Monthly Archives: July 2013

Gold Diverging From Fine Wine as Bullion Investors Lose Faith

"The Liv-ex Fine Wine 100 Index (LIVX100) tripled in the past 10 years and gold advanced fourfold. The wine gauge rose 5.9 percent this year as bullion slid 17 percent. The Wine Investment Fund, which manages about $50 million of assets, expects the Liv-ex gauge to rise by about another 7.6 percent by the end of December. Demand for gold, wine and other alternative assets gained in the past several years as equities retreated and bond yields tumbled to record lows as central banks printed money on an unprecedented scale. Gold held through exchange-traded products exceeded all but two of the world’s central-bank reserves." Continue reading →

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Illegal gold mining costs Uganda millions in lost revenue

"As a result of Uganda's central bank deregulating gold sales, local production has increased. The precious metal accounts for 30% of Uganda's export revenue. Illegal mining is having such an impact that experts say it must be stopped in order to shore up revenue collection. A government official said the issue is so alarming that the country exported none of its own gold in April, while Kenya exported 40 kilograms of smuggled Ugandan gold. Some citizens have said police are not responding to calls for them to act on illegal activities. Other reports indicate government officials are profiting from illegal operations through illicit tax collection." Continue reading →

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India finance minister to countrymen: Contain ‘uncontrolled passion’ for gold

"Finance Minister P Chidambaram today asked countrymen to contain their 'uncontrolled passion' for gold and instead save in financial instruments. 'Have faith in our financial sector. Unfortunately, we have difficulty shedding our old habits and put our money in gold,' he said while speaking at an event to mark the platinum anniversary celebrations of state-run Dena Bank. 'The uncontrolled passion for gold must be contained,' Chidambaram said. People should rather switch to financial products to funnel their savings, the Minister said and added the soon to be launched inflation indexed bonds is a very lucrative option." Continue reading →

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Granny’s Gold Bars Are Key to Vietnam Push to Boost Dong

"The target of Vietnam’s campaign to stabilize its currency is in the locked bedroom wardrobe of retired civil servant Vu Thi Huong: gold bars. Huong is among millions of Vietnamese who hold an estimated 300 tons to 400 tons of bullion to store their wealth -- valued at as much as $19 billion at domestic prices and equal to official U.K. holdings -- a legacy of more than a century of war, revolution and economic turbulence. The central bank wants to convert the hoard, much of it smuggled in, into dong deposits to strengthen the currency, which has slid 21 percent against the dollar in five years." Continue reading →

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‘No Longer Necessary’: Hungary Wants to Throw Out IMF

"A long-running dispute between Hungary and the International Monetary Fund escalated on Monday when the head of the country's central bank called on the IMF to close its office in Budapest, saying it was no longer needed. On Monday, central bank chief Matolcsy said Hungary would repay the 2008 loan in full by the end of this year. He said the government had succeeded in pushing its budget deficit below the EU ceiling of 3 percent of GDP. Matolcsy is the architect of Orbán's unorthodox economic policy which is based on imposing heavy special taxes on large companies. He became central bank governor four months ago." Continue reading →

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Nearly 2,500 British bankers paid over €1m, says EU regulator

"In 2011, 2,436 UK-based bankers earned in excess of €1m, down from 2,525 the previous year, according to a study by the European Banking Authority. The most senior bankers working in Britain took home on average €1.44m in 2011, down from €2.3m in 2010, highlighting the impact of the downturn in the financial services industry.In total, the country's highest paid financiers shared a salary and bonus pool in 2011 worth €3.51bn, down from €5.8bn in 2010.However, based on average pay levels, bankers in Spain earned the most, with earnings of €2.26m (£1.95m) in 2010 and €2.44m in 2011. The number of individuals paid more than €1m in Spain was 125." Continue reading →

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Why South Africa’s Currency Has Been Getting Destroyed

"The South African rand (ZAR) is getting absolutely brutalized lately. The currency has fallen from levels around 9.00 against the U.S. dollar just three weeks ago to levels around 10.00 today. 'The key negative risk from headlines out of the mining sector wage negotiations is playing out in a text book fashion – alongside plummeting gold prices and rising [U.S. Treasury] rates – creating a perfect storm for ZAR,' write Bank of America Merrill Lynch currency strategists. The ongoing unrest in South Africa's mining sector – which relies heavily on exports of gold and other metals – is dragging down the country's economy." Continue reading →

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Unemployment crisis in Italy hits immigrants the worst

"Immigrants are being hit harder than Italians by the country’s unemployment crisis, a new report showed Monday, saying the figures were 'extremely worrying' and could lead to 'major social destabilisation'. The report said the number of unemployed foreigners in the country was currently 385,000 — up from 220,000 at the beginning of the economic crisis in 2008. The report also outlined the importance of immigrants in Italian society and said those who did work were often stuck in low-skill and low-pay jobs. Without migrants, Italian demographic growth would be zero and the population would be ageing at a faster rate, according to the report.." Continue reading →

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Germany fears revolution if Europe scraps welfare model

"German Finance Minister Wolfgang Schaeuble warned on Tuesday that failure to win the battle against youth unemployment could tear Europe apart, and dropping the continent's welfare model in favor of tougher U.S. standards would spark a revolution. Germany, along with France, Spain and Italy, backed urgent action to rescue a generation of young Europeans who fear they will not find jobs, with youth unemployment in the EU standing at nearly one in four, more than twice the adult rate. If U.S. welfare standards were introduced in Europe, 'we would have revolution, not tomorrow, but on the very same day,' Schaeuble told a conference in Paris." Continue reading →

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Europe’s ‘new deal’ for jobless dismissed as rhetoric

"The Prado in Madrid has become the unlikely symbol of Europe’s unemployment curse. The museum recently advertised for 11 low-level jobs, mostly guarding paintings by Velasquez, El Greco and Picasso from enthusiastic tourists. The starting salaries were just €13,000 (£11,100) a year yet, to the astonishment of the curators, 18,524 people applied. The print-out list of applicants runs for 357 pages. This is the 'white heat' of a youth jobs crisis that has crept up on EU leaders and now threatens to set off a volcanic political eruption. Francois Hollande, the French president, warned on Tuesday that failure to offer these people hope risks destroying the EU altogether." Continue reading →

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