Payment for Iranian oil in gold

More than a trend, there is a strong signal being sent: gold is returning to the markets as a currency of exchange. Thus, China, the largest importer of Iranian oil, follows in the footsteps of India and avoids the embargo imposed on Iran by choosing to pay for crude oil in gold. Because it decided to continue with its nuclear program, Iran saw sanctions imposed by the United States in late 2011. The oil embargo, which will take effect in June, prohibits payment for Iranian crude oil in international exchange currencies (Dollars, Yen, Euros…). Soon after, the European Union announced that it was also going to apply the embargo which will take effect in July.

Gold returns in trading

Although Iran does not represent a large percentage of oil imports to the US and to the EU, the same cannot be said for India and China which between them account for 40% of imports. India, which has a large demand for oil, has chosen to maintain its commercial trade with Iran by paying its bills in gold.

Recently, Forbes magazine reported that China was also intending to avoid the financial sanctions imposed on Iran by buying its oil with gold. China, the largest producer but also the largest consumer of gold, already imports huge amounts of the yellow metal (its imports tripled in 2011, to 428 tons). Such a decision will only amplify the economic effects on the price of gold.

Gold: exchange currency and political weapon

Gold, which is increasingly returning to the mechanisms of means of payment will also take a more political dimension and become a real weapon of war. These events confirm the most bullish gold market for years. In the same way that investors made wise choices by betting on gold since 2007, this also goes for today’s investors, when they will see the ounce crossing the $2,000 mark in the next few months.

 Gold has recently been undergoing a consolidation period – its price is below the value that in reality it should have. It is therefore the right time to strengthen one’s positions on gold, before the summer. Moreover, because of the presidential elections in the US next November, uncertainty over the economic future of the country will undoubtedly cause a new rush on gold… which will not stay at the current level of $1,640.

The Fourth Summit of the BRIC nations, a major political event.

This is a huge story and yet has gone largely unreported by the major western media. On the 29th of March in New Delhi, the Fourth Summit of the BRIC nations took place (Brazil, Russia, India, China).

“The BRIC nations (Brazil, Russia, India, China and South Africa) should no longer use the US Dollar in their bilateral exchanges. That is what was decided on Thursday the 29th March, 2012, during the Fourth Summit of leaders of these five nations in the Indian capital”.

Source: algeriedz.info and rian.ru

The following was decided during this meeting: an essential step was taken towards a “multipolar” global monetary system. March 29th 2012 will undoubtedly not be the date remembered in history as marking the end of the era of the Dollar. Nonetheless, the change is major.

Towards an overhaul of the IMS

We are entering a phase of disintegration of the International Monetary System as we know it. Our monetary system dates back to the Bretton Woods agreement of 1944 which was brought to an end by the Jamaican agreement of 1976 (this ended the gold standard).

So what will happen now? Stock markets are starting to fall because the issuing of European bond funds is doing badly or is disappointing (depending on your degree of optimism about the outcome of this policy), which is the case for Spain and now Italy.

What one must understand is that according to the current economic system it is the surpluses of some which finance the deficits of others, thus creating a balance. In other words, western countries are in a chronic deficit which has been, and I stress has been, financed by the major Asian exporting nations on the one hand (China and India) and the oil-producing nations on the other.

For the last few years, nobody was lending to western states (by this we mean the US and Europe) which now find themselves in an irreversibly compromised situation.

It is this lack of external funds which is pushing the central banks, the FED and the ECB to massively intervene in the markets. The only option that remains for us is indeed the use of the printing press and the creation of money with all the negative consequences that follow.

Though this Fourth Summit of the BRIC nations is a founding step towards the overhaul of the IMS this is certainly not the ultimate goal.

Ground-breaking events in international relations

Discussing the topic of the monetary system without mentioning the political dimensions would be a mistake. The future International Monetary System will be shaped by the international balance of power and alliances between the major players in the context of the fight for access to energy and agricultural resources and in the broader sense to raw materials. A strong axis is taking shape amongst the BRIC countries, and Iranian diplomacy is also far from insignificant.

The trans-Atlantic relationship remains strong despite the strains and divergences. Lastly, one should not imagine that the United States of America will let their status as world leaders slip away without a colossal “fight”. American policy has always been based on a simple concept: “America First”.

We are thus entering a new phase in the current crisis:

In 2007, the subprime crisis led to a financial and stock market crisis.

The financial crisis led to an economic recession.

The economic recession lead to massive state intervention in the form of stimulus packages which resulted in massive debts for these states.

The debt crisis can only lead to a major monetary crisis.

The monetary crisis (which is on its way) will lead to the restructuring of the International Monetary System.

And… the manoeuvres have already begun. The global repercussions will be deeply felt, as the International Monetary System is to the global economy what tectonic plates are to geology. We are touching upon the essential part. The tremors will truly be felt.

Will you be ready?

Nothwithstanding such follies of prediction, I am going to announce the Barmiest Political Story of the Year. And no, it is not the euro-shenanigans…

It was reported in The Sunday Telegraph, 5 January 2012, that last year the Indian Government tried to reject Great Britain’s development aid largesse. The U.K. Department for International Development has spent in excess of £1 billion over the last five years in “aid” to India, with a further £600 million earmarked up to 2015, corresponding to about £280 million per year.

This in spite of the fact that “the then Foreign Minister, Nirupama Rao, proposed ‘not to avail [of] any further DFID assistance with effect from April 1, 2011’.” In tune with the April folly, the British government declined the saving offered by India, officially now ranked as a middle-income country.

And what was the reason?

To save politicians’ faces. “They said”, continues The Sunday Telegraph correspondent Andrew Gilligan, quoting an anonymous source, “British Ministers had spent political capital justifying the aid to their electorate. … They said it would be highly embarrassing if the Government of India then pulled the plug.” Highly embarrassing? Wasting taxpayers’ money, when the recipient has declined it? Which is stupider: looking foolish because the DFID has ignored the tremendous growth in Indian prosperity? (And at an annual growth rate of 10%, that’s growing! Within the decade, the Indian growth rate is projected to be greater than Britain’s.) Or looking foolish because it is determined to persist in an unnecessary and demeaning expenditure, especially in these would-be austere times?

The Indian Government regards the aid as belittling, as if India was still being regarded as an impoverished country. Said the Finance Minister, Pranab Mukherjee: “We do not require the aid. It is a peanut in our total development exercises.”

This is a land where even the peasants invest in gold: “The IMF estimates in fact that Indian homes alone represent 15,000 tons of gold,” notes Jean-François Faure in “Gold: an investment and an insurance that reassures” (transalation). And here at GoldCoin.org we reported on January 14, 2011 that “India is responsible for one quarter of the global imports of gold.”
Gold is immensely important in India, even for the poorest families because it represents some sort of status; this is because gold jewellery plays an essential role in Indian marriage customs and ceremonies. It is a measure of both prudence and munificence. The U.K., the government of which has long since forgotten the first of these, and then makes a pretence of the latter, has no business being spendthrift with money it really hasn’t got.

Savings, anyone?

by Mark Rogers

In Tuesday nights website update — initial resistance in gold was listed at 1464-1468 and the high so far is 1467. Second tier resistance for today was listed at 1474-1478 — and that would be the area to watch if we can continue to move higher today.

Initial support was listed at 1444-1455 and the low so far today is 1453.60

London Gold Fix $1461.25 -$8.25

While the June gold contract saw an initial downtrend overnight, gold prices have recovered above the prior session’s closing value in the early Tuesday US trade action. Gold appears to be partially undermined by declining oil prices and a dampening of overall inflationary fears.

News that a major commodity trading brokerage firm was recommending profit taking in commodities, may also be undermining the gold market slightly. However, another key brokerage firm suggested that gold would outperform most commodities directly ahead and that might help gold prices stand up to the partial liquidation wave in some commodity prices.
Indian gold prices were slightly weaker overnight and news of another quake in Japan applied some minor pressure to gold and other commodity prices overnight. While the trade balance report from the US can drive gold prices, expectations for a slight narrowing of the US trade deficit might be seen as a negative to gold prices, especially if that report lifts the greenback and adds pressure to the bond market. If that would be the case — we think it would be temporary. The US dollar is under pressure again today and the Euro has now traded at the 145 level — a very IMPORTANT price point.

While the gold market generally saw dovish comments from the Fed yesterday, dialogue from the Fed’s Hoenig today might be add to the downside tilt as they are trying to “TALK” their way into making the markets think that there is not going to be more stimulus. So that is the one thing that could return gold to testing the lower areas from last night.

Equity markets in Asia and Europe were weaker during overnight trading and early indications are for the US stock market to open today’s session with moderate losses as Alcoa reported lower than expected earnings and Japan raised the danger level of its on-going crisis. The Japanese Economics Minister said that last month’s earthquake and tsunami would likely have a larger negative impact on the Japanese economy than earlier projections. A proposal by the African Union to end the Libyan conflict was rejected by rebel forces. The German CPI during March was up 2.1% year-on-year, in line with forecasts. A survey of German economic sentiment during April was 7.1, lower than estimates. The UK CPI during March was 4.0% year-on-year, lower than projections. The UK Trade during February was 6.78 billion Pounds, a smaller deficit than forecasts. Major US economic numbers to be released this morning include the February International Trade Balance, as well as Export and Import Prices at 7:30 AM, and surveys of store sales will also be released during the session. In addition, Fed Regional President Dudley will give a speech during the session. The first leg of the Treasury’s monthly refunding, the 3-Year Note auction, will have results announced at 12:00 PM CENTRAL time.

Going to the gold charts:

Last nights low was right at the dotted trend line on 30 min chart we published on the website and as long as the 1444-1455 area holds the trend remains up. The market is NOT AS BULLISH as it looked when we entered the week — and even though gold has come back 13 dollars from the low — we’re not out of the woods just yet on this pullback. The 1468-1470 area is probably the most important price point to watch today. We want to see gold above 1468 on a closing basis to add more potential that the pullback is complete. Until then — we can’t rule out more downside pressure today.

It seems like the 9am-10:30AM EST period today might be where the rubber meets the road — and that time frame is when gold would be the most likely to try and pullback.

In summary — the trend is still up —but not as solid as last week– the 1468-1470 area is resistance. Support is the 1444-1455 area. We still favor the bulls —- but we might remain in the 1450-1470 area today in price.

by Bill Downey

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People often ask if it is the right time to buy gold?

Quite simply it is always the right time to buy gold if you are looking to protect and preserve your wealth.

Sure the price can vary but the real value in owning physical gold is that it is your outright property which cannot be wiped out during a crisis or financial collapse. So think of a stocks and shares investment (or any other “paper” investment) the day after a crash – now think of physical, tangible gold assets that you own the day after a crash. The difference is obvious – one is worthless and may even lead to debt, the other has inherent value that will still be sought and can therefore be traded or sold.

Buying gold nowadays is simple and accessible to everyone.

You do not need to physically possess gold at home to fully participate, indeed quite the contrary – keep it safe, keep it in a vault and keep it accessible to sell whenever you choose.

For further information click here.

London Gold Fix $1431.00 +$12.00

With the US Dollar down this morning and oil up sharply, commodities have gotten a lift but the gold market also rose off the World Gold Council’s 2010 Indian gold consumption peg of 963 tons, and of a longer term demand forecast for India from the World Gold Council that pegged demand to reach 1,200 tons by 2020.

While the gold market has benefited from talk of favorable Indian wedding demand, evidence of a huge wheat crop and a very large sugar crop, coupled with extremely high historical prices for those crops, probably increases the purchasing power of a noted portion of the agrarian population in India. With the World Gold council also suggesting that Indian demand for gold will rise 3% annually for the next 10 years on the idea of strong Indian gold demand.

Iit is also possible that gold prices will took direction from a USDA grain report, which suggested bullish prices for Corn and Soybeans.

A report out at 11:30 pm est today on Ireland banking is being awaited by the markets.

The Feds had to release data on who received all the discount window lending. Over 900 pages have been released. This should be ripe discussions over the next few days.

Going to the gold chart — yesterday’s price pullback finally touched the lower purple trendline and for the third time this week — the lows were established near the 1410 area. Prices remained firm all night setting their lows in Asian trade and price has been rising in quick bursts with stair step consolidations since the London session. Resistance for the remainder of the day is the 1440-1444 area and support is the 1427-1430 area.

In summary — the trend remains up — a close above 1444 would increase potential of higher prices into early next week. A close above 1436 would also keep things positive going into Friday.

by Bill Downey

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In January 2010, China recorded an inflation rate of 1.5%. But just 12 months later, the rate of Chinese inflation has climbed to 4.9%.

Rising inflation has sent food and property prices in China skyrocketing.

The price of food in China has increased 10.3% on an annual basis. The price of grain rose 15.1% and fruit prices were up 34.8% since January of last year.

Chinese inflation has been fuelled by an economic stimulus during the financial crisis two years ago of $585 which has resulted in excesses of liquidity in the economy.

The Chinese Government has tried to curb the inflation with measures such as raising interest rates several times and tightening lending requirements but so far this hasn’t worked. Even worse is the fear sweeping through the Chinese economy that inflation could go out of control and even lead to hyperinflation.

This has already prompted Chinese citizens to buy gold and their appetite for the yellow metal is insatiable.

This trend is not only set to increase but possibly explode into action following recent reports that the People’s Bank of China (PBOC) is actively recommending that over 1 Billion Chinese citizens buy gold as a way of preserving and protecting their wealth against inflation, economic crisis and the falling values of major currencies .

This recommendation was given in the Financial Markets Review from the PBOC and its publication coincided with the decline of several major currencies against the value of gold notably, the Swiss Franc fell 2.5%, The Japanese Yen 2%, The Pound Sterling 2% and of course the US Dollar  which fell 1%.

Chinese buy almost half the Gold produced in the world

According to the gold-specialising Swiss Bank UBS the Chinese demand for gold in the first 2 months of 2011 exceeded  7.05 Million ounces.

This unbelievable demand is the equivalent of 47% of all gold produced in the world during the same period. So the Chinese are buying almost half of the world’s gold production.

If this continues then the Chinese are set to buy in excess of 42.3 Million Ounces of Gold this year!

To put this quantity into context it is more gold than China’s Central Bank officially stores in its reserves.

The Financial Times recently quoted a senior executive at the Industrial and Commercial Bank of China ICBC, who spoke of the “voracious” appetite for gold in China…

China’s largest bank started a physically-backed gold savings account in December with the World Gold Council. Account openings have already surpassed 1 million, with more than 12 tonnes of gold already stored on behalf of investors.

Zhou Ming, deputy head of ICBC’s precious metals department, said the nation’s largest bank sold nearly 250,000 ounces of physical gold in January — the equivalent of 50% of all the bullion ICBC sold last year.

Added to this is the continuing diversification out of Forex by the People’s Bank of China into gold and other precious metals. They have around $3 Trillion which they would like to change because the weakening dollar is eroding its real value. How much gold will they need for $3 Trillion?

We know that China has been accumulating gold surreptitiously by buying up its own domestic production.

This suggests that increasing gold production was part of a long-term strategic plan to become a global leader in gold investments among governments.

The World Gold Council even reported:

Some market participants believe that China may also be continuing to buy local mine production, which it has done regularly in the past. There is certainly no shortage of experts, both domestic and from overseas, advising China to do so.

The World Gold Council estimates China’s gold demand could double in 10 years as more investors embrace precious metals.

But even in the short term, the expected demand for gold in China over the coming month will be enough to put significant strain on global supplies.

According to Tom Bulford  “China has spent the last decade buying every ounce of gold it can lay its hands on.

In fact, the Chinese have increased their deposits by 1,054 tonnes since 2001.

That’s 76% more than it was buying just a decade ago!

And it’s not just the Government we’re talking about here.

Ever since private gold ownership was legalised in China…and the Shanghai Gold Exchange opened – regular Chinese citizens have also started buying up gold in a BIG way”.

Quite simply, the Chinese seem to want to buy ANYTHING gold…

…gold coins…gold bullion…even foreign gold miners.

In fact, according to Want China Times…

“Chinese state-owned gold miner China National Gold Group announced… that it will step up overseas mergers and acquisitions in an effort to increase its gold stockpiles by 100 tonnes this year.”

Chinese production figures

China Produced $35 Billion in Gold in 2010

According to China’s Ministry of Industry and Information Technology, gross output from domestic production increased 67% to 230 billion yuan ($35 billion) in 2010.

Of this, China’s gold industry earned 5 billion yuan ($3.8 billion) in profit — 78% more than in the previous year.

China’s gold mines produced 9.9 million ounces of gold in 2010 — an increase of 7% over 2009.

Meanwhile, total domestic gold output grew 9% to 12.0 million ounces. (source WGC)

India is also encouraging Gold acquisition

Traditionally there has always been a strong demand for gold in India  with its specific seasonal demands for weddings and a cultural attachment to jewellery. However, they are also strengthening demand in Asia which is fast becoming the most important Continent for gold investment.  Gold is selling extremely well to the ordinary citizens looking for wealth protection and preservation. There are over 460 Post Offices that sell gold direct to the people. India also has public companies that offer credit to anyone wishing to purchase gold – in other words you can get a loan to buy gold!

This incredible demand throughout Asia is sure to impact the price of gold which may not have been factored in to the so-called expert calculations/ predictions/guesses.

Gold Price set to go skyward with Asian demand and World events

Similarly there are other significant factors that cannot have previously been factored in to annual gold price predictions such as;

• The continuing European Sovereign debt crisis with Portugal the latest Eurozone country in difficulty,
• The on-going Japanese catastrophe following the Earthquake, Tsunami and nuclear crisis,
• The popular uprisings in North Africa and around the Middle East with Syria and Yemen on the brink and the conflict in Libya worsening by the day. This has drawn military (and therefore financial)  resources from France, the UK and the US which have their own deficit problems and now has involved NATO countries.

It is becoming increasingly difficult to see how all of this can be paid for or accommodated in a World Economy already faltering.

It is no wonder that the Chinese are hedging against another crisis and with their ever increasing hoards of gold they are aiming to back the Yuan with gold and ultimately replace the Dollar as the world’s reserve currency.

We are heading for a spot of $1500 within weeks – and then…..$3000+

In view of the colossal demands for gold already discussed, the possible collapse of the dollar and the unknown outcomes of other world events a crisis bigger than 2008 looms large and we cannot predict which event will trigger it but be sure that it will happen. When it does make sure you have copied the Chinese and secured your wealth in the only safe haven for the crisis ahead. Buy Gold and buy now before the price takes off exponentially surpassing $2000 and even £3000 an ounce before the end of the year. The worthless dollar, hyperinflation, extraordinary demand and debt crisis dictate the course of gold to re-establish itself as the only real measure of currency and wealth. When the dust settles and re-evaluations have been made just pray you have gold as it will be worth upwards of $3000 an ounce.

Secondly, demand strengthened in key Asian markets, notably in China and India.
The Indian market is based on strong cultural references such as the Wedding Season and 2010 saw a revitalisation of the sector as awareness grows regarding the protection of wealth in gold.

The Chinese demand is backed by a strengthening retail investment by private affluent investors who are looking to gold bars and gold coins as a safe refuge for their newly acquired wealth.
The Chinese market saw the greatest increase in investment demand growth. The annual demand showed a 70% increase year on year and was equivalent to 179.9 tonnes.

After 21 years Central Banks are Net Purchasers

Thirdly and even more significant is the fact that after 21 years of being net sellers of gold the Central Banks became net purchasers of gold. This can be seen as a consolidation of their position in troubled times because they feel exposed to Forex fluctuations due to currency dilution and devaluation. It is also proof that they see gold as a safe haven to protect their reserves of wealth when they are aware of instability and potential crisis ahead. The instability in the Middle East, the soaring oil price and the risks of increasing inflation in developed economies is causing anxiety.
Central Banks are all too aware of the possible Eurozone collapse as Sovereign debt issues, austerity measures and bailouts fail to shake off the looming depression that awaits.

What will happen if Greece, Ireland or any other of the Eurozone Members are unable to abide by their debt resolution measures? Chances are there will be more than one if not all of them. Politicians wrangle with the shackles of increasing debt which they are trying to defer to another generation on a daily basis but fact is they can’t run away fast enough and they WILL get caught out. What then?

Paper Gold or Physical Gold?

It is hardly surprising that real demand is focused on physical gold and this can be illustrated by a drop of 45% for the year in demand for ETFs (or paper gold). Investors know that protecting their wealth ahead of a crisis can only be achieved by owning physical tangible assets.

When a crisis hits hard no-one can guarantee the value or indeed honouring of paper transactions as the financial institutions offering such products are themselves vulnerable to the systemic debt that pollutes all economies and that influences everyday life across the globe. Nobody predicted that an institution such as Lehman Brothers would fail or that RBS and Lloyds Banks would be brought to their knees. Similarly no-one can tell you today who will be the next casualty when economies falter. It could be your bank, your pension provider, your employer.

Act now or do nothing?

If you really like a bet then do nothing and take a chance on life not changing for you.

If you prefer to protect what you have and want to be sure that you are left with something for your future survival then get in to gold now. It is the inflation proof investment that is like fire insurance for your personal wealth. Exactly like fire insurance, do you think you should buy it before or after the event?

There are more and more options for physical gold investment and it has become accessible to everyone.
The most difficult step to take is to start, the rest is logical and reassuring.

Remember that investing in bars is good but investing in gold coins is even better. Click here for a guide to gold coin investment and don’t wait to start.

The gigantic Chinese economy is driving the bullion market, coins and gold assets upwards. Bloomberg obtained a report from Shanghai Gold Exchange in which it states that China moved from purchasing 45 metric tonnes of gold in 2009 to a projected 230 metric tonnes for 2010.

At the same time, China’s Ministry of Industry and Technology reported last December that the exporting and importing of non-ferrous metals for this country grew year on year in the first eleven months of the year and reached 108,480 million dollars.

Individual Investment pushes up demand

The increased demand comes mainly from individual investors who prefer to hold physical gold as a safe haven for their wealth. Shen Xuangrong, Chairman of the Shanghai Gold Exchange, stated a few days ago that this interest was mainly due to the expectations of an increase in inflation in this Asian country.

Between January and October last year, the amount of precious metal traded on the Shanghai Gold Exchange increased by 43%, according to its Chairman, Shen Xuangrong. Approximately 20% of these transactions were made on behalf of individuals.

In August of 2010, the Central Bank of China reported that it was going to authorise more Banks to be able to buy and sell gold. It also stated that it was going to makes the regulations for the gold market more flexible to enable more firms to be able to operate in this segment.

More than a million Indian Weddings this Spring!

India has already demonstrated that it occupies a prominent place in the purchasing of bullion, coins and gold assets due to jewellery being accumulated in March in readiness for the wedding season. This year it is very probably that the trend will be repeated: there are more than a million weddings planned to take place in April and May in India and this triggers a strong demand for precious metals, especially gold.

The growing demand for gold jewellery, together with an increase in the demand for bullion and gold coins, demonstrates the popularity of the metal in India. Moreover, for many Indians it represents a safe investment compared with the volatility of paper money.

India is responsible for one quarter of the global imports of gold. China has made changes to its regulations for importing precious metals. Everything seems to indicate that it will shortly become the new leader in gold imports. And not only that: “In the medium and long term, China will be a decisive factor in determining the price of gold “, said Yuichi Ikemizu, Chief commodities analyst at Standard Bank in Tokyo.

From the baroque tasting room of Chateau Mouton Rothschild, to the grand hall of the Union des Grands Crus, Chinese delegations declared their intent to siphon off huge quantities of first growths, the very best wines.  The price of the first growths are likely to cost £4000 per 12 bottle case and even as high as £1000 per bottle.  According to the Chinese importers money does not seem to be a problem and Lafite-Rothschild is said to be the tipple of choice for the Chinese industrialist.  Private companies are soaring and property values are rising fast so people have a lot of money.

You may wonder why I am writing about wine on a blog whose main interest is gold. Whilst critics were in raptures with the top wines from Haut-Brion, Margaux and Latour it seems to matter little to the Chinese consumer who are reported to glug their wine or dilute even the most expensive bottles with lemonade. The reason is one of economics, no longer do these famous vintages end up in the cellars of the rich in the western world and particularly recession hit America; but they have become prestigious gifts amongst Chinese business people.

Throughout history, all great powers have their day Egyptian, Greek, Roman. More recently countries such as Spain, France, and Great Britain all had periods of unrivalled power. Today, the United States still reigns as the world’s sole superpower but it is on the brink and is being credibly challenged by rising powers in Asia, India and more importantly China who have designs on world financial dominance. It is a process that will have huge implications for investors over the coming years. It is no surprise India is the greatest consumer of gold and China the largest producer.

The balance of power is swinging eastwards. First the West exported industrial plant to Asia leading to investment in technology in the East which coupled with a cheap workforce produced a number of startups. Their cost effectiveness captured markets normally supplied from the West and eventually western domestic markets were flooded by cheaper imports leading to a decline in the manufacturing base and vast trade deficits. Now we find our selves in a situation where we are even being financed by the East. Iconic UK brands MG and Jaguar are Chinese owned and the new Californian bullet train was not only funded by money borrowed from China but built by a Chinese company.

Sovereign debt is threatening the fabric of western society and dragging down our currencies. It reminiscent of the 1930s as austerity measures have been running in Ireland fore some time, problems in Greece and Spain have lead to strikes and a general strike is threatened in Italy. Portugal is in the same mould as Spain and Italy, later additions to the EU from former Eastern Europe are in great difficulty particularly Hungary, France has to tighten its belt and Germany is in a domestic struggle over the Euro. Outside the Euro zone, the UK debt is of a greater GDP of all but Spain and its only because our repayment has a longer time span that we are not in quite the same mess as Greece. If the June budget does not show sufficient promise to bring down our deficit our triple –A rating maybe under threat.

So how does the American superpower stand?. The economy is the country’s top concern, with persistently high unemployment the greatest threat the public sees. Eight of 10 Americans rate joblessness a high risk to the economy in the next two years, outranking the federal budget deficit, which is cited by 7 of 10. An increase in taxes is named as a high risk by almost 6 of 10. Fewer than 1 in 3 Americans think the economy will improve in the next six months….Only 32 percent of poll respondents believe the country is headed in the right direction, down from 40 percent who said so in September.” (Bloomberg).

The U.S. debt will top $13.6 trillion this year and climb to an estimated $19.6 trillion by 2015, according to a Treasury Department report to Congress. ( Reuter 8^th June). Economic contraction will continue with record numbers of foreclosures, personal bankruptcies, the highest rate of unemployment with millions more jobs to be lost as purse strings tighten.

Going back to the origination of this theme if Chinese businessmen can afford to mix lemonade with £1000 bottles of Bordeaux to impress friends and associates then there truly has been a swing to the East and that is where the demand for Gold will be driven. Currently the USD is the reserve currency but as power is being challenged so is the dollar as  both Russia and China are pushing for alternatives where gold may play a part.

Read the china Gold Report on this blog

Maurice Hall

We are at a period of time where religion in India was at a crossroads and the Guptas  were said to be responsible for patronizing a new temple based religion recognized as Hinduism. However, Kamuragupta  ( AD415-455) still practiced ancient Vedic rituals

Commemorating King Kumaragupta's horse sacrifice

Normally gold coins would feature the king or ruler on the obverse of the coin but this coin of King Kumaragupta I features a magnificent tethered stallion ordained with banners and ribbons. It symbolises the ashvamedha ( horse sacrifice) the Vedic ritual of legitimizing the conquests of a honourable and pious king. The reverse features the queen with ritual instruments for the ceremony. The Sanskrit around the rim says “King Kamuragupta the supreme lord who has conquered his enemies”

The Ashvamedha could only be conducted by a king. Its object was the acquisition of power and glory, the sovereignty over neighbouring provinces, and general prosperity of the kingdom. This was immensely expensive and is usually only performed once in  a Kings life time.

The horse to be sacrificed must be a stallion, and it is ritually purified and the sacrificer whisper mantras into its ear. The horse is then set loose towards the North-East, to roam around wherever it chooses, for the period of one year. Anyone who should stop the horse is ritually cursed, and a dog is killed symbolic of the punishment for the sinners. If the horse wanders into neighbouring provinces hostile to the sacrificer, they must be subjugated. The wandering horse is attended by a hundred young men, sons of princes or high court officials, charged with guarding the horse from all dangers and inconvenience but manly to stop it mating thus keeping it pure.

Reverse with the queen and ceremonial instruments

After the return of the horse, more ceremonies are performed. It is and bathed and anointed with ghee by the chief queen and two other royal consorts. The chief queen anoints the fore-quarters, and the others the barrel and the hind-quarters. They also embellish the horse’s head, neck, and tail with golden ornaments.  The king performs the sacrifice with a golden Knife. It concludes with the eulogy “May this Steed bring us all-sustaining riches, wealth in good kine, good horses, manly offspring”

First Indian Coins

Based on the available evidence today, it appears that the concept coins as means of trading (money), was developed by three different civilizations independently and almost simultaneously. Coins were seen in Asia minor, India and China in 6th century BC. Most historians agree that the first coins of world were issued by Greeks living in Lydia and Ionia around 650 BC using Electrum a natural alloy of gold and silver . However some historians have suggested that coins were minted in India as long ago as the 8^th Century BC.

What is beyond doubt that the first coins of India were minted just before 5th century BC in central India. Archaeological evidence confirms that the Indians were minting coins between 5th to 6th century BC. Coins are also mentioned  in ancient literature from 500 BC.

The Indians love of gold continues to this day as the world number one consumer of the precious metal.

Maurice Hall