LILA RAJIVA: The Mind-Body Politic
Individuals Not Ideologies
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Illegal Immigrant Workers
David Kramer, at Lew Rockwell blog:
“You know what an “illegal” immigrant worker is, don’t you? It’s someone who voluntary decides to move from one piece of land on the planet Earth to another piece of piece of land on the planet Earth because he or she knows of a person at that second piece of land on the planet Earth who wants to voluntarily exchange with him or her a medium of exchange for his or her labor services—but wasn’t given permission to by a third party with a gun (i.e., the government).”
What China Wants
The Financial Times points out the quirks in the Chinese market that have Western companies racking their brains to stay on top of sales:
“The big spender in China, in years past and even more so today, is the state: private consumption as a percentage of gross domestic product has fallen from 60 per cent in 1968 to 36 per cent last year and could be as low as one-fifth in 2009 as the government ramps up capital investment.
In fact, the Chinese, who already have a world-beating savings rate of nearly 40 per cent of their income, tend to become more frugal when times are tough. As bank deposit rates decline, most of us spend more. The Chinese tend to stash away even greater sums to make up for the lost interest. The reason for this conservatism is the lack of a social safety net in China – citizens have to provide for their own medical care, old age and possible unemployment.
This makes them “penny pinching, ruthless, suspicious shoppers”, says Tom Doctoroff, north Asia director of advertising agency JWT and a writer on Chinese consumer trends. In a recession this behaviour only grows worse. “The downturn has made people keener on finding the cheapest deal,” says Yuval Atsmon, an associate principal in McKinsey’s Shanghai office. Even when they can easily afford it, buying a PC typically involves six visits to a store, and more often than not, customers will wait six months before making their decision after consulting blogs, online comparison sites and – the most important source of information in China – friends and family. Sales of copycat mobile phones, with all the functions of top models but a lower price, have soared from 17 million units in 2006 to 62 million units last year.
Brand consciousness is high, at least in the big cities, but brand loyalty is much lower than in the west. A price cut or good in-store promotion can often sway shoppers. And for cultural reasons, appealing to an individual’s taste or personal comfort typically doesn’t work, Doctoroff points out. A purchase either has to publicly signal status or wealth, like a flashy car does. Or provide a practical benefit: the latest craze in China is chocolate with added calcium, eaten not for pleasure but for the health benefits. The growing appeal of diamonds to women is not based on romance, but as a financial signal of a man’s commitment. Trust is another key issue in a country where so many consumer products are faked. Chinese mothers, for example, will pay 30 per cent more for safe baby milk – and this should favour foreign brands.
But foreign retailers and manufacturers have to cope with vast regional differences in demographics, language and culture that make it hard to plan a single marketing strategy – indeed treating China like a single country is usually a mistake. Natives of Zhejiang on the east coast like “toilet roll as rough as sandpaper”, the former head of Wal-Mart China liked to observe, a penchant thankfully absent elsewhere. Atsmon points out that cities even an hour apart can be entirely different: in southern Shenzhen, more than four-fifths of the population consists of migrant workers, mostly under the age of 35, who speak Mandarin and drink in bars. In nearby Guangzhou, migrants number just over a quarter, more people are older, enjoy watching Cantonese TV and go out to restaurants to drink with family members. Adequately addressing such niches requires an army of local suppliers, costly infrastructure and several layers of wholesalers and intermediaries. Even then, success may remain as elusive as it always has been: “No matter what you may be selling, your business in China should be enormous, if the Chinese who should buy your goods would only do so,” lamented Carl Crow, an advertising executive in Shanghai and author of the original book on how to sell to the Chinese … more than 70 years ago.”
The Corporate Media: Suffering From Truth Emergency
We have an elite that has a stranglehold on what gets heard through its grip on professional societies and the major print and TV news. Prizes, media attention, peer approval go to very few media outlets. It’s well- known that only reporters and columnists at a handful of papers get serious attention. That’s a truly dangerous state of affairs and we’re suffering the fall-out from it. What makes it even worse is that news itself is more and more swept aside by trashy, sensation-seeking reporting, which leaves the audience with misinformation or simply a great black hole of ignorance.
Mickey Huff and Peter Phillips analyze the “truth emergency” ravaging the corporate media in the West (and to a lesser degree, everywhere):
“Truth Emergency: Keeping the Facts at Bay
The truth comes as conqueror only because we have lost the art of receiving it as guest.
– Rabindranath TagoreWhat are some of these truths, that not knowing them creates a literal state of emergency for human society? Here are two of many possible examples. A 2008 report from The World Bank admitted that in 2005, over three billion people lived on less than $2.50 a day and about forty-four percent of these people survive on less than $1.25. Complete and total wretchedness can be the only description for the circumstances faced by so many, especially those in urban areas of so-called developing nations. Simple items Americans take for granted like phone calls, nutritious food, vacations, television, dental care, and inoculations are beyond the possible for billions of people.6
In another ignored but related story, Starvation.net logged the increasing impacts of world hunger and starvation. Over 30,000 people a day (eighty-five percent of children under five) die of malnutrition, curable diseases, and starvation. The number of deaths has exceeded three hundred million people over the past forty years. These stories should be alarming headlines, certainly more significant than celebrity tripe and tabloid hype.7
Continuing on the theme of human poverty and its ramifications, farmers around the world grow more than enough food to feed the entire world adequately. Global grain production yielded a record 2.3 billion tons in 2007, up four percent from the year before, yet, billions of people go hungry every day. The website Grain.org describes the core reasons for continuing hunger in a recent article “Making a Killing from Hunger.” It turns out that while farmers grow enough food to feed the world, commodity speculators and huge grain traders like Cargill control the global food prices and distribution. Starvation is profitable for corporations when demands for food push the prices up. Cargill announced that profits for commodity trading for the first quarter of 2008 were eighty-six percent above 2007. World food prices grew twenty-two percent from June 2007 to June 2008 and a significant portion of the increase was propelled by the $175 billion invested in commodity futures that speculate on price instead of seeking to feed the hungry. This results in erratic food price spirals, both up and down, with food insecurity remaining widespread.“
My Comment:
Some of this commentary of course paints speculation with too broad a brush. Futures markets can, and do, provide efficient allocation of resources if they function as they should. The problem is not the futures market but the corruption of the market and the constant meddling in it by the state, which blunts the normal checks that the market would otherwise provide.
And again that goes back to public culture and professional standards that have become debased. The deeper question is how they became debased.
Which, of course, leads us to the government’s manipulation of the interest rate. That is where the problem lies.
But meanwhile, where is the media in all this? Providing the context so people can understand what’s going on?
No. It’s rooting around in John Edward’s trash can……
Soros: Gold In Bubble; But Keep Stimulus Going…..
Always nice to see people talk out of both sides of their mouth.
Here is currency speculator George Soros (ex of legendary hedge-fund Quantum) at the World Economic Forum at Davos:
“When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment. The ultimate asset bubble is gold.”
So far so good. Mis-price money (cheap interest rates) and people don’t want to keep their savings in it. They want it in something that isn’t subject to mis-pricing (so they hope) - hence gold.
But then Soros shows how disingenuous he’s being by adding this:
“I think that since the adjustment process to the recession is incomplete, there is a need for additional stimulus. Some countries, like the US and European countries, have plenty of room to increase their deficits. The political resistance to doing so increases the chances of a double dip in the economy in 2011 and after that.”
That is, he’s suggesting running more deficits and keeping the money spigot going, just the thing that’s caused the gold price to rise.
So how do we understand this?
Gold is due for a technical correction, but it’s also probably responding to deflation in the general economy. It’s not going down that fast, because a lot of people are also buying it speculatively.
That’s the tug of war.
Meanwhile, who know what Soros’ holdings are and who knows what his motivations are in making such contradictory statements.
But anyone who takes these sorts of pronouncements as any kind of lead for their own investments/speculations, should be prepared to part fairly soon from their money.
Bernard Stiegler On Justice And Shame
French philosopher Bernard Stiegler writes about the need to have an ideal that informs the competition of the market place. This ideal would prevent competition and efficiency from degenerating into what he calls shamelessness, a state he associates both with globalization and with the suppression of individuation in modern societies:
“Imitation cannot be the first or unique principle of a new political and economic community. It is precisely to the degree that relations between countries allied in the same political community are not reduced to economic exchanges and competition, but instead presuppose a common interest above particular interests, that one can distinguish between a political union and a simple league of economic interests like the Hanseatic League or the Alena today, as well as countless other zones of special economic exchanges.
Is Latin America Moving Right?
Alvaro Vargas Llosa of the Independent Institute asks whether Latin America is moving right and what that could mean:
“Chile’s runoff election this month will probably mean the end of the center-left coalition’s two-decade hold on power and the emergence of businessman Sebastian Pinera as a political tour de force.
The Machinery of Habit
A piece I wrote four years ago, The Burgh: Downsizing,” examines the nature of change and habit in relation to urban economies transformed by globalization and war.
“The boys come in and the beer flows. Ricardo tells us about training. Four-mile runs, 200 push-ups every morning, wall-climbing. “They break you, man,” he shakes his head. “They make you tough.
“I said I hoped so, considering where he was going. But Melanie, who studies the theology of the medieval anchoress Juliana of Norwich and sells papers on a corner in Oakland for the Socialist Worker, is more worried about his getting into what she calls killing mode. I ask her if a mode is the same as a habit. It takes time after all to form a habit. A mode on the other hand sounds like a gearshift on an Audi. And if you can shift into a gear, you can shift out. Maybe it’s really a question of what sort of habits. Learning, retraining, moving need effort. They don’t come easily. But war is a machinery that moves on its own and blood-lust, like a winter flu, might be easy to pick up and impossible to get rid of.
War and demolition come too easily to human nature. And take away too much. Anything worth pursuing, on the other hand, needs to be stalked through the years with the patience and vigilance of a hunter, cultivated through seasons of scarcity and remembered in times of forgetting. In our sophistication we laugh at those who buy dear and hold dearer. Who stay when they should have left. Bag holders. Fools. Who step into the river and expect the waters to stay the same. The immobilized in our mobile society. What is the value of an abandoned church, an obsolete mill, an aging worker? Flux, we shrug, is the only certainty. Change is the first law of nature.
“People talk about joining but they don’t,” says Ricardo, “I’m the only one who did.” He sounds proud.
“I ask him if he thinks good health insurance and tuition money are worth risking his life for. He laughs.
“Look — I ain’t gonna die. Most of the guys who teach me, they’ve been there. They got through. More chances I’d get shot in a ghetto. So some guy’s lost an arm…or a leg. So what? All this new technology now, reconstruction…they can make you another leg; it’s really no big deal.”At 26, you can think of that as a good trade. An amputation of the body or the mind is all it takes to keep up with change. Like those translucent lizards which shed their tails seasonally as they wait immobile and vigilant for flies on dusty window sills, we might grow new limbs just as good. New memories to replace old ones. Here in the hills, at the confluence of three rivers, we have learned not to resist the laws of nature.
“But perhaps we don’t live by nature alone. Perhaps, as Juliana of Norwich said, we also need mercy and grace.”
“The need to change and the machinery of habit that makes it difficult - a theme I find myself returning to , over and over, especially when I’m confronted with the depressing spectacle of people going back to the same propaganda, the same bogus assertions that caused this global catastrophe in the first place.
Going back, like dogs to vomit.
I’m sorry if that sounds ugly, but what’s happening now in DC is ugly….and very very dangerous.
Climate-Gate Is The Work Of A Whistle-blower
Excellent demonstration by Lance Levson, a system and networks administrator with fifteen years experience, that the climate-gate data could not have been the work of a random hacker but was most likely that of a whistle-blower publishing documents previously collected pursuant to a freedom of information act (foia) request- After a lengthy technical analysis of the sources of the email and data, he concludes:
“I suggest that the contents of
./documentsdidn’t originate from a single monolithic share, but from a compendium of various sources.For the hacker to have collected all of this information s/he would have required extraordinary capabilities. The hacker would have to crack an Administrative file server to get to the emails and crack numerous workstations, desktops, and servers to get the documents. The hacker would have to map the complete UEA network to find out who was at what station and what services that station offered. S/he would have had to develop or implement exploits for each machine and operating system without knowing beforehand whether there was anything good on the machine worth collecting.
The only reasonable explanation for the archive being in this state is that the FOI Officer at the University was practising due diligence. The UEA was collecting data that couldn’t be sheltered and they created FOIA2009.zip.
It is most likely that the FOI Officer at the University put it on an anonymous ftp server or that it resided on a shared folder that many people had access to and some curious individual looked at it.
If as some say, this was a targeted crack, then the cracker would have had to have back-doors and access to every machine at UEA and not just the CRU. It simply isn’t reasonable for the FOI Officer to have kept the collection on a CRU system where CRU people had access, but rather used a UEA system.
Occam’s razor concludes that “the simplest explanation or strategy tends to be the best one”. The simplest explanation in this case is that someone at UEA found it and released it to the wild and the release of FOIA2009.zip wasn’t because of some hacker, but because of a leak from UEA by a person with scruples.”
Danish Climate-Gate
From the Washington Examiner:
“Police and authorities in several European countries are investigating scams worth billions of kroner, which all originate in the Danish quota register. The CO2 quotas are traded in other EU countries.
“Denmark’s quota register, which the Energy Agency within the Climate and Energy Ministry administers, is the largest in the world in terms of personal quota registrations. It is much easier to register here than in other countries, where it can take up to three months to be approved.
“Ekstra Bladet reporters have found examples of people using false addresses and companies that are in liquidation, which haven’t been removed from the register.
“One of the cases, which stems from the Danish register, involves fraud of more than 8 billion kroner. This case, in which nine people have been arrested, is being investigated in England.
“The market for CO2 trade has exploded in recent years and is worth an estimated 675 billion kroner globally.”
China Bubble, China Trouble
Dominique Strauss-Kahn, the IMF’s Managing Director ended a 6-day trip in Asia by telling Chinese authorities to continue with their stimulus program.
“The main goal is to help with public demand, weak private demand. And the reason why we have to continue with stimulus is because a self-sustaining private demand is not yet visible,” he said.”
He also called for
1) Asian countries to rebalance their economies by becoming less export oriented and fostering internal demand
2) for the renminbi to strengthen to raise household purchasing power and labor’s share of income
Strauss-Kahn said he anticipated Asian growth of nearly 6% for next year (double the forecast for the global economy) and called for Asian leadership in the global financial crisis.
What does this mean?
Let’s start with Eclectica Fund Manager, Hugh Hendry, cited in “Outside the Box” (JohnMauldin@InvestorsInsight.com). Hendry writes:
“Now, if we repeat the Japanese experience then it is possible that nominal US GDP will rise from $14trn today to perhaps just $16trn in ten years time….. The Chinese are building capacity to meet a world where US nominal GDP is $25trn in ten years time. I fear they could be in for a nasty shock.”
That is, the IMF is banking on the remninbi strengthening so that domestic household expenditure can pick up the slack from weakening US consumer demand because there’s huge overcapacity in China.
Serendipitously, just as Strauss-Kahn and the Chinese premier Hu Jintao agreed that domestic demand has to be stimulated, along comes this Bloomberg report that quotes China International Capital Corp. as predicting that Chinese steel demand will rise 12% rather than the 5% predicted by the World Steel Association.
Now, where will the steel go? To a boom in housing construction and auto manufacture.
I blogged earlier that Jim Chanos, the dark prince of short-selling, has declared China a bubble set to burst, on the strength of these mysterious auto purchases that seem to be entirely production driven. One one hand, the government is using its dollars to manufacture cars, demand be damned. But the government has also committed to stimulate demand by social spending (on education and health) that’s intended eventually to make the Chinese loosen up…. and spend on those big-ticket items, like cars and houses.
But there’s an irony in thinking about China’s demand as affecting the commodity market. The irony, says Hendry, is that China is the commodity market.
“Huge demand and numerous small players are a perfect setup for price increases by the Big Three miners, which often cite high spot prices as the reason for jagging up contract prices. But the spot market is relatively small, and mines can easily manipulate spot prices by reducing supply. On the other hand, numerous Chinese steel mills simultaneously want to buy ore to sustain production so their governments can report higher GDP rates, even if higher GDP is money-losing. China’s steel industry is structured to hurt China’s best interests.
The Chinese government is very much wedded to it’s 8% growth target and will do whatever it takes to come close to that target – including flooding the domestic banks with a wall of cheap money to lend as economic stimulus. However, preventing a downturn with easy money is a dangerous way to reflate the economy.
As profitability for the businesses that serve the real economy remain weak, there has been of shift of investment in the first half of 2009 disproportionately into property, stock and commodity markets rather than private sector capital formation. This shift in the medium term threatens to undermine China’s financial stability. Thus, China is experiencing a relatively weak real economy and red hot asset markets.
The Chinese imports that revived the bulk carrier market this year were mostly for speculative inventories. Bank loans were so cheap and easy to get that many commodity distributors used financing for speculation……
Even more foreboding is a looming real estate bubble. The real estate sector in China is especially critical to the bulk carrier market because approximately 50% of Chinese demand for steel is generated by the construction industry. Most Western shipping forecasts are based on unlimited future need in China for new construction. The reality is quite different. China’s urban living space is 28 square meters per person, quite high by international standard. China’s urbanization is about 50%. It could rise to 70-75%. Afterwards the rural population would decline on its own due to its high average age.
So China’s urban population may rise by another 300 million people. If we assume they all can afford property (a laughable notion at today’s price), Chinese cities may need an additional 8.4 billion square meters. China’s work-in-progress is over 2 billion square meters. There is enough land out there for another 2. The construction industry has production capacity of about 1.5 billion square meters per annum. Absolute oversupply, i.e., there are not enough people for all the buildings, could happen quite soon.
…..The nationwide average price [of housing] is about three months of salary per square meter, probably the highest in the world! Consequently, a lot of properties can’t be rented out at all. Those that can bring in 3% yield, barely compensating for depreciation……
Some argue that China’s property is always like this: appreciation is the return. This is not true. The property market dropped dramatically from 1995-2001 during a strong dollar period. Property prices could drop like Japan has experienced in the past two decades, which would destroy the banking system.
IMF Sells Gold to India (Updated)
Update 2 (Nov 3): The only other explanation I can think of is that the Indian government is privy to information indicating that the demise of the dollar is much closer at hand than is being given out..
Update 1:
OK. As you know, I’ve found this Indian purchase a bit puzzling. I have a bunch of questions:
*Why didn’t the Indian government make a big purchase earlier this year, at $900, rather than now, at the top?
*What, if any, is the connection between this and the Fisk report a few weeks ago about the Gulf Arabs moving out of the dollar, which a lot of people found odd, despite the reputation of the reporter? The report bumped up the price of gold.
Now, here’s Chuck Butler of Everbank, via The Daily Reckoning:
“I told you yesterday that I thought it would be a “wash” for the dollar and the gold price… But that was before I learned that the Reserve Bank of India paid for their $6.7 billion dollars worth of gold with… SDRs.”
(Note:Reuters reports that the sale was in dollars - which would be dollar negative).
What does this mean? That, over the whole past 15 -20 years of “globalization” while the US Govt. inflated its money and sold its treasuries and fake derivatives all over the world in return for real work and real savings, who were the buyers?
Countries like India, where large parts of the middle-class stored its savings in dollars. Now those dollars are seen as so unsound that the IMF (which is the new locus of Anglo-European global domination) won’t accept them for payment of gold.
That means the Indian government has to give up its SDRs (Special Drawing Rights) in exchange.
Now the resurgent IMF is where the globalists are exerting their power and not in the G20 (which was supposed to augment the power of developing nations when it was established in 1999).
As I blogged earlier, the Financial Stability Board is the new regulatory agency that will coordinate with the IMF, but it includes the G20 and also Spain and the European Commission and is headed by ex-Goldmanite, Mario Draghi and it’s housed at the Bank for International Settlements in Basel. So that is a double hit to any representation India will have in the forum.
India sold gold at the bottom in the 1990s; and is now buying it at the top nearly 20 years later - thus selling part of the gains of these past years. At least, so it seems to me. To me this smacks of neocolonialism.
And now, it becomes easier to understand why the center-liberal establishment media is interested in co-opting the anger against Goldman and channeling it into various subplots of the financial crisis (naked short selling, the bail-outs etc.etc).
I see this as an elaborate feint to divert world attention from the reprise of Anglo American and European colonization over the last two decades - accomplished, with a “black” president in charge.
Here’s a piece on IMF sales of gold in 1999. http://www.independent.co.uk/news/business/imf-sells-gold-to-hep-debt-of-poorest-nations-1090154.html
Notice how similar the language is - they’re doing it to increase funding to the poorest countries, etc. etc.
In the news, Bloomberg reports:
“The International Monetary Fund sold 200 metric tons of gold to the Reserve Bank of India for about $6.7 billion, its first such sale in nine years.
The transaction, equivalent to 8 percent of global annual mine production, involved daily sales from Oct. 19-30 at market prices and is in the process of being settled, the IMF said in a statement yesterday. The average price to India, the biggest consumer, was about $1,045 an ounce, an IMF official said on a conference call. Gold for immediate delivery gained 0.2 percent.”
My Comment:
Interesting. The Indian government doesn’t buy gold at the bottom (2000) but now, when it’s at all time highs (shades of the British government selling gold at the bottom).
Now, the Indian central bank is reputed to be very savvy, as are Indian gold buyers. Most commentators expect gold to consolidate, if not correct, before pushing on. It would make sense for the Indian government to wait and buy it on dips.This is a good move for the IMF. But for the Indian government, which managed to steer the banking system past the whirlpool of unwinding derivatives, I wonder if this move is astute.
Look at the peculiar facts, as reported in the New York TimesWall Street Journal)
“In the last one year, China has increased its gold holdings, by weight, by 75.69%, Russia by 18.78%, the Philippines by 18.50% and Mexico by 108.91%.
Compared with this, India’s central bank did not add anything to its gold reserves in the last one year, according to Bloomberg data.(Lila: Why not? Why buy gold at record prices when the government was unwilling to buy when it was trading much lower, only this year?)
In fact, the share of gold in India’s total reserves has dwindled over the decade.
In March 1994, the share of gold in the total reserves of the country was 20.86%; by the end of June 2009, gold constituted only 3.7% of the total reserves.”
Even the IMF expressed surprise, as Breitbart.com notes:
“A senior IMF official said that the IMF was “lucky” in selling the 200 tonnes to India for roughly 1,045 dollars an ounce, compared with 850 dollars an ounce in April 2008.”
(Lila: In other words, over the whole period of globalization, India sold it’s gold and bought US treasury…dollars…just what the US government was desperate to get rid off, so it wouldn’t drive inflation at home…)
Again, India sold gold cheap and bought it back at its height. Does that sound like savvy behavior from a country renowned for well trained economists and smart gold buyers?
A former governor of the Indian central bank (Reserve Bank of India), Bimal Jalan, said it was to help the IMF meet its funding needs for loans to the poorest countries, for which it had looked to India and China.
As an aside, in an earlier post, I speculated that the report (by Robert Fisk, a very respected source) about Gulf Arabs moving out of the petrodollar - which was promptly denied - might have been a rumor circulated to bump up the price of gold to help IMF gold sales….maybe, I wasn’t so far off, after all.
I went back to an earlier post this year, in February, which quotes from a list in Richard Russell’s letter:
Note: The list looks inaccurate. I’ll go back and find why Russell’s numbers are so different from the World Gold Council figures below them). (Note: Russell is referring to tonnes of gold; the WGC figures are for dollar amounts. So the discrepancies we refer to at in the percentages).The US has 8,135 tonnes….64.4% of reserves
Germany — 3,412… …64.4% of reserves
IMF — 3,217… … …(1)
France — 2,508… … …58.7%
Italy — 2,451… … …61.9%
Switzerland — 1,040… …23.8%
Japan — 765.2… …1.9% …(a potential gold-buyer)
China — 600.0… …0.9% …(should be a big buyer)*A reader notes that this number is too low. I assume it’s a number from before China started buying off market. Compare with list below.
Russia — 495. 9… …2.2% …(is a buyer)
Taiwan — 422.2… …3.6% …(should be a buyer)
India — 357.7… …3.0% …(should be a buyer)
UK — 310.3… … …14.5% …(sold most of its gold at the low price)
Saudi Arabia — 143.0… …11.4% (should buy gold)
South Africa — 124.4… …9.0%
Australia — 79.8… … …6.3%So there you have it. Among countries, Italy, France, Germany, and the US have the most gold. Switzerland has a third of what they have. The UK, South Africa, Australia, and Saudi Arabia are next with about 1/5th - 1/10th as much. Russia and Japan have only a small percent in gold. China and India have even less. What do most Asians have? Debt (treasuries and dollars) from the US. Neo-colonialism anyone?
Correction:
CNBC has the following completely different list of top gold holding countries compiled by tradermark via Seeking Alpha, posted October 13, 2009.
(Note: Data is based on the World Gold Council’s September 2009 report and is converted to US short tons at a rate of 1 T = 1.102311 US tons. All monetary estimates are calculated at the rate of 1oz gold = $1042 US).
United States $298.4 N/A
Germany $125.0 69.2%
International Monetary Fund $118.0 N/A
Italy $89.9 66.6%
France $89.7 70.6%
China $38.7 1.9%
Switzerland $38.2 29.1%
Japan $28.1 2.3%
Netherlands $22.5 59.6%
Russia $20.9 4.3%
European Central Bank $18.4 18.8%
Taiwan $15.5 3.9%
Portugal $14.0 90.9%
India $13.1 4.0%
Venezuela $13.1 36.1%China Saved Brazilian Economy, Says Brazilian Economist
From the Brunei Times:
“In Latin America, IMF economists said the crisis is affecting countries differently depending on whether, like Mexico, they are more closely tied to the US or, like Brazil, they have more links with China.
“If it was not for China we wouldn’t have seen positive growth in the second quarter in Brazil,” Ilan Goldfajn, chief economist at Brazilian bank Itau Unibanco, said at an IMF-organised conference in Istanbul. He said the world would now start to “rebalance towards Asia”.
Obama Heads UN Security Council..
“Barack Obama will cement the new co-operative relationship between the US and the United Nations this month when he becomes the first American president to chair its 15-member Security Council.
The topic for the summit-level session of the council on September 24 is nuclear non-proliferation and nuclear disarmament – one of several global challenges that the US now wants to see addressed at a multinational level.
“The council has a very important role to play in preventing the spread and use of nuclear weapons, and it’s the world’s principal body for dealing with global security cooperation,” Susan Rice, US envoy to the UN, said last week.
Her remarks were the latest by the Obama administration to emphasise a shift from the strategy of the previous Bush administration, sometimes criticised by its UN partners for seeking to use the world body principally to endorse its own unilateral policies. The US currently holds the month-long rotating presidency of the Security Council…”
More at the Financial Times.
My Comment:
Did I read that right? The way to shift away from the Bush administration’s tendency to use the UN to endorse its own unilateral policies is to put Obama at the head of the UN Security Council??
Am I missing something here? How does this represent a shift away? Isn’t it more like coming out of the closet on it?The Ghost Ships of Singapore
“Some experts believe the ratio of container ships sitting idle could rise to 25 per cent within two years in an extraordinary downturn that shipping giant Maersk has called a ‘crisis of historic dimensions‘. Last month the company reported its first half-year loss in its 105-year history.
Martin Stopford, managing director of Clarksons, London’s biggest ship broker, says container shipping has been hit particularly hard: ‘In 2006 and 2007 trade was growing at 11 per cent. In 2008 it slowed down by 4.7 per cent. This year we think it might go down by as much as eight per cent. If it costs £7,000 a day to put the ship to sea and if you only get £6,000 a day, than you have got a decision to make.
‘Yet at the same time, the supply of container ships is growing. This year, supply could be up by around 12 per cent and demand is down by eight per cent. Twenty per cent spare is a lot of spare of anything - and it’s come out of nowhere.’
These empty ships should be carrying Christmas over to the West. All retailers will have already ordered their stock for the festive season long ago. With more than 92 per cent of all goods coming into the UK by sea, much of it should be on its way here if it is going to make it to the shelves before Christmas.
via Lew Rockwell.
World Bank’s IFC Suspends Investment in Agrofuels in Indonesia
From The Third World Institute’s Choike program, here’s a recent report that World Bank and International Finance Corporation (IFC) head Robert Zoellick has agreed to suspend World Bank/IFC financing of the agrofuel sector (oil palm, in this case) in Indonesia, in response to activists’ concerns about environmental degradation and social troubles:
“In response to an appeal by a global coalition of NGOs, IFC / World Bank President Robert Zoellick has agreed to suspend IFC funding of the oil palm sector pending the development of a revised strategy for dealing with the troubled sector.
The response follows a highly critical audit by the IFC’s independent ‘complaints advisory ombudsman’ which had shown that, as claimed by the NGOs, IFC funding of the Wilmar Group had violated the IFC’s own procedures, and commercial concerns had been allowed to override the IFC’s environmental and social standards.”
My Comment:
The IFC is an arm of the World Bank group and is based in Washington, DC. It differs from the World Bank in being entirely private and for-profit and in not being backed by sovereign (i.e. government) guarantees. It’s focus is on investment in the private sector in emerging markets.
This will be a big blow to top agro-fuels producer Singapore-based Wilmar International, whose business activities in Sumatra and Kalimantan have provoked complaints from some 19 environmental groups, plantation small holders, and indigenous people’s organizations:
“IFC’s ombudsman had conducted an audit following the NGO complaints and found that IFC funding of Wilmar International, listed on the Singapore Stock Exchange, had violated IFC’s procedures and commercial concerns had been allowed to override IFC environmental and social standards.
The ombudsman’s report was released earlier this month and focused on four financing arrangements made by the IFC between 2003 and 2008 in favor of Wilmar International, which runs more than 200,000 hectares of palm oil plantations in Indonesia and Malaysia.
IFC had earlier agreed to provide the company with US$33.3 million in investment guarantees and $17.5 million in loans over five year.” (Jakarta Post, Sept 14, 09)
Wilmar is also the supplier of cheap palm kernel that’s used to feed cows by New Zealand dairy giant Fonterra. Fonterra uses 1/4 of the world’s palm kernel - a trade that has drawn fire from NZ environmental groups, which call it a national scandal that a company in a country known for its environmental quality should be doing business with a corporation they describe as destroying Malaysian and Indonesia rain-forest at unsustainable rates.
George Kennan on the Realities Behind US Foreign Policy (Links added)
I have been meaning to post the surrounding text of the famous passage in which George F. Kennan, a noted Sovietologist, cold warrior, and advocate of realpolitik, expressed his view that US policy in the post-war years should be unsentimental in its attitude toward Asia. As director of the State Department’s Policy Planning Staff from 1947 to 1950 (under George Marshall and Dean Acheson), Kennan was one of the principal architects of US post-war strategy and the formulator of the policy of long-term “containment” of the Soviet Union. So the piece makes for interesting reading today, especially in light of the following:
*the destruction of Asian savings by the US government-generated debt & dollar tsunami
*the rise in food prices in Asia
* the ongoing rush by Asian governments (along with everyone else) to buy up world farmland
* the potential for global water-wars in the immediate future.
KENNAN:
II. Far East
“We are deceiving ourselves and others when we pretend to have the answers to the problems which agitate many of these Asiatic peoples.
Furthermore, we have about 50% of the world’s wealth but only 6.3% of its population. This disparity is particularly great as between ourselves and the peoples of Asia. In this situation, we cannot fail to be the object of envy and resentment. Our real task in the coming period is to devise a pattern of relationships which will permit us to maintain this position of disparity without positive detriment to our national security. To do so, we will have to dispense with all sentimentality and day-dreaming; and our attention will have to be concentrated everywhere on our immediate national objectives. We need not deceive ourselves that we can afford today the luxury of altruism and world-benefaction.
For these reasons, we must observe great restraint in our attitude toward the Far Eastern areas. The peoples of Asia and of the Pacific area are going to go ahead, whatever we do, with the development of their political forms and mutual interrelationships in their own way. This process cannot be a liberal or peaceful one. The greatest of the Asiatic peoples-the Chinese and the Indians-have not yet even made a beginning at the solution of the basic demographic problem involved in the relationship between their food supply and their birth rate. Until they find some solution to this problem, further hunger, distress, and violence are inevitable. …..
…In the face of this situation we would be better off to dispense now with a number of the concepts which have underlined our thinking with regard to the Far East. We should dispense with the aspiration to “be liked” or to be regarded as the repository of a high-minded international altruism. We should stop putting ourselves in the position of being our brothers’ keeper and refrain from offering moral and ideological advice. We should cease to talk about vague and — for the Far East — unreal objectives such as human rights, the raising of the living standards, and democratization. The day is not far off when we are going to have to deal in straight power concepts. The less we are then hampered by idealistic slogans, the better……”
— George F. Kennan, Policy Planning Study 23 (PPS23), Foreign Relations of the United States (FRUS), 1948
[From Russell Wvong’s website, via
Gilles D’Aymery in a piece on the improper use of this quote by Noam Chomsky and others atSwans Commentary.
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