President Putin says he is correcting a period of 'cowboy capitalism'
Russia's president has defended the purchase of Yukos' key production unit by state-owned oil firm Rosneft, saying it followed free market principles. Vladimir Putin said it was quite within the rights of a state-owned company to ensure its interests were met. Rosneft bought 100% of Baikal Finance Group, in a move that amounts to the renationalisation of a major chunk of Russia's booming oil industry. Rosneft will now control about 16% of Russia's total crude oil output. Yukos share jumped in Moscow, climbing as much as 50% before being suspended. The US, meanwhile, has said a lack of transparency in the sale of Yukos' Yuganskneftegas subsidiary could affect Russia's standing in the world economy. "We think this sends the wrong signals to foreign investors and could negatively impact Russia's role in the global economy," deputy State Department spokesman Adam Ereli said. Coming together Rosneft is already in the process of merging with Gazprom, the world's biggest gas company, a move that will see Gazprom return to majority state-ownership.
Now the state, using market methods, is safeguarding its interests. I think this is quite normal
Baikal was the surprise buyer of oil and gas giant Yukos' main production division at a forced auction on Sunday. "Everything was done by market methods," Mr Putin said at his year-end press conference in Moscow. Shedding some light on the Kremlin's motivation, Mr Putin referred to a period of so-called "cowboy capitalism" that followed the collapse of the Soviet Union.
Yukos's main oil producing unit has changed hands twice in five days
He said privatisations carried out in the early 1990s had involved trickery, including law breaking, by people seeking to acquire valuable state property. "Now the state, using market methods, is safeguarding its interests. I think this is quite normal," the Russian president said. A Rosneft spokesman has said the acquisition is part of its plan to build a "balanced, national energy corporation." Complex web The latest announcement comes after more than a year of wrangling that has pushed Yukos, one of Russia's biggest companies to the brink of collapse. The Russian government put Yuganskneftegas up for sale last week after hitting the company with a $27bn (£14bn) bill for back taxes and fines.
You cannot sue the Russian government
Eric Kraus, Sovlink Securities
Analysts say that Yukos's legal attempts to block the auction by filing for bankruptcy protection in the US are probably what caused this week's cloak-and-dagger dealings. Gazprom, the company originally tipped to buy Yuganskneftegas, was banned from taking part in the auction by a US court injunction. By selling the Yukos unit to little-known Baikal and then to Rosneft, Russia is able to circumvent a host of tricky legal landmines, analysts said. "You cannot sue the Russian government," said Eric Kraus, a strategist at Moscow's Sovlink Securities. "The Russian government has sovereign immunity." "The government is renationalising Yuganskneftegas." Far from over Even so, analysts reckon that the saga still has a long way to go. The Rosneft announcement came just hours after Yukos accused Gazprom of illegally taking part in Sunday's auction. It has said it will be seeking damages of $20bn. The claim was made at the latest hearing in the US bankruptcy court in Houston, Texas, where Yukos, had filed for Chapter 11 bankruptcy protection. If found in contempt of the US court order blocking the auction, Gazprom could face having foreign assets seized.
Yukos' lawyers had also been expected to try to have Baikal's assets frozen. Lawyers claimed the auction was illegal because Yukos - with an office in Houston - had filed for bankruptcy and therefore its assets were under the protection of US law which has worldwide jurisdiction. Further muddying the waters is a merger between Rosneft and Gazprom which authorities have said will go ahead as planned.
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Hungary’s largest gas distribution company, EMFESZ, has been “fraudulently” sold to the mysterious Swiss-based firm RosGas AG without the consent of its owner, Ukrainian gas billionaire Dmitry Firtash, Robert Shetler-Jones, chief executive of Group DF that holds Firtash’s business assets, told New Europe telephonically on May 8, adding that DF would fight to get EMFESZ back. “We at Group DF and Mr. Firtash have sold nothing. What has happened is that our Managing Director, Mr (Istvan) Goczi has fraudulently transferred the shares in EMFESZ to RosGas without our approval and without our consent,” Shetler-Jones claimed. He said that the sale raises new concerns about Europe’s gas security since the future EMFESZ, Hungary’s largest independent supplier of gas, remains uncertain. “We do not know who is behind RosGas and therefore we don’t know who is looking to supply EMFESZ with gas,” Shetler-Jones said, adding that he doesn’t understand how RosGas can secure supplies of gas to provide to EMFESZ. Little is known about RosGas, the Swiss company which was recently created in Zug. Shetler-Jones claimed that RosGas has a few directors, one of whom is an officer who is directly responsible to Goczi, the managing director of EMFESZ. “We do not know who owns RosGas, we do not know on what basis they have persuaded Mr. Goczi to carry out this fraudulent operation,” he said.
Read more: http://www.neurope.eu/articles/94168.php#ixzz0b0C7PKvj
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Shetler-Jones stressed that there has not been a decision of the board of directors to sell EMFESZ to RosGas. “Mr Goczi, what he seems to be saying is that he is using a power of attorney for this so-called ‘sale.’ The power of attorney he is supposedly using is one dating from 2004 that was issued to him to initially buy the shares in EMFESZ on behalf of Mr. Firtash. He somehow managed to persuade the Hungarian authorities that this power of attorney gives him the authority also to sell the shares onto a third party,” Shetler-Jones claimed. “However, this does not, in our view, give him the right; it is certainly not done with our approval and therefore we will be pursuing all legal means in our path to get this asset back to our control,” he told New Europe, adding that Group DF will “most certainly” seek criminal charges against Goczi and his associates.
The dispute over the ownership of EMFESZ comes weeks after Firtash was muscled out of the Ukrainian gas trade under the terms of a new Russian-Ukrainian contract agreed by his nemesis Ukrainian Prime Minister Yulia Tymoshenko and Russian counterpart Vladimir Putin after the January gas supply crisis. Under the new contract, Russian gas monopoly Gazprom will supply Ukraine directly, cutting out the middleman – RosUkrEnergo. Firtash owns 45 percent of Swiss-registered RosUkrEnergo, where he is a partner with Gazprom, which holds another 50 percent of the trader. EMFESZ announced two weeks it was switching its gas purchases from Rosukrenergo to RosGas. Asked about the switch, Shetler-Jones said, “As far as I’m aware RosGas is not supplying gas to EMFESZ. One of the issues that concerned us was the very statement that EMFESZ made about securing supplies of gas from RosGas ... Group DF was not aware of those negotiations and, of course, we do not know what Rosgas is, so I’m assuming that is all part of the process that we now seeing unwinding, the transfer of shares, the sourcing of different supplies of gas and who is behind it is fundamental to understanding what has happened.” In a statement, EMFESZ said that RosGas is part of Gazprom’s network of business interests. This claim was dismissed by Gazprom Press Secretary Sergei Kupriyanov. “RosGas has nothing to do with Gazprom and does not belong to the Gazprom group,” Kupriyanov said. Shetler-Jones told New Europe that there is no evidence that there is any connection between RosGas and Gazprom. “If it is Gazprom and again we have no proof if it is Gazprom, of course this would be extremely important commercially but also politically, but I do reiterate that we have no evidence to that effect at the moment.”
Read more: http://www.neurope.eu/articles/94168.php#ixzz0b0CAm6Pe
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KUPOL MINE, Russia (Reuters) - Every winter, an ice road is laid across 400 km (250 miles) of tundra to carry supplies to one of the world's most isolated gold mines.
There is no other way for heavy machinery to reach Kupol, the $700 million Arctic mine behind a resurgence in Russian gold production after five straight years of decline. "It's one of the harshest climates I've worked in, and I've worked in the Atacama desert in Chile and at 15,000 feet in Indonesia," said Patrick Dougherty, general manager at Kupol. "But I don't get to pick where the gold is." Only South Africa holds more gold than Russia, but Moscow's fragmented industry has struggled to access vast reserves in its inhospitable Far East. The region was first mined in the 1930s by prisoners of the Gulags set up by Soviet leader Josef Stalin. Russia is the world's biggest energy supplier, but falling prices and reduced demand have cut income from natural resources to about 8 percent of its gross domestic product in the first quarter of 2009, from nearly 11 percent a year ago. Gold, on the other hand, has been helped by recession. Its safe-haven appeal has shielded it from a demand slump that shredded other commodity prices, lifting it by 10 percent this year to keep it within striking distance of a record price of $1,030.8 an ounce set in March 2008. Chukotka, a region revived in the last eight years by the $2.5 billion investment of Chelsea soccer club owner Roman Abramovich, produced a fifth of Russia's gold in the first half of this year. Gold is the region's passport to growth after Abramovich quit as governor last July. Russia ranked fifth among the world's gold miners last year, between Australia and Peru, with an 8 percent share of output. Production rose 13 percent in 2008, the first increase in six years, and jumped another 25 percent in the first half of 2009. "This was solely due to the commissioning of Kupol," said Olga Okuneva, mining analyst at Deutsche Bank in Moscow. "If other large projects in the Far East start producing gold, this will be a major growth driver for the Russian gold industry." Kupol -- meaning dome in Russian -- is named after a rounded outcrop of rock that juts skyward from the tundra in central Chukotka, over 200 km (125 miles) from the nearest settlement. The mine took five years to build. It is the largest tax payer in Chukotka, a land twice the size of Germany where reindeer outnumber people four to one. "With a deposit as large as Kupol, mining's contribution to the regional economy is expected almost to double to 37 percent this year," said Roman Kopin, the 35-year-old who took over as governor when Abramovich resigned. Kinross Gold Corp, the Canadian miner which owns 75 percent of Kupol, is unusual among foreign investors for holding a majority share in a major Russian mineral deposit. The government of Chukotka owns the other 25 percent. Untangling the red tape that stifles some foreign investors in other parts of Russia was one of the main achievements of Abramovich's more than seven years as governor, Kopin said. "The investment climate here, perhaps, is a little bit different, because we understand that it's very difficult to work in Chukotka," he added. Kinross has been the top performing gold stock on the New York Stock Exchange for the last three years, when the company's value rose more than 160 percent. Kupol will supply about a third of its total output this year and 15 of 24 equity analysts polled by Reuters retain a bullish rating on the stock (KGC.N). ARCTIC CORRIDOR About 1,400 jobs are related directly to Kupol, and Chukotka's population totals around 50,000. Miners and catering staff spend four weeks on site and four weeks off, earning an average monthly wage of 50,000 roubles, 25 percent above the regional average. "We have equipment that works here," said Alexander Puzovets, 48, a drill rig operator who works 10-hour shifts at the pit face. "I've been in mines where we've used hammers." The mine's in-house electricity plant could generate enough to power the regional capital, Anadyr. In winter, miners walk the purpose-built Arctic Corridor -- an enclosed, 900-meter tunnel from camp to mine -- to avoid temperatures that drop more than 50 degrees Celsius below zero (minus 58 degrees Fahrenheit). About 60 percent of Kupol's gold is mined underground. Zurab Samteladze, a 55-year-old Georgian more than 7,000 km from home, hauls 45-tonne rock loads to the surface in a Caterpillar truck. In deeper parts of the mine, skilled operators maneuver drill rigs by remote control. This avoids the need for miners to work long hours beneath areas vulnerable to rock falls. "With all the video games they play, the younger generation has a better chance of operating these units," said Dougherty, a native of Arizona. Alcohol is banned. Miners pass their time playing pool, in the gym or watching television. Popcorn is a popular snack, while eight tonnes of reindeer meat was served up last year. "I play guitar -- they have a music room. I like basketball -- they have a sports hall," said Andrei Aksanov, 34, a mechanic in the truck shop. Like 80 percent of the miners at Kupol, Aksanov comes from Magadan, the port city 1,500 km (940 miles) to the southwest. This is where mining began in Russia's Far East. Stalin, needing bodies to unearth new-found gold reserves, sent hundreds of thousands of prisoners to slave in the region's labor camps over two decades from the early 1930s. From such grisly beginnings, Magadan has developed into the hub of gold processing in the Russian Far East. Kupol flies its dore -- bullion bars to be processed into almost pure metal -- to be refined at the Kolyma Refinery to the north of the city. Vladislav Feoktistov, the refinery's 71-year-old director, raised a glass of vodka to visiting officials from Kinross Gold. Supplies from Kupol will guarantee the plant's biggest turnover in its 11-year history, he said. "This a business that's only as good as its suppliers," he said. From here, 15 kg (33 pound) gold bars worth more than $450,000 each at current prices are delivered to Russian banks. MORE GOLD TO MINE There should be more to come. Polyus Gold, owned by billionaires Mikhail Prokhorov and Suleiman Kerimov, plans to launch Natalka, the world's third-largest gold deposit, in 2013. Annual production of between 25 and 30 tonnes will put Natalka on the same scale as Kupol. Beyond 2017, Polyus plans to raise output to more than 40 tonnes a year. "It's a deposit with reserves of more than 1,000 tonnes that will create jobs, infrastructure and become a major center for Magadan region," said German Pikhoya, Polyus Gold's deputy chief executive for strategy and corporate development. If Chukotka is to retain its leading position, it must do more. Current reserves at Kupol will last only until 2016. To extend the mine's life beyond this date, more reserves must be found, mapped and registered with Russian authorities. Kinross and others are already exploring. "Chukotka is definitely a key gold-producing region, particularly in the long term," said Vitaly Nesis, chief executive of St Petersburg-based miner Polymetal. His company plans to launch the Mayskoye gold deposit in Chukotka by 2011. (Additional reporting by Polina Devitt in Moscow; Editing by Sara Ledwith)
The state-owned unitary enterprise-foreign trade association "Almazjuvelirexport" has for over 26 years been trading in diamonds rough and polished, platinum group metals, jewellery, etc. The company signed the first contracts for exporting the above mentioned commodities. The markets of these goods are extremely complicated and strongly monopolized, that's why highly professional specialists are needed to work on them as well as reliable, long-standing contacts with foreign partners and a good knowledge of the market situation, all these qualities characterize experts of Almazjuvelirexport. ALMAZJUVELIREXPORT executes the Government's assignments on export of platinum group metals, precious stones, etc. A network of associated companies in Belgium, Switzerland, the United States and Israel facilitates the work of Almazjuvelirexport on these countries' markets. ALMAZJUVELIREXPORT has recently set up a number of manufacturing joint ventures. It renders services to Russian and foreign firms on commission basis in selling precious stones, including emeralds, jewellery, gold and platinum nuggets, amber and amber articles, silverware, pearls as well as refinement of waste containing platinum group metals. ALMAZJUVELIREXPORT has the reputation of a reliable partner.
“The investment sentiment towards gold is very positive,” said analyst Suki Cooper at Barclays Capital, adding the worries about inflation and the health of the economy could help support gold prices."
Business : Gold rises 1.5 pct as dollar falters: "Gold rises 1.5 pct as dollar falters (Reuters) 24 December 2009 LONDON - Gold prices rallied more than 1.5 percent on Thursday to above $1,100 an ounce as the dollar lost ground and on the back of robust investment flows betting on higher bullion prices.
Other precious metals took their cue from gold’s strength with both palladium and platinum rallying to their highest in about a week at $375 an ounce and $1,4560.50 an ounce respectively.
Spot gold was at $1,104.05 an ounce by 1035 GMT, versus $1,087 an ounce late in New York on Wednesday. Bullion tumbled to a seven-week low of $1,074.10 an ounce earlier this week.
Analysts said the price moves were partly exaggerated due to low liquidity because of the Christmas holiday period, but the fundamentals which sent gold to an all-time high of $1,226.10 an ounce in early December were also still in place.
“Gold’s rising because of a weaker dollar,” said Daniel Smith, analyst at Standard Chartered. “But also the recent sell-off was a bit overdone as a lot of the factors that supported gold are still in place,” he said.
The dollar dipped, coming off three-month highs against a basket of currencies after weak U.S. housing data the previous day dampened optimism about the outlook for the U.S. economy.
A weaker dollar makes gold cheaper for non-U.S. investors and boosts its appeal as an alternative asset.
At current levels, bullion was set to post its biggest one-day percentage gain in more than three weeks.
“Investor flows have held up pretty well. Physical demand in places like India has been strong and I think that’s going to be supportive of the prices,” Smith said, adding he expected a volatile trade due to holiday-thinned liquidity.
U.S. gold futures for February delivery rose 1.1 percent to $1,106.40, compared to $1,094.00 an ounce on the COMEX division of the New York Mercantile Exchange. Futures also hit a 7-week low of $1,075.20 on Tuesday.
The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings stood at 1,132.708 tonnes as of Dec. 23, unchanged from the previous business day and staying just below a record high of 1,134.03 tonnes hit on June 1.
The world’s largest silver-backed exchange-traded fund, iShares Silver Trust, said its silver holdings stood at 9,492.97 tonnes as of Dec. 23, unchanged from the previous business day, after easing from a record high of 9,514.35 tonnes on Dec. 22.
Among other precious metals, spot silver was bid at $17.30 an ounce against $17.09. Platinum was at $1,454 an ounce against $1,418.50, while palladium was at $374 against $355.50."
MOSCOW -- Russia postponed a plan to sell up to $1.7 billion in gold on the international market after word of the sale was leaked to local news media.
Precious-metals export agency Almazyuvelirexport said Tuesday it would delay the planned move, five days after the Interfax news agency reported it would sell up to 50 metric tons (1.6 million troy ounces) in London before the end of the year to cover the state budget deficit.
In an interview, the agency's deputy chief, Sergey Gorny, declined to comment further but said that more information may be available after Nov. 10.
On Thursday, Interfax had cited an unidentified person as saying that the state's Gokhran precious-metals depository was planning to use Almazyuvelirexport to sell a large amount of gold for the first time since Soviet days. Russia's change of plans highlights the dilemma facing some governments and central banks that are seeking to diversify their reserves beyond U.S. dollar-denominated holdings by investing in assets such as gold, yet may be tempted to lock in profits after gold prices rose to more than $1,000 an ounce.
"For sure Russia wants to fix some profits with gold above $1,000 an ounce," said Nikolai Sosnovsky, a metals analyst at UralSib Capital. "The reason for all this is surging gold prices."
The 50 metric tons of gold mentioned by Interfax represent "quite a big amount," equal to about 30% of Russia's total gold production last year, Mr. Sosnovsky said.
In February, when its reserves of gold totaled 16.7 million troy ounces, the central bank said that it would continue to buy gold in 2009.
Russia's gold and foreign-currency reserves are the world's third-biggest, valued at $418.7 billion as of Oct. 9.
The bullion market appeared unaffected by the postponement of Russia's gold sale, according to Barclays Capital analyst Suki Cooper. The analyst said prices didn't move when news of the sale emerged because there was no certainty over how much gold would be sold. Write to William Mauldin at william.mauldin@dowjones.com
Business : Gold firms as dollar extends losses: "Gold firms as dollar extends losses
(Reuters)
23 December 2009
LONDON - Gold rose nearly 1 percent on Wednesday, bouncing off from a seven-week low struck in the previous session as the dollar lost ground and physical demand offered some support to prices.
But with the year-end looming and investors keen to square their positions, bullion could struggle to climb any further, especially with pockets of dollar strength, traders said.
Spot gold was bid at $1,092.20 an ounce at 1553 GMT, against $1,083.55 late in New York on Tuesday, when it tumbled to $1,074.10 an ounce, its lowest since November 3.
“The metal could increasingly get restricted to a narrower range as we proceed towards the year-end,” said Pradeep Unni, senior analyst at Richcomm Global Services.
“Book closing and weak physical demand, combined with the selling pressure building up in charts are restricting fresh investments,” he said. “A year-end price closing in the range of $1,050-1,055 is quite likely.”
The dollar fell further against the euro and yen after data showing U.S. new home sales fell to a seven-month low in November dented optimism about the economy.
Weakness in the U.S. unit boosts gold’s appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
Afshin Nabavi, head of trading at MKS Finance, said many speculative investors were getting out of the market as the end of the year approached, with thin trade exaggerating price moves. But 2010 could bring a recovery, he added.
“Selling seems to be coming from specs liquidating their positions, and if it hadn’t been for physical demand, the market would have been much, much lower,” he said.
“It is very difficult to have an opinion for the next few days, but I remain positive towards the price of gold in the coming year. Once everyone is back in their seats, we will see prices head back towards where they were earlier this month.”
Spot gold rose to an all-time high of $1,226.10 an ounce at the beginning of December.
Oil firms
Other commodities also held firm, with oil prices holding near $75 a barrel after industry data showed a sharp drawdown in U.S. crude stocks. Gold tends to track crude prices, as the metal can be bought as a hedge against oil-led inflation.
If gold declines further it will likely find initial support around $1,060-$1,065, traders said, having shed 11.5 percent since early December’s record high. If this breaks, it could lead to a further correction, analysts said.
The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings stood at 1,132.708 tonnes as of Dec. 22, unchanged from the previous business day.
London’s ETF Securities said holdings of its gold-backed exchange-traded products fell half a percent to 7.778 million ounces on Tuesday from 7.821 million ounces the day before.
India’s spot gold prices fell for a second consecutive session on Wednesday as buyers stayed away expecting prices to fall further, dealers said. India was the world’s biggest bullion consumer last year.
U.S. gold futures for February delivery on the COMEX division of the New York Mercantile Exchange firmed $6.2 to $1,092.90 an ounce.
Spot silver was bid at $17.12 an ounce against $16.96. Platinum was at $1,405 an ounce against $1,393, while palladium was at $357 against $352.50."
MOSCOW - Russia plans to sell as much as 50 tonnes of gold this year to help plug a budget deficit in the first major bullion sales by its precious metals repository since the fall of the Soviet Union, a high level source told Reuters.
The sales from Russia’s State Precious Metals and Gems Repository (Gokhran) could account for 0.5 to 1.25 percent of global consumption of the metal, which soared in price to a record of $1,070.40 per ounce on Oct.14.
“More than 20 tonnes, but less than 50 tonnes of gold will be supplied this year,” the source familiar with the matter said on Friday, adding that the sale was intended to increase state budget revenues.
The source said the sale would be the first major gold sale by Gokhran since the fall of the Soviet Union, which kept a veil of secrecy over its sometimes significant foreign sales of gems and precious metals.
Two other sources in the Russian government confirmed the planned gold sale but declined to comment on the volumes involved. The sales will be carried out by state owned Almazjuvelirexport.
Government spokesman Dmitry Peskov said a government resolution allowing the sale had not yet been signed.
Gokhran, which traces its history to a decree by Tsar Peter the Great in 1719, holds the Russian state’s stocks of precious metals such as gold and palladium and gems such as diamonds.
The size of Gokhran’s stocks is a state secret and disclosure is punishable by imprisonment, though traders say Gokhran’s stocks are thought to be sizeable.
Russia was the world’s fifth-largest gold producer last year, accounting for about 7 percent of global output.
Russia sells gold
Gold, which is viewed as safe haven in uncertain times, has soared in recent weeks as investors seek protection against declines in the value of the U.S. dollar.
After hitting record highs above $1,070 per ounce last week, gold prices have been in a narrow range centering around $1,060, giving Russia the chance to raise as much as $1.7 billion if Gokhran sold 50 tonnes of bullion.
That would help it cover its first budget deficit in a decade that is forecast to total nearly $100 billion this year, or about 7.5-7.7 percent of gross domestic product. Gokhran is subordinated to the Finance Ministry.
Under a government order signed at the start of the year, Gokhran is allowed to sell precious metals worth 44.4 billion roubles ($1.53 billion) in 2009.
Gokhran plans to buy around 5 tonnes of gold from domestic producers, or about 3 percent of the total expected to be produced in Russia this year.
Stocks of gold held by the Central Bank as part of its international reserves have risen in the last nine month by 14 percent to 19 million ounces.
Arkady Dvorkevich, the Kremlin's chief economic adviser, said Russia would favour the inclusion of gold bullion in the basket-weighting of a new world currency based on Special Drawing Rights issued by the International Monetary Fund.
Chinese and Russian leaders both plan to open debate on an SDR-based reserve currency as an alternative to the US dollar at the G20 summit in London this week, although the world may not yet be ready for such a radical proposal.
Mr Dvorkevich said it was "logical" that the new currency should include the rouble and the yuan, adding that "we could also think about more effective use of gold in this system".
The Gold Standard was the anchor of world finance in the 19th Century but began breaking down during the First World War as governments engaged in unprecedented spending. It collapsed in the 1930s when the British Empire, the US, and France all abandoned their parities.
It was revived as part of fixed dollar system until US inflation caused by the Vietnam War and "Great Society" social spending forced President Richard Nixon to close the gold window in 1971.
The world's fiat paper currencies have lacked any external anchor ever since. It is widely argued that the financial excesses and extreme debt leverage of the last quarter century would have been impossible - or less likely - under the discipline of gold. Russia is a major gold producer with large untapped reserves of ore so it has a clear interest in promoting the idea. The Kremlin has already instructed the central bank of gradually raise the gold share of foreign reserves to 10pc.
China's government has floated a variant of this idea, suggesting a currency based on 30 commodities along the lines of the "Bancor" proposed by John Maynard Keynes in 1944.
Sale of 50 tonnes could have raised up to $1.7bn at current prices
Kaya Burgess
The Russian Government has been forced to scrap plans to sell between 20 and 50 tonnes of gold this year after information about the sale was leaked to the market, it emerged today.
Russia had planned to sell the gold to plug its budgetary deficit, but has had to postpone plans indefinitely due to leaked information about the sale affecting the price of gold.
"Due to the leak of the information the sale in the reported period and in the reported form will not take place," said the government agent for precious metals sales.
The sale, had it gone ahead, would have been Russia's first major bullion sale since the fall of the Soviet Union.
The sale of 50 tonnes would have represented as much as 1.25 per cent of annual global gold consumption and could have raised up to $1.7 billion (£1 billion) at current gold prices.
Gold hit a record price of $1,070.40 per ounce on October 14 ahead of news that Russia's State Precious Metals and Gems Repository (Gokhran) was considering the sale.
Gold opened at $1,041.50 per ounce this morning and continues to be boosted by India's purchase last week of 56 tonnes of gold for the Dhanteras and Diwali festivals, up 5.7 per cent on last year.
Gordon Brown faced embarrassment as Chancellor in 2007 when he sold off more than half of the country's gold reserves while bullion prices were at rock bottom.
Mr Brown sold 400 tonnes of bullion in a series of auctions between 1999 and 2002 when the price was at a 20-year low, at around $282 per ounce.
In the past two months, gold has rallied as the dollar steadily weakened, making bullion cheaper for non-dollar holders and boosting interest in gold as a hedge for investors.
The world’s largest gold-backed exchange-traded fund, the SPDR Gold Trust, said yesterday that its holdings had fallen by 1.22 tonnes to 1,106.874 tonnes.
Fears about inflation next year are helping gold prices, and David Wilson, director of metal research at Société Générale, believes that the price will stay at around $1,000 for the next few years, especially as there is no expectation for supply to be constrained.
China has replaced South Africa as the major gold producer and so there are few supply problems, although the physical demand for gold is low as is the demand from industry.
Last month, Russia was the world's fifth-largest gold producer, accounting for around 7 per cent of output. Stocks of gold held by the Central Bank have risen by 14 per cent to 19 million ounces in the last nine months.
Russia's budget deficit is expected to be around 7.6 per cent of GDP this year.
Robert Sutherland-Smith, co-manager of the SF T1ps Smaller Companies Gold ICVC, said: “It’s a pity that the Russians weren’t managing British gold reserves in 1997 as our leader chose to sell at a massive discount to today’s prices and to flag the offload ahead of selling.
"We suspect that there may be more to this than meets they eye: central banks sales have in our view kept gold artificially low. Paper currencies are unattractive and perhaps the Russians realise this and the postponement may be a long one."
Glenn Beck - Current Events & Politics - The top 10 memorable moments of 2009: "The top 10 memorable moments of 2009" December 25, 2009 - 0:32 ET It was an amazing year for Glenn Beck & Co, so much so that this may be the first time Glenn had more memorable moments than chins. We've looked over every classic moment from the year and compiled a Top 10 list. Frog-Gate The left is always looking to discredit Glenn in any way, shape, or form possible. So when the media reacted with horror after Glenn boiled a fake (yes, fake) frog on TV, it shouldn’t have been a surprise. Glenn was talking about how John McCain would have been ‘worse’ for America as President. Glenn argued that McCain and Obama are both progressives, and would lead us to the same place. Obama has just stomped on the accelerator. To illustrate this point, Glenn used the boiling frog analogy. As the saying goes, if a frog is placed in lukewarm water (McCain), it will stay in as the temperature rises and eventually die. However, if you place a frog in boiling water (Obama), it will immediately jump out. Glenn proceeded to toss a (fake plastic) frog in a pot of boiling water. Glenn clearly explained, on camera, that the frog was a fake. It was plastic. But that didn’t stop the attacks from the left, however. The next day Glenn did a segment showing the lengths the left went to call him a frog killer, and also shows how he pulled the double switch. It was a tremendous segment, and it comes in at #10on our Top 10 Glenn 2009 countdown. Buckner faints live on TV Usually it’s the audience that falls into a slumber when the topic shifts into bond market talk. This time it was the guest who passed out – literally. The interview was one of the most bizarre moments of Glenn’s broadcasting career, and it all started with Columbia University Professor David Buckner. He and Glenn were deep into discussing the financial crisis when Buckner gets a little wobbly and whispers ‘I’m going to pass out.’ Glenn is hard at work (using the 7 brain cells that survived his drinking days) trying to understand the intricacies of 4 week treasuries but still manages to pick up that something bad is about to happen. He offered his hand to Buckner and moments later Buckner is out cold. Thankfully, David was just fine and pretty much the only thing bruised was perhaps the ego. To this day he still gets ‘hey, aren’t you that guy who passed out on Glenn Beck’s show?’. The Buckner pass out is #9 on our Top 10 Glenn 2009 countdown. Glenn’s Mug It was a rough year for magazines. They were hoping to find a way to continue putting Barack Obama’s mug on every cover issue, but instead they have a major dilemma. The President is steadily tanking in the ratings as he spends the country into oblivion. So they needed an alternative – and unfortunately for them Britney Spears hadn’t relapsed yet. Fresh out of flesh, the magazines decided to go a different route: The villain. Enter Glenn Beck. Time Magazine rolled out their September 28th issue with Glenn’s mug on the cover, along with the title ‘Mad Man: Glenn Beck and the angry style of American politics.’ Apparently Time hadn’t noticed the previous eight years of Bush bashing. Time wasn’t the only one. Glenn’s mug and references to Glenn started popping up all over the place this year – SNL did a parody as well as South Park. Stephen Colbert and Jon Stewart view Glenn as show prep, shows like Law and Order and Glee all found a place for Glenn. Keep it coming, guys – Glenn has plenty of chins to go around, and his mug seemingly everywhere this year comes in at # 8 on our Top 10 Glenn 2009 countdown. Lying sack of dog mess There’s nothing quite like an ambush, and that’s exactly what happened to Glenn when he made an appearance on The View. Within mere moments, Glenn (who was not feeling well) was under full-fledged estrogen attack. Not surprisingly, the attack wasn’t related to anything of substance. It was about Glenn’s telling of a chance encounter he had on the train with Whoopi and Barbara. It’s an understandable angle to take if you are Whoopi Goldberg or Joy Behar because they’d have about the same chance of winning as a 13 year old would of escaping Roman Polanski. Whoopi’s attack culminated with her calling Glenn a ‘lying sack of dog mess’ during the hit job. Of course, Glenn was not lying, and Scott Baker laid out the timeline of events to prove it, making this ridiculous and baseless attack #7 on the Top Ten Glenn 2009 countdown.
Art 100 Glenn finally makes a list he cares about – The Art Review’s Power 100 list. No one is exactly sure how Glenn landed on the list, being that his only contribution to the art community in recent memory was painting something that looked more like a 3rd grader spilling grape juice than an actual painting. It’s either that or the flamboyant wardrobe Glenn sports that is considered ‘art’ by some. Whatever the reason, Glenn (even if he doesn’t really admit it) is most excited about landing on the Power 100 artist list, and it comes in at #6 on the Top Ten Glenn 2009 countdown. A new home Things kicked into high gear when Glenn started his new show on The Fox News Channel, January 19, 2009 at 5pm. There were the usual ups and downs that go along with starting something new. The ups included having Sarah Palin as the featured guest on the very first show, a tremendous way to start things off. The downs included Glenn’s eyes doing an entire segment, which caused the comedy show to have a field day. Everyone had high expectations for Glenn, but no one could have predicted that this little 5pm cable news show would obliterate the competition and rise to the #2 show in all of cable news. There was even talk of ‘Palin/Beck 2012’ floating around, but Palin was once again on the mark and simply called this possibility ‘a hoot.’ Glenn’s Fox News debut – and eyes – are #5 on the Top 10 Glenn countdown. Glenn rips Blago Governor Rod Blagojevich, of Illinois, was in deep trouble after facing multiple corruption charges including trying to sell President Obama’s vacant Senate seat for … This guy was so shameless and brazen in his corrupt dealings that prosecutors could ‘barely contain’ their ‘revulsion’ as Blago could be heard on tape complaining that Obama and staff are ‘not willing to give me anything but appreciate… (expletive) them.” The PR campaign that followed was nothing short of miraculous, instead of going into hiding, Blago tried the contrarian approach. He went on a media blitz where he coined gems, for example when he dubbed himself the ‘anti-Nixon’ because he wanted people to hear the tape recordings. Needless to say, this was not a good strategy. Making matters worse, he agreed to do an interview with Glenn. What took place after that lands at #4 on the Top 10 Glenn countdown. Common Sense Earlier this year, Glenn wondered if common sense was dead. Passing TARP and the Stimulus were bad enough, but add government healthcare, Cap and Tax and even more stimulus spending bills to the mix and it was enough to send Glenn over the edge. Politicians didn’t seem to mind that America was broke, so they just kept racking up debt. Especially frustrating was the feeling that no one cared – as no conservatives in Washington DC were willing to say ‘stop the spending!’ When would someone speak up? Since the spineless weasel politicians weren’t going to do it, Glenn did. And the #1 New York Times bestseller Common Sense was born. When it was released, it skyrocketed to #1 and stayed in the top ten for 26 straight weeks, clearly sending the message common sense was alive and well in America. Common Sense: The Case Against an Out of Control Government is #3 on our Top 10 Glenn 2009 countdown. The Red Phone When videos of White House’s Green jobs Czar Van Jones started surfacing in the blogosphere, no one in the media bothered to report on it. Glenn seemed to be the only one who cared that a communist was working to ‘restructure’ our system. As Glenn uncovered more and more outrageous video clips of Jones spouting his commie rhetoric, the White House would only say ‘his official title is not Czar.’ Not exactly a spirited defense. News that Jones was a 9/11 truther broke, and that was the end of Van Jones at the White House. But that wasn’t the last of the radicals as Glenn again uncovered more disturbing video. Fed up that they were dealing with Glenn, the White House decided to act - that’s when Communications Director Anita Dunn declared war on Fox News. As if that attack on the first amendment wasn’t disturbing enough, shortly into the war a tape surfaced showing Dunn proclaiming Chairman Mao was the philosopher she ‘turned to most’ for guidance. Chairman Mao killed 60 million people. Dunn resigned shortly after the controversy erupted. A couple of bad apples are gone – but the pattern of radicals is clear, leaving many unanswered questions. That’s why Glenn has the red phone – a direct line to the show that only the White House has. They still haven’t called. Will 2010 be the year it finally rings? The quest to get answers on the pattern of radicals in the White House, the clashes with Glenn and the White House, and the patiently waiting Red Phone are #2 on the Top Ten Glenn 2009 list. The 9/12 Project When ‘Ed’ called the radio program early on in 2009, he could not have predicted the chain of events that would be triggered from his decision to pick up the phone. Frustrated and feeling like throwing in the towel, Glenn pleaded with Ed not to do that, saying it would only serve those who seek power. Ed’s call inspired what Glenn would unveil a few weeks later – the 9/12 Project. Based on 9 Principles and 12 Values, the 9/12 Project was a place where people who, although they may disagree on some issues, could unite at the end of the day as Americans, just like we united on 9.12.01 after the 9.11.01 terrorist attacks. The idea took off and took on a life of its own. Small 9/12 groups all around the country mobilized to let their voices be heard. They rallied on tax day – of course the media largely ignored the rallies. It all culminated in September with a giant rally in Washington D.C. as hundreds of thousands of people showed up. The media might not be too impressed – but Washington is hearing and responding to what Glenn hopes will become America’s #1 D.C. special interest group: The American People. The movement that will really bring ‘change’ to the country – The 9/12 Project – is #1 on the Top Ten Glenn 2009 list.
WatchGlenn Beckweekdays at 5p & 2a ET on Fox News Channel
During this health care reform debate, how many times have you heard that health care is a right? That's been one of the main selling points — that we're the greatest country in the world, and the only one where every citizen isn't entitledto health care?
How can that be? Well, I'll tell you how that can be: It's simply because we are the greatest nation on Earth that we haven't succumbedto socialized medicine.
Our Founders knew that the people would need health care; the need hasn't changed over the years, only the quality of the care and they didn't put it in the Constitution.
I'll tell you something else, the progressives know it's not constitutional. Here's President Obama talking about the trouble with the Constitution: (BEGIN 2001 AUDIO CLIP) BARACK OBAMA: Generally the Constitution is a charter of negative liberties. It says what the states can't do to you, it says what the federal government can't do to you, but it doesn't say what the federal government or the state government must do on your behalf. (END AUDIO CLIP)
Yes, that's the way the Founders designed it. This is an old progressive argument, but one that was first brought to the forefront when FDR campaigned for a Second Bill of Rights: (BEGIN AUDIO CLIP) PRESIDENT FRANKLIN D. ROOSEVELT: We have accepted, so to speak, a Second Bill of Rights ... the right to a useful and remunerative job in the industry ... the right to earn enough to provide adequate food and clothing and recreation; the right of farmers to raise and sell their products at a return which will give them and their families a decent living; the right of every businessman, large and small,to trade in an atmosphere of freedom from unfair competition and domination by monopolies ... the right of every family to a decent home; the right to adequate medical care ... the right to adequate protection from the economic fears ... and finally, the right to a good education. (END AUDIO CLIP)
Why would they need a Second Bill of Rights, if it was already included in our initial Bill of Rights? The right to a job, a certain pay, a home and yes, medical care.
If government provides everyone jobs, pay, a home and medical care, how would that work? Simple: communism. All the money goes to the government, who then redistributes it equally: equal pay, equal homes, equal medical care — equally bad. We saw how the system worked for the Soviet Union and China, that's why the Second Bill of Rights ended up on the scrap heap of history.
Oh, but our neo-progressives have pulled it off that heap, dusted it off, shined it up and put a fresh coat of lipstick on that same, old, disgusting pig.
Cass Sunstein, Obama's recently confirmed regulatory "czar," wrote an entire book about it called, "The Second Bill of Rights: FDR's Unfinished Revolution and Why We Need It More Than Ever": (BEGIN VIDEO CLIP) CASS SUNSTEIN, REGULATORY 'CZAR': Roosevelt's Second Bill of Rights has turned out to be lost in the United States, but the Second Bill of Rights has turned out to be one of the best American exports. So in Europe, and even in Iraq now, the constitutional understandings often include a right to a decent chance at economic well being. (END VIDEO CLIP)
It's turned out to be one of the "best American exports"? How's that export working out for Europe and Iraq? One of our best exports? That just shows you the sorry state of what we export in this country.
What is this fascination, this progressive love affair with socialist Europe? Europe is your standard of excellence? In France, they're experienced a record economic downturn this year, which has led to strikes and riots. CMA DataVision gives Ireland a 24.6 percent chance of going bankrupt within five years. Greece was just downgradedto a triple-B credit rating — good luck with those interest rates now. And Iraq? Are you seriously going to try to hold up Iraq as a beacon of stability, who has created a lasting constitution?
In more than 200 years since ratification, we've had one Constitution and one government in the United States. France has had fifteen.Russia had six constitutions in the last 100 years. Spain, Great Britain, Poland, Italy — does anyone remember Yugoslavia? I think we all envy those accomplishments. Need we even mention, Germany?
All of Europe has undergone massive and repeated upheavals in their forms of government. Why do progressives so dearly covet the European example of chaos, tyranny and instability? America is the only nation on Earth with the kind of stability, longevity, prosperity and freedom we've enjoyed for over two centuries. And we've accomplished it all with just the original Bill of Rights in our original Constitution.
Michael Moore "discovered" FDR's fireside chat on the second Bill of Rights in his anti-free market movie, "Capitalism" and acted as if he'd found the Holy Grail of Socialism. I expect that from him, from Hollywood. But I expect better, more logical thinking, with maybe a grasp of historical perspective from our elected officials. Well, at least I usedto.
I mean, think about it: Guaranteed jobs and the right to earn enough to provide adequate food, clothing and recreation? What's "adequate" food? Enough to keep me from starving to death or to help me get to 500 pounds? "Adequate" clothing: K-Mart or Armani? And adequate recreation? Is that a movie once a month or three yearly trips to socialist Europe? How would you determine that? Who decides? Obviously, government. Farmers have a right to produce and sell their products at a return that gives them and their families a "decent" living? Decent? Who decides? The government. Does the right of the farmerto set his decent living price conflict with my right to adequate food? The right to a decent home. How big? How decent? Does someone else get a better home than I do?
With all these guaranteed necessities, what happens to incentive? An all-powerful government would decide everything for us. By the way, if this sounds somewhat familiar, maybe you've read the old Soviet Constitution:
Article 40: Citizens of the USSR have the right to work (that is, to guaranteed employment and pay in accordance wit the quantity and quality of their work, and not below the state-established minimum), including the rightto choose their trade or profession, type of job and work in accordance with their inclinations, abilities, training and education, with due account of the needs of society.
Article 41: Citizens of the USSR have the right to rest and leisure... the length of collective farmers' working and leisure time is established by their collective farms.
Article 42: Citizens of the USSR have the right to health protection
Remember the Soviet Union's decent housing, decent jobs and who could forget the easy access to quality food?
But I'm only talking to you about the right of health care.
They haven't yet passed the second Bill of Rights that FDR, Cass Sunstein, Michael Moore and others advocate, but they are desperateto lay the foundation and install the infrastructure. That's why they're willing to pass this health care bill at virtually any cost.
Public option a no-go? No problem, we'll just do Medicare expansion? No? Drop that? Fine. Just pass it anyway or we'll destroy you.
Why? Understand that if this passes it will be the first time in American history that you will be required to purchase something from a private company just to be a legal citizen. That does not work constitutionally.
Could the plan be to have this unconstitutional reform pass, then brought up in court and thrown out because it is unconstitutional? Then, with the health care framework already in place, there'd be nothing elseto do — we're already collecting taxes for health care and we can't force anyone to purchase it. So we'll just have to put in the public option now because it is constitutional to tax Americans and have the government provide health care.
So far though, that pesky Constitution doesn't seem to be getting in the way of the politicians in Washington. This has been the typical response from health care reform supporters: (BEGIN AUDIO CLIP) CNSNEWS.COM REPORTER: Madame Speaker, where specifically does the Constitution grant Congress the authority to enact an individual health insurance mandate? SPEAKER OF THE HOUSE NANCY PELOSI, D-CALIF.: Are you serious? Are you serious? (END AUDIO CLIP)
Nah, don't even worry about it, Nancy!
The White House is considering working out a deal in Copenhagen without involving Congress. But, as Newt Gingrich pointed out Wednesday, President Obama cannot bind the American peopleto job-killing international agreements on climate change without the advice and consent of the United States Senate. In fact, he'll need two-thirds of the Senate. The EPA is taking matters into their own hands, circumventing Congress, by declaring your every exhale hazardous to the planet.
These leaders don't care about the Constitution. And the few decent ones that do, don't see Cass Sunstein licking his chops right now. They can't think out of the box. You must think like a European socialistto understand. They want their socialist utopian society and the Constitution is nothing more than a speed bump to that end.
One way or another, through regulation, nudging, extortion or trickery, they will get it done. Because that's the way Washington works now. I have never thought that way until recently. I've always wantedto believe the best about the motivations of our leaders. That's why I was initially in favor of TARP. I thought — for about three days — they had good intentions. I now know better. You haveto stop taking these people at face value and look at these things with a skeptical eye. Hope for the best, but prepare for the worst.
I for one am sick and tired of American leaders trying to bring Europe to the United States. We left that continent for a reason. If they want Europe so badly, I say go. You have a right to move to move to Europe. There are hundreds of flights departing daily, bound for your European utopia.
But it is high time that this country charts a course back to the Republic called the United States of America. — WatchGlenn Beckweekdays at 5p & 2a ET on Fox News Channel
Share Your 9/12 Story Deadline March 6
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A whole lot of change has happened in the last 5 years – some of it for you
and because of the 9/12 Project has been encouraging, inspirational, and
notewo...
Now the state, using market methods, is safeguarding its interests. I think this is quite normal 
