In The News Today

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It was possible, no doubt, to imagine a society in which wealth, in the sense of personal possessions and luxuries, should be evenly distributed, while power remained in the hands of a small privileged caste.

But in practice such a society could not remain stable. For if leisure and security were enjoyed by all alike, the great mass of human beings who are normally stupified by poverty would become literate and would learn to think for themselves; and when once they had done this, they would sooner or later realise that the privileged minority had no function, and they would sweep it away.

In the long run, a hierarchical society was only possible on a basis of poverty and ignorance.
–George Orwell, 1984



Boosting forex reserves: Pakistan refuses to sell $2.7b worth of gold says IMF
By Shahbaz Rana
Published: March 29, 2014

ISLAMABAD: Pakistan has refused to sell gold worth $2.7 billion, citing national security reasons, as the International Monetary Fund (IMF) pushes Islamabad to convert the precious metal into cash to build foreign currency reserves, revealed the global lender’s report on Friday.

The report, prepared by IMF’s staff led by its Washington-based Mission Chief to Islamabad Jeffrey Franks, also spills the beans on the ‘$1.5 billion gift’ to Pakistan by ‘Saudi Arabia’ – the name Prime Minister Nawaz Sharif’s government has so far refused to officially share with parliament.

According to the report, the State Bank of Pakistan (SBP) holds over 2 million troy ounces of monetary gold, having $2.7 billion value at market rate. It is not counted in gross international reserves as it is not deemed to be liquid by the SBP, says the IMF.

The IMF and Pakistan authorities discussed what steps would be needed to make gold more liquid, the report adds. “However, the (Pakistani) authorities stressed that they have no plans to sell gold and preferred existing arrangements for gold holdings for national security reasons.”

The IMF is pushing Pakistan to sell gold holdings at a time when other countries are buying the commodity as a strategic reserve. The IMF had even sold its surplus gold to India a couple of years ago.




Jim Sinclair’s Commentary

Mr. Williams shares the following with us.

– Trade-Deficit Deterioration Should Hit First-Quarter GDP Growth Hard
– Real Merchandise Trade Deficit on Track for Worst Quarterly Showing Since Fourth-Quarter 2012
– February Construction Spending Showed Ongoing Stagnation

"No. 615: February Trade Deficit and Construction Spending"


Russian Lawmakers Approve Satellite Navigation Hub in Nicaragua
© RIA Novosti. Sergey Pyatakov
11:50 01/04/2014

MOSCOW, April 1(RIA Novosti) – Russian lawmakers have endorsed draft legislation to allow the country to set up a satellite navigation monitoring system in Nicaragua, a Cabinet committee said Tuesday.

"The agreement is aimed at creating an organizational and legal framework for mutually beneficial partnership between Russia and Nicaragua in terms of exploring and using space for peaceful purposes," the official statement explained.

Under the agreement, Russia would set up a network of land-based control stations in the Latin American country to monitor and augment the accuracy of navigation satellites in Earth orbit.

It is hoped the system will boost Russia’s GLONASS satellite navigation system, the only current alternative to the US’s Global Positioning System (GPS) to feature global coverage and comparable accuracy.

The Nicaragua accords also propose to establish a more general cooperation program on space exploration between the two nations, including the allotment of intellectual property rights and procedures for customs controls.


Switzerland snubs U.S. effort to sanction Russian billionaires

ZURICH (Reuters) – Russian officials sanctioned by the European Union will be barred from new business interests in Switzerland but billionaires included on the U.S. sanctions list face no restrictions, the Swiss government said on Wednesday.

Switzerland decided last week against imposing its own sanctions in response to the Ukraine crisis, but promised not to become a place to circumvent sanctions imposed elsewhere.

In a statement on Wednesday, it fleshed out its plans to make sure people on the EU list – 33 politicians and security officials – could not use Switzerland to bypass the EU rules, but did not mention those sanctioned by the U.S. Treasury.

A spokeswoman for the Swiss State Secretariat for Economics (SECO) later confirmed to Reuters that only the individuals on the EU sanctions list were affected by the Swiss measures.

The United States and the EU have both imposed personal sanctions against Russian and Crimean officials involved in last month’s seizure of the Crimea peninsula from Ukraine.

Washington has also targeted a bank and several Russian billionaires, including Gennady Timchenko, whose sale of his shareholding in Geneva-based oil trader Gunvor narrowly averted collateral damage to the Swiss commodity trading sector.


Jim Sinclair’s Commentary

Another shot at the petro dollar.

Russia should switch to ruble payments with all trading partners – head of VTB Bank
Published time: April 03, 2014 01:58

The head of VTB Bank has urged Russia to start transitioning to ruble payments with all its trading partners, including China and Western Europe, adding that export companies should lead the way in adopting the change.

It makes sense for Russia to make the switch to rubles, president and chairman of VTB’s management board, Andrey Kostin, said at the XXV Congress of Russian Banks Association on Wednesday, Vedomosti newspaper reported. He added that the switch should begin immediately.

Kostin explained his thinking by pointing out the West’s recent calls to isolate Russia’s economy by virtually destroying the nation’s banking sector with dollar payments.

He stressed that half of Russia’s exports and less than half the country’s imports target eurozone countries and the dollar zone.

Exports by companies such as Gazprom, Rosneft, and Rosoboronexport add up to almost US$230 billion a year, he noted.

VTB Deputy President Herbert Moos also added that while the sanctions against Russia are unlikely to sufficiently impact the business, it could be affected by the continuing weakening of the ruble. The Russian currency has been falling in the wake of the situation around Crimea.

In addition, Kostin said that Russia should develop a national payment system as soon as possible.


Jim Sinclair’s Commentary

Taunt for taunt ends in a battle.

Ukraine agrees to host NATO war games
April 1, 2014 5:30 AM

Kiev (AFP) – Ukraine’s parliament on Tuesday approved a series of joint military exercises with NATO countries that would put US troops in direct proximity to Russian forces in the annexed Crimea peninsula.

"This is a good opportunity to develop our armed forces," acting defence minister Mykhailo Koval told Verkhovna Rada lawmakers ahead of the 235-0 vote.

The decision came as NATO foreign ministers gathered in Brussels for a two-day meeting dominated by concern over the recent buildup of Russian forces near Crimea that US officials estimate had at one point reached about 40,000 troops.

NATO has sought to reinforce its eastern frontier after Russia’s takeover of Ukraine’s Black Sea peninsula and amid concerns about Kremlin’s emboldened foreign policy.

Russia on Monday reported pulling back a battalion of about 500 to 700 soldiers from the border region in a move that German Foreign Minister Frank-Walter Steinmeier called "a small sign that the situation is becoming less tense".


NASA suspends cooperation with Russia over Ukraine crisis
Published time: April 02, 2014 20:19
Edited time: April 02, 2014 20:54

The United States has suspended contact between NASA and its Russian counterpart over the ongoing situation in Ukraine. Only ongoing International Space Station cooperation will continue through the freeze in relations.

NASA associate administrator Michael O’Brien said in a memo sent Wednesday that all missions with Russia’s Roscosmos are on hold indefinitely, UPI reports.

“This suspension includes NASA travel to Russia and visits by Russian Government representatives to NASA facilities, bilateral meetings, email, and teleconferences or videoconferences,” O’Brien wrote. “At the present time, only operational International Space Station activities have been excepted.”

O’Brien added that “multilateral meetings held outside of Russia that may include Russian participation are not precluded under the present guidance.”

NASA told various US media that it will release a public statement later on Wednesday.

Three Russians, two Americans, and one Japanese astronaut are onboard the International Space Station (ISS).