17 October 2013

Matières à Réflexion for Thursday, 17 October - Larry Summers Flinches At Gold Question

Alas, Google has repeated its error of the other week. It must be tinkering with a library of code, fixing some things and breaking others. The lowly system test process is always underrated and under-appreciated, but crucial to large scale software development.

I have notified them and expect they will correct this, but for now, here is the news. I will update during the day.

The Extraordinary Promise of the Greenwald-Omidyar Venture - CJR

Fed Could Begin to Taper From December - FT (Yes and the Banks could begin to act with moral goodness and honor.)

What To Expect During the Budget/Debt Cease Fire - Reich

China Ratings Agency Downgrades US Debt

GEAB N°78 The de-Americanisation of the World Has Begun

Thirty Million People Are Slaves - Half In India

Dollar Status In Doubt After Washington Antics

Why Regulators and Clients Can't Break Audit Oligopoly

Nobel Foundation Seeks Donations As Hedge Funds Are Not Sufficient

Mario Draghi Comments On Central Banks and Gold To Le Café friend Tekoa Da Silva

Or perhaps more apropos, Mario Draghi on why you should own gold.

Tekoa Da Silva: “Dr. Draghi, what are your thoughts on gold as a reserve asset? You have central banks like China, Russia, increasing their reserves, especially over the last ten years. Germany for example asking for some of their holdings back from New York. It [gold] doesn’t produce any income unless it’s leased. So why do you think they would want that, and what value does it offer in your opinion?”

Dr. Mario Draghi: “Well you’re also asking this to the former Governor of the Bank of Italy, and the Bank of Italy is the fourth largest owner of gold reserves in the world, which is out of all proportion to the size of the country.

But I never thought it wise to sell it, because for central banks this is a reserve of safety, it’s viewed by the country as such. In the case of non-dollar countries it gives you a value-protection against fluctuations against the dollar, so there are several reasons, risk diversification and so on.

So that’s why central banks which have started a program for selling gold a few years ago, substantially I think stopped…most of the experiences of central banks that have leased or sold the stock of gold about ten years ago, were not considered to be terribly successful from a purely money viewpoint.”