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New All-Time Highs on the Dow: Does It Matter?
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Be Careful: Russia is Back to Stay in the Middle East
By OilPrice.com
Russia is back. President Vladimir Putin wants the world to acknowledge that Russia remains a global power. He is making his stand in Syria.
The Soviet Union acquired the Tardus Naval Port in Syria in 1971 without any real purpose for it. With their ships welcomed in Algeria, Cuba or Vietnam, Tardus was too insignificant to be developed. After the collapse of the Soviet Union, Russia lacked the funds to spend on the base and no reason to invest in it.
The Russian return to the Middle East brought them first to where the Soviet Union had its closest ties. Libya had been a major buyer of arms and many of the military officers had studied in the Soviet Union. Russia was no longer a global power, but it could be used by the Libyans as a counter force to block domination by the United States and Europeans.
When Gaddafi fell, Tardus became Russia’s only presence in the region. That and the discovery of vast gas deposits just offshore have transformed the once insignificant port into a strategic necessity.
Earlier at the United Nations, Russia had failed to realize that Security Council Resolution 1973 that was to implement a new policy of “responsibility to protect” cloaked a hidden agenda. It was to be turned from a no-fly zone into a free-fire zone for NATO. That strategic blunder of not vetoing the resolution led to the destruction of Gaddafi’s regime and cost Russia construction contracts and its investments in Libyan gas and oil to the tune of 10 billion dollars.
That was one more in a series of humiliating defeats; and something that Putin will not allow to happen again while he is president. Since his time as an officer in the KGB, he has seen the Soviet Empire lose half of its population, a quarter of its land mass, and most of its global influence. He has described the collapse of the Soviet Union as a “geopolitical catastrophe.”
In spite of all of the pressure from Washington and elsewhere to have him persuade Bashar Al-Assad to relinquish power, Putin is staying loyal to the isolated regime. He is calculating that Russia can afford to lose among the Arabs what little prestige that it has remaining and gain a major political and economic advantage in Southern Europe and in the Eastern Mediterranean.
What Russia lost through the anti-Al-Assad alliance was the possibility to control the natural gas market across Europe and the means to shape events on the continent. In July 2011, Iran, Iraq, and Syria agreed to build a gas pipeline from the South Pars gas field in Iran to Lebanon and across the Mediterranean to Europe. The pipeline that would have been managed by Gazprom would have carried 110 million cubic meters of gas. About a quarter of the gas would be consumed by the transit countries, leaving seventy or so million cubic meters to be sold to Europe.
Violence in Iraq and the Syrian civil war has ended any hope that the pipeline will be built, but not all hope is lost. One possibility is for Al-Assad to withdraw to the traditional Aliwite coastal enclave to begin the partitioning of Syria into three or more separate zones, Aliwite, Kurdish, and Sunni. Al-Assad’s grandfather in 1936 had asked the French administrators of the Syrian mandate to create a separate Aliwite territory in order to avoid just this type of ethnic violence.
What the French would not do circumstance may force the grandson to accept as his only choice to survive. His one hundred thousand heavily armed troops would be able to defend the enclave.
The four or five million Aliwites, Christians, and Druze would have agricultural land, water, a deep water port and an international airport. Very importantly, they would have the still undeveloped natural gas offshore fields that extend from Israel, Lebanon, and Cyprus. The Aliwite Republic could be energy self-sufficient and even an exporter. Of course, Russia’s Gazprom in which Putin has a vital interest would get a privileged position in the development of the resource.
In an last effort to bring the nearly two year long civil war to an end, Russia’s foreign minister Sergei Lavrov urged Syrian president Bashar al-Assad at the end of December to start talks with the Syrian opposition in line with the agreements for a cease fire that was reached in Geneva on 30 June. The Russians have also extended the invitation to the Syrian opposition National Coalition head, Ahmed Moaz al-Khatib. The National Coalition refuses to negotiate with Al-Assad and Al-Assad will not relinquish power voluntarily.
The hardened positions of both sides leaves little hope for a negotiated settlement; and foreign minister Sergei Lavrov has made it clear that only by an agreement among the Syrians will Russia accept the removal of Al-Assad. Neither do they see a settlement through a battlefield victory which leaves only a partitioning that will allow the civil war to just wind down as all sides are exhausted.
The Russians are troubled by what they see as a growing trend among the Western Powers to remove disapproved administrations in other sovereign countries and a program to isolate Russia. They saw the U.S involvement in the Ukraine and Georgia. There was the separation of Kosovo from Serbia over Russian objections. There was the extending of NATO to the Baltic States after pledging not to expand the organization to Russia’s frontier.
Again, Russia is seeing Washington’s hand in Syria in the conflict with Iran. The United States is directing military operations in Syria with Turkey, Qatar, and Saudi Arabia at a control center in Adana about 60 miles from the Syrian border, which is also home to the American air base in Incirlik. The Program by President Obama to have the CIA acquire heavy weapons at a facility in Benghazi to be sent to Turkey and onward to Syria is the newest challenge that Putin cannot allow to go unanswered. It was the involvement of Ambassador Chris Stevens in the arms trade that may have contributed to his murder; and the Russians are not hesitating to remind the United States and Europeans that their dealings with the various Moslem extremists is a very dangerous game.
The Russians are backing their determination to block another regime change by positioning and manning an advanced air defense system in what is becoming the Middle East casino. Putin is betting that NATO will not risk in Syria the cost that an air operation similar to what was employed over Libya will impose. Just in case Russia’s determination is disregarded and Putin’s bluff is called, Surface to surface Iskander missiles have been positioned along the Jordanian and Turkish frontiers. They are aimed at a base in Jordan operated by the United States to train rebels and at Patriot Missile sites and other military facilities in Turkey.
Putin is certain that he is holding the winning hand in this very high stakes poker game. An offshore naval task force, the presence of Russian air defense forces, an electronic intelligence center in latakia, and the port facilities at Tardus will guarantee the independence of the enclave. As the supplier of sixty percent of Turkey’s natural gas, Moscow does have leverage that Ankara will not be able to ignore; and Ankara well knows that gas is one of Putin’s diplomatic weapons.
When the Turks and U.S see that there is little chance of removing Al-Assad, they will have no option other than to negotiate a settlement with him; and that would involve Russia as the protector and the mediator. That would establish Russia’s revived standing as a Mediterranean power; and Putin could declare confidently that “Russia is back.” After that, the Russians will be free to focus upon their real interests in the region.
And what is Russia’s real interest? Of course, it is oil and gas and the power that control of them can bring.
By. Felix Imonti for Oilprice.com
More Banks Bearish on Gold as Price Flatlines in “Spinning Top” Pattern
London Gold Market Report
from Adrian Ash
BullionVault
Thurs 7 Mar, 07:55 EST
WHOLESALE PRICES to buy gold held around $1580 per ounce on Thursday morning, trading in a tightening range as Asian and European stock markets crept higher after the Dow stock average recorded another all-time high in New York last night.
The Euro and Sterling both rallied this morning against the Dollar after the ECB and Bank of England both left their key interest rates unchanged.
Silver ticked back below $29.00 per ounce as the broader commodity markets also held flat.
“Gold has flatlined for the last 4 sessions,” says Wednesday night’s note from bullion bank Scotia Mocatta, “trading in very narrow ranges with very little difference between the open and close.
“This is referred to as a spinning top in candlesticks.”
“Gold continues to drift within a $1570-85 range,” agrees Moudi Raad at Swiss refinery and finance group MKS.
“On one side we have long term investor liquidation capping the market…while on the other side regional Asian demand continues to support.”
Still holding his hedge fund’s large position in gold-backed ETF trusts, mining shares and bullion derivatives, John Paulson last month posted an 18% decline in his $900 million Gold Fund reports Bloomberg News, quoting a letter to clients.
The fund has now lost 26% so far in 2013. The gold price is down 5.5%.
“For the first time since 2008,” says a new average forecast of $1600 in 2013 from Japanese bank Nomura, “the investment environment for gold is deteriorating.
“Economic recovery, rising interest rates and still benign Western inflation (for now) will likely leave some investors rethinking their cumulative $240bn investment in gold over the past four years.”
Cutting its 2013 average price forecast today to $1530, Australia’s Macquarie Bank says “Without a compelling new driver, weaker investment demand for gold is likely to continue on reduced tail risks, low inflation, and a lower prospect of more QE.”
The Bank of England today failed to expand its Quantitative Easing program, surprising analysts and leaving its purchases of government gilts at £375 billion.
It also left its key interest rate at 0.5%, four years after first taking it to that new all-time low.
“The steep fall in Sterling seen in recent weeks may have made the BoE more cautious,” reckons James Knightley at ING.
Prices to buy gold for UK savers fell as Sterling rose back above $1.50 on the news, dropping 0.5% to £1051.60 per ounce on BullionVault’s live online market.
“I can’t stop thinking that gold is still a good buy here, even though it is losing momentum,” says one London bullion-bank dealer in a note.
“Loose monetary policies are still on, sovereign debts issue are still on, the debasement of currency is the easiest and only way out.”
Ahead of Friday’s much-anticipated US jobless data, new figures today showed a sharp rise in the number of planned lay-offs, rising to a 3-month high of 55,000 in February.
Gold price chart, no delay | Buy gold online
Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold and silver in Zurich, Switzerland for just 0.5% commission.
(c) BullionVault 2013
Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.
ECB holds key interest rate steady, as expected
By www.CentralBankNews.info The European Central Bank (ECB) held its key refinancing rate steady at 0.75 percent, as expected, along with its other main rates, the rate on its marginal lending facility and the deposit rate at 1.50 percent and zero percent, respectively.
The ECB, which cut is refi rate by 25 basis points last year, said its president would comment on the bank’s decision at a press conference later today.
The euro area’s inflation rate fell to 1.8 percent in February from January’s 2.0 percent. The ECB targets inflation of below, but close to 2 percent.
The Gross Domestic Product of the 17-nations that make up the euro zone contracted by 0.6 percent in the fourth quarter, the fifth quarterly contraction in a row, for annual shrinkage of 0.9 percent.
BOE holds rate steady, maintains asset purchase target
By www.CentralBankNews.info The Bank of England (BOE) held its official Bank Rate paid on commercial bank reserves steady at 0.5 percent, as widely expected, and maintained its target for asset purchases at 375 billion pounds.
The BOE, which has not changed its benchmark interest rate since March 2009, did not make any further comments in its brief statement apart from saying that minutes of today’s meeting would be published on March 20.
The U.K. central bank had been expected by some economists to increase the size of its asset purchase program after three of it’s nine-member Monetary Policy Committee last month voted to raise the bond-buying program by 25 billion pounds.
Britain’s headline inflation rate was steady in January at 2.7 percent for the fourth month in a row, above the BOE’s 2.0 percent inflation target.
The country’s Gross Domestic Product contracted by 0.3 percent in the fourth quarter from the third quarter, for annual growth of 0.3 percent.
Last month the BOE said it expects the UK economy to slowly recover though risks are weighted to the downside due to the challenges facing the euro area.
Malaysia holds rate, sees modestly higher inflation
By www.CentralBankNews.info Malaysia’s central bank held its benchmark Overnight Policy Rate (OPR) steady at 3.0 percent, as expected, and said that even if inflation is expected to rise this year it is expected to remain modest.
Bank Negara Malaysia (BNM), which has held its policy rate steady since June 2011, said domestic investment activity remains robust and there is continued expansion in private consumption.
“Going forward, this trend is expected to continue,” the BNM said, adding that “the external sector is also expected to improve and provide additional support to the economy.”
Inflation in January rose to 1.3 percent from 1.2 percent in December and the central bank said higher global prices on some food and commodities, along with domestic factors, are expected to raise costs and contribute to higher prices.
However, modest global growth is expected to contain global commodity prices, it added.
“While inflation is expected to rise during the year, the expectation is for it to remain modest,” the central bank said.
Malaysia’s Gross Domestic Product rose by 2.9 percent in the fourth quarter from the third for annual growth of 6.4 percent, up from a rate of 5.3 percent in the third quarter. Malaysia’s economy is expected to expand by 4.5-5.5 percent in 2013.
The global economy is still confronted by uncertainties and there are still risks to sustained recovery.
“While global financial markets have broadly improved, markets remain vulnerable to setbacks and changes in sentiment,” the BNM said.
www.CentralBankNews.info
Central Bank News Link List – Mar 7, 2013: (China) interest rate hikes ‘cannot be ruled out’
By www.CentralBankNews.info Here’s today’s Central Bank News link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don’t miss any important news.
Real-Forex Market Update 7.3.2013
Forex Daily review brought to you by REAL FOREX | www.Real-forex.com
EUR-USD
Date: 06/03/2013 Time: 18:28 Price: 1.3000
Strategy: Short / Long
Graph 4 hours
Quote previous review:
The 1.3000 level of support, combining with the lower lip of the parallel descending channel (lower continuous red line), these two, are formatting a support level for the price movement, while the moving average of the Bollinger bands is being used now as resistance level, continuing its way upwards. A basing above the average price level and an opening of the Bollinger bands, will most likely attract the upper lip of the parallel channel to go down, at the first stage. On the other hand, a breaking of the 1.3000 level, is reasonable to take the price towards the next support level at 1.2892.
Current Review today:
The price got to the lower level than the previousrecord level and has dropped again to check the level of support at 1.3000. Breaking of this highlevel, it is reasonable to assume, will take the price towards the support level at1.2892. However, basing above the level of 1.3000 and a breakthrough level of 1.3100, might create a move in orderto fix the downtrend that has started at the level of 1.3711, between one third and two thirds of it by the Fibonacci bar.
You can see the graph here:
GBP-USD
Date: 06/03/2013 Time: 18:39 Price: 1.5053
Strategy: Short / Long
Graph 4 hours
Quote previous review:
The pair is being close to the increasing structure formation, while the level of 1.5219 is being its testing point level. An outbreak of this and a reasonable price structure, will continue towards the level of 1.5314, according to the Fibonacci correction level of 38.2% , and will move downwards (described by the black broken line). On the other hand, a breaking of the price level at 1.4986 and a continuousdownward movement might signal us about preserving the falling prices structure.
Current Review today:
The price was unsuccessful in its attempt to breakthrough the resistance level of 1.5219, when it creates a lower peak level, and now, it seems to be doing its last move towards the low level of 1.4986. This high levelisalmost proven to continue the downtrend. On the other hand, an increasing strength of the price above the level of 1.4986 and the 1.5219 break through level, might create arising pricestructure, when its first goal, is going to be the last level of 1.5314, which is also a Fibonacci correction level of 38.2% on thedownwards move described by the black broken line.
You can see the graph here:
Indonesia holds rate steady, economy on track in Q1
By www.CentralBankNews.info Indonesia’s central bank held its BI rate steady at 5.75 percent, as expected, saying this is consistent with the bank’s inflation target for this year and 2014, and the economy will expand as forecast in the first quarter.
Bank Indonesia (BI), which cut its rate by 25 basis points last year, said first quarter economic growth will reach a forecast 6.2 percent, mainly supported by strong domestic demand based on improved consumer confidence and purchasing power.
However, there are signs of continued moderation in investment activity that began in the fourth quarter, especially in non-construction.
“On the other hand, exports to many major trading partners, particularly China, the United States and India, is expected to improve,” the BI said in a statement.
For 2013, the central bank said it expects growth in the lower end of a 6.3-6.8 percent range.
Indonesia’s headline inflation rate rose to 5.31 percent in February from January’s 4.6 percent with core inflation at 4.29 percent. The central bank targets inflation of 4.5 percent, plus/minus 1 percentage point.
Indonesia’s Gross Domestic Product contracted by 1.45 percent in the fourth quarter from the third for annual growth of 6.1 percent, slightly down from the third quarter’s rate of 6.17 percent.
