Perspectives on the global economic meltdown- (Nov 28 2010)

prahaar · Post by **prahaar** » 30 Oct 2012 14:39

Christopherji, not to de-emphasize your point. But the reason many people are focused on power generation deficit is simple: There is a huge base load deficit, which needs to be overcome in next 1-5-10 years span. There is no shying away from conventional power for base loads, we have not even reached there. All the renewable sources should be tapped, but they cannot be made available in the time-scale-cost parameters in the short term.

So people are crying hoarse at the government's failure to even provide basic load for industries, it does not mean, efficiency should not be one of the key tools.

There is no escape from conventional power sources. Even in Gujarat, where there is a high emphasis for solar power, the state is guaranteeing 12Rs of purchase to encourage that sector. This is not sustainable for driving all the base load. Only when prices of solar power come down (which they will) in the coming decade(s), this should be expanded pronto (taking into account water availability as well).

Theo_Fidel · Post by **Theo_Fidel** » 30 Oct 2012 20:09

Pratyush wrote:It is some thing that bothers me as well. Particularly when I look at the Indian rural population. Along with the raw numbers domesticated cattle. While Indian villages are open to the Idea of using cow-dung cakes for energy. They are not yet graduated to the Idea of using community level bio gas plants.

Actually there are hundreds of gobar gas plants that dot the rural countryside, esp. in areas that produce a lot of milk. In other cases it is not worth it to collect the small amounts available. I know of at least 3 in my area, a 4th is now no functional as the diary closed down. Most use the gas for cooking and pasteurization. It can never be a huge source of energy however.

The other problem is, no one wants to do this work due to the social stigma attached to it. It is hard to get such workers in my area. For that matter no one wants to be a milkman either these days.

Atri · Post by **Atri** » 30 Oct 2012 20:28

Theo_Fidel wrote:
Pratyush wrote:It is some thing that bothers me as well. Particularly when I look at the Indian rural population. Along with the raw numbers domesticated cattle. While Indian villages are open to the Idea of using cow-dung cakes for energy. They are not yet graduated to the Idea of using community level bio gas plants.
Actually there are hundreds of gobar gas plants that dot the rural countryside, esp. in areas that produce a lot of milk. In other cases it is not worth it to collect the small amounts available. I know of at least 3 in my area, a 4th is now no functional as the diary closed down. Most use the gas for cooking and pasteurization. It can never be a huge source of energy however.

The other problem is, no one wants to do this work due to the social stigma attached to it. It is hard to get such workers in my area. For that matter no one wants to be a milkman either these days.

http://maharashtratimes.indiatimes.com/ ... 002655.cms

This is one startup venture in MH.. the news is in Marathi. The gist is as follows..

Basically this deals with apparatus which separates Methane from CO2 by the means of ceramic raschig rings. Under pressue with tube within a tube apparatus, CO2 in biogas dissolves in water leaving out pure methane which is then filled in cylinders and sold at cheap price. CO2 too can be stored separately and sold for further use. The revenue model postulates earning from selling CO2 while earning carbon credits, and methane cylinders to villagers.

There is another individual from Bihar, Gyanesh pandey who has started up a company which produces biomass gassifiers and installing them in villages, generating electricity by means of rice-husk biomass gassification. - http://www.huskpowersystems.com/index.php

There are many such "Mohan Bhargavs".. These two are only which came to my mind in spur of moment. a detailed search in my mind will throw up many names.

possibilities are endless.. Uttishtha Bhaarata: !!

shyam · Post by **shyam** » 01 Nov 2012 08:49

Looks like most of the countries do not keep the gold they own, with them. It is well known that 3000 tons of Germany's gold is in US, and little bit in UK.

After the economic scam and crash, and currency risks, scramble to relocate one's own gold has gone up recently. Last year Venezuela got their gold parked in London back into the country. Recently one report claimed that Germany actually relocated 1000 tons of gold from London to Germany when Brown was selling British gold at around 1999. After the report came out, more and more Germans want their back into their country and a court ordered the govt to get 150 tons of gold from US (US actually has 3000 tons of german gold and so 150 tons is not a significant amount).

Another recent report said that Equador wanted 1/3rd of their gold in London back into their country. Someone in Poland started asking Russia to return the Polish gold in Russia.

Roumor is that if too many people demand their gold from UK and US, nobody is going to get theirs.

Does anyone know whether India physically relocated the gold it pledged at Bank of England back in 1991, back to India?

Singha · Post by **Singha** » 01 Nov 2012 09:16

I believe india also keeps most of its so called gold reserve locked away under US key in NYC.

a sad state of affairs - US does not have all the gold it claims to have , and a audit request for Fort Knox proposed by Mccain was hurriedly rejected on grounds of national security. so there are skeletons in the closet for sure.

pentaiah · Post by **pentaiah** » 01 Nov 2012 19:30

Indian gold is safer abroad than in India.
The latest casualty is Guruvayur temple gold recently discovered.

While my blood boils when ever I visit Tower of London to see our wealth looted and stocked there, the cynic in me tells me from scandal a day of India Today the gold would sublimate into Cayman Islands Licheistien Bahamas etc

The current Italian East India company topi wallahs will loot anything
Jai hind sight

JE Menon · Post by **JE Menon** » 02 Nov 2012 15:32

Are you referring to Padmanabhaswamy temple? Something happened recently and I missed it? I mean in terms of "latest casualty" - did they come to any decision on it?

Or did they discover gold in Guruvayoor too? Genuinely curious...

Chinmayanand · Post by **Chinmayanand** » 18 Nov 2012 18:55

Must Read !!!

http://www.scribd.com/fullscreen/113621 ... rwnsdswgqs

satya · Post by **satya** » 18 Nov 2012 19:00

Playing Poker with Trillions-Prison of Debt Paralyzes West

krisna · Post by **krisna** » 21 Nov 2012 05:04

Multinationals Find Loopholes Galore in Europe

Large multinationals, many of them based in the United States, are masters at avoiding taxes on profits made abroad. Apple, for example, paid just $100 million in taxes in 2010 on overseas profits of $13 billion. But Germany would like to put a stop to the practice, and is finding some influential support.

When it comes to tax issues, the US government has a history of siding with US corporations. But that might be changing now that Washington is searching for new revenue streams to combat its massive budget deficit. Many US politicians are no longer willing to accept the fact that companies are stashing away billions in tax havens to circumvent taxation at home.

The US government could certainly use the money. In a recent inquiry, a US Senate committee found that about 1,000 US companies have moved substantial assets abroad -- assets valued at roughly $1.5 trillion, or one tenth of the country's national debt.

vishvak · Post by **vishvak** » 21 Nov 2012 16:47

Wonder where all that money is going and who owns it still.

France loses its AAA rating.

Well coordinated protests in Portual, Italy, Greece, Spain and joined by others too. protests in P.I.G.S. and others.

It should be the UK! - says official head of the French central bank.

Singha · Post by **Singha** » 21 Nov 2012 18:41

all the ratings agencies being de-facto arms of the UK/US govt , the french and germans must surely be p***ed

Christopher Sidor · Post by **Christopher Sidor** » 21 Nov 2012 23:00

The Greek tragic drama unfolds once again. At stake is the world economic health and the future of euro-zone.
Europe Fails to Seal Greek Debt-Cut Deal in IMF Clash ---- Bloomberg Dated 21-Nov-2012

It has all come down to this, despite all the austerity and unemployment of about 25%, because Greece will still land up with 180-190% Debt-to-GDP ratio in 2014. Even the statement by the ECB president saying that ECB will do whatever it takes to keep the euro-zone intact will be done has been forgotten.

This is seen as the revolt of the AAA-rated countries led by Germany, which want two things
1) No more new money for Greece.
2) No haircut on the money lend to Greece by the Euro-zone countries.

IMF begs to differ. It says anything about 120% Debt-to-GDP ratio is unsustainable. It also says that Greece will require more money.

It is such a contrast on the means being employed to battle the worst recession since the Depression in North-Atlantic region. On the Western side, in the yankie-land, we see a loose monetary policy almost on the lines of what Japan followed minus the Fiscal stimulus which Japan carried out. On the Eastern side of the North Atlantic, we see countries hell bent on following the austerity route. Now UK, which according to pundits is set for a tripe dip recession, is going around in Europe and talking about a balanced Budget for the EU, mind you EU and not Euro-Zone. After what is going on in Greece and Spain they still want a balanced budget.

What is common is that the politicians are all bickering. When Henry Paulson had gone to bush and said that he needed 700 billion dollars to buy stuff, he was asked did he have the money. He said that if he could not do it then Ben Bernanke of Federal reserve could do it. And when Ben was asked did he have the money, he said that he had practically limitless amount. From then on wards the politicians knew that they could continue to bicker. And if push came to shove they could all depend on the central bankers, i.e. the Fed and ECB, to do the right thing. Hence we have the Fiscal cliff in US and a Aid Cliff in Europe.

Think about it, the Federal Reserve is buying 40 billion worth of mortgage bonds every month. Now consider this during the savings and loans crisis of 1989 it was the Federal Govt of US which bought the bad debt. During the depression of 1929-33 it was the US Federal Govt which bought excess inventory of housing and essentially removed it as a factor from the economy.
ECB is saying that it has enough scope to prevent the collapse of Euro-zone. "And believe me it will be enough" resounded the words of the ECB president.

In the book "Too Big to Fail" one is stuck that whenever one institution sought to rescue another for JP Morgan - Bears, BoA - Merill Lynch, Citibank - Wachovia, etc everybody was looking for a "Jamie Deal." They were referring to the deal which Jamie Damon of JP Morgan got when he rescued Bear Sterns. Only the first 1 Billion USD losses will be borne by JP Morgan, the rest of 30 Billion USD losses will be borne by US Fed Reserve. This was the mother of deals based on leverage. Only in this case the leverage was being offered by the Central Bank, US Fed Reserve.

Politicians will get the wrong message by the actions of the central bank, they will all look for a Jamie Deal. The problem is that while they bicker rome burns.

RamaY · Post by **RamaY** » 21 Nov 2012 23:06

^ One way to solve Greece's problem is that it becomes part of Germany and become its nth state.

Wondering the best route from Germany to Greece - Is it Germany>Austria>Hungary>Romania>Bulgaria>Greece OR Germany>Austria>Italy>Greece?

krisna · Post by **krisna** » 22 Nov 2012 02:29

Why bankers rule the world

Professor Margrit Kennedy writes that a stunning 35% to 40% of everything we buy goes to interest. This interest goes to bankers, financiers, and bondholders, who take a 35% to 40% cut of our gross domestic product.

That helps explain how wealth is systematically transferred from Main Street to Wall Street. The rich get progressively richer at the expense of the poor, not just because of "Wall Street greed" but because of the inexorable mathematics of our private banking system.

Even if you pay within the grace period, you are paying 2% to 3% for the use of the card, since merchants pass their merchant fees on to the consumer. Debit cards, which are the equivalent of writing checks, also involve fees. Visa-MasterCard and the banks at both ends of these interchange transactions charge an average fee of 44 cents per transaction - though the cost to them is about four cents.

Consider California. At the end of 2010, it had general obligation and revenue bond debt of $158 billion. Of this, $70 billion, or 44%, was owed for interest. If the state had incurred that debt to its own bank - which then returned the profits to the state - California could be $70 billion richer today. Instead of slashing services, selling off public assets, and laying off employees, it could be adding services and repairing its decaying infrastructure.

The only US state to own its own depository bank today is North Dakota. North Dakota is also the only state to have escaped the 2008 banking crisis, sporting a sizable budget surplus every year since then. It has the lowest unemployment rate in the country, the lowest foreclosure rate, and the lowest default rate on credit card debt.

Globally, 40% of banks are publicly owned, and they are concentrated in countries that also escaped the 2008 banking crisis. These are the BRIC countries - Brazil, Russia, India, and China - which are home to 40% of the global population. The BRICs grew economically by 92% in the last decade, while Western economies were floundering.

A solution whose time has come
Public banking may be a radical solution, but it is also an obvious one. This is not rocket science. By developing a public banking system, governments can keep the interest and reinvest it locally. According to Kennedy and Creutz, that means public savings of 35% to 40%. Costs can be reduced across the board; taxes can be cut or services can be increased; and market stability can be created for governments, borrowers and consumers. Banking and credit can become public utilities, feeding the economy rather than feeding off it.

shyam · Post by **shyam** » 22 Nov 2012 23:01

Austrian Parliament Hears 80% Of Austrian Gold Bullion Reserves In London

The Austrian central bank keeps most of its 280 metric tons of gold reserves in the United Kingdom, Vice Governor Wolfgang Duchatczek was quoted as saying in the finance committee of the country’s parliament today, according to Bloomberg.

Answering lawmakers’ questions, Duchatczek said 80%, or 224.4 metric tons of the metal was stored in the U.K., 17% or 48.7 metric tons in Austria and 3% in Switzerland, according to a summary of a closed-door committee meeting provided by the parliament.

member_23686 · Post by **member_23686** » 23 Nov 2012 20:05

^^^
Where is Indian gold bullion? Do they have it in India or is it somewhere else?

member_23677 · Post by **member_23677** » 24 Nov 2012 04:27

dharmaraj wrote:^^^
Where is Indian gold bullion? Do they have it in India or is it somewhere else?

IMF gold holdings, Reserve Bank of India are two places where Indian gold is stored.

shyam · Post by **shyam** » 24 Nov 2012 07:52

IMF Gold holdings? Where is that physically located? Does that gold belong to India?

Does RBI keep its gold inside India?

shyam · Post by **shyam** » 24 Nov 2012 07:59

Some of the countries who claim to purchase gold, do not physically get it.

Brazil Gold Reserves In Fixed Term Gold Deposits With Bullion Banks

Brazil raised its gold holdings by 17.2 tonnes in October to 52.5 tonnes, the highest level since January 2001. The move comes on the back of Brazil’s 1.7 tonne increase in September, the country’s first significant gold purchase in a decade
...
However, there are concerns that the increase in the Brazilian central bank gold holdings’ and tonnage are not all that they seem. It appears that the central bank in Brazil has not actually bought London Good Delivery bullion bars but rather fixed term gold deposits with bullion banks.

Recently, the Brazilian central bank was asked about their gold reserves and about a section on gold on their website under ‘Official Reserve Assets’ lists gold as “gold (including gold deposit and, if appropriate, gold swapped)” with a footnote of “Includes available stock of financial gold plus time deposits.”

member_23677 · Post by **member_23677** » 24 Nov 2012 08:51

shyam wrote:Some of the countries who claim to purchase gold, do not physically get it.

Brazil Gold Reserves In Fixed Term Gold Deposits With Bullion Banks

Brazil raised its gold holdings by 17.2 tonnes in October to 52.5 tonnes, the highest level since January 2001. The move comes on the back of Brazil’s 1.7 tonne increase in September, the country’s first significant gold purchase in a decade
...
However, there are concerns that the increase in the Brazilian central bank gold holdings’ and tonnage are not all that they seem. It appears that the central bank in Brazil has not actually bought London Good Delivery bullion bars but rather fixed term gold deposits with bullion banks.

Recently, the Brazilian central bank was asked about their gold reserves and about a section on gold on their website under ‘Official Reserve Assets’ lists gold as “gold (including gold deposit and, if appropriate, gold swapped)” with a footnote of “Includes available stock of financial gold plus time deposits.”

We are talking about India not Brazil here... just so you know. RBI is India's central bank, it would have some gold holdings and some must be in IMF and some in UK-US banks... thats what I said above.

shyam · Post by **shyam** » 24 Nov 2012 09:09

P.Bhagat wrote:We are talking about India not Brazil here... just so you know. RBI is India's central bank, it would have some gold holdings and some must be in IMF and some in UK-US banks

I thought you have some data about the holdings....

The purpose of posting information about gold holdings of various countries, as they come out recently, is to show that most of the countries who claim to hold gold do not actually have them, but only vault receipts. The fact that gold is actually held in London/NY explains why they are the world financial centers. Those who just hold receipts can only play sebservient role to those masters.

member_23677 · Post by **member_23677** » 24 Nov 2012 09:23

shyam wrote:
P.Bhagat wrote:We are talking about India not Brazil here... just so you know. RBI is India's central bank, it would have some gold holdings and some must be in IMF and some in UK-US banks
I thought you have some data about the holdings....

The purpose of posting information about gold holdings of various countries, as they come out recently, is to show that most of the countries who claim to hold gold do not actually have them, but only vault receipts. The fact that gold is actually held in London/NY explains why they are the world financial centers. Those who just hold receipts can only play sebservient role to those masters.

Would this help??

RBI holds 557.75 tonnes of gold as part of foreign exchange reserves. The gold held by RBI is revalued on monthly basis as per accounting policies, he said.

On whether the government has earned huge profit due to steep hike in global gold prices, Meena said that gains and losses on valuation of gold due to movements in the price of gold are not taken to the profit and loss account but booked under a balance sheet head.

On steps taken to boost gold reserves in the coming years, Meena said RBI had purchased 200 tonnes of gold at the cost of USD 6.7 billion from the International Monetary Fund (IMF) as part of the foreign exchanges reserves management operations in 2009.

http://articles.economictimes.indiatime ... old-prices

member_23686 · Post by **member_23686** » 24 Nov 2012 11:21

dharmaraj wrote:http://www.rbi.org.in/scripts/Publicati ... d=12476#17

I.7. Management of Gold Reserves

The Reserve Bank held 557.75 tonnes of gold forming about 6.0 per cent of the total foreign exchange reserves in value terms as at the end of March 2010. Of these, 265.49 tonnes are held abroad (65.49 tonnes since 1991 and further 200 tonnes since November 2009) in deposits / safe custody with the Bank of England and the Bank for International Settlements.

In November 2009, the Reserve Bank concluded the purchase of 200 metric tonnes of gold from the International Monetary Fund (IMF), under the IMF's limited gold sales programme. The purchase was an official sector transaction and was executed over a two week period during October 19-30, 2009 at market-based prices. As a result of this purchase, the Reserve Bank's gold holdings have increased from 357.75 tonnes to 557.75 tonnes.

member_23686 · Post by **member_23686** » 24 Nov 2012 11:21

you see saar. the gold purchased from IMF stays at IMF. so we have nearly 300 tonnes at home.

member_23677 · Post by **member_23677** » 24 Nov 2012 11:24

dharmaraj wrote:you see saar. the gold purchased from IMF stays at IMF. so we have nearly 300 tonnes at home.

That's naive to say, it still belongs to us in every way

Christopher Sidor · Post by **Christopher Sidor** » 24 Nov 2012 11:46

If one takes all the PIIGS countries into account than Greece is unique. None of the other countries lied about their finances. Greece did. It hid the true extent of its debt obligations. None of the other countries did.

So unlike the Bear - Lehman - Merill tango a dynamo of Greece exit or default might not be catastrophic. The Euro-Zone leaders are not willing to take that risk. And for good reasons. The unraveling of Greek debts and its fall out, even after the massive private sector debt haircut, i.e. so called private sector initiative, would have unintended consequences. There is only one way to handle a Greek Exit/Default and it is MESSY to put it diplomatically. And there is a precedence for this.

The story that I am outlining comes from the book "Too Big to Fail". Once Lehman filed for bankruptcy all of its trades outside america froze. The problem was that Lehman had carried out trades which would take time to unwind, even if the markets were functioning normally.
In a nut shell what lehman did was take 100 USD and bought a security rated for 85 USD from say UBS. It then loaned out the 85 USD security to Barclays for 75 USD. Not only cash, it did that for Securities too. For example it took a 100 USD worth security (i.e. bond certificate, Gilts, Govt backed bonds, etc) and loaned it to say RBS for 85 USD cash. Then it loaned the 85 USD cash to BNP for a 95 USD worth security and so on.
Once Lehman filed for Bankruptcy all of such trades outside America froze. So its counter parties started pulling out money from other sources to make up for the short fall. One of these sources happened to be another Investment banking behemoth by the name of Morgan Stanley.
The week before Lehman filed for bankruptcy, Morgan Stanley had in excess of 100 Billion USD in the bank. 4 days after Lehman filed for Bankruptcy it was all practically gone, with Morgan Stanley on verge of going the way of Merill-Lehman-Bears. Not because of panic, but because money was stuck in Lehman's operations overseas and the people whose money was stuck had to make good of the short fall.

So the euro-zone countries are being cautious in letting old-greece go. Can the market factor in a Greece default/exit? No not with any confidence.

And if Greeks exits the Euro, then the stakes just get extremely higher for Spain and Italy. We have already seen the market price in differences between different euro-zone countries. This is a step away from the recent history and that is good. But the problem with this differential marking of Spanish/Italian bonds from the German/French bonds is that certain European countries joined in Euro to enjoy the low interest rates that certain northern countries were enjoying not out of any love for european integration or for euro.

shyam · Post by **shyam** » 24 Nov 2012 12:23

dharmaraj wrote:http://www.rbi.org.in/scripts/Publicati ... d=12476#17

I.7. Management of Gold Reserves

The Reserve Bank held 557.75 tonnes of gold forming about 6.0 per cent of the total foreign exchange reserves in value terms as at the end of March 2010. Of these, 265.49 tonnes are held abroad (65.49 tonnes since 1991 and further 200 tonnes since November 2009) in deposits / safe custody with the Bank of England and the Bank for International Settlements.

In November 2009, the Reserve Bank concluded the purchase of 200 metric tonnes of gold from the International Monetary Fund (IMF), under the IMF's limited gold sales programme. The purchase was an official sector transaction and was executed over a two week period during October 19-30, 2009 at market-based prices. As a result of this purchase, the Reserve Bank's gold holdings have increased from 357.75 tonnes to 557.75 tonnes.

Thanks dharmaraj. This is the information I was looking for. So, even the gold we pledged at BoE for IMF loan in 1991 is not returned even after paying it back with interest

How come none of the political parties are asking for its repatriation.

member_23686 · Post by **member_23686** » 24 Nov 2012 14:51

shyam ji, don't worry! they'll repatriate it like they repatriated our archaeological relics, manuscripts, original statues "gifted" by temples, jewellery, treasures, diamonds...oh wait

member_23686 · Post by **member_23686** » 24 Nov 2012 15:03

P.Bhagat wrote:
dharmaraj wrote:you see saar. the gold purchased from IMF stays at IMF. so we have nearly 300 tonnes at home.
That's naive to say, it still belongs to us in every way

P.Bhagat ji, it belongs to us till we ask them to physically move that gold to India. The only way to use that gold is by opting to pay for imports by it when IMF will just account the gold to recipient country.
Let's say that US and UK keep all their holdings in their own territory while we have half our gold "girvi" at "sahukar"'s house even after paying off "baap ka karz"

shyam · Post by **shyam** » 24 Nov 2012 15:39

X-post

dharmaraj wrote:http://en.wikipedia.org/wiki/Federal_Re ... f_New_York

The Federal Reserve Bank of New York maintains a vault that lies 80 feet (24 m) below street level and 50 feet (15 m) below sea level,[8] resting on Manhattan bedrock. By 1927, the vault contained 10% of the world's official gold reserves.[6] Currently, it is reputedly the largest gold repository in the world (though this cannot be confirmed as Swiss banks do not report their gold stocks) and holds approximately 7,000 tonnes (7,700 short tons) of gold bullion ($415 billion as of October 2011), more than Fort Knox. Nearly 98% of the gold at the Federal Reserve Bank of New York is owned by the central banks of foreign nations.[9] The rest is owned by the United States and international organizations such as the IMF.

shyam · Post by **shyam** » 24 Nov 2012 15:39

X-post

dharmaraj wrote:http://en.wikipedia.org/wiki/United_Sta ... Depository

The United States Bullion Depository, often known as Fort Knox, is a fortified vault building located adjacent to Fort Knox, Kentucky, used to store a large portion of United States official gold reserves and occasionally other precious items belonging or entrusted to the federal government.

The United States Bullion Depository holds 4,578 metric tons (5,046.3 short tons) of gold bullion (147.2 million oz. troy). This is roughly 3% of all the gold ever refined throughout human history. Even so, the depository is second in the United States to the Federal Reserve Bank of New York's underground vault in Manhattan, which holds 7,000 metric tons (7,716 tons) of gold bullion (225.1 million oz. troy), some of it in trust for foreign nations, central banks and official international organizations.

shyam · Post by **shyam** » 24 Nov 2012 15:44

Now we can fairly guess why the world will NOT go back to the goid based international trade any time soon, even if there is a major currency crisis. None of the countries physically have the the amount of gold they claim to have. The countries that are accused of printing money also control the largest share of gold in the world and other countries' gold too. When people get pissed off with one currency, it will just be replaced by another one, and may be in another form.

Singha · Post by **Singha** » 25 Nov 2012 08:28

I find it extremely surprising that so any countries incl germany agreed to holding it in federal reserve NYC. was it the low cost offered (no transport need, economy of scale, no secure facility in host country required?).

whatever be the cost we must ensure every gm of gold in our official reserve is held in physical form in GOI facility inside India. whatever one time costs are needed we must pay and clear that account.

I would be rather uncomfortable as a person having a gorilla gently keep my balls cupped in his fist

I wonder why GOI is so status quo?

member_23686 · Post by **member_23686** » 25 Nov 2012 11:29

^^^+1000

member_23686 · Post by **member_23686** » 25 Nov 2012 11:32

Singha ji, I think that Germany was forced to submit its gold as a consequence of II world war.

member_23686 · Post by **member_23686** » 25 Nov 2012 11:59

http://www.theepochtimes.com/n2/busines ... 11144.html

Gold Accumulation After World War II

The reasons why such a large amount of gold is stored in New York are historical and made a lot of sense during the Cold War. After World War II, Germany was broke, it had nothing left by way of any type of currency reserves, let alone gold. The Marshall plan and the new currency, the Deutsche mark helped the economy to recovery quickly. Germany was soon racking up large trade surpluses with various countries.

Due to the nature of the Bretton Woods currency system of fixed exchange rates, trade imbalances ultimately settled in gold. The dollar was the trade settlement currency and exchangeable for gold at the price of $35 per ounce.

If the United States imported more from Germany than it exported, the balance would ultimately be settled in gold. Germany not only ran surpluses with the United States, but also other countries.

It was costly to ship large amounts of gold around, so Germany simply accumulated a hoard in New York and other major gold trading centers such as London and Paris. The bars easily moved from one country’s vault to another’s and Germany increased its stash from 1,328 tons in 1956 to 4,034 tons in 1969. During the difficult economic times of the 1970s, Germany lost some reserves.

Another reason why the gold was stored abroad, and not in Frankfurt, was the invasion threat of the Soviet Union. In case of an invasion, the Soviet Union would have attacked Germany first as the line separating NATO and Warsaw Pact-nations was delineated between East and West Germany.

Germany’s gold reserves form an important element in backing the euro within the eurosystem of central banks. America’s gold backing the dollar is in America. Why shouldn’t Europe’s gold backing the euro be located in Europe?

It’s possible to move large amounts of gold, though it will be costly. Germany had already moved 940 tons from London to Frankfurt after 2000. A return of the overseas gold had precedent. In 1965, French President Charles de Gaulle sent over warships to withdraw French gold from New York. As recently as 2011, Venezuelan President Hugo Chavez pulled his country’s gold out of London.

The outbreak of the global financial crisis in 2008 might also have increased the feeling to secure the treasure. Otherwise, it is hard to explain why the Bundesrechnungshof would issue an order for the audit now, after it never found any reason to for decades. It is now criticizing that the bars have never been checked for consistency and weight. The only thing the Bundesbank ever received was a written confirmation by the respective custodian.

http://www.simontaylorsblog.com/2012/10 ... d-my-gold/

in the mid-1920s the head of the NY Fed, Benjamin Strong, hosted a visit by his German opposite number Hjalmar Schacht. He thought it would be polite to show Herr Schacht the stack of gold in the vault which belonged to Germany. But to Strong’s great embarrassment the pallet of German bullion couldn’t be found (p.379). Schacht presumably regarded this as an administrative error though he might have wondered whether the gold really existed.

much of the French stock of gold was held at the Bank of England in London. So when gold “flowed” from the UK to France, which it did in large quantities during the late 1920s, what actually happened was that somebody from the Bank of England went down to the vault, re-labelled some bars of gold and went back upstairs again.

http://www.bullionstreet.com/news/germa ... ambers/340

Rumours abound that the Federal Reserve lends the gold in order to earn interest, allowing banks to keep the gold price artificially low by short selling it on the market – something which the FTD said would profit many actors apart from gold owners and mine operators.

this>>>>

Critics suggested the storage of Germany’s gold in the United States was – and remains – a kind of political deposit, to ensure that West Germany remained tightly bound to the West.

http://www.numismaster.com/ta/numis/Art ... cleId=7113

Such a request could put the U.S. government on the spot, as there is some concern that the German gold reserves are no longer intact. Some or all of it may have been distributed to the public as part of gold price suppression schemes. If so, any request by the German government to return gold could cause a severe supply squeeze. To prevent a surge in gold demand sparked by this revelation, there could be significant price suppression efforts early this week.

end with this article that mentions almost every point

http://www.spiegel.de/international/ger ... 33289.html

member_23686 · Post by **member_23686** » 25 Nov 2012 12:01

apparently germans sent their gold to US to save it from USSR

member_20292 · Post by **member_20292** » 25 Nov 2012 18:09

krisna wrote:Why bankers rule the world
Professor Margrit Kennedy writes that a stunning 35% to 40% of everything we buy goes to interest. This interest goes to bankers, financiers, and bondholders, who take a 35% to 40% cut of our gross domestic product.

That helps explain how wealth is systematically transferred from Main Street to Wall Street. The rich get progressively richer at the expense of the poor, not just because of "Wall Street greed" but because of the inexorable mathematics of our private banking system.

Even if you pay within the grace period, you are paying 2% to 3% for the use of the card, since merchants pass their merchant fees on to the consumer. Debit cards, which are the equivalent of writing checks, also involve fees. Visa-MasterCard and the banks at both ends of these interchange transactions charge an average fee of 44 cents per transaction - though the cost to them is about four cents.

Consider California. At the end of 2010, it had general obligation and revenue bond debt of $158 billion. Of this, $70 billion, or 44%, was owed for interest. If the state had incurred that debt to its own bank - which then returned the profits to the state - California could be $70 billion richer today. Instead of slashing services, selling off public assets, and laying off employees, it could be adding services and repairing its decaying infrastructure.

The only US state to own its own depository bank today is North Dakota. North Dakota is also the only state to have escaped the 2008 banking crisis, sporting a sizable budget surplus every year since then. It has the lowest unemployment rate in the country, the lowest foreclosure rate, and the lowest default rate on credit card debt.

Globally, 40% of banks are publicly owned, and they are concentrated in countries that also escaped the 2008 banking crisis. These are the BRIC countries - Brazil, Russia, India, and China - which are home to 40% of the global population. The BRICs grew economically by 92% in the last decade, while Western economies were floundering.

A solution whose time has come
Public banking may be a radical solution, but it is also an obvious one. This is not rocket science. By developing a public banking system, governments can keep the interest and reinvest it locally. According to Kennedy and Creutz, that means public savings of 35% to 40%. Costs can be reduced across the board; taxes can be cut or services can be increased; and market stability can be created for governments, borrowers and consumers. Banking and credit can become public utilities, feeding the economy rather than feeding off it.

Good article. So nationalization of banks as per Indira Gandhi is good onlee? Not!

1. We should have govt owned banks serving a common, aam aadmi agenda. This is important.. Private banks will not set up a branch in Kargil or Arunachal Pradesh.
These days, I find, similarly, that Doordarshan, as opposed to the private TV channels gives excellent coverage of news, current events, in depth interviews. Most private news channels focus on breaking old news repeatedly in new bottles. The BBC in the UK, is another channel I love to watch, which is also govt. owned.

2. So a good balance of public private partnership is required. If the balance is closer to America...its cowboy...to hell with everyone else ..me first capitalism and individualism.
If Europe...then private and public in some ways. Slow and steady. India is similarly socialist.

Christopher Sidor · Post by **Christopher Sidor** » 01 Dec 2012 15:22

More trouble is heading the way of europe's financial institutions. It appears that Moody has downgraded ESM ratings from "AAA" to "AA1". EFSF's rating has also been so called "provisionally" downgraded by Moody, with a negative outlook. What this means is that Moody believes that the ratings might get lower.

S&P has already downgraded EFSF earlier.

What this does is that it impacts other non-government financial institutions. A down grade by one rating agency can be ignored, as the mandate of most of the money managers is to look at the ratings of two or more than two rating agencies. So if S&P downgrades while Moodys or Fitchs or somebody else does not downgrade then also the money managers are fine.
But if more than one rating agency downgrades than either the classification of the debt goes or the debt has to be sold or more collateral put in.

This downgrade has to be seen in the context of ECB's proposal to buy "unlimited" government bonds for those countries which submit to tough conditions. So even if the European rescue fund gets downgraded, then also we might not forsee a derailment of the European rescue efforts.