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From American Survival Newsletter:

America damaged by Fed economic policy

by Alfred Adask

MarketWatch.com, a subsidiary of the Wall Street Journal, recently published an article titled “American is being damaged by low rates, weak dollar.” If that argument is true, we might reasonably ask why is the Federal Reserve willing to “damage” America?

According to that article:

“Five years after the beginning of the economic recovery, after rock-bottom interest rates and trillions of dollars of quantitative easing by the Federal Reserve, the economy is growing about 2 percent.

“No country has attained prosperity by printing money and weakening its currency, and the United States appears to be no different. Monetary stimulus might be useful in the initial stages of a recession and recovery, but zero percent interest rates for years on end are a different matter altogether. Under Fed Chairman Ben Bernanke and his successor, Janet Yellen, the dollar has fallen about 15 percent against the euro.”

But the euro’s value is also falling, so we’re measuring a falling dollar against a falling euro. That measurement has to understate the dollar’s actual loss over the past six years.

If we compare the price of gold in 2008 (about $800/ounce) to the price of gold today ($1,300/ounce) we see that the dollar has lost about 62 percent of its value as compared to gold. That’s an average of about 10 percent a year.

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From MoneyNews.com:

Financial Times: Currency wars heat up again

A year after G-20 finance ministers agreed to end their currency wars, competitive devaluations are back in style.

European Central Bank President Mario Draghi called the euro’s strength a “serious concern” last week, and officials in Australia, Canada and New Zealand have been making noise about weakening their currencies for weeks, the Financial Times reports.

China moved strongly to push down the yuan during the first quarter, spending an estimated $100 billion-plus in direct market intervention. Other emerging market governments are apparently fighting off currency strength too, including India, Brazil and South Korea, according to the Times.

The dollar’s weakness amid the Federal Reserve’s determination to keep short-term interest rates near record lows has put upward pressure on other currencies.

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Russia buying gold like there’s no tomorrow

The Central Bank of the Russian Federation updated its website with April numbers. What they showed was that officials had purchased 900,000 troy ounces of gold during the reporting month. That, along with their purchase in January 2010, represents the second-largest monthly Russian Central Bank purchase ever – and only the 1.1 million troy ounces added in May 2010 was larger.

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From The London Telegraph:

Vladimir Putin faces giving ground in China to seal gas deal

Russian president Vladimir Putin may have to accept unpalatable terms from China to clinch a massive gas pipeline deal in Shanghai, abandoning red lines defended tooth and claw by the Kremlin for the past decade.

The Russian state gas giant Gazprom said it is just “digits” away from an accord to supply North East China with 38bn cubic metres (BCM) for 30 years as soon as 2018. It is a long-coveted prize that would allow Russia to switch sales from Europe to the Far East and totally transform the Eurasian gas market.

Gazprom’s share price has soared 14 percent this month as negotiations reach a climax. Investors are betting that the deal could be the start of an even greater build-up in gas shipments to Asia that would ultimately eclipse sales to Europe, currently 130 BCM, or 60 percent of Gazprom’s revenues.

Mr. Putin said the deal had “nearly been finalised” and was a perfect fit for both sides: allowing Russia to diversify its sales and letting China plug its “energy deficit” and switch to a cleaner fuel.

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From MiningWeekly.com:

AngloGold’s new game-changing technology churns out 1,600 ounces

South Africa’s largest gold miner AngloGold Ashanti has now produced 1,600 ounces of gold using its exciting new technology, which mines “all of the gold, only the gold, all the time, safely.”

AngloGold’s Tau Tona gold mine, near Carletonville, has become the first pukka production site of the “game-changing” technology, which leaps over mechanization into automation. The technology is referred to as the South African Technology Project because of the company’s big-hearted decision to allow it to be migrated to all of South Africa’s hard-rock narrow-reef non-group mines, including the hard-pressed platinum mines.

Despite widespread cost-cutting in the latest quarter to March 31, which saw AngloGold reduce its all-in sustaining costs by 22 percent to $993/ounce, the project budget was one of the few that remained untouched because of the “bang” the company expects to get from every “buck” it spends on it.

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From In Gold We Trust:

German TV network broadcasts program on gold market manipulation

Gold researcher and GATA consultant Koos Jansen calls attention to a long broadcast about gold market manipulation made this month on the German-language television network 3sat, which serves Germany, Austria and Switzerland. The broadcast came on the 3sat program “Makro” and focused on recent complaints about the daily London gold fixings.

It quoted market analyst and GATA consultant Dimitri Speck and Hong Kong fund manager William Kaye, who is frequently interviewed by King World News about gold market manipulation. The program does not seem to have gotten much into central bank involvement in the market manipulation, but questions are raised about Germany’s gold reserves vaulted abroad, so this may have been a good start.

Jansen has posted both full video of the program and an English transcript at his Internet site ingoldwetrust.ch. It’s worth watching if you speak German – and worth the read if you don’t.

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