, the Japanese yen and the Swiss frank.


May 20, 2009 Posted by | Economics | , | 1 Comment

GM Bankruptcy Seen as All But Inevitable

  • The company which Alfred Sloan built is going bust. I wonder what he will say to all the management idiots running the company to the ground? I wonder how he would have handled the powerful unions too? Death knell for GM, Reuters reports :
    After 100 years in business and 10 months of frenzied but failed restructuring, General Motors Corp is weeks from the bankruptcy filing experts say will be required to complete the Obama administration’s bid to reshape a fallen icon of American industry.
    Facing a government-imposed June 1 deadline to restructure, GM is scrambling to slash some $27 billion of bond debt, win sweeping cost concessions from the United Auto Workers union and eliminate almost 1,600 U.S. dealers.
    But with the clock ticking, experts see it as all but certain GM will follow its smaller rival Chrysler into federal bankruptcy court. “I almost think it is inevitable,” independent auto industry analyst Erich Merkle said. “I don’t know how they are going to escape it.”
    The battery of problems to have hit GM range from plunging sales and declining share to a line-up that has seen more misses than hits over the past decade and that trails engineering leaders like Toyota Motor Corp and Honda Motor Co in hybrid technology.
    But GM’s debt-laden balance sheet is the source of its immediate crisis and the reason restructuring experts, analysts and auto executives do not see a way forward that avoids what could be a complicated and contentious bankruptcy.
    “The only way it is not inevitable is if the government accepts whatever percentage of bondholders have tried to exchange, whether it is 40 percent or 50 percent or 60 percent,” said Peter Kaufman, president and head of restructuring and distressed mergers and acquisitions at the Gordian Group LLC in New York.
    GM has said that it must have 90 percent of the $27 billion of bonds participate in the exchange or it will be forced to file for bankruptcy. GM’s offer to its bondholders would give them only a 10 percent equity stake in a reorganized company. Representatives of a committee representing major bondholders have called that offer unfair given the payout being offered to the UAW.
    In a sign of how far apart the sides remain, bondholders have sought a majority stake in the new GM, the controlling position in a new and smaller auto company GM has offered to the U.S. Treasury.
    After extending $15.4 billion to keep GM afloat since the start of the year, the U.S. Treasury would own at least 50 percent of the automaker under GM’s proposed terms.
    A UAW healthcare trust would hold nearly 40 percent of GM in return for allowing GM to pay $10 billion — half of its remaining funding obligation — in stock, instead of cash.


May 20, 2009 Posted by | Economics | , , , , | Comments Off on GM Bankruptcy Seen as All But Inevitable

US African Command: AFRICOM’s $6 billion Fiasco in Djibouti

  • The never ending war machine of America keeps rolling on. The people governing America seems to be planning for world conquest. With over 750 military bases worldwide, you have to ask: Are all these military bases necessary? How long can the American empire last? Does America have limitless amount of money to maintain and grow their war machine? I don’t think so. This is really about corporatism. The huge military industrial complex have corrupted the US government. And the result is never ending wars to feed this MIC.
  • Thomas C. Mountain comments :
    The USA African Command (AFRICOM) is building their new African megabase in the tiny Horn of African country of Djibouti. The first phase is costing $2 billion, according to reports, and eventually another $4 billion will be spent. This latest expansion of USA imperial might, this time on African soil, is turning into a fiasco for the Pentagon and US State Department.
    To understand why one must review the recent history in the region. Djibouti is and has been little more than a province of Ethiopia. It was a French colony and continues to host a significant French military base. Since 9-11, the USA military has been feverishly trying to find a site for a major military presence in a strategic place in Africa. Unfortunately for the Pentagon, no African country with a suitable site will allow the USA to set up shop there.
    So enter Djibouti. With a population of about 500,000, and one of the poorest countries on the planet, Djibouti sits at the entrance to the Red Sea, through which passes much of the world’s shipping, including a sizable portion of the oil used in Europe and Asia. The USA made the Djiboutian president an offer he couldn’t refuse and now the concrete is being poured and the new runways and docks are growing out of the sand and desert of the North African coastline of the Indian Ocean.
    Coming back to the Africom fiasco in Djibouti, when the Eritreans found out that the USA was building a major military base in Djibouti the Eritreans did what was prudent and made sure their military secured Eritrean high ground overlooking Djibouti.
    It must have come as an unpleasant surprise for the USA military to find the entire AFRICOM base within potential range of Eritrean artillery, some 60 miles or so. One can only imagine the red-faced rage experienced by the generals in the Pentagon when they arrived at work one morning and were given the satellite images of Eritrean troops looking down from Eritrean soil on AFRICOM’s spanking new base being built on the Djiboutian coast. The Eritreans could, if they so desire, bring their artillery up onto the mountain tops and shut down the new AFRICOM base on a moment’s notice.
    Eritrea, of course, is not stupid, and has no desire to start any war with the USA. Eritrea is not about to wave a red flag in the face of the USA military bull and there is no evidence or even suggestion that Eritrea has stationed any artillery overlooking Djibouti. On the other hand, Eritrea has lost a lot of blood winning its independence, something the USA was bitterly against from the very beginning, and very prudently made sure that its territory bordering Djibouti, very strategic high ground, was secure. Ethiopia has already occupied Eritrean territory on the Eritrean/Ethiopian/Djibouti border and continues to occupy Eritrean territory captured during the 2000 invasion. Eritrea, a fiercely proud and independent country, is not about to sit back and allow any further violation of its national territory.
    To put it mildly, the USA is very unhappy having Eritrean troops in such a strategic position vis–vis their new base, which explains why the Djiboutian army attempted to capture the Eritrean military positions overlooking the new AFRICOM base last year. In short order, the battle hardened veterans of the Eritrean Defense Forces destroyed the Djiboutian invasion attempt and Eritrean boys still sit in their trenches overlooking the AFRICOM megabase in Djibouti.
    What the generals in the Pentagon plan to do about this is anyone’s guess. The quick manner in which the Eritrean army crushed the Djiboutian incursion and the near mutinies reportedly taking place in the Djiboutian military over having to attack their former colleagues from Eritrea on behalf of the USA has left the USA with little room to maneuver.
    The USA has tried bluffing Eritrea by ramming through a resolution in the UN Security Council demanding, in violation of international law and the UN’s own charter, that Eritrea withdraw its troops from its own territory. Eritrea has quite rightly denounced such demands and ,with its bluff called, the USA is left with egg on its face.
    One thing for sure is that the USA is not going to find it easy to swallow that fact that their new AFRICOM base in Djibouti has become a 6 billion dollar fiasco and made the USA military look like fools.
    For more of the real deal stay tuned to Online Journal, the only place for news about the Horn of Africa that the so-called ‘Free Press’ in the West has failed to cover.


May 20, 2009 Posted by | GeoPolitics | | 3 Comments