Argentina Desperate For Gold To Fight 25% Inflation

Interesting detail from Bloomberg.  Runs 2 minutes.
Demand for gold is so strong in Argentina, the only bank that trades gold is looking to buy bullion directly from mining companies.  A sign of things to come in other countries perhaps, as Argentina fights the highest inflation rate in the Western hemisphere.  And government bonds are forced to pay 14% -- 3 times higher than the emerging market average.

Great clip from earlier today:

Texas Wants Its Gold Back From The Fed

China, Brazil sign trade, currency deal ahead of BRICS summit

(Reuters) - BRICS members China and Brazil agreed on Tuesday to trade in their own currencies the equivalent of up to $30 billion per year, moving to take almost half of their trade exchanges out of the U.S. dollar zone.
The agreement, due to last three years and signed hours before the start of a BRICS summit in Durban, South Africa, marked a step by the two largest economies of the emerging powers group to make real changes to global trade flows long dominated by the United States and Europe.
"Our interest is not to establish new relations with China, but to expand relations to be used in the case of turbulence in financial markets," Brazilian Central Bank Governor Alexandre Tombini told reporters after the signing.
Trade between the two countries totalled around $75 billion in 2012. Brazilian officials have said they hope to have the trade and currency deal operating in the second half of 2013.
At the summit in Durban, the fifth held by the group since 2009, Brazil, Russia, India, China and South Africa are widely expected to endorse plans to create a joint foreign exchange reserves pool and an infrastructure bank. They are also due to discuss trade and investment relations with Africa. (Reporting by Agnieszka Flak and Marina Lopes; Editing by Jon Herskovitz and Pascal Fletcher)

Halting Gold Delivery, Clearing the Path for Rash Action?

Gold repatriation ... The Cyprus/ Eurozone crisis has just intensified, as Dutch Bank ABN Amro has sent a letter to clients this weekend informing them that they will halt extradition and physical delivery of their clients' gold holdings effective April 1st! No worries however, Amro ensures its clients that there is no need to panic or do anything rash (such as remove your phyzz prior to April 1st: We ensure that we have your investments in precious metals now the new way to handle and administer [them]. – Max Keiser
Dominant Social Theme: It's okay. We'll hold onto your gold for you.
Free-Market Analysis: Above and also at ZeroHedge it's been reported that Amro Bank is not delivering gold to customers but retaining it on clients' behalf.
This disturbing news comes after reports that German demands for gold from the Federal Reserve and France will take years to fulfill. The impression is that neither country has enough of the precious metal.
Over at the Golden Jackass, Jim Willie is claiming that French officials made the decision to invade Mali in order to refill coffers with the yellow metal based on the necessity to comply with German demands.
Here's what Keiser writes about Willie's latest speculations:
Willie states that a global financial collapse is now at our doorstep, and that the endgame will be triggered by a small-medium sized bank failure in Europe. Willie informs SD readers that the coming European bust will ignite a global Gold rush as the only remaining safe haven, will see an end to the reserve status of the USdollar, and will result in the arrival of the Gold Trade Finance platforms.
Our reaction to all this is that it is really a shame that so many people let themselves be misled by the mainstream media that has been misrepresenting the state of the world's economy to Baby Boomers and others for virtually their entire lives.
In both Europe and the US, the mainstream media has for years reported on gold and silver as barbaric remnants of an ancient era when people were not so sophisticated. Paper money or even electronic digits are to be seen as the currency of modern man.
Not so fast. The Internet itself, what we call the Internet Reformation, has made it clear that ownership of precious metals has its place. For providing this information and much else, the alternative media has been pilloried and its ability to provide information is always under some sort of attack.
And yet when it comes to precious metals and so much else, the alternative "free" media proves accurate while the mainstream media is constantly exposed as a promotional mechanism providing the public with what we call dominant social themes.
These are surely fairytales, scarcity propaganda designed to push the middle class into demanding more and more government action – and eventually, it would seem, world government.
Ironically, there will be real scarcities, eventually ... of precious metals.
The mainstream press informs us of scarcities in water, food and energy. But the one legitimate scarcity will likely be in gold and silver. And you will not hear of that from the mainstream media until it is too late.
The scarcity, by the way, will give rise to further manipulations by the powers-that-be. We've already pointed out numerous times that the recent LIBOR scandal is ridiculous given that those involved in the price fixing were actually charged by authorities with an affirmative obligation to "fix" the price.
What is going on with such financial scandals is likely a deliberate attempt to accustom people to the idea that widespread manipulation of the markets is part of daily business in the financial world. This paves the way for further manipulations and even various kinds of confiscation. Cyprus (see our other articles) is but the beginning.

expect these eight steps from the government’s playbook

To anyone paying attention, reality is now painfully obvious. These bankrupt, insolvent governments have just about run out of fingers to plug the dikes. And history shows that, once this happens, governments fall back on a very limited playbook:

1. Direct confiscation

   As Cyprus showed us, bankrupt governments are quite happy to plunder people’s bank accounts, especially if it’s a wealthy minority.
   Aside from bank levies, though, this also includes things like seizing retirement accounts (Argentina), increases in civil asset forfeiture (United States), and gold criminalization.
   

2. Taxes

   Just another form of confiscation, taxation plunders the hard work and talent of the citizenry. But thanks to decades of brainwashing, it’s more socially acceptable. We’ve come to regard taxes as a ‘necessary evil,’ not realizing that the country existed for decades, even centuries, without an income tax.
   Yet when bankrupt governments get desperate enough, they begin imposing new taxes… primarily WEALTH taxes (Argentina) or windfall profits taxes (United States in the 1970s).
   

3. Inflation

   This is indirect confiscation– the slow, gradual plundering of people’s savings. Again, governments have been quite successful at inculcating a belief that inflation is also a necessary evil. They’re also adept at fooling people with phony inflation statistics.
   

4. Capital Controls

   Governments can, do, and will restrict the free-flow of capital across borders. They’ll prevent you from moving your own money to a safer jurisdiction, forcing you to keep your hard earned savings at home where it can be plundered and devalued.
   We’re seeing this everywhere in the developed world… from withdrawal limits in Europe to cash-sniffing dogs at border checkpoints. And it certainly doesn’t help when everyone from the IMF to Nobel laureate Paul Krugman argue in favor of Capital Controls.
   

5. Wage and Price controls

   When even the lowest common denominator in society realizes that prices are getting higher, governments step in and ‘fix’ things by imposing price controls.
   Occasionally this also includes wage controls… though wage increases tend to be vastly outpaced by price increases.
   Of course, as any basic economics textbook can illustrate, price controls never work and typically lead to shortages and massive misallocations.
   

6. Wage and Price controls– on STEROIDS

   When the first round of price controls don’t work, the next step is to impose severe penalties for not abiding by the terms.
   In the days of Diocletian’s Edict on Prices in the 4th century AD, any Roman caught violating the price controls was put to death.
   In post-revolutionary France, shopkeepers who violated the “Law of Maximum” were fleeced of their private property… and a national spy system was put into place to enforce the measures.
   

7. Increased regulation

   Despite being completely broke, governments will dramatically expand their ranks in a last desperate gasp to envelop the problem in sheer size.
   In the early 1920s, for example, the number of bureaucratic officials in the Weimar Republic increased 242%, even though the country was flat broke from its Great War reparation payments and hyperinflation episode.
   The increase in both regulations and government officials criminalizes and/or controls almost every aspect of our existence… from what we can/cannot put in our bodies to how we are allowed to raise our own children.
   

8. War and National Emergency

   When all else fails, just invade another country. Pick a fight. Keep people distracted by work them into a frenzy over men in caves… or some completely irrelevant island.

The Long Con by the Federal Reserve Amounting to 3.6 percent of the US GDP, or $518 billion, each year since 1913

An Explanation about How the Bankers Who Convened at Jekyll Island, Again,

Fooled this Humble Nation: “Inflation” is

not an Accident of the Financial System,

It is the Heart of a Con by which We are all Fleeced, Year by Year”

W. Curtiss Priest, Ph.D.

Director, Center for Learning,

Knowledge and Social Progress

Editor, CITS Capital & Debt Watch

Emeritus, Principal Research Associate, MIT

Summary

:

During my twenty years of studying this country's financial system in publishing the

Capital & Debt Watch Newsletter, I came across something far more invasive and

pernicious than the various pyramiding schemes such as by Bernie Madoff. I discovered

a rather astounding version of the "Long Con." As those know, in a long con, the con

artists, in this case the "old bankers," set up a rouse to bleed the victim. In this con, the

main rouse was to convince everyone that inflati

on is a fact of life. In fact, inflation, at

about 4% per year, is contrived by the old bankers (contrasted to the new bankers

inventing other means of bleeding money away from folk, such as via derivatives). The

con always involves some kind of "front" and since 1913, the front has been the US

Federal Reserve. Prior to that, the front was the 1st National Bank of the US and the 2nd

National Bank, which Jefferson and Jackson shutdown, respectively, because they saw

the bleed of money from ordinary folk.

I term this con the "Fed Fleece" and I have written about it in more detail at

"The Fed

Fleece Proof."

In short, the bankers who conceived of the Fed on Jekyll Island (see

Griffith, The Creature of Jekyll Island

) inserted one paragraph in the enabling legislation

to create the Federal Open Market Committee (FOMC) and they gave this non-

government, non-responsible entity the right to create and sell federal securities. I

document, via a Barron's chart, how this committee has magically sold many more

securities into the financial markets then they have purchase and returns only 10% of the

proceeds to the US Treasury. And the other 90% (the other 90% of 4% of our entire

GDP, aka, so-called "inflation") goes to line the pockets of member banks and thus

member families. How? As with a fractiona

l lending system, any "new money" can create

10 times that amount in new loans. So, if asked, the Fed says, oh yes, I do introduce the

equivalent of money (these are Federal obligations and do not constitute newly created

money as only the US Treasury can do), and I send the proceeds to the Treasury. What

they don't say, and which is the heart of the con, is that the other 90% is bled away from

all of us at the rate of 4% of GDP, each year.

I fact checked this issue with Martin Mayer,

author of The Bankers

and The Fed

and it was he who steered me to the 10% flow back

to the Treasury. However, and now quite elderly, Mr. Mayer could not say quite how or

why the other 90% has gone unnoticed. I don't even know if Dr. Bernanke is even aware

that he is running the front for the

largest con in all of history

.

One political response to this 4% fleecing (3.4% to the bankers; .6% to the US Treasury –

as a highly regressive tax) is that a growing economy needs more money in circulation

and that the FOMC provides this addition to the money supply. In the age of electronic

banking, however, it is highly unlikely that an increase in the velocity in the money

supply isn’t sufficient and, even if the increase is desirable, perhaps the best way to

introduce this money, is not by fleecing us, but by paying everyone a dividend check in

the amount of 4% of the GDP each year. Further, as mentioned here, what should the

Fed do when GDP doesn’t grow or even shrinks? As they take 4% away from our wealth

at about the rate of GDP growth -- typically 3-4% GDP, will the same bankers return,

say, 4% to us when GDP declines by 4%? In summary, the need to increase the money

supply may be unneeded in this era of electronic banking and regardless, the money

supply argument is a cover-up for the Long Con.

Related Center Activity – Financial Protection

:

Like Professor Elizabeth Warren, I concluded that there should be a separate agency to

prevent further financial collapses. However, unlike Warren, Dodd, and others, I see no

stable solution except by forming a fourth branch of the US Federal Government for

Financial Safety. The reasons for this are described in my rationale and description of a

twenty-eighth amendment

to the US Constitution. While the magnitude of this financial

problem may appear to dwarf the issue raised here, if you take $.518 trillion and multiply

by 100 years, the amount is $51.8 trillion in current dollars. This amount is surely on a

par with the kinds of figures associated with the more recent debacle.

The Fed Fleece:

In August, 2009, my first version of the “Fed Fleece,” (aka the Long Con), appeared on

the CyberSociety List. Since then I have edited it several times as, 1.) I’ve seen

corollary articles on the subject, and 2.) as I have further reflected on the problem. In

August I had the opportunity to further discuss a draft of the paper with Mr. Mayer

(author of The Fed

) and explore where the $51.8 trillion has gone. Mr. Mayer pointed to

the .6% returning to the Treasury but was unsure about where the 3.4% has gone.

In general, I am quite astounded when I tell this story to various folk including Dr.

Krugman, to the Chief Economist of the US Joint Banking Committee, and other

Senators considering Bernanke’s position. I am mostly greeted by silence. But silence is

not what this uncovering deserves. Material from the August paper follows. For

information about my background, see the credentials section below.

Original August, 2009 paper:

I now understand that the 4% inflation rate is a "slow bleed of society" created by the

"old bankers." This is a form of the long con. The Fed is a diversion in this con-job.

This slow bleed destroys the ability to build up savings and maintain financial stability;

this slow bleed destroys families; this slow

bleed makes the (unworkable) Social Security

System necessary.

There is no honest reason that a five cent candy bar shouldn't still be five cents today.

This bleed has nothing to do with hyperinflation. This bleed has nothing to do with the

destructive innovations of the new bankers, e.g., derivatives.

Both Jefferson and Jackson realized the fleecing, the bleed, by these so-called national

banks -- and got rid of them.

But, like any very long con job, the "old bankers" just go into hiding and wait for another

opportunity to begin it again. Look at the 1913 Federal Reserve Act. Examine the single

paragraph giving the FOMC (Federal Open Market Committee) the legal right to sell

"scribbled pieces of paper" as if genuine US treasuries. Note the Barron's chart over 60

years (also at

http://www.elearningspace.org/debfom.gif

:

Notice that this Committee with regulations only known to itself, has quietly been

bleeding the nation, year by year at 4% of GDP. It ALWAYS sells more "obligations"

than it buys. Only 10% of the proceeds go into the US Treasury. The rest is a gift to all

member banks to be lavished as they will. In 1987 dollars, this meant that 400 billion

dollars was created (do not confuse this with fiat money, this is sheer counterfeiting) So

$40 billion, a horribly regressive tax, made it into the Treasury, and 360 billion was sent

to "friends and relatives" of the (old) bankers.

However, today? Our problems are so much greater than this larcenous, slow bleed, and

would Obama, Bernanke, Krugman, etc. care, if

they clearly knew? And, as the bleed was

always geared to an increase in the GDP (excused by the "need" to increase the money

supply, which Milton Friedman noted, see recent obituary of his wife, where Friedman

says "inflation" is due to the increase in the money supply -- note: this does not make it

necessary nor any less larcenous), and in that our GDP is contracting ... does that mean

that the "old bankers" will now purchase MORE obligations than they sold, and thus give

back the money? Or, if Batra is correct ... that we are now a third-world country that is

printing money (the trillions just printed as "stimulus") -- that like all third-world

countries we will extinguish ourselves in a poof of hyperinflation.

And the Fed per se, only worsens matters in general. Greenspan destroyed this country

by dropping the discount rate to 1% after the dot-com boom/bust.

So, in the middle of all this chaos, would clos

ing the Fed be of any use even if the slow

con were fully exposed? First, should the bleed be permanently stopped for all time?

Yes. Second, DO close the Fed today if it serves the greater purpose of restoring

tranquility and the faith of China and others in not selling us out.

But, whatever, the Chair of the Federal Reserve, Dr. Bernanke, owes it to the people to

explain this Front before his next confirmati

on. What should be asked of the Professor is

how is it that his main role is presented to “fight inflation” when, in fact, it is the major

role of his institution to “create inflation”

Dr. Priest, Credentials

I am a member of the American Economics Association since 1972, was the Chief

Economist of MIT’s Center for Policy Alternatives. As Chief Economist he testified

before Congress especially on issues on the Costs and Benefits of Regulation. Having

retired last year from MIT, Dr. Priest is

speaking as the director of an MIT founded

Program (2008), The Center for Learning, K

nowledge & Social Progress (CLK&P), now

a 501(c)3 nonprofit near Cambridge, MA.

As editor of an Internet-acclaimed Newsletter on the implications of US Debt, and cited

by Newsweek as one of the Fifty People Who Matter Most on the Internet (1996), Dr.

Priest is author of Risks, Concerns and Social Legislation

(Praeger, 1988) and the

organizer of the CyberSpace Society, founded in 1999. Supported by grants from the

MacArthur Foundation, Cisco Academies, AARP, and the US Congressional Office of

Technology Assessment, Dr. Priest has had the freedom to seek the truth, no matter what

the political implications of those truths are.

Further information about Dr. Priest’s more recent research and projects are described at

the

CLK&P web site

. As some ask for proof of credentials, Dr. Priest received his Ph.D.

in Management Science and Economics at RPI in 1972. He has been an active economist

since 1972 as a member of the American Economics Association (shown in Figures 1 &

2). He has been an active member of the MIT community from 1978 to 2008 (shown in

Figures 3 & 4). His financial newsletter reached nearly 10,000 Internet readers and past

issues can be found in a search engine using a phrase ‘CITS debt watch.’

Member of the American Economics Association (1972-present): AER Members

Directory (Figures 1 & 2):

Member of the Massachusetts Institute of Technology (MIT) – 1978-2008, Figures 3 & 4.

Currently, Director of the Center for

Learning, Knowledge, & Social Progress (1986-

present -- previously titled th

Gold – Do You Believe Central Banks or Bloomberg?

Learn how some well-known contrarian speculators (like Doug Casey and Rick Rule) made their millions. Simply sign up for Downturn Millionaires, a free video presentation from Casey Research.
Bloomberg reported recently that Russia is now the world’s biggest gold buyer, its central bank having added 570 tonnes (18.3 million troy ounces) over the past decade. At $1,650/ounce, that’s $30.1 billion worth of gold.
Russia isn’t alone, of course. Central banks as a group have been net buyers for at least two years now. But the 2012 data trickling out shows that the amount of tonnage being added is breaking records.
The following table lists the countries that have added to their gold reserves this year, while the second one tallies those that have been selling. You’ll see how recently each country has reported, along with its percentage increase.

Changes in Central Bank Gold Reserves in 2012 (Million Troy Ounces)
	Year-End 2011	YTD 2012	Last Reported	Net Change	Percent Change
Countries Increasing Reserves
Turkey	6.28	11.56	Dec	5.283	84.1%
Russia	28.39	30.79	Dec	2.405	8.5%
Bank for International Settlements	15.6	16.71	Dec	1.114	7.1%
Brazil	1.08	2.16	Dec	1.08	100.0%
Philippines	5.12	6.2	Nov	1.079	21.1%
Kazakhstan	2.64	3.71	Dec	1.07	40.5%
South Korea	1.75	2.71	Nov	0.965	54.9%
Iraq	0.19	0.96	Nov	0.773	405.3%
México	3.41	4	Dec	0.596	17.3%
Paraguay	0.021	0.263	Sept	0.242	1152.4%
Ukraine	0.9	1.14	Dec	0.239	26.7%
Belarus	1.21	1.37	Dec	0.164	13.2%
Tajikistan	0.15	0.2	Dec	0.05	33.3%
Brunei	0.06	0.09	Oct	0.031	50.0%
Mozambique	0.08	0.11	Oct	0.025	37.5%
Serbia	0.46	0.48	Nov	0.022	4.3%
Jordan	0.41	0.43	May	0.02	4.9%
Kyrgyz Republic	0.08	0.1	Dec	0.014	25.0%
Greece	3.59	3.6	Dec	0.008	0.3%
Mongolia	0.11	0.12	Nov	0.004	9.1%
Suriname	0.071	0.074	Dec	0.003	4.2%
South Africa	4.02	4.02	Nov	0.003	0.0%
Moldova	0	0.002	Dec	0.002
Bulgaria	1.28	1.28	Dec	0.001	0.0%
Pakistan	2.071	2.072	Dec	0.001	0.0%
Subtotal Gross Increases				15.2
Changes in Central Bank Gold Reserves in 2012 (Million Troy Ounces)
	Year-End 2011	YTD 2012	Last Reported	Net Change	Percent Change
Countries Decreasing Reserves
Sri Lanka	0.32	0.12	Sept	-0.204	-62.5%
Germany	109.19	109.04	Dec	-0.159	-0.1%
Czech Republic	0.4	0.37	Dec	-0.028	-7.5%
Macedonia	0.22	0.22	Dec	-0.001	0.0%
France	78.3	78.3	Dec	-0.001	0.0%
Malta	0.01	0.01	Dec	-0.001	0.0%
Subtotal Gross Decreases				-0.39
Total Net Change				14.8
Sources: IMF, CPM Group. Data as of 1-31-13.

Based on current data, the net increase in central bank gold buying for 2012 was 14.8 million troy ounces – and that’s before the final 2012 figures are in for all countries.
This is a dramatic increase, one bigger than most investors probably realize. To put it in perspective, on a net basis, central banks added more to their reserves last year than since 1964.The net increase – so far – is 17% greater than what was added in 2011, which was itself a year of record buying.
Here’s a picture of total central bank reserves since the financial crisis hit.

Whatever gold’s price movements, positive or negative, central bank officials have continued adding a lot of ounces to their reserves.
But this understates the case, because most of the data exclude China, as well as a few other small countries. China last officially reported gold reserves in 2009, so the totals in the chart since then exclude whatever its purchases might have been.
Here’s where it gets interesting: Bloomberg claimed that Russia has been a bigger buyer of gold over the past decade than China – by a full 25%. Based on data about gold imports through Hong Kong and the fact that, for the most part, Chinese production doesn’t leave the country, it seemed to me that this could not be right.
The Chinese central bank holds an official 1,054 tonnes of gold in its reserves. Bloomberg states, based on IMF data, that China has added somewhere around 425 tonnes over the past decade.
I can’t say exactly what the correct number is, but the Bloomberg number almost has to be wrong. Here’s why:

• Gold imports through Hong Kong in December alone hit a record high of 109.8 tonnes.

• Imports for 2012 also hit a record high of 572.5 tonnes.

• If you add 2012 mine production – remember that China is now the world’s largest gold producer – roughly 970 tonnes of gold was delivered to various entities within the country last year.

• Cumulative imports since 2001 have reached 1,352 tonnes.

• Since 2001, imports plus production total a whopping 4,793 tonnes.

So Bloomberg is essentially saying that roughly 10% of the total gold available inside the country during that period was added to China’s reserves. While it’s true that Chinese citizens are buying a lot of gold (though perhaps more silver), it’s highly doubtful that private parties bought 90% of all the gold brought to the Chinese market during this period. I think – but can’t prove – that China’s central bank is buying more gold and at a faster pace than its Russian counterpart.
Jim Rickards, a highly respected author and hedge fund manager, said last month that China has probably already accumulated between 2,000 and 3,000 tonnes of additional gold reserves. If he’s right, that would be roughly double or triple the 1,054 tonnes it reported in 2009 – not the 40% increase Bloomberg‘s numbers suggest.
At the very least, we can say that the Bloomberg report left consideration of China’s imports and production out of its report naming Russia the top gold buyer of 2012. Okay…but so what?
Well, Jim thinks the next big catalyst for gold will be an announcement from China about its reserve position. Here’s what he told me in late December:
“The catalyst for a spike into the $2,500 to $3,000 price range for gold will be an announcement by China, probably in late 2013 or 2014, that they have acquired 4,000 tonnes or more in their official reserve position. This will put China on an equal footing with the US in terms of a gold-to-GDP ratio, and validate gold as the real foundation of the international monetary system. Once that position is validated, gold will move to the $7,000 range in 2015 and beyond.”
Even if Jim’s estimate is high or China doesn’t make an announcement until later, it’s clear that central banks around the world are buying gold in record quantities.
It almost makes you wonder… do they know something we don’t?
The Russians gave us some hints.
Evgeny Fedorov, a lawmaker for Putin’s United Russia Party, said last week, “The more gold a country has, the more sovereignty it will have if there’s a cataclysm with the dollar, the euro, the pound, or any other reserve currency.”
President Vladimir Putin told his central bank not to “shy away” from the metal, adding “After all, they’re called gold and currency reserves for a reason.”
The Chinese have been quiet on this topic recently, after being very vocal a few years ago. Here’s a recent quote.
“The current international currency system is the product of the past,” said Hu Jintao, General Secretary of the Communist Party of China.
Others have provided clues as well.
“We’re in the midst of an international currency war,” said Guido Mantega, finance minister of Brazil.
“Quantitative easing also works through exchange rates… The Fed could engage in much more aggressive quantitative easing, to further lower the dollar,” said Christina Romer, former chair of the Council of Economic Advisors.
Economist Kyle Bass recently spoke to a senior member of the Obama administration about its planned solutions for fixing the US economy and trade deficit. When he asked, “How are we going to grow exports if we won’t allow nominal wage deflation?”, the answer he got was, “We’re just going to kill the dollar.”
Yes, we’re talking about the US dollar. Perhaps some investors have gotten complacent about the risks to the world’s reserve currency – but not central bankers. It’s not hard to see why: whether they admit it or not, central bankers must know what it means to run the printing presses the way the US has since 2008, even if price inflation is not immediately obvious. It’s no surprise they want to hedge their bets, moving more reserves into something with actual value… something that can’t be debased by a few computer keystrokes by an increasingly unfriendly government.
The US dollar has been the world’s reserve currency since WWII. That’s beginning to change, and the movement into gold is just one facet of that change. The buying by central banks is exactly what one would expect to see as we approach the end of the dollar hegemony.
The message from central banks is clear: they expect the dollar to move inexorably lower. It doesn’t matter that it’s been holding up against other currencies or that the economy might be getting better. They’re buying gold in record amounts because they see a significant shift coming with the status of the dollar, and they need to protect themselves against that risk.
This leads to a second message: gold is not overpriced, in spite of the 500%+ increase since 2001. Indeed, with the recent correction, central banks are likely buying more, even as you read this.
Central bank gold buying will continue, of that we’re certain. Even after Putin’s binge, gold accounts for only 9.5% of Russia’s total reserves. China’s 1,054 tonnes is roughly 2% of its reserves. It’s clear that both countries, along with others, have decided to accumulate as much gold as they can, as quickly as they can, before the dollar’s decline becomes more pronounced… and permanent. This could explain why some central banks don’t publicize their purchases. It also means that Bloomberg and other mainstream media outlets could be caught off guard when China announces higher gold reserves than expected – perhaps much higher.
Clearly we should take notice. If central banks are preparing for a major change in the value of the dollar, shouldn’t we? The fact remains that the US dollar cannot and will not survive the ongoing abuse heaped upon it by government planners and federal officials. That not only means the gold price will rise, but that many, if not most currencies, will lose a significant amount of purchasing power. This has direct implications for all of us.
Embrace the messages central bankers are telling us – the ones they tell with their actions, not their words. Buy gold. Your financial future may very well depend upon it.

While buying gold will protect your purchasing power, your best bet at growing it substantially is to stake claims in little-known companies that mine precious metals. That’s how Doug Casey, Rick Rule, and other well-known contrarian speculators made their millions. To learn exactly how they did it – and how you can too – sign up for Downturn Millionaires, a free video presentation from Casey Research.

Brics reach deal on development bank

The Brics grouping of emerging powers have reached a deal to establish a development bank that would rival Western-backed institutions.

"It's done," Finance Minister Pravin Gordhan said after meeting with his counterparts from Brazil, Russia, India and China. "We made very good progress, the leaders will announce the details," he added, just hours before a summit in the South African port city of Durban.
The bank is likely to focus on infrastructure financing, a direct challenge to seven decades of dominance by the World Bank.
It is the first time since the inaugural Brics summit four years ago that the group matches rhetorical demands for a more equitable global order with concrete steps.
Together the Brics account for 25% of global gross domestic product (GDP) and 40% of the world's population. But members say institutions like the World Bank, the International Monetary Fund and the United Nations Security Council are not changing fast enough reflect their new-found clout.
In the face of competing policy demands, Brics negotiators had been under pressure to come up with an agreement that proves the grouping is relevant. And to reach a deal that would send a strong message to the United States and Europe that the current balance of power is untenible.
But an Indian diplomat involved in the talks told Agence France-Presse many of the details are likely to be left for another day, allowing leaders to announce a deal, however tentative.
Up and running
The bank is not likely to be up and running for years. Brazil's central bank chief also told AFP there was also good progress made on a deal to establish currency swap lines, which is likely to be worth in the region of $100-billion.
"We are working on it," said Alexandre Tombini.
The fund would be used to draw on in times of liquidity or other crises and to encourage trade. Securing both deals is a thumb in the eye to those who argue the Brics is little more than a talking shop for disgruntled nations.
It is also a boon for Brics leaders many who have tethered their reputations to a deal.
Xi Jinping has underscored the growing importance of the group by making Durban his first summit as China's president.
In a keynote speech in Tanzania on Monday Xi vowed Beijing's "sincere friendship" with the continent, and a relationship that respects Africa's "dignity and independence".
Meanwhile host President Jacob Zuma has lauded the summit as a means of addressing his country's chronic economic problems including high unemployment.
Challenge
"Brics provides an opportunity for South Africa to promote its competitiveness," Zuma said in a speech on the eve of the summit.
"It is an opportunity to move further in our drive to promote economic growth and confront the challenge of poverty, inequality and unemployment that afflicts our country."
But the Brics nay-sayers are unlikely to be dissuaded. "Ironically it may be the cleavages within the Bric grouping that more accurately hint at the future of the global order: tensions between China and Brazil on trade, India on security, and Russia on status highlight the difficulty Beijing will have in staking its claim to global leadership," said Daniel Twining of the German Marshall Fund.
Leaders will try to counter that view when the summit begins at 17:30 GMT, when more details of the Brics development bank are likely to be known.
Diplomats say it could start with $10-billion seed money from each country, but the exact role of the bank is up for debate. Indian officials have pressed for a Brics-led South-South development bank, recycling budget surpluses into investment in developing countries.
Many developing nations inside and outside Brics will hope that is a way of tapping China's vast financial resources.
Trade-multiplying projects
Meanwhile China would no doubt like the bank to invest in trade-multiplying projects. The currency swaps would open the door for Brics countries to tap some of China's massive $3.31-trillion foreign reserves, the world's largest. Brazil also signed a bilateral accord with China to promote trade in their national currencies.
Brics leaders will also establish business and think-tank councils and launch an investigation into how trade can be more balanced, with other Brics countries exporting more to China.
With Syria's two-year long civil war escalating through the suspected use of chemical weapons, Brics leaders will also have to weigh a call from President Bashar al-Assad to intervene.
In a message to the summit leaders Assad asked "for intervention by the Brics to stop the violence in his country and encourage the opening of a dialogue, which he wishes to start," said his senior adviser Bouthaina Shaaban after he delivered the message to South African President Jacob Zuma. – AFP

"NO BANK ACCOUNT ANYWHERE IN THE EUROZONE IS SAFE"

"NO BANK ACCOUNT ANYWHERE IN THE EUROZONE IS SAFE"

Stores Charges Customers $5 'Just Looking' Fee to Combat Showrooming

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RedditThere's a store in Australia that really hates it when its customers walk around the store without buying anything.

Redditor BarrettFox posted a pic of a sign informing shoppers of a new fee at a  specialty food store in Brisbane.
It's $5 for "just looking."
The fee exists to stop people from "showrooming" — which occurs when a customer looks at items in a physical store, then makes the purchase online.
The sign assures that you'll have the five dollars deducted from the final purchase price, so you'll get your money back if you buy something.
Here's what the sign says:

As of the first of February, this store will be charging people a $5 fee per person for “just looking.”
The $5 fee will be deducted when goods are purchased.
Why has this come about?
There has been high volume of people who use this store as a reference and then purchase goods elsewhere. These people are unaware our prices are almost the same as the other stores plus we have products simply not available anywhere else.
This policy is line with many other clothing, shoe and electronic stores who are also facing the same issue.
Management

The policy is being ripped apart unanimously.
"It has to be the most misguided strategy we've seen for dealing with showrooming," wrote Matt Brownell at Daily Finance. "The goal of any retailer should be to impress customers with competitive pricing and great customer service — not treat their customers with suspicion and hostility from the moment they walk in the door."
"If customers aren’t buying, the seller needs to figure out why and adapt accordingly," wrote Chris Morran at The Consumerist. "If this store’s prices are truly the best, then maybe it should be offering a price-match guarantee. If it truly offers products that aren’t available elsewhere, then how are these showrooming shoppers buying these items from someone else?"
The commenters in the Reddit thread were more straightforward.
"This store seems desperate to go out of business," quipped one commenter.
"If it was me, I'd say 'Screw you.' and not give them a dime, walk out and refuse them any future business," wrote another. " They are asking to go out of business."
And those were the polite ones.