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Sunday, November 30, 2008

Complex Oil Outlook for Coming Year


Foreign Confidential....

The oil outlook is complex.

On the one hand, the market is clearly over-supplied.

On the other hand, a combination of a cold snap in the United States and OPEC production cuts could push crude prices higher despite the global economic meltdown.

That said, Saudi officials' stated target of $75 per-barrel oil is probably just public relations. The kingdom does not need $75, unlike Iran and Venezuela.

Top Hotels Increasingly Targeted by Terrorists

Foreign Confidential....

Intelligence experts say leading international hotels are tempting targets for terrorists.

Greg Katz reports:

Across the world, the finest hotels draw foreign businessmen, droves of tourists, and local movers and shakers who crowd the restaurants and bars to see and be seen. There are society weddings, banquets and even "Sweet Sixteen" birthday parties for the daughters of the well-to-do.

In places where Western-style amenities are rare, international hotels are often the most vital connection to the rest of the world. Their business model demands openness and accessibility for visitors and guests, making total security virtually impossible despite security barriers, metal detectors and high-tech surveillance gear.

That's why, experts say, hotels have been attacked by terrorists in Pakistan, Jordan, Afghanistan and now Mumbai, India, where commandos battled security forces for three days in a deadly rampage focused on the renowned Taj Mahal and Oberoi hotels.

"There is obviously a trend for hotels to be targets," said Christopher Newberry, general manager of the Serena Hotel in Kabul, Afghanistan, where three militants slaughtered eight guests in January.

Continue here.

China's Economy Could Grow by 10% Next Year

China's economy may grow 10% next year, according to China Confidential analysts, thanks to a massive government stimulus of at least $800 billion. Measures to ease the tax burden on consumers and support the stock market--direct stock market intervention in response to an anticipated major correction--are also in the works.

The World Bank disagrees. It forecasts 7.5% growth in China in 2009.

Did Pakistan Aid the Assault on Mumbai?

The prime suspect for the attack on Mumbai, Lashkar-e-Toiba, is the biggest and most violent of the Islamist groups fighting against India for a separate Kashmir. It has also, over the years, built up close links with al-Qa'ida and ISI, the Pakistani intelligence service.

It is Lashkar's policy of bombings and shootings within India as well as Kashmir that has brought Pakistan and India, two nuclear-armed powers, to the brink of conflict in recent years. The link to the ISI, often described as a state-within-a-state in Pakistan, may again shift relations between India and Pakistan to incendiary levels if evidence is uncovered that the intelligence organisation was involved in the attack.

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Oil Rebound at Least Two Years Away




Concerned about a possible return to crushingly high crude oil prices?

There is good news and bad news on that score.

The good news is that a rebound in the oil markets is at least two years away.

The bad news is that a rebound in the oil markets is at least two years away--meaning, oil will come roaring back and oil-importing nations will suffer terribly.

In 2011, China Confidential analysts say, demand in China and India could outstrip supply and send oil prices soaring.

In order to meet rising demand, national and multinational oil companies will have to bring twice as much newly found oil onto the market in the next 22 years than what they did in the last 22 years. In other words, large oil companies will have to find and deliver 70 million barrels a day of new supply to the market. Few analysts expect that will happen.

As the world runs on oil and is likely to continue to run on oil for the next two decades, regardless of the investments in conservation and alternative energy, the case for a national oil company in the United States is extremely compelling. The U.S. sits atop enormous, untapped oil reserves, including heavy oil and onshore and offshore conventional oil; but while these resources may be profitable in principle, even at today's prices, they are not profitable enough for multinationals addicted to relatively cheap reserves of foreign oil.

Saudis Likely to Buy More Gold, Sell Oil for Gold




Foreign Confidential....

Saudi Arabia is increasingly bearish on the dollar--and bullish on gold.

Greg Pinelli, meanwhile, makes a convincing case for (a) further gold purchases by the Gulf states, and (b) a new role for the precious metal.

The twin conundrums the Kuwaitis and Saudis have faced in particular is how to protect themselves from the fallout of either unacceptably low or high oil prices and (critically) depreciating value of the currency they receive for their precious oil - US Dollars.

The solution to the two great concerns for the future - "What to do after oil?" and "How do we retain value from our Dollar payouts?" may rest with gold. It most certainly doesn't lie with an alternate paper currency. The EURO is rife with issues, not the least of which is reconciling drastically different nation states to a common economic vision and financial execution. The YEN is as dramatically leveraged as the US$, burdened by debt and a flagging international heft.

The answer? Initiation of a new payment regime - a 10% gold payment share between 2009 and 2012, 20% thereafter. The rest of the bill? Payable in US$. Gold has a long and very respected history in the Middle East. It is already held in very sizeable amounts by the Saudis and Kuwaitis. New gold, however, could be used to satisfy the region's concern for its following generations. It would form, literally, the foundation for mega banking centers and the stabilization of the currency they will still need to receive in mountain like proportions in the future.

Click here to read the whole analysis.

Gold May Rise for Fifth Straight Week





Foreign Confidential....

Bloomberg's Claudia Carpenter reports from London that gold may rise for a fifth straight week on speculation the dollar will extend a decline, increasing demand for the precious metal as an alternative investment.

Carpenter says 22 of 35 traders, investors and analysts surveyed from Melbourne to Dallas from Nov. 26 to Nov. 28 advised buying gold, which climbed 3.4 percent last week to $819 an ounce in New York. Eight said to sell; five were neutral.

Will Governments Confiscate Gold?


Replying to a reader's inquiry, The Motley Fool blogger Chris Martenson outlines the improbable conditions under which he will become concerned that gold forfeiture and seizure rules might be in the offing:

1. Gold climbs to some meaningful dollar value that both represents a threat to the perceived value of the dollar and represents a meaningful target for seizure. For me that number begins around $5,000/ounce and becomes critical around $10,000/ounce.

2. Some foreign country with a resource we want demands payment in gold. For example, if some oil-producing nation suddenly demands gold in exchange for oil, I would place a very high probability that gold will be seized under the umbrella of "national security."

3. A major bank, playing the short side of the paper gold trade, gets caught, is unable to deliver, and faces insolvency as a result. Here I might also expect the rules to suddenly be changed to protect yet another "too big to fail" institution.

4. A new international standard of currency exchange arises, based in whole or part on gold. In this scenario I could see all gold in the world being declared off-limits for everybody except for official purposes and uses.

While reason #4 gives me the most pause, I am counting on two things: My ability to see this coming from a long way off, and my ability to sell out at a much higher price prior to it happening.

But the short version of all this is that gold is not money in today's financial system, and it is a tiny asset compared to other more readily identified and liquid assets. Those, like Argentinian bank accounts in 2001, would presumably become the first targets of a desperate government.

Click here to read the whole response.

Obama's First Foreign Policy Tests


President Obama's first foreign policy and national security tests are likely to be the following:

1. The fall of Afghanistan. The country's corrupt central government barely controls the capital, Kabul. It is only a matter of some months before the Taliban again take power, thanks to the Bush administration's failure to wipe them--and Al Qaeda--out after 9/11. Instead of formally declaring war on Afghanistan, which aided and harbored Al Qaeda, allowing it to set up a state within a state, the United States took too long to respond with too little force and relied on notoriously unreliable Afghan warlords, many of them openly pro-Islamist, for most of the real fighting. A swift, massive, merciless, military response to 9/11--including justifiable use of tactical nuclear weapons, if necessary--would have ended the Taliban and Al Qaeda for once and all. The whole world was with the U.S. in the immediate aftermath of the Islamist mega-attacks--the worst-ever attacks on U.S. soil--but the Bush administration, for all its tough talk and conservative rhetoric, backed down from a true, World War II-style campaign that would have delivered mass death to the enemy that delivered mass death to the U.S. in New York City and Washington, D.C.

2. A nuclear armed Iran. Successive, Democratic and Republican U.S. administrations have appeased the Islamists in Iran, starting with the catastrophic Carter administration, which secretly assisted the Islamist overthrow of the pro-U.S. Shah, a modernizing monarch, in a craven, cynical attempt to curry favor with the Ayatollah Khomeini. Along with Afghanistan, Iran should have been hit--extremely hard--after 9/11. The regime should have been obliterated; Iran's war-making capabilities, destroyed for at least a decade. Apparently guided by an idiotic, reverse domino theory--the idea that installing a democracy in Iraq would transform the Middle East--in addition to incredibly faulty intelligence and obvious disinformation, the U.S. under President Bush attacked, invaded and occupied a contained secular enemy that had no meaningful ties to Islamism or 9/11 and allowed Iran to continue its terror-sponsoring, nuclear-developing programs. Obama may have to deal with the awful result--an atomic weapon in Iranian hands--within weeks of moving into the White House. China Confidential analysts believe that Iran's Hitlerian maniac-in-chief, Mahmoud Ahmadinejad (whom President-elect Obama has offered to meet in face-to-face talks) is determined to announce a major nuclear breakthrough in time for this February's 30th anniversary celebrations of the Islamic Republic.

3. A terrorist attack against U.S. targets abroad--or the U.S. homeland. Al Qaeda has no intention of cooperating with Washington while it rescues and tries to rebuild the devastated U.S. economy. On the contrary, the terrorist group clearly believes now is the time to escalate the global jihad. More than seven years after 9/11, suicidal sleeper cells are believed to be present in the U.S., where Islamist organizations and sympathizers have been allowed to take root and actually flourish. Mumba's urban warfare is a likely model, although many experts insist that Al Qaeda remains focused on maga-attacks and weapons of mass destruction.

Saturday, November 29, 2008

Why Terrorists Tried to Kill the Golden Songbird


Suketu Mehta's Op-Ed essay in The New York Times is a must-read.

My bleeding city. My poor great bleeding heart of a city. Why do they go after Mumbai? There’s something about this island-state that appalls religious extremists, Hindus and Muslims alike. Perhaps because Mumbai stands for lucre, profane dreams and an indiscriminate openness.

Mumbai is all about dhandha, or transaction. From the street food vendor squatting on a sidewalk, fiercely guarding his little business, to the tycoons and their dreams of acquiring Hollywood, this city understands money and has no guilt about the getting and spending of it. I once asked a Muslim man living in a shack without indoor plumbing what kept him in the city. “Mumbai is a golden songbird,” he said. It flies quick and sly, and you’ll have to work hard to catch it, but if you do, a fabulous fortune will open up for you. The executives who congregated in the Taj Mahal hotel were chasing this golden songbird. The terrorists want to kill the songbird.


Click here to continue.

Not Just the Economy, Stupid

Dateline USA....

There is more to the Bush-Obama cooperation than meets the eye. More than the economy, even.

China Confidential analysts say the outgoing and incoming administrations have been briefed about possible terrorist attacks over the holiday season--a threat that is believed to be growing in the wake of the Mumbai attacks.

In theory, it would not be difficult for Al Qaeda and other Islamist terrorists to attack any American city. Office and residential buildings, schools, hospitals, airports and train stations, malls and shopping centers ... all soft targets are clearly vulnerable.

Eyewitness: Black Cats Cleared Taj Room by Room


Phil Smith has been the Reuters Editor for South Asia since 2005. Previously he worked for Reuters in Sydney, Singapore and London. Phil was out on the streets of Mumbai with a reporter's notebook throughout the militant attacks on India's financial capital. In the following story, he describes his vigil outside the Taj Mahal Palace Hotel.

By Phil Smith

MUMBAI (Reuters) - The gunbattle at Mumbai's famous Taj Mahal Palace Hotel was finally over after three bloody days, but the dull thud of explosions still vibrated up through the shoes of those standing nearby.

India's crack NSG "Black Cat" commandos went from room to room to secure the battle-scarred old building, mopping up after brazen, coordinated attacks that killed at least 155 people at three sites in the heart of India's financial hub.

The bodycount rose as one last gunfight in the Taj marked the end of the drama, during which scores of foreigners hid terrified in their rooms and many more were taken hostage.

Live television images were jolted by explosions, either from stun grenades or controlled detonations used to destroy ordnance found by the Black Cats as they prowled through the hotel.

The gunbattle ended just after dawn on Saturday.

In the early hours I made my way around to the back of the Taj, where a crack Sikh regiment was stationed.

Stray bullets fizzed as they passed overhead in light rain.

By that stage the story had become a little surreal as tiredness and fear set in, like watching a televised news report with me in it unfold before my own eyes.

After 30 years in journalism I knew it was my job to be there but it was still hard to put aside fears for my own safety.


Click here to continue.

Friday, November 28, 2008

US Pundits Miss the Point About Mumbai

Dateline USA....

U.S. pundits who stress the so-called sophistication of the Mumbai attacks miss the point: it is actually not so difficult to carry out such atrocities. All that is needed to paralyze urban centers are groups of minimally trained suicide fighters willing to hunt and kill unarmed civilians in multiple locations.

Consider how much mayhem isolated lunatics were able to cause in school shootings. The global jihad has no shortage of indoctrinated, death-worshipping, hate-filled fanatics.

Cities in the United States and Europe are wide open--easy targets. Beefed-up security measures will help only to a point. The best defense is an effective offense. The enemy must be crushed.

On the Battle for Mumbai

Foreign Confidential....

The Battle for Mumbai is a harbinger of things to come as long as radical Islam is alive and well.

Even now, Islamist terrorists are probably planning new battles--for London, Paris, New York--maybe, even, Washington, D.C.

The Islamist enemy cannot be wished away. It must be utterly defeated--meaning, physically destroyed.

Ein breira--there is no alternative.

Mumbai's Heroic Hotel Workers Saved Many Lives

In a world driven down by greedy and cowardly investment bankers, hedge fund managers, and corporate chief executives, ordinary hotel workers in India are emerging as true heroes. Krittivas Mukherjee reports from Mumbai:

Prashant Mangeshikar could be dead, one of more than a hundred victims of militant attacks across Mumbai landmarks, if it had not been for an employee at the Taj Mahal Hotel.

Mangeshikar, his wife and daughter were in the foyer of the 105-year-old hotel on Wednesday night when Islamist gunmen opened indiscriminate fire in one of a series of coordinated attacks in India's financial capital.

Recovering from the initial shock and chaos, hotel staff shepherded the guests, including the Mangeshikar family, through the service section upstairs -- only suddenly to come face to face with one of the gunmen.

"He looked young and did not speak to us. He just fired. We were in sort of a single file," Mangeshikar, a 52-year-old gynecologist, told Reuters. "The man in front of my wife shielded us. He was a maintenance section staff. He took the bullets."

The tale of the unnamed staff member has echoed across Mumbai where, time after time, hotel workers have emerged as the people who shielded, hid or evacuated their wealthy guests from militants at the Taj and Trident/Oberoi hotels.

Click here to continue reading.

A Tale of Two US Airlines: Delta Cancels Mumbai Service As Continental Maintains Daily Schedule

Delta Air Lines capitulated to Islamist terrorism on Friday. The airline canceled its Mumbai flights again on Friday as the State Department warned that American lives are still at risk there.

Continental Airlines said it planned to maintain its daily service from Newark, N.J.

AJC Issues Statement on India Crisis

As Indian forces for a third day continued to root out terrorists responsible for a wave of deadly attacks across Mumbai, the American Jewish Committee (AJC), which maintains an office in Mumbai and is in close contact with Indian government and Jewish community officials, issued the following statement:

The outlines of the terrorist attacks in Mumbai, India, are becoming clear. The terrorists targeted India, the U.S. and Britain, and the Jewish people. More than 150 were killed, and more than 300 wounded, either by random attacks into crowds or the murder of hostages.

Among the terrorists' targets was the Chabad House of Mumbai, located at Nariman House, and among the reported dead are Rabbi Gavriel Holtzberg and his wife, Rivka. AJC extends its profound condolences to the families and associates of the Holtzbergs, and mourns this unspeakable tragedy -- a deadly attack directed against Jews in a pluralistic society that has always welcomed the Jewish people.

We express our grief over all who have been made victims of this terrorist rampage. We are both deeply saddened and utterly appalled by yet another vicious attack apparently by radical Islamist terrorists upon democracies and upon innocent civilians. In addition to grieving for all the civilians who have been killed, we honor the memories of the brave souls of the Indian security forces who have lost their lives fighting the terrorists.

AJC has longstanding relationships with the government and people of India and the Indian-American community, through our office in Mumbai and our network of offices across the United States. We stand in solidarity with the government and people of India and the Indian-American community at this time of tragedy.

At this dark hour, we reaffirm our determination to continue our work to combat hatred and intolerance throughout the world.
"This is India's 9/11," said AJC Executive Director David A. Harris, "and should serve as another wake-up call for the world."

Indian Commandos Confront Terrorists

Wednesday, November 26, 2008

Mumbai Signals New Phase in Islamist War on West


Foreign Confidential....

Intelligence experts say the Islamist war on the West, which began in earnest on September 11, 2001, could be entering a new phase, starting with the highly coordinated attacks on Mumbai

Low-intensity urban--and suburban--warfare aimed at paralyzing and demoralizing Western and non-Muslim, Western-oriented societies followed by a new wave of mega-attacks, including nuclear or radiological dirty-bomb attacks ... that is the new face of Islamist terror, according to this reporter's expert sources.

Mumbai Model for Future Attacks on the West

Foreign Confidential....

The brazen, coordinated, Islamist attacks on Mumbai--with a clear focus on killing Westerners--constitute a template for future terrorist assaults on Western cities by jihadist and Al Qaeda-associated groups.

While the West, since 9/11, has been focused on the threat of mega-terrorist attacks, Al Qaeda and its associated and affiliated groups have been plotting low-tech assaults, which can be carried out by suicide squads armed with automatic weapons, hand grenades, and other conventional weapons.

Imagine several SUVs descending on midtown Manhattan--or New York airports--depositing terrorists armed with ordinary handguns and shotguns. Imagine how many innocents could be slaughtered before the terrorists could be taken out.

Imagine, too, attacks on hospitals, schools, housing complexes ... all these things are being planned and plotted by Al Qaeda. No nation, no city, no neighborhood is safe as long as this group is alive and well.

US Warns of Al Qaeda Threat to NY Subways as Terrorists Lay Siege to India's Financial Capital

The U.S. government has warned against a possible terrorist plot targeting the New York subway system during the holiday season, a spokeswoman for the Department of Homeland Security said Wednesday.

In a joint internal statement sent late Tuesday, the department and the Federal Bureau of Investigation warned state, local and other officials of a 'possible but uncorroborated' Al Qaeda threat against the New York transportation system, said Laura Keehner, a spokeswoman for the Department of Homeland Security.

The agencies were still working to verify the information. Commuters and travellers on transit systems in major metropolitan areas would likely see increased law enforcement presence during the holiday season, Keehner said.


Assault on Mumbai

Overseas, India's financial capital, Mumbai, is under siege, as heavily armed attackers have targeted numerous locations throughout the city in an unprecedented, ongoing assault.

The state government says nearly 80 people are confirmed dead and 150 others are injured so far.

Police say gunmen with automatic weapons and grenades have attacked at least nine different places in this highly coordinated series of terror attacks. The sites include two train stations and two luxury hotels - "The Taj Colaba" and the "Oberoi"--as well as hospitals and a dockyard.

Authorities say gunmen are still barricaded in the hotels, where they are believed to be holding hostages. Reporters outside The Taj Colaba report hearing an explosion inside the luxury hotel. Gunmen also have attacked the well-known Leopold's restaurant, which is popular with tourists.


Islamists Suspected


A businessman from London, Rakesh Patel, told local television that he escaped from the Taj Colaba Hotel after being taken hostage by two young gunmen. He said the attackers specifically wanted people with British or American passports.

The railway inspector general in Mumbai KP Raghuvanshi says the attacks are terror-related.

Islamist groups are suspected.

India's Home Minister Shakeel Ahmed says the main priority is to overpower the attackers.

A member of parliament from southern Mumbai, Milind Deora, says the explosions were caused by grenades, not bombs. But witnesses say the gunmen also fired indiscriminately.

Authorities say Indian army troops have been called in to help police secure the city.

Citigold Raises Cash, Lists on NASDAQ Dubai

Foreign Confidential....

Australian-based Citigold Corporation Limited (ASX:CTO; NASDAQ DUBAI:CTO; FSE:CHP) is now listed on the NASDAQ Dubai following the rebranding this month of the Dubai International Financial Exchange (DIFX).

Citigold Managing Director Mark Lynch said these moves reflect the growth of Dubai as an international financial centre. “Citigold’s recent $35 million capital raising deal with the Dubai Group demonstrates our company’s long term commitment to this major gold and financial centre. The region is now further enhanced through rebranding the international stock exchange, Nasdaq Dubai."

Adding further strength to Citigold’s fundamentals is the current Australian gold price which is above $A1,200 per ounce with the fall in the Australian dollar.


Earlier Placement to Dubai Group

The Dubai Group, a leading diversified financial services company of Dubai Holding, through its subsidiary Dubai Ventures Group Limited, acquired up to an 18% stake in Citigold for A$ 35 million. The capital raising raised up to A$35 million through a staged securities placement to Dubai Group. Initially a placement of 50 million shares at A$ 0.20 per share (A$10 Million) will be carried out followed by a Convertible Loan at a 9% p.a. interest rate that is convertible into shares of the Company at A$ 0.26 per share within a 2.5 year term.

Lynch said, “this transaction reflects our long-term view on gold and Citigold’s ability to enhance shareholder value by ramping up production to 250,000 ounces per annum by 2011.” Citigold re-affirmed its 10 million ounce gold deposit at Charters Towers.

During the September quarter Citgold's completed the capital raising to underpin the capital works program at the Charters Towers gold mining operations. Citigold aims to ramp up production and increase Citigold’s status to a mid tier gold producer. This saw the removal of a major restriction to the ramp up of mining operations, with the completion of the 3MW electric grid power upgrade to site. The completion of the upgrade coincided with the move to a 24/7 operation. This combined increase in both power and operating time in August has now been established. Citigold is now accelerating the underground capital works necessary for increasing gold output.

The mine plan is to achieve an output, at full production, of over 300 000 ounces of gold per year from the overall Charters Towers Project. The review concluded that current mine planning is largely based on actual achieved performances. On the basis of the equipment that Citigold now owns and operates, plus the judicious use of specialist contractors when required, there is no technical reason why the development and production targets should not be achieved.


Gold Production

Gold revenue for the quarter from production was A$4.33 million on the sale of 3,960 ounces. This was at an average per ounce sale price of A$1,094 per ounce. The cash operating cost for the quarter was A$371 per ounce. The amount was lower than usual due to the fact that some of the production was mined and expensed in the previous quarter. Excluding the previous quarters production the cash operating cost would have been approximately A$480 per ounce. The cash operating cost coupled with the current Australian gold price, above the $1,200 per ounce level, implies a gross profit margin above 50 per cent.

Cash at end of September quarter was $9.0m. Market Capitalisation was $133m. Citigold's last trading price was 20 cents, up 14.5%

Maoists Kill Five Policemen in India

At least five policemen were killed Tuesday in a landmine blast triggered by Maoist rebels in India's central state of Chhattisgarh. The explosion that took place in the southern Bastar district of the state blew up a bridge killing five policemen and injuring two other security personnel.

The rebels carried out the blast when the policemen were returning after their election duty at polling booths in the region.

Chhattisgarh is one of the six Indian states holding elections.

Senior police officials and additional police forces have been sent to the region, considered a hotbed of Maoist militancy.

Maoist militants, who claim to be fighting for the rural poor, operate in 13 of India's 29 states. They usually target police and government installations. The Maoists are so powerful in several districts of central and eastern India that they virtually run a parallel administration.

According to independent estimates, over 500 people, including civilians, police and rebels, have been killed in Maoist violence in India since the beginning of the year.

Lawyer to Jury: Chevron Killed Nigerians

Seeking to hold Chevron Corp. accountable for its practices overseas, an attorney for 19 Nigerian villagers urged a federal jury Tuesday to find the oil company responsible for the killing and wounding of four Nigerians during a protest at an offshore oil platform.

Dan Stormer, giving his closing argument in the case, said the San Ramon-based oil company paid members of the Nigerian military and brought them by helicopter to the oil platform where they began shooting unarmed villagers peacefully protesting Chevron's destruction of the Niger Delta environment.

"We know that the military was transported, directed, paid, housed and supervised [by Chevron] in its invasion of that platform," Stormer told the nine-member jury. "They sent in people who were notoriously vicious."

Click here to continue.

In other news, Chevron (NYSE: CVX) kicked off production from a new Indonesian oil field. Read all about it here.

Tuesday, November 25, 2008

Space Experts Alert UN to Killer Asteroid Threat











While narrow-minded nationalists and religious fanatics promote violence, hatred, and extremism in an effort to divide humanity, a few global visionaries are raising awareness of a real threat--possible planetary collision with an asteroid--which should unite all nations on Earth. Danica Kirka reports from Vienna, Austria:

It is disaster planning on a galactic scale: Space experts want to come up with a contingency plan on what to do in case a killer asteroid collides with Earth.

The experts, including former American astronaut Rusty Schweickart, told U.N. officials Tuesday that the international community needs a plan to counter so-called Near Earth Objects in advance of the potential catastrophe. Deflecting asteroids — or at least evacuating people in areas where they might strike — could save millions of lives.

"This is a natural disaster, which is larger, potentially, than any other natural disaster we know of," Schweickart said. "However, it is preventable ... that's a very important thing to keep in mind. But it is our responsibility to take action to do that."

Asteroids are small planetary bodies that revolve around the sun, according to the NASA Web site, which states that many scientists believe an asteroid collided with Earth about 65 million years ago, helping cause environmental changes that led to the extinction of the dinosaurs.

Schweickart, a former Apollo 9 crew member, spoke at a news conference after briefing U.N. officials on a recent report called "Asteroid Threats: A Call for Global Response." The report was compiled by the International Panel on Asteroid Threat Mitigation that is made up of members of the Association of Space Explorers, among others.

The report, among other things, calls for an international decision-making program within the framework of the United Nations to decide on actions to counter asteroids. It also urges the creation of an information, analysis and warning system that would operate telescopes worldwide to detect and track possibly harmful objects.

Schweickart acknowledged that devastating collisions happen "very infrequently" but warned the risk could not be ignored. Next year alone, six asteroids have a "very small" probability of hitting the Earth, he said.

Click here to read the whole article and here to read a 1989 report about a close call (in cosmic terms) with an asteroid that is expected to return.

In 2004, astronomers discovered the killer asteroid Apophis--the Destroyer--named for an ancient Egyptian mythological serpent that dwells in the eternal darkness of the underworld and tries to swallow Ra during his nightly passage. NASA estimated that an impact from Apophis would release more than 100,000 times the energy released in the nuclear blast over Hiroshima. Thousands of square kilometres would be directly affected by the blast but the whole of the Earth would see the effects of the dust released into the atmosphere.

Last April, a German schoolboy, Nico Marquardt, revised NASA's figures for the chances that Apophis will hit earth. If the asteroid hits a satellite in 2029, its path could be diverted enough to cause it to collide with Earth on the next orbit, in 2036. NASA had calculated the chances as 1 in 45,000 but the 13-year-old, in his science project, made it 1 in 450.

NASA agreed.

Sign of the Times: Americans Burying Cash and Gold

More and more Americans, especially rural residents, are reviving an old tradition: burying their cash and valuables, including gold and silver coins, as an insurance policy against a massive financial and banking crisis.

The Midnight Gardener website advertisement reads:

This amazing watertight tube has a 12" x 4" interior dimension. In this photo, it holds over $4000 in gold, silver and paper money and has an enormous amount of space remaining. Using a conservative estimate, we believe that $192,000 in gold coins will easily fit. Unfortunately we do not have that many Krugerrands at this time to test this theory. BUT IF I DID THEY WOULD BE IN MY MIDNIGHT GARDENER! This product is made with high quality plastic resin to maintain superior impact and load resistance. Our product is engineered to withstand the most extreme outdoor environments.

Is Israel Facing Financial Disaster?

The prices on the Tel-Bond 40 index are presently reflecting the grimmest of pictures: that one-third to one-half of the companies on the index will crumple like tissue paper.

Click here for the story.

Saudis Screening for Gold Stocks




Foreign Confidential....

Follow the money--Saudi money--if you want to make money and can afford the risk of speculating in tumultuous times.

Saudi investors are buying physical gold and screening for undervalued equities in gold mining and energy.

The most interesting gold mining stocks, in Saudi eyes, are well managed, undervalued juniors with well-thought-out plans for growth through acquisition.

Monday, November 24, 2008

Iran Making Big Inroads in Latin America


Foreign Confidential....

Iran is courting Latin America‘s leftist bloc with active diplomacy, joint business projects and aid while gathering support for its suspect nuclear program.

Nicaragua has received Iranian aid pledges for a dam and milk-processing plants, and is playing down U.S. concerns about Iran‘s nuclear-weapon ambitions.

Iran has also promised Bolivia $1 billion in aid and investment, including plans to build a cement plant, dairies and two public health clinics.

Some of Iran‘s ambitions may be dampened by falling oil prices, but its checkbook diplomacy is likely to continue.

Venezuela could also give Iran breathing space as it tries to weather the financial pressure of U.N. and U.S. sanctions over its nuclear program. Venezuela could end up being an outlet for Iran to move money, obtain high-tech equipment and access the world financial system.

Venezuela has already become Iran‘s gateway for travel to the region, with a flight between Tehran and Caracas every other Tuesday. Chavez says Venezuela‘s state airline bought an Airbus jet especially for the route, which includes a stop in Damascus, Syria. Venezuela has a large Arab community of Syrian and Lebanese immigrants, many of whom arrived decades ago.

U.S. officials say they are worried about the possibility of terrorists and Iranian intelligence agents arriving on the flights. The U.S. State Department charged in an April terrorism report that "passengers on these flights were not subject to immigration and customs controls."

One of the biggest worries for U.S. and Israeli officials is Iran‘s long history of funding and aiding Islamic militant groups like Lebanon‘s Hezbollah. They point to accusations by Argentine authorities that Iran backed Hezbollah in carrying out the 1992 bombing of the Israeli Embassy in Buenos Aires which killed 29 people, and also the 1994 attack which leveled the Jewish community center there and killed 85. Iran and Hezbollah have denied involvement.

The U.S. Treasury Department announced in June that it found Hezbollah was receiving support from a Venezuelan diplomat and a Lebanese-born businessman living in Caracas. The diplomat, Ghazi Nasr al Din, is assigned to the Venezuelan Embassy in Syria, and the U.S. said he used his position to provide financial support to the Lebanese militant group and "counseled Hezbollah donors on fundraising efforts." The diplomat is also accused of arranging travel for Hezbollah members to and from Venezuela, and to attend a training course in Iran.

Opinion: Obama Should Form a National Oil Company to Develop North Dakota's Huge Bakken Formation

Dateline USA....

Here's an energy independence/economic stimulus idea: President-elect Obama should commit to creating a government-owned, national oil company to develop domestic oil reserves, including the massive Bakken formation of western North Dakota, heavy crude oil, and conventional crude that can be produced from old fields using enhanced oil recovery methords (similar to heavy crude recovery methods).

The Bakken Formation is an amazing story. During the Presidential campaign, Obama expressed support for drilling the formation, which, according to the U.S. Geological Survey, contains over 4 billions barrels of recoverable oil--enough oil to run 5 million cars for 30 years. Many geologists and scientists believe the reserves, which lie two miles below the surface, could be closer to 200 billion barrels--more than 20 times the controversial Arctic National Wildlife Refuge (ANWR).

Sunday, November 23, 2008

Report: US Begging Gulf States for Foreign Aid







Foreign Confidential....

Now hear this: Kuwait's daily newspaper got the story right. The United States is begging Persian Gulf countries for foreign aid--nearly $300 billion--to help stem the global financial collapse.

Quoting "highly informed sources," Al-Seyassah reported last Thursday that the Bush administration has asked Saudi Arabia for $120 billion, the United Arab Emirates for $70 billion, Qatar for $60 billion, and Kuwait for $40 billion.


The money is reportedly being sought to help the automobile and banking industries and other companies in danger of going out of business.

The four countries, which together produce 14 million barrels of oil per day, are estimated to have amassed close to $1.5 trillion in surplus during the past six years due to record-high oil prices, which have since rapidly declined.

Case Closed: Hitler Had Only One Ball




Foreign Confidential....

Turns out, the WW II song was accurate: the Nazi monster was monorchic (medical term for having one testicle).

Click here to read the report.

Iran's wannabe Hitler, Mahmoud Ahmadinejad, is believed to have two testicles. But Tehran is rife with rumors of bizarre gay sex and AIDS. This reporter's reaction: if it's not true, it should be.

US Ready to Bail Out Citigroup; Saudi Prince Tipped


Foreign Confidential....

This reporter has learned that a novel--actually, unprecedented--U.S. government bailout of ultra-distressed Citigroup (NYSE: C) is a certainty, and that this is the reason Saudi mutli-billionaire Prince Al-Walid bin Talal increased his investment in the company last week from 4% to 5%. He was tipped off by a senior official in the Bush administration.

Insider trading? It would seem so.

Which again raises the question: why wasn't Lehman Brothers saved? Who benefitted from allowing the venerable investment bank to fail?

The Case for the Coming Explosion in Gold Prices

Foreign Confidential....

Must reading.

James West argues convincingly that the dollar is headed south and gold is set to explode. Click here to read West's analysis.

A Bull Market in Gold Shares?

Foreign Confidential....

Peter Cooper predicts a bull market in gold mining stocks is coming, thanks to Saudi buying, and argues that the best values are in junior-sized companies. Click here to read Cooper's forecast and analysis.

Russia Plans to Drill for Offshore Cuban Oil


Foreign Confidential....


While America inexplicably neglects and discourages domestic oil drilling, Russia is making moves to tap hydrocarbon resources in America's backyard. AP reports:

Russian oil companies could soon begin searching for oil in deep Gulf of Mexico waters off Cuba, a top diplomat said just days before Russian President Dmitry Medvedev visits the island.

Russian oil companies have "concrete projects" for drilling in Cuba's part of the gulf, said Mijail Kamynin, Russia's ambassador to Cuba, to the state-run business magazine Opciones.

Kamynin also said Russian companies would like to help build storage tanks for crude oil and to modernize Cuban pipelines, as well as play a role in Venezuelan efforts to refurbish a Soviet-era refinery in the port city of Cienfuegos, according the article published this weekend.

Medvedev comes to former Cold War ally Cuba on Thursday, part of a tour of Latin America to strengthen his country's economic and political ties in the region. Kamynin said trade between Russia and the island would top $400 million this year.

Washington's nearly 50-year-old trade embargo prohibits U.S. companies from investing on the island. But Cuba's state-run oil concern has signed joint operating agreements with companies from several countries to explore waters that Cuban scientists claim could contain reserves of up to 20 billion barrels of oil.

Click here to continue.

Saturday, November 22, 2008

Obama Outlines a New New Deal

Dateline USA....

US president-elect Barack Obama announced Saturday that he had ordered his economic advisers to produce an economic recovery plan to create 2.5 million new jobs over the next two years.

"We'll be working out the details in the weeks ahead, but it will be a two-year, nationwide effort to jumpstart job creation in America and lay the foundation for a strong and growing economy," Obama said in his weekly radio address.

Obama, who has vowed to make the economy his priority when he takes office from President George W. Bush in January, said the effort should produce 2.5 million new jobs by January of 2011 and lay the foundation of the country's economic recovery.

His announcement came two days after government data showed that new jobless claims had surged to a 16-year high, in a new sign that the world's largest economy appeared to be sliding into a deep recession.

This year, the US economy has shed 1.2 million jobs, and the president-elect warned millions more could be lost next year without urgent action.


Energy and Infrastructure

The Federal Reserve has warned the jobless rate could climb to 7.6 percent in 2009 as the economy struggles with a sharp downturn and a global financial crisis.

Obama said he intended to put people back to work rebuilding roads and bridges, modernizing schools, building wind farms, solar panels and fuel-efficient cars.

He also plans to develop alternative energy technologies that he says can free the United States from its dependence on foreign oil and keep the US economy competitive in the years ahead.

"These aren't just steps to pull ourselves out of this immediate crisis," he said. "These are the long-term investments in our economic future that have been ignored for far too long."

Obama said his economic recovery plan represented "an early downpayment" on the type of reform his administration will bring to Washington.

He said he wanted to form a government "that spends wisely, focuses on what works, and puts the public interest ahead of the same special interests that have come to dominate our politics."

The announcement came amid media reports that the Illinois Democrat had picked New York central banker Timothy Geithner to be his treasury secretary.

Geithner, 47, is well known to Wall Street from his role as New York Federal Reserve chief and was a career official at the Treasury Department from 1988 to 2001, serving under three administrations and rising to undersecretary for international affairs.

As the successor to Republican Henry Paulson, Geithner would become the overseer of a 700-billion-dollar bailout package for distressed banks at a time when the world's largest economy is staring at recession.

- AFP

In China, the Best is Yet to Come

Global doom and gloom got you down?

Forget about it! In China, the best is yet to come.

So says Money Morning contributing editor Keith Fitz-Gerald. Although China's economic growth may slow from 9.6% to 7.75% next year, that is no reason to write China off, according to Fitz-Gerald. He writes:

China is much like America was at the dawn of the Industrial Revolution. Sure, there are problems – and, admittedly, it’s easy to focus on a whole slew of them right now – but there’s still all kinds of potential, too.

If you’ve ever been to China, you know exactly what I’m talking about. You literally can feel the broad sense that the best is yet to come. Contrast that with the United States or Western Europe, where hand wringing, and finger pointing are the norm.

Why is that?

Because, as I mentioned a few weeks back, Beijing “gets it.” And China’s central government is taking major, decisive steps to ensure that China’s people do, too, an admirable example of the kind of leadership that Washington’s self-absorbed politicians seem no longer capable of delivering. Most recently, as Money Morning reported, Beijing approved a $586 billion stimulus package. In an era of trillion-dollar bailouts, that was almost too small to register on the old Richter scale here in America. But it should have.

If America were to put in place a stimulus plan that represented the same proportionate outlay that Beijing’s will for China, we’d be talking about an infusion of nearly $1.83 trillion, or 10.89 times more than the positively puny $168 billion stimulus that went into the hands of U.S. taxpayers last year. And it would probably dwarf anything that President-elect Barack Obama is contemplating right now.


Click here to read the entire--extremely persuasive--essay. The contrast between China's plan to recharge its economy and what is likely to come in the U.S. could not be more dramatic. Like the country he so admires, Fitz-Gerald "gets it."

Friday, November 21, 2008

Corn and Soy Likely to Outperform in Recession

Foreign Confidential....

Although corn and soybeans reached new lows in trading this week, they may do better than other commodities as developed economies head into recession.

In general, agricultural markets are likely to outperform other commodities.

But the outlook for corn and soybeans is most positive because the crops are not as affected by GDP fluctuations as other commodities.

In the United States, corn-base ethanol subsidies--and related farming incentives--are not going to change, especially during an Obama administration. The President-elect is pro-ethanol.

He is also pro-biodiesel, and 80% of U.S. biodiesel is made from soy.

A Fool's Gold Rally or the Real Thing?



Foreign Confidential....

Gold rallied Friday--finally. Has the precious metal broken its newfound bond with oil and reverted to its traditional safe-haven role, or is the pice-hike temporary and bound to fade?

Time--meaning, next week--will tell.

Gold futures ended sharply higher as buying sent it past $800 an ounce.

Gold also found support as participants bought back previously sold positions after options rolled into futures contracts. Traders and investors also added fresh long positions, which anticipate further price increases, after December gold options expired Friday.

December gold rose $43.10, or more than 5.7 per cent, to settle at $791.80 an ounce on the Comex division of the New York Mercantile Exchange. During pit trading hours the contract hit $801.90 but moved as high as $802.80 in after-hours electronic trading.

Wednesday, November 19, 2008

Sources: GE Could Close or Merge CNBC


Dateline USA....

America's premier cable TV business news network, CNBC, could be cut back, shut down, or merged with its sister network, MSNBC, which specializes in political news.

China Confidential has learned that CNBC's principal parent company stockholder, General Electric's NBC unit, is quietly drawing up contingency plans for CNBC in case the U.S. plunges into a 1930s-style depression--or worse. The feeling at GE (NYSE: GE), according to company sources, is that cable TV audiences will desert CNBC in droves--and advertising will practically disappear--in a worst-case scenario.

What government does or does not do would be much more important and interesting than anything so-called corporate America does, sources say.

CNBC is owned by NBC Universal, a media and entertainment company formed in May 2004 by the combination of NBC with Vivendi Universal Entertainment--part of the French media group, Vivendi Universal (now Vivendi SA). GE owns 80% of NBC Universal with the remaining 20% owned by Vivendi SA (EPA: VIV).

MSNBC is owned 50-50 by NBC Universal and Microsoft. MSNBC, like CNBC, shares the NBC logo of a rainbow peacock.

China and Peru Agree on Free-Trade




China and Peru have successfully concluded talks for a free-trade agreement that will strengthen ties between two of the world's fastest growing economies.

The pact will be China's second agreement with a resource-rich country in Latin America, whose exports it needs to fuel a roaring economy.

Chinese President Hu Jintao is visiting Peru as leaders from 21 economies gather this week in Lima for the Asia-Pacific Economic Cooperation summit.

Soybean Prices Ease Despite Strong Global Demand

Dateline USA....

Chicago Board of Trade soybean futures rose slightly Wednesday morning as strong Chinese demand and dry weather in Argentina offset the economic gloom gripping wider markets. But soy and grain futures eased later in the day in tandem with other commodities, including crude oil and industrial metals, as concerns about a deepening global recession affected all markets.

Chicago Board of Trade soybeans ended 5 cents lower at $8.97 a bushel, holding within the roughly $8.72 to $9.22 trading range of the past week.

The good news for soybeans is that while prices maybe dropping, there is strong underlying demand for the crop. This gives soybeans some solid fundamentals on which prices could be based in the future. American farmers have been holding on to their crop, and that should slow the downward progression of prices.

On the downside, the strength of the U.S. dollar has limited countries' ability to buy U.S. soybeans.

Exxon and TPAO Ink Black Sea Exploration Deal






Foreign Confidential....

Exxon Mobil Corp. (NYSE: XOM) and Turkey's state-run oil company, TPAO, signed a deal Wednesday for the joint exploration and development of oil and natural gas off its Black Sea coast.

Turkey imports almost all of its oil and has turned to a policy of prospecting for offshore oil in the Mediterranean and the Black Sea in order to reduce dependence on foreign imports.

TPAO estimates that the Black Sea may hold some 10 billion barrels of oil, which would cover Turkey's oil needs for the next 50 years.

"I hope that this joint venture will be crowned with the discovery of oil and natural and that our dependence on foreign countries will be reduced, or even eliminated," Turkey's Energy Minister Hilmi Guler said at a signing ceremony.

Exploration costs could mount to $450 million (euro355 million), Guler said. Developing resources could reach $20 billion (euro15 billion), the minister added.

The exploration will take place off the coast of the Black Sea port cities of Samsun and Kastamonu, Guler said.

Turkey hopes to start producing oil from the Black Sea by 2015.

Turkey has signed a similar Black Sea oil exploration deal with Brazil's Petrobas.


- AP

Gold Bugs Suspect Manipulation, Fear Confiscation


Foreign Confidential....

Gold bugs and gold standard advocates around the world are increasingly attracted to a new conspiracy theory--that the world's central banks are manipulating the price of gold down ahead of using the precious metal as the basis for a new financial system and confiscating ordinary citizens' gold.

It's a sign of the times that serious investors and analysts are thinking in these terms.

Nightmarish Nuclear News: Russian Reactor for Venezuela, as Iran and Syria Stonewall IAEA


The Guardian reports on a new foreign policy challenge for the incoming Obama administration--plans for a Russian-made nuclear reactor in Venezuela.

Russia's deepening strategic partnership with Venezuela took a dramatic step forward yesterday when it emerged that Moscow has agreed to build Venezuela's first ever nuclear reactor.

President Dmitry Medvedev is expected to sign a nuclear cooperation agreement with his Venezuelan counterpart, Hugo Chávez, during a visit to Latin America next week, part of a determined Russian push into the region....

The prospect of a nuclear deal between Moscow and Caracas, following a surge in Russian economic, military, political and intelligence activity in Latin America, is likely to alarm the US and present an early challenge to the Obama administration.

"Hugo Chávez joins the nuclear club," Russian's Vedomosti newspaper trumpeted yesterday.

Venezuela's socialist leader said the reactor may be based in the eastern state of Zulia. He stressed that the project would be for peaceful purposes. As if to underline that point, four Japanese survivors from the Hiroshima and Nagasaki bombs visited Venezuela this week at the government's invitation.

The energy ministry, which is scouting locations, said the project was at a very early stage. A report which mooted a nuclear reactor long before Chávez came to power has been dusted off.

Despite abundant oil reserves, Venezuela's energy infrastructure is creaking and prone to blackouts. A nuclear reactor would enable the country to utilise its rich uranium deposits and allay criticism that the government has neglected energy investment.

More importantly for Moscow and Caracas, a nuclear deal will showcase a partnership which advocates creating new "poles" of power to check American hegemony.

Nick Day, a Latin American specialist, said the nuclear deal was deliberately timed to pile pressure on the US administration during a moment of transition and weakness.

"Russia is manoeuvring hard in the time between Obama's election and his inauguration. What the Russians are trying to do is to set up a chessboard that gives them greater mobility in negotiations when he [Obama] comes to power," Day said.

He added: "Russia's message is: 'We can exert influence in your backyard if you continue to exert influence in our backyard. If you don't take your missiles out of Poland and end Nato expansion we're going to increase our influence in Latin America and do things to provoke you.'"

In other nuclear news, Bloomberg reports:

Iran and Syria have failed to provide sufficient assistance with two separate investigations into suspected clandestine nuclear work, the United Nations atomic agency said.

"Iran has not offered any cooperation with the agency'' to clear up allegations that it has sought to develop a weapon, the Vienna-based International Atomic Energy Agency said in a report.

A Syrian site bombed by Israel in September 2007 on suspicion that it was an undeclared atomic reactor had ``significant'' quantities of uranium particles, and shared some characteristics of a reactor, the IAEA said. The UN agency said it hasn't yet received documentation to support Syria's stance that it was a conventional military facility.

Corrupt Karzai Regime Crawling to the Taliban



Foreign Confidential....

Where is the outrage?

More than seven years after 9/11, the war in Afghanistan is going very badly.

In fact, the situation is rapidly deteriorating.

The corrupt Karzai government barely controls the capital, Kabul.

The government is desperate for a deal with the resurgent, Islamist Taliban--and showing its desperation and weakness at every turn.

Karzai and his drug-dealing cronies have taken to pleading--begging would be more accurate--for a power-sharing arrangement, even promising to protect the fugitive Taliban leader, the one-eyed monster known as Mullah Omar, against any attempts to capture or kill him.

The United States and its NATO allies may have to settle for a Taliban-controlled country that bans Al Qaeda from restoring its state-within-a-state-style terrorist training camps and operational bases.

That would be the best case scenario, analysts say. Absent a wholesale destruction of Taliban sanctuaries in Pakistan--which is hard to imagine--the Taliban will sooner or later win the war in Afghanistan. It is too late for an Iraq-style U.S. troop surge; and even in Iraq, analysts agree, a secret understanding with Iran to control Shiite militias had as much or more to do with restoring a certain measure of stability and calm than the surge itself.

China Considering Seven-Fold Hike in Gold Holdings



Another sign that the ppresent downward pressure on gold--which could very well continue and further depress the price of the precious metal before it levels and again begins to climb--is temporary.

Following unusually large Saudi gold purchases, China's central bank is considering diversifying out of US dollars and into gold to spread risk in its huge foreign exchange holdings.

A seven-fold increase is possible. State media reported Wednesday that China is weighing a move to increase its gold reserves to 4,000 tonnes from the current 600 tonnes. It did not provide further details.

The People's Bank of China declined to immediately comment on the report when contacted.

China has emerged as the world's largest and fastest-growing holder of foreign exchange reserves, which totalled more than 1.9 trillion dollars at the end of September, according to the central bank.

China became the largest foreign holder of US treasury debt in September ahead of Japan, according to US Treasury Department figures released Tuesday.


Rising Demand for Gold in China


In related news, the World Gold Council said demand for gold in China rose 18 percent in the third quarter as consumers turned to the precious metal as a safe haven for their cash.

Demand rose to 109 tons in the third quarter, the majority of which is attributed to a strong rise in the Chinese mainland, the council said yesterday, citing figures complied by researchers GFMS Ltd.

Demand from the mainland rose 20 percent to 99.8 tons. In Hong Kong it increased 7 percent to 3.8 tons while demand in Taiwan shrank by 6 percent to 5.4 tons.

China's gold jewelry demand grew 9 percent to 92.5 tons in the quarter as sharply lower prices persuaded consumers to overcome their reluctance to spend in the gloomy global economic environment.

The retail investment market was particularly animated in China and demand from the segment more than doubled to 16.5 tons as gold's safe-haven status appealed to investors in a time of financial crisis.


Mixed Near-Term Outlook

Over the next quarter, the outlook for gold across China is mixed, the council said.

The arrival of the Chinese wedding season may provide some support for jewelry purchases, particularly if the gold price steadies at the lower levels seen in recent weeks. However, the global economic slowdown is also likely to restrain consumer spending on gold jewelry.

Investment demand, however, is likely to benefit from continued uncertainty.

The strong rise in demand from China, India, Middle East and Indonesia has boosted global gold demand in dollar terms to a quarterly record high. Dollar demand for gold reached an all-time quarterly high of US$32 billion in the third quarter. That was 45 percent higher than the previous record in the second quarter.

Food Scandals Lead to FDA Opening China Office


The United States opened a Food and Drug Administration office in Beijing Wednesday as the first step in an FDA strategy to try to improve food and drug safety standards around the world.

The moves came one week after the U. S. placed a temporary ban on dairy products imported from China, which is still recovering from a scandal involving tainted milk.

Eventually, eight FDA staffers eventually will be based in three Chinese cities: Beijing, Shanghai and Guangzhou.


Global Strategy

FDA's China presence is the first step in a global strategy that will see FDA offices also open in India, Latin America, Europe and the Middle East in coming months.

China in recent months has been embroiled in a scandal involving milk tainted with melamine, an industrial chemical that gives the false appearance of higher protein content. The tainted milk has killed at least four babies and sickened tens of thousands of others.

Melamine was also found to be the culprit in contaminated pet food ingredients imported to the United States from China in 2007, after pet cats and dogs died.


Ban on Dairy Imports


Last week, amidst the latest scandal, the U.S. imposed a ban on imports of Chinese dairy products, unless importers could certify they are free of melamine.

Chinese Foreign Ministry spokesman Qin Gang on Tuesday said his country regrets the US decision, and called for the ban to be lifted as soon as possible.

He also told reporters China plans to send "relevant" Chinese food safety officials to the United States.

Qin gave no specifics, but said China hopes the arrangement will help the two countries strengthen communication and cooperation on food quality and safety.

The posting of FDA officials in China was based on two agreements on the safety of food, feed, drugs and medical devices US and Chinese officials signed last December.

Tuesday, November 18, 2008

The Rise of the Shekel






Foreign Confidential....

Bloomberg reports on Israel's surprisingly hard currency, which in June of this year became one of 17 world currencies that can be traded in multi-currency banks.

While Iran threatens to destroy Israel, militants in the Hamas-controlled Gaza Strip fire rockets into the country and corruption scandals forced the prime minister to resign, the shekel increasingly looks like a hard currency. Since Stanley Fischer, the former International Monetary Fund deputy director, became the Bank of Israel governor in May 2005, the shekel strengthened 12 percent against the dollar and the Swiss franc, 13 percent versus the euro, 3.1 percent against the yen and 41 percent compared with the British pound.

"The shekel is the safest asset in Europe, the Middle East and Africa,'' Merrill Lynch & Co. strategist Benoit Anne in London wrote in an Oct. 22 report. "The shekel presents some defensive characteristics, which has served the currency relatively well at a time of several global risk conditions.'' Merrill set its "medium-term'' fair value for the shekel at 3.37 to the dollar....

Investors are gaining confidence after Israel's economy grew an average of 6 percent in the past four years and inflation slowed to an annualized rate of 5.5 percent last month from as high as 486 percent in November 1984.

Israel's $206 billion economy will expand 4.5 percent in 2008, according to Central Bureau of Statistics estimates. That's faster than the 3.7 percent forecast for the world economy by the IMF in Washington. U.S. gross domestic product contracted at a 0.3 percent rate last quarter, the biggest decline since 2001, and will expand 1.4 percent this year, based on the mean estimate in a Bloomberg survey of 75 economists.

Click here to read the whole article.

Hijacked Saudi Oil Tanker Anchored off Somalia







Foreign Confidential....

A hijacked Saudi supertanker carrying two million barrels of oil is reported to have dropped anchor off the coast of Somalia. Pirates captured the vessel more than 800 kilometers off the coast of Kenya on Saturday. The company that owns the tanker says the 25 crew members are believed to be safe. Alisha Ryu reports from Nairobi that the ship's owner hopes to negotiate an end to the spectacular seizure.


The head of the East African Seafarers' Association in Mombasa, Kenya, Andrew Mwangura, says negotiations for the release of the $140 million oil tanker and its multi-national crew of 25 have begun. He says he expects the pirates to demand a far higher ransom for the release of the vessel than the $1.2 million the pirates have previously demanded from ship owners.

"We are informed that they are already in touch with the ship owner but we do not know who far they [negotiations] have gone," Mwangura says.

According to Mwangura and other maritime officials, the enormous weight of the cargo would have limited the 330-meter supertanker to a top speed about 14 knots - slow enough for armed pirates in fast attack boats to come alongside.

British maritime journalist David Hughes says although the newly-built Sirius Star sits higher in the water than older tankers, it would not have been difficult for experienced gunmen to board her.


Largest-Ever Hijacking

"The modern one is higher than an old one," he says. "We are talking 10 to 15 meters. Not easy. Still, you could get a ladder up."

The hijacking of the vessel, the largest ever taken by pirates, took place despite the presence of warships recently deployed by the United States, the NATO alliance and the European Union to protect one of the world's busiest shipping areas.

Many of the warships have been conducting their patrols in the narrow shipping lanes of the Gulf of Aden, where the number of successful piracy attacks on merchant ships have dropped significantly in the past month.

But Monday's attack occurred 830 kilometers off the coast of Kenya in wide open waters that navies cannot adequately cover. The United States' top military officer, Navy Admiral Michael Mullen told reporters that he was stunned by the pirates' ability to operate so far from shore.

Journalist David Hughes says the attack signals a potential catastrophe for the global maritime industry. "It means that nowhere from somewhere down the middle of the Indian Ocean and westward is safe," he said. "And that means you essentially cannot have normal merchant shipping in that huge area."

The U.S. Navy has not said whether it is considering taking military actions to rescue the tanker.

Hillary Clinton for Secretary of State





Dateline USA....

As of this writing, President-elect Barack Obama is said to be seriously considering appointing his former rival, U.S. Senator Hillary Clinton, to one of the most important jobs in the country--Secretary of State.

It is a brilliant idea. Senator Clinton is a tough, hard-nosed realist with great intelligence and a firm understanding of world affairs. She is experienced, knowledgeable, respected across the land and overseas.

Cynics and critics who assert that Senator Clinton's husband, former President Bill Clinton, would be a detriment are totally wrong. Hillary is her own woman. She would have made a great President. She will make a great Secretary of State. Besides, Bill Clinton's expertise and insights would be welcome in these trying times.

Hillary for Secretary of State! Fantastic!

Monday, November 17, 2008

Rushing to Gold, Saudis Study Ruble Report

EDITOR'S NOTE: THIS BLOG HAS BEEN EXPERIENCING INEXPLICABLE DELAYS IN SERVICE ALL DAY. TRAFFIC HAS BEEN UNUSUALLY HEAVY, ESPECIALLY TO THE GOLD-RELATED ARTICLES.

China Confidential has learned that Saudi Arabia believes that there is a 50/50 chance that Russia will introduce either a gold-backed ruble or a gold-backed special drawing right.

The kingdom's estimated $3.5 billion gold purchase in November was partly influenced by this belief.

Saudi investors expect gold to rise as the world's central banks print money to stimulate economic activity; a dramatic move toward a gold-backed currency by any government would spark a global gold rush.

Saudi financial advisers are also screening undervalued gold stocks.

Sunday, November 16, 2008

China Issues First White Paper on Latin America

China's first white paper on Latin America includes sections on political, economic and military issues.

Xinhua News Agency released the full text of the paper on November 5, just 10 days before Chinese President Hu Jintao's planned trip to the U.S. to attend the G-20 summit on the financial crisis.

Following the summit, Hu will conduct state visits to Cuba, Costa Rica and Peru. Hu also will attend the 16th Asia-Pacific Economic Cooperation meeting from Nov. 22-23 in Lima, Peru.

Regarding defense and security, the white paper looks at three issues: military exchanges and cooperation, cooperation on judicial and police affairs, and nontraditional security issues.

The paper said it would continue to "actively carry out military exchanges and defense dialogue and cooperation with Latin American and Caribbean countries," including mutual visits by defense and military officials. Personnel exchanges also would be increased. Exchanges will include military training, personnel training and peacekeeping.

Regarding judicial and police issues, intelligence and technological exchanges will be strengthened, "with bilateral and multilateral exchange mechanisms put in place." Non-traditional security issues will include exchanges and cooperation on "combating terrorism, so as to jointly improve the capacity to respond to nontraditional security threats."

China has agreed to sell arms to Venezuela, whose leader, President Hugo Chávez, made his fifth visit to China in late September to make oil and arms deals.

During the visit, Chávez described himself as a "Maoist" and signed an agreement to procure 24 Hongdu K-8 trainers in 2009. There have been some discussions to procure Chinese-made Harbin Z-9 helicopters and Chengdu J-10 and FC-1 fighters.

As Good as Gold?

Is gold a good hedge against economic uncertainty?

Heather Connon:

Just a month ago, investors were queuing to buy gold bars as the price rose by more than a fifth in just two weeks. Since then, the economic news has become gloomier - jobs are being lost across all industries, the Bank of England is warning of a prolonged recession and even the Chinese authorities have been forced into offering a stimulus package - yet gold has lost all its gains and stands close to the year's low.

Angus McPhail, global oil and resources analyst at Alliance Trust, thinks that is largely because gold is priced in dollars and that currency has risen sharply. But he thinks gold is still attractive over the long term, partly because of its status as a 'safe haven' during times of recession, high inflation and falling interest rates - as we are likely to experience over the next two years. But he also points out that South Africa, the leading producer of gold, is experiencing political turmoil, which could hit output, while demand for gold for jewellery and investment from Asia is expected to remain strong.

Justin Urquhart Stewart, marketing director at Seven Investment Management, agrees that gold could have attractions in the longer term, because inflation is likely to be stoked up by the government bank bail-outs and stimulus packages. But he expects the price to remain weak over the next year to 18 months as inflation and interest rates fall. He thinks investors who have no exposure to gold may like to have some in their portfolio, but no more than 5 per cent.

While you can buy gold bars directly, you can also get exposure to gold by buying an exchange-traded fund - a share that tracks its price, such as those offered by ETF Securities. General commodity funds, such as Blackrock's Gold and General, will also have some exposure to gold as well as investing in a range of other commodities.

Over 70% of Americans Against Nuclear Iran




Dateline USA....


The United States must work hard to stop Iran from acquiring nuclear weapons and stand with Israel, a poll of American voters found.

Some 72 percent of those who voted Nov. 4 agreed that "even with all the problems that America faces at home now, we must still work hard to stop Iran from getting nuclear weapons," according to the Election Day survey of 800 commissioned by The Israel Project.

In addition, 66 percent said America should be a supporter of Israel, with just 6 percent saying America should be a supporter of the Palestinians. Some 80 percent of those who called themselves Republicans and 59 percent of Democrats said America should support Israel.

Asked about the top two foreign policy priorities of the next president, "ending the war in Iraq" garnered 56 percent; "restoring global economic growth" garnered 41 percent; and "defeating al-Qaida and the Taliban" received 35 percent. Lower priorities included "making peace between Israel and the Palestinians" at 19 percent, "dealing with the instability in Pakistan" at 15 percent and "meeting the threat of Putin’s Russia with 8 percent.

"Even though Americans endured a long and difficult election, at the end of the day there is very strong support for Israel and significant concern about Iran as a threat not just to Israel but to the U.S.," said Neil Newhouse of Public Opinion Strategies, which conducted the poll in conjunction with Greenberg Quinlan Rosner.

The poll, which was released Sunday, has a margin of error of plus or minus 3.46 percent.

The Israel Project is a 6-year-old international nonprofit organization that provides journalists and leaders with information about the Middle East.


- JTA