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Money matters: Storm Watch Update Part
3
Gold and Silver Fundamentals - Based on a an article by Jim Puplava March 2004
Graham Macdonald
MBMG International Ltd.
Increased Demand
Decreasing Supply
The fundamental supply and demand picture for gold has
begun to deteriorate. Demand is rising while supply can no longer keep up
with demand. According to Gold Fields Mineral Services demand for gold
rose 4% globally last year while supply increased by only 0.4%.
The demand for gold is changing from one of industrial
demand to one of investment demand. Higher prices have curtailed jewellery
demand while investment demand is flourishing.
As prices have risen, fabrication demand has fallen
from 3,782 tonnes to estimated demand of 2,822 tonnes this year. Primary
demand has fallen, while investment demand has accelerated; disinvestments
of 358 tonnes in 2000 to estimated demand of 565 tonnes this year, a turn
around in demand of 923 tonnes.
A summary of the GFMS report for last year reveals the
following: Gold demand rose 4% year over year; Producer de-hedging fell by
27%; Jewellery demand fell by 7%; Mine supply increased by less than 1%
and Investment demand has risen by 328%. Over 50% of the industry’s
3,000 hedge position has been eliminated over the last three years.
Despite the recent run up in the price of gold there
remain two wild cards regarding gold; they are official sector gold sales
and the gold derivative book of money centre banks in the U.S. and in
Europe. Central banks could try to drive gold prices down by dumping their
gold but the Washington Agreement places a limit on these sales. The
agreement can be circumvented through gold leasing. However, the question
of the amount of gold left to sell in central banks is far less than where
it was in 1994.
There are professional estimates that believe that more
than half of all the gold of central bank vaults no longer exists. It has
been sold or lent out. The other wild card is the derivative position of
money centre banks both in gold, currencies, and in interest rate swaps
and contracts. The current derivative book of money centre banks has
mushroomed to $67 trillion as of the end of the third quarter of last
year. The gold derivative position of money centre banks is currently $85
billion - a figure that hangs over a much smaller physical market. Nobody
knows for sure which way these contracts swing. It doesn’t matter
whether they are long or short, if prices spike up or down in the opposite
direction. When you are this leveraged there can be a major problem. If
rates rise or the price of gold goes parabolic like silver has done
recently, then “Houston we have a problem.”
This could become a major wild card that could send the
price of bullion and bullion shares soaring if or when it erupts. The
problem is when you are this leveraged, you are always unprepared for the
unexpected. History shows us that the fat tails of the bell shaped curve
recently have been reoccurring with greater frequency. It is the fat tails
and not the belly of the curve that we should be concerned about.
Low Negative
Interest Rates
The return from short -term interest rate vehicles is
no longer high enough to compensate an investor for inflation. The rate of
return on short-term Treasury paper is as follows:
3M .94%
6M 1.00%
1Y 1.06%
2Y 1.48%
3Y 1.88%
5Y 2.68%
The rates shown above are far below the current rate of
inflation. This means that an investor is actually losing ground on
short-term paper investments. The interest rate offered isn’t
commensurate with the rate of inflation.
According to the recent PPI report here in the U.S.,
producer price inflation is running at an annual rate of 7.2%. Commodity
price inflation as reflected in the price of the CRB Index is running at
an annual rate of 7.7%. The price inflation of food and energy -
commodities that we need and consume daily - is running in the double
-digits.
It is clear that interest rates this low are clearly
signalling the destruction of the value of financial assets. Interest
rates this low are a sign of monetary inflation. This is good for gold.
Interest rates this low reduces the contango in the futures market which
is also good for gold. Low interest rates are gold bullish.
Volatile Geopolitical
Storms
Pick up the papers, turn on the evening news, or read a
news magazine and tell me what you see ... war, assassinations, political
coups, bombings, and worldwide terrorist attacks. These are just a small
sampling of (that day’s) headlines out of Bloomberg: Israel kills Hamas
chief Yassin; Hamas vows revenge; Pakistani army convoy attacked in
North-western tribal region; UN envoy calls for calm in City of Heart
where 100 people were killed; Bush will ask Congress to increase U.S.
troops in Columbia by 75%; Fighting in western Nepal kills 130.
These headlines are not out of the ordinary. The
headlines listed above seem to be a daily faire in global news. Terrorism
is on the rise and most western governments seem powerless to stop it.
Bombings, assassination attempts, low density conflicts (LDCs) are all
part of the world we live in. As conflicts increase the rise in the price
of gold and silver become a barometer of not only fear, but also a lack of
confidence in world leadership.
Rising global budget deficits, an expanding world money
supply, resource scarcity and resource wars are all part of today’s
present political climate. When fear abounds, gold astounds. The present
global conflict is very much reminiscent of the global conflicts, trade
wars and depressions of the 1930s. This time around there is far more
debt, a larger supply of fiat currency, greater political tensions, and a
shortage of natural resources to meet economic and population growth.
Today’s modern weapons of war are more lethal. Our modern nuclear weapon
systems, as well as our modern financial weapons of mass destruction:
derivatives, are capable of wrecking far more havoc, tragedy, and
destruction than all of the history of mankind.
Geopolitical storms are joining together with financial
storms and are causing greater volatility and political mishap in the
world’s financial markets and in the halls of government. It is just one
more reason why the price of gold and silver are heading higher. (For
further reading of this new political environment see PowerShift: Money,
Oil & War).
The above data and research was compiled from sources
believed to be reliable. However, neither MBMG International Ltd nor its
officers can accept any liability for any errors or omissions in the above
article nor bear any responsibility for any losses achieved as a result of
any actions taken or not taken as a consequence of reading the above
article. For more information please contact Graham Macdonald on [email protected]
Snap Shots: How to make the subject jump off the print
by Harry Flashman
What is the most commonly photographed subject? No, it
is neither elephants nor local politicians, but is most likely a person
you know. Be that wife, parents, children or country cousins, the main
subject for the majority of amateur photographers is people. Take a look
at your photo albums if you don’t believe me. For many of these photos
they are of the type, Mum at the zoo or Auntie Mame at the beach, or Uncle
Walter in Chiang Mai.
What you have to consider is “why” you are
recording this 1/60th of a second in time for posterity. When you realize
“why” - your shots will improve.
It is simple really - in actual fact, you are recording
a time “when” your relative was “in” a particular place.
Consequently, you have two important items to show in the shot - “who”
and “where”.
Take “where” first. This is the background to the
shot, and in many ways a most important item. While you may know that the
shot was taken in Chiang Mai, nobody else does, and certainly not in a few
years time, unless there is something in the photograph that relates to
the location.
So rule number one is to make the background
“specific” for the location. Mum with a giraffe probably does mean a
zoo somewhere, but a sign always helps to pinpoint the location. Likewise
with Uncle Walter in Chiang Mai. Get somewhere in the city that either
says Chiang Mai, or use some local landmark that is unmistakable, like the
moat in Chiang Mai or the bay in Pattaya. Look at this week’s photo with
Pattaya Bay giving the location for the snapshot.
Now remember that after you have found a good
background location, you have to stick a person in it too, and the concept
here is not to make the subject (Mum, Auntie Mame, Uncle Walter) part of
the background. You have to well and truly separate the two. The subject
is the “hero”, so bring the subject up close. Rule number two is to
bring the subject away from the background, to make sure the subject is
the principal item of interest.
What you do now is to juggle the two items around so
that you get the best shot possible. Try taking one shot where the subject
is central, and the background extends on both sides. The next two shots
should be taken with the subject 1/3rd in from the left border for one and
similar placement in from the right border of the shot for the second
photo (back to the Rule of Thirds).
The thirds tip is to look at the background before you
pop the shutter button. This requires you to practice looking through the
viewfinder with the critical eye. It means that you look beyond the
breathtakingly beautiful model posed before your lens and stretch your
focus through to the background. Now look for contrasts.
This simply means to have a light background if the
person you are shooting has dark hair, and the reverse for those with
blonde or white hair. Now to get this may require you to move the model,
move yourself or move the location again. This is worthwhile. No matter
how good the shot looks as you try so diligently to get pinpoint focus on
your subject - if there is no contrast between subject and background you
will be disappointed in the final photograph. The person’s hair will
disappear into the background. This is especially so when photographing
the very dark haired people of Thailand. Just look at some of the social
page photographs in this issue of the Mail and you will see just what I
mean.
Probably the last item to consider is colour. When all else fails, or
is impossible, position your subject against a contrasting coloured
background. A yellow dress in front of a red door, for example, will
always stand out. Blue and white are also good contrasts. And of course,
never forget black and white!
Modern Medicine: The hewers of stone and the drawers of water
by Dr. Iain Corness, Consultant
In the medical business, Urologists are
sometimes called the hewers of stone and drawers of water, because much of
their work deals with kidney stones and assisting men to be able to pass
water adequately. We men do suffer at times; it’s not only the ladies who
have ‘specific’ problems!
Your urinary system is a remarkable collection of organs,
beginning with the kidney, the “super filter”. The kidney filters the
blood and allows the important stuff like blood cells and nutrients to
continue waltzing around your circulation, but taking out the nasties, and
at the same time helping balance the acidity/alkalinity of the body. Clever
little organs, the kidneys!
To keep your kidneys in top shape does not require
special kidney exercises, you will be pleased to know. In fact, there is
nothing you can do ‘physically’ to make the kidneys perform, but
fortunately there are some things you can do to keep them in top condition.
The first is to drink plenty of water every day. And by
‘water’, I mean the plain and simple H2O, not the stuff that has been
mixed with hops, distilled with grain or left to age in oak casks. Making
the kidneys exercise, to filter and regulate the circulating blood volume,
is simply carried out by drinking several litres of water every day. Yes, it
is that easy. On your desk at work keep a glass of cold water beside you and
empty it every 30 minutes.
The advantages you get from this are enormous. First off,
you have immediately lowered the chances of forming kidney stones, a
potentially dangerous (and painful) condition. Being a card carrying coward,
I have always preferred the drinking water option to the lying in bed
groaning with pain alternative. In fact, around 15 percent of people will
experience stones in their lifetime (especially in the hot climates) and men
outnumber women between two to three times. We also know that if you do not
change your lifestyle, you are very likely to develop another stone within
two years after the first episode. We men do suffer at times, it’s not
only the ladies who have ‘specific’ problems!
The kidneys drain to the bladder by two tubes called
Ureters. These do not do much, other than connect the kidney to the
collecting vessel (bladder). However, if a piece of stone gets stuck, you
will soon know about it. Renal colic sorts out the men from the boys!
Ultimate pain!
From the bladder, the urine gets introduced to the
outside world by another tube called the Urethra. This is short in ladies
and is the reason that women get Cystitis (bladder infections). It is longer
in the men folk, allowing us to stand up to pee and become obsessed with how
long or short it really is.
However, we chaps have another problem in that region, as
far as getting the urine from the bladder to the far wall of the urinal.
This is called the Prostate, and it encircles the Urethra and when enlarged,
closes down the internal diameter of the pee tube. This makes it difficult
to pass water and you dribble on your shoes. The prostate can also become
cancerous, an even less pleasant state of affairs. We men do suffer at
times, it’s not only the ladies who have ‘specific’ problems!
Yes, you can have a check-up for this area too. Just ask
to see the hewers of stone and drawers of water!
 Heart to Heart with Hillary
Dear Hillary,
I read in the Chiangmai Mail that the bar girls are worrying about the health of
the local buffaloes, because if they are all replaced by tractors then the
pleading “buffalo sick, send money” won’t work any more. I have got a
letter asking for money to pay vet bills for a Thai girl’s family buffalo. Is
this really true? Are they that devious?
Buffalo Bill
Dear Buffalo Bill,
I could have answered your letter with just one word - Yes! However, like all
begging attempts, it is up to you what you do. When you go across the pedestrian
footbridges in Bangkok, there will be somebody, usually with a rented baby at
the breast or an obvious physical deformity, with a begging cup at each
stairwell. You can give, or keep your money firmly in your pocket. Likewise the
begging letters, which all have a fairly common source, in fact there is a book
published for bar girls to learn English, that has a basic pro-forma letter of
the type “Dear Blank (fill in name of sucker, sorry, boyfriend), I miss you so
much. Unfortunately I have to tell you that I will have to go back to working in
the bar because my mother/brother/father/baby/buffalo (delete whichever are
inappropriate) is sick. If you could send $$$$$ (fill in the amount wanted) then
I could just stay here in our flat and wait for you. Life is not the same
without you (or without your wallet). Your loving girlfriend (Sai, Sim, Toy, A,
Bee, Dee, Nud, Nid - delete whichever is inappropriate). Yes Buffalo Bill, I
think you should keep your money in the bank at Wounded Knee and wait for the
Cavalry. The buffalo will look after itself. You don’t need to.
Dear Hillary,
My computer is behaving worse than any woman I have ever met.
It can be all sweetness and light one day, and just as suddenly change and
become impossible to work with. It will work sometimes, and for no apparent
reason just change its mind and stop working. The screen can be a lovely sunny
sky colour and in the blink of an eye it turns into a horrible deep storm blue.
Have I just got a bitch of a bug, or do you think this is some female plot?
Before I jump on the damn box of tricks, or punch the screen’s lights out,
have you any suggestions as to what I should do? I’ve had everyone look at it,
but nobody seems to know how to make it behave. I’m at my wits end.
Computer Charlie
Dear Computer Charlie,
What do you think Hillary is? A computer repairman? I mend
broken hearts or give advice to the lovelorn, Petal. I don’t mend computers. I
hate computers as much as you do. If the car companies sold cars that would stop
for no reason, crash despite all your good efforts, and race off and do illegal
things behind your back, they would be out of business in no time. Yet somehow
the boss of the (guaranteed to fail) operating systems ends up as the richest
man on the planet. Charlie, there is no justice in the world, or otherwise
Hillary would be sitting sunning herself around a six star swimming pool, while
sipping French champagne and nibbling Belgian chocolates surrounded by attentive
waiters. However, I do think you should do something about that temper of yours.
You can’t go round threatening to punch people’s lights out, just because
they won’t work the way you want them too!
Dear Hillary,
I have been holidaying here in Thailand for three months and
will be returning to my country for around four months, before coming back. I am
a single male and have formed a steady relationship with a young woman here. She
has a regular job and is not employed in the entertainment industry, if I can
use so loose a term. I would like to give her something to remind her of me
while I am away. Have you any suggestions on what I should get for a young Thai
lady in her late twenties? We have not been living together and up till now it
is a real ‘friend’ situation, though I am looking to make this into
something more when I return.
Regular guy Ron
Dear Regular guy Ron,
First, I am very happy that you want to give your lady friend
a gift to be a token of your feelings for her while you are off overseas. That
is very sweet and thoughtful of you, Petal. The best kind of present is one that
she would use every day, and when using it, this would bring you to mind. Have
you thought of a nice leather money purse/wallet, complete with a photo of you
(and her) inside? This is something that she would use every day, and would
hopefully bring a smile to her face each time. However, it is probably more
important for you to tell her what you have told me, where you say that you are
looking at making the relationship “something more” when you return. Good
communication is the most important factor in all relationships.
Personal Directions:
9 Ways to motivate yourself when you
just don’t feel like it
by Christina Dodd
In this article I want to spend more time on goals and
attaining them. So this week I have taken my inspiration from the work and
writings of Skye Thomas ... a great teacher and motivator.
Achieving the really big goals and dreams always involves
breaking it down into do-able little steps. Assuming that you’ve picked a
goal or dream that you really love working at, then most of the steps are a
delight to take. No matter how much you love your dream and no matter how
much you love your work, there are going to be tasks along the way that you
really don’t want to do. Those pieces of work that we hate doing can be
the very ones that sabotage our success. How do you stay motivated during
those parts of the journey?
1) Reward yourself
Let’s say that you want to lose twenty pounds. That’s
not too much, but it’s still going to involve more days of self discipline
than you feel like doing. So, reward yourself with a little treat every time
you drop five pounds. Maybe you get to have one of your favorite meals at
the end of each five pound loss. Then go back to your diet. At the end,
maybe you can get to go on a shopping spree to buy new clothes. Come up with
a reward that you can use to motivate yourself.
2) Do it for love of someone else
A friend of mine’s teenage son proposed a deal that
works for both of he and his parents. They don’t smoke cigarettes and he
doesn’t experiment with drugs. Every time one of them is about to give in
to temptation, their love for each other stops them. They can’t light up
knowing that he might start doing drugs because they broke their deal. “He
hates the idea of me dying of cancer, so he never touches any kinds of drugs
offered to him by his peers.” The love of someone else can motivate you to
do what you otherwise might not be able to do for yourself.
3) Trade work with someone else
I’ve watched kids perfect this style of motivation. My
nephew will offer to scrub out the showers if my niece will do the dishes
for him. Hiring someone to do the work you don’t want to do is actually a
form of trade. Barter or pay someone else to do it for you, so that you can
continue moving forward with your dreams.
4) Truly consider quitting
I’m not telling you to quit, but to really think about
it. If you’ve got a goal or dream that means a lot to you and you’ve
already invested a large part of yourself into making it happen, then what
would quitting feel like? Is avoiding the difficult or distasteful task
worth giving up on your goals and dreams? The love of your long-term goal
can motivate you not to quit.
5) Share the misery
This reminds me of friends in college getting together to
study for an upcoming test. Having friends along can make the experience
more festive then it would have been if you were doing it alone. Is there a
way to team up with a friend so that the work is easier or at least more
enjoyable?
6) Just get it over with
One of my all time favorite quotes about getting past
your inner blocks was written by Stuart Wilde in his book The Quickening,
“Cut the shit and do the thing.” Yeah it’s a bit rough, but we all
know those stoic tough people who simply roll up their sleeves and dive in
no matter how much they may hate the task before them. Take on a soldier’s
mindset and just get to work doing the ugly parts so you can move on to the
more rewarding parts of making your dreams a reality.
7) Get training or education
Quite often, we don’t like doing something because deep
down we don’t think we know how or that we are talented enough. So, get
the education, do the research, learn the necessary skills, or whatever else
it is that you need to do to get ready for taking that next step. Once
you’ve properly trained yourself, then you might even be enthusiastic
about taking that next step.
8) Take a running start at it
Think of riding your bike uphill. It doesn’t take kids
very long to figure out that the best way to get that bicycle to the top of
the steep hill is to build up a lot of speed before you even get to the base
of the hill. You then let that momentum help to propel you most of the way
up. Heck, with enough of a running start you can sometimes make it all the
way up without any major struggles. If there is a way to pace yourself and
reschedule the not so fun parts of accomplishing your goals until after
you’ve completed a bunch of the cool parts, then do so. The highs of your
mini successes will help inspire you to push past the parts that you are
avoiding.
9) Figure out a
different way to do it
This is the supreme way to avoid doing the task all
together. Be creative, be smart, think outside the box. Is there any way to
make your dream come true without having to actually do the specific duty
that you’re wanting to avoid? Sometimes you can find another way. Other
times, just knowing that there is definitely no other path to your dreams
other than the one before you is enough to motivate you to just buck up and
get through it.
What’s most important is not how you keep yourself
motivated but that you keep the long-term benefits of your goals in mind. If
you focus too much on avoiding the uncomfortable parts of accomplishing your
goals, then you won’t accomplish much. Find a way to keep going and
remember that all things come with a price. Pay the price so you can get on
with enjoying the dream.
For more details about our one on one or small group life
coaching services or our personal and professional skills development
programs, please email me directly at christina.dodd@asiatraining
associates.com or visit our website www.asiatrainingassociates.com
Psychological Perspectives:
AIDS
by Michael Catalanello,
Ph.D.
The XV International AIDS Conference
being held this week in Bangkok prompts a consideration of the
psychological issues raised by this deadly epidemic.
AIDS has been with us now for over two decades. Despite
worldwide efforts to develop an effective vaccine or cure for the disease,
researchers have yet to achieve this goal. A variety of medical treatments
have been developed, however, which allow those infected to live longer and
better with the disease. Unfortunately, these medical treatments are not
always accessible to many who need them due to high cost and limited
availability.
Sadly, levels of infection have been rising
disproportionately among children and young people in recent years. In
fact, the highest rates of infection are currently found among 15-24
year-olds. Children are also adversely affected when parents or other
caretakers succumb to the disease.
HIV, the virus that causes AIDS, attacks the body’s
immune system, compromising its ability to defend against other potentially
fatal diseases. HIV is usually transmitted through certain “high risk”
behaviors that allow the transfer of bodily fluids such as blood and semen
from an infected person to another. Historically, the most common means of
transmission has been through unprotected sexual activity, and through the
sharing of needles by IV drug abusers. Babies can also become infected by
an infected mother before or during birth.
A key approach to the prevention of HIV infection has
been through education. Education programs make available basic information
on how the disease is transmitted and ways to avoid infection. Such
programs typically encourage the use of condoms during sexual intercourse
and sterile needles by those injecting drugs.
Those engaging in risky practices may experience
disturbing emotions such as guilt, depression, or anxiety over the
possibility that they may have become infected or may have inadvertently
infected others. These emotional reactions may be accompanied by unhealthy
behavioral responses, such as continued risk taking, sleep disturbance, and
poor eating habits. Such individuals might also experience obsessive
thoughts about the possibility of infection, and excessive or unnecessary
use of medical services.
Likewise, those receiving news that they are infected
may experience a wide variety of disturbing emotional reactions, including
anger directed toward themselves and/or toward the individual who
transmitted the virus, guilt, depression, and even suicidal thoughts or
impulses. Psychological approaches are designed to reduce the emotional
distress of those experiencing disturbing emotional reactions, and to
assist them in responding in healthier ways to the challenges of living
with HIV/AIDS.
People infected with HIV may also face social stigma,
such as rejection by family and friends, employment discrimination, and
ignorance or insensitivity within their social groups. Despite efforts to
educate the public about HIV/AIDS, there unfortunately exists within our
society gross misinformation, superstitions, and prejudices concerning this
disease. Psychological approaches help patients overcome the challenges
posed by these uncomfortable situations.
Family members of an infected person may also experience
confusion and emotional distress in response to the news that their loved
one has become infected by HIV. They too may require psychological
assistance in dealing with their own disturbing emotions such as anger or
depression, and responding appropriately toward their family member with
support, understanding and compassion.
Dr. Catalanello is licensed as a psychologist in his
home State of Louisiana, USA. He is a member of the Faculty of Liberal Arts
at Asian University in Jomtien. Address questions or comments to [email protected]
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