Gold Rush ??? -A few years ago annual production was 13,000,0000 ozs,it is now 10,000,000 ozs worldwide,although figures for Russia and China are vague and possibly unreliable.We do know,however,that they do not export in any volume that which they do mine.  I have a friend ,a board member ,of a company ,that produces 1,000,000 ozs per annum.it s no secret that they have enough ore above ground for about two years production,they are ,at the moment,not mining.  Now,onto consumption,prefaced by the admission that I reside in Thailand,and I am speaking as I see the situation here and indeed the surrounding countries of S.E.Asia.  The general population buy gold to keep for weddings and the rainy day syndrome.They do not buy as an investment or for trading,the spread is too great.  The Chinese will,if the coming year is thought to be unfavourable.  India,the largest consumer, placed tax on imports a couple of years ago of  (I believe) 5%.  My question to my self at the time was answered by an Indian who was trying to come to an agreement with the company mentioned above,to no avail of course,when he reminded me of our conversation of sometime before,years in fact,when he predicted that middle class Hindu brides,say five or ten million every year,would swallow world production.  The presumption I now have confirmed to myself is that most markets are manipulated,you and I will be allowed to gamble in shares bonds and propery,because they are our decisions and will be our fault.The underpinning we used to enjoy fifteen years ago ,is no more.Good luck and God bless you all ... $1000 dollars of gold stuffed under the mattress a hundred years ago would be more valuable today than $1000 in cash stuffed under the same mattress, so people saying pieces of paper issued by a central bank are a better bet than gold are clearly talking nonsense, how are those Hapsburg thalers, Reich marks or Czarist rubles doing these days?  But, and it is a huge but, gold only retains its value in a civilized society, it is spectacularly useless when society breaks down a fact about which many gold buyers seem to be completely unaware. How the heck do you think gold coins will save your neck when the Morlocks are coming over the garden fence?  The mere fact of owning gold will mark you out for immediate attack. The first time you go to the market to buy your bag of rice with a gold sovereign is the moment your fate is sealed.  Historically Jews and other persecuted groups kept their wealth in gold as they figured it was their passport when the crisis came, all it meant was that the bad guys knew to strip them naked and steal their clothes and luggage after chasing them out while the peasants ransacked their homes looking for the secret stash.  Think of those caches of gold dug up by archeologists, which we are told were hidden to keep it safe from the Vikings and ask yourself how much use all that gold was to its original owner. 

In a letter to Jeroen Dijsselbloem, president of the eurozone finance ministers’ group, obtained by Reuters, Greece’s finance minister, Yanis Varoufakis, conceded that the Greek authorities would “refrain from unilateral action that would undermine the fiscal targets, economic recovery and financial stability”.  Crucially, he said Greece would remain under the supervision of the European commission, the European Central Bank and International Monetary Fund – the unpopular troika that the Syriza-led government had insisted it would throw off.  Germany says Greek proposals for a six-month extension to its bailout programme do not go far enough .   Eurozone officials are meeting in Brussels on Thursday to assess the latest Greek proposal. Raoul Ruparel, the head of economic research at Open Europe, thinks the Greek government has little chance of getting the rest of the eurozone to back its plans on labour market reforms, pensions or privatisation.   However, in a briefing paper, he wrotethat the eurozone could give way on another one of Greece’s key demands, to allow the government to run a smaller budget surplus, so freeing up money for social spending. “The Greek election represented a tipping point, meaning that the rest of the eurozone will have to consider some tradeoffs,” he wrote.  A spokesperson for the European commission president, Jean-Claude Juncker, said the letter was a positive sign that could pave the way for a reasonable compromise....

The Greeks were screwed to save the banks, now the banks are free, they are being screwed to save EU taxpayers and the debt just keeps on growing, how anyone thinks this makes sense I do not know....Grexit is inevitable. The only question is when, and how?  Many imagine Grexit will mean be a return to the Drachma and cheap holidays in Greece and maybe even cheap property to buy in Greece.  The reality will be very different.  You cant wind the clock back to the nineties (some DT journalists think you can!).  Most likely scenario is a semi-orderly/disorderly retreat from the Euro.  Starting this weekend with drastic capital controls to prevent a run on Greek banks next week , in the run up to the 28 Feb deadline.  Followed by either a cut in Govt spending (unlikely) or IOU’s and delayed payments for /salaries /pensions/ contracts from the Greek govt.(more likely)
Reason being the Greek Govt budget is already at -12% at end of last year - they are bankrupt  and this is set to go higher - Greek taxpayers aren’t paying their taxes …they are stuffing their spare Euros in offshore accounts or under the mattress, plus the social spending promised by Syriza– rehiring public employees, pensions at 50, free energy for some (the ones who voted for them).   The introduction of capital transfer controls and IOU’s by Greek Govt will be de facto exit from Euro , although officially Greece wont leave the Euro and cant be kicked out… instead a dual currency economy will exist.   You will still pay for your holiday in Greece this year in Euros… nothing will change for those parts of the Greek economy which are productive and competitive. Likewise real assets like property will keep their Euro value.   A situation much like Cambodia for example – a third world country but with a competitive tourist industry. Tourists pay in Dollars and get dollars from ATM’s , but every time they pay with foreign currency they get their small change in local currency …ending up with a pile of useless local currency at the end of the holiday.
Unproductive parts of the Greek economy – public employees, pensioners, unemployed and the poor will have to use local, depreciating currency on a hand to mouth basis, like all banana republic currencies.  But if you are a Brit- look on the bright side - the depreciation in the Euro , primarily due  to this Greek fiasco, will result in holidays being 10-15% cheaper in2015 , as compared to 2014….

(Reuters) - A war of words between Greece and EU paymaster Germany escalated on Tuesday with Athens' new leftist prime minister rejecting what he called "blackmail" to extend an international bailout and vowing to rush through laws to reverse labor reforms.  A source close to the government said Greece intends to ask on Wednesday for an extension for up to six months of a loan agreement with the euro zone, on conditions to be negotiated. The source drew a distinction between a loan agreement and the full bailout program which the government insists is dead.  However hardline German Finance Minister Wolfgang Schaeuble dismissed the Greek gambit, telling broadcaster ZDF: "It's not about extending a credit program but about whether this bailout program will be fulfilled, yes or no."   Financial markets held their nerve after the latest talks among euro zone finance ministers broke down late on Monday and EU partners gave Greece until the end of the week to request an extension or lose financial assistance.   Many investors believe that whatever the rhetoric, both sides will find a face-saving formula before Athens' credit lines expire in 10 days. If they fail, Greece could rapidly run out of cash and need its own currency.  Greek banking sources said outflows of deposits increased on Tuesday after the failure of Monday's talks, but were not as severe as on some days last month around the election of a radical anti-austerity government.  The European Central Bank will review emergency funding for Greek banks on Wednesday but should not cut the lifeline this week, a source familiar with the situation said.   Both sides continue to insist Greece will remain in the euro.  Greek Prime Minister Alexis Tsipras told lawmakers in his Syriza party that the government - elected to scrap the bailout, repeal hated austerity measures and end cooperation with the "troika" of EU, ECB and IMF lenders - would not compromise.

Greece's anti-austerity government is presenting its first concrete proposals for an alternative debt plan at an emergency meeting of eurozone finance ministers in Brussels.  The government wants to overhaul 30% of its bailout obligations, replacing them with a 10-point plan of reforms.  But EU ministers have warned that Greece must abide by existing terms.  The EU-IMF bailout for the debt-laden country expires on 28 February and Greece does not want it extended.  Instead the new Athens government is asking for a "bridge agreement" that will enable it to stay afloat until it can agree a new four-year reform plan with its EU creditors.  Thousands of left-wing demonstrators have rallied in Athens in support of their government's proposition.   Prime Minister Alexis Tsipras's government won a confidence vote on Tuesday, with the support of 162 deputies in the 300-seat parliament.  The Athens stock exchange then fell by 4% ahead of the emergency Eurogroup meeting, which will see Finance Minister Yanis Varoufakis unveil the controversial debt proposals.  The Syriza-led government says the conditions of the €240bn (£182bn; $272bn) bailout - sweeping spending cuts and public sector job losses - have impoverished Greece.  It rejects the "troika" team - the EU, International Monetary Fund (IMF) and European Central Bank (ECB) - overseeing the bailout's implementation.  The government's proposal for overhauling its bailout comes in four parts, according to a finance ministry source widely quoted in Greek media.  Under the first part, Greece would co-operate on 70% of its bailout conditions but wants to scrap 30% - replacing it with 10 new reforms to be agreed with the Organisation for Economic Cooperation and Development (OECD). It is unclear what these would be.

At a joint press conference on Wednesday, OECD head Angel Gurria told Mr Tsipras that his organisation would "work with Greece in getting growth back not only on the books but also... to the Greek citizens".  The government's plan also includes bond swaps and a proposal to reduce the primary budget surplus target for this year to 1.49% of GDP, rather than the 3%.

Greece and its European creditors reached Friday a deal over the country's request to extend its bailout that would keep the country from falling out of the euro bloc.  An official close to discussions, who spoke only on condition of anonymity because he wasn't authorized to comment publicly, says a deal was reached between the two sides at a meeting of finance ministers in Brussels.  The official said that, as part of the agreement, Greece could "present a first list of reform measures by Monday" for the country's debt inspectors to assess. 
European creditors have insisted that any extension to loans should be accompanied by a commitment to some budget measures and reforms.  If the officials from the European Central Bank, International Monetary Fund and European Commission, say the list of measures presented Monday by Greece is acceptable, then eurozone finance meeting could discuss the issue by conference call on Tuesday.  The breakthrough in the standoff between Greece and its creditors helped global markets, with the euro and stock markets in the U.S. rising.  Friday's meeting was delayed by 4 hours as the finance ministers worked in clusters, where details of the statement were discussed.  The developments come a day after Athens requested a six-month loan extension, which would allow Greece to pay its bills and avoid an eventual bankruptcy...
A bad day for Greece from the looks of it, another 4 months of pain in a fiscal straightjacket that they have no hope of ever escaping from.  They are a long way off the levels of competitiveness required to stay in the EU and they are also now saddled with huge debt.  Logic says exit but logic doesn't include the stubborn heads of the politicians.  An exit is coming, it's just a case of when.
A total defeat for Greece actually:
1) The accord requires Greece to submit by Monday a letter to the Eurogroup listing all the policy measures it plans to take during the remainder of the bailout period, to ensure they comply with the conditions.
2) That drove ministers to make Greece hand over custody of nearly 11 billion euros in aid earmarked for stabilising its banks to the euro zone's rescue fund. "We wanted to make sure that the money for Greek bank recapitalisation is for that purpose, not for recapitalisation of the government," Dijsselbloem said.
3) "The Greeks certainly will have a difficult time to explain the deal to their voters," Schauble said.
But I cannot think why Germany has bothered. No way Greece can deliver any primary surplus, so all the next four months will do is prove that.
 

The European Central Bank has thrown Greece a lifeline to prevent Athens running out of money before crunch talks with European leaders.  The extension of emergency funding to the Greek finance sector by the eurozone’s central bankers lifted the euro and gave Greece’s prime minister, Alexis Tsipras, a stronger hand before meetings with senior officials at the leaders summit in Brussels.

Tsipras was scheduled to meet the German chancellor, Angela Merkel, in an attempt to hammer out a deal after he told her, following his election a little more than a fortnight ago, that he will lift draconian austerity measures, contravening the terms of the Greek bailout programme.  Greece has failed so far to persuade European leaders that it needs more generous loan financing to alleviate poverty and to promote growth. Talks earlier his week between eurozone finance ministers reached a deadlock after plans put forward by Athens for cheaper long-term loans were rejected...The ECB has come under pressure to allow Greece to access short-term lending facilities after it said the crisis-hit country no longer qualified for drawing on standard borrowing terms. ECB officials declined to comment, but two sources familiar with the matter told Reuters that the provision of emergency liquidity assistance (ELA) by the Greek central bank would be authorized by the ECB as a temporary expedient...  Merkel was scheduled to meet Tsipras privately on the sidelines of the one-day informal EU summit, which was meant to focus mainly on the Ukraine crisis and report back on negotiations in Minsk with the Russian president, Vladimir Putin.   Tsipras’s position appeared to weaken before the summit after figures showed a shortfall in Greek tax receipts and a steady flight of savings from the country’s largest commercial banks. Finance ministry data showed tax revenues were €3.49bn (£2.58bn) in January, well below the €4.54bn target set under Greece’s latest budget.  The grim data adds to concerns that Greece will run out of time and money before settling differences with European partners, who want Athens to stick with a debt plan that expires at the end of this month.  Greek households withheld tax payments desperately needed by the new Athens government after it rejected the last payment worth €7.2bn under the existing bailout scheme.   Greek banks have also been hit by a flight of capital to foreign-owned rivals in the runup to snap elections, which propelled Tsipras’s radical left party Syriza to the head of a coalition.