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Monday, September 10, 2012

As the Euro tumbles, spaniards look to gold

J. Luis Martín

The unremitting deterioration of the eurozone's sovereign debt landscape continues to fuel uncertainties about the longevity of the euro as a hard currency. Such uncertainties are not only leading to capital flight from the EMU's periphery to the core and destabilizing markets worldwide, but they are also beginning to frighten southern European savers into seeking refuge outside their 10-year-old currency.

Such is the case in my home country of Spain - the latest tumbling economy to threaten the euro's survival. As the crisis deepens, there is still a window of opportunity for Spaniards to turn to gold as a means to protect their wealth against the risks of increased foreign exchange volatility, forced re-denomination, or even a total currency collapse.

Spain: Too Big To Ignore

While the general consensus among analysts is that the common currency may withstand (and even desire) Greece's exit, Spain is both "too big to fail" and "too big to rescue."

Indeed, as the crisis finally hits Spain, the eurozone's fourth-largest economy, the country has witnessed the flight of €315bn ($397bn) worth of foreign capital in the past year - the equivalent of 22% of its GDP. Of this amount, €220bn ($274bn) vanished during the first six months of 2012. And in just-released numbers from the European Central Bank (ECB), private sector deposits at Spanish banks fell almost 5% in July (the biggest drop since the ECB began to record this data in 1997).

Brussels' inability to stop Spain (and potentially Italy) from spinning into an uncontrollable solvency crisis has spurred fear over a potential disintegration of the euro system.

Others warn, however, that signs of economic stagnation spreading to the core, along with rising political and social tensions across the continent, may be conducive to an equally wealth-destructing picture: the desperate adoption of expansionary monetary and debt mutualization policies long prescribed by officials in Brussels to "save the euro." In fact, ECB President Mario Draghi promised as much in his latest remarks on Thursday. 
Naturally, either of these scenarios will severely punish creditors and savers in euro-denominated assets.

From Cement Bricks to Gold Bars?

For years, Spaniards have trusted home ownership as a safe and profitable savings channel. Up until the late 1990s, "investing in bricks," as the Spanish call it, was a relatively easy and affordable wealth accumulation strategy (according to the government, 83% of Spaniards are homeowners). The coupling of Spaniards' blind faith in ever-rising real estate values with the artificially low interest rates that came with the euro - as well as a financial system plagued by politicians recklessly managing savings banks - conjured up a massive housing bubble.

Since Spain's entry into the euro system, the country has experienced such economic myopia that in the spring of 2007, Pedro Solbes, the then Socialist government's Minister of Finance, revealed the sale of a large portion of the country's gold. At the time, Minister Solbes argued that the precious metal "was no longer profitable," and that the proceeds from the sale would be "reinvested in sounder assets," such as Spanish sovereign debt. That year, Spain sold 157.8 tons of gold (32% of the national reserves) at an average $630 an ounce. We lost over $5bn of appreciation in the intervening years.

As the real estate bubble burst, and as Spaniards watched with astonishment the dire economic developments in Ireland, Portugal, and Greece, the prospect that an era of prosperity (albeit artificial) had come to a sudden end began to finally sink in.

This past May was a turning point for Spain, when BFA-Bankia, the country's fourth-largest bank, became de facto nationalized. Foreign capital flight spiked (€41.3bn left the country in May, and €56.6bn in June) and small depositors noticeably started to look for ways to protect their savings.

Following Bankia's debacle, Spain's Budget Minister Cristóbal Montoro was quick to address the media in an attempt to calm the public. Montoro said that a "corralito,"or bank holiday, was a technical impossibility in Spain due to the country's membership in the euro system, and that all bank deposits were safe. The damage, however, had already been done - evidence of a failed financial system demanding billions of foreign aid to fill its holes and the possibility of Spain following Greece's path to economic meltdown had become too evident to conceal.

The sale of safe deposit boxes has since surged and mainstream media have begun to run stories on how to legally open accounts in foreign currencies abroad to protect savings.

Furthermore, since the ongoing "financial sector restructuring" is far from over and an estimated 2 million homes remain empty, the value of the real estate Spaniards possess continues to decline.

So, Spaniards are now seeing the value of their cherished "bricks" plummeting, the government raising taxes, and the future of their paper money - and even its mere existence - uncertain.

Under the current environment, gold may turn out to be the Spaniards' best hedge.

The Gold Market in Spain

According to Marion Mueller, vice president of the Spanish Precious Metals Association (Asociación Española de Metales Preciosos, or AEMP) and founder ofOrno y Finanzas, an online publication which specializes in gold and finance, Spaniards' interest in gold is experiencing a noticeable boost.

"Up until very recently, to speak about gold as an investment or as wealth protection insurance was grin-provoking. That is changing," says Mueller.

She notes that since 2010, when the Spanish economic downturn became inescapable, a growing tendency to invest in physical gold developed among Spanish investors, brokers, and financial institutions. Demand for physical gold from the general public is also growing, but Spaniards are not yet as educated about the market as northern Europeans. "There is still confusion and lack of information about gold as a way to protect one's purchasing power," she explains, "and our goal at the AEMP and at Oro y Finanzas is precisely to try to inform people about gold." 

Cash-for-gold sign walkers in Madrid (Photo: Luis Hernando)

Evidence of the growing demand for investment gold is also found in the rapid proliferation of cash-for-gold shops in Spain. This particular market responds to a different side of the crisis, as it caters to people who need to sell their jewelry to pay debts or make ends meet. However, in terms of its relationship with the upswing in bullion demand, scrap gold is not going back to the jewelry sector. Instead, Mueller explains, "100% of it is going back to feed the international gold bullion industry in places such as England, Switzerland, and Belgium."

As per a European directive, gold bullion in Spain enjoys a favorable tax treatment, as the investment-grade metal is exempt from Value Added Tax (VAT). In addition, in Spain, there are no special taxes or levies specific to the resale of gold bullion. There is thus great potential for gold (and silver) to become a money substitute among the population.

According to Mueller, Spain's increasing demand for physical gold has led to the emergence of specialized dealers in Spain. Not only are Spanish precious metals distributors sprouting, but well-known French and German dealers are beginning to offer bullion in Spain.

While access to physical gold in Spain is becoming easier and more widespread, "things might change," warns Mueller.

"The rise in gold prices is a reflection not of the crisis, but rather of the end of a monetary cycle," Mueller emphasizes. In her view, the current debacle in Europe may turn governments to intervene in the gold market. "We live in a period of maximum government control... you can rest assured that, if [the government] decides to intervene, it will."

Owning physical gold now, Mueller says, "remains the best protection against wealth confiscation."

Because the next several months may prove critical to the future of the euro system, the ECB has charted a course for devaluation. This may continue to buy the eurozone additional time before its endgame finally plays out, but any number of factors could still split the common currency. Either way, this is a critical window of opportunity for Spaniards to learn how to safeguard their wealth.

Luis Martin

The Coming World Leader - Chuck Missler

Italy recession deeper than first estimated

The Italian economy shrank by 0.8% between April and June, slightly more than previously estimated, official figures have shown.

A bigger drop in investment and consumer spending accounted for the downward revision from the 0.7% contraction estimated last month.

Meanwhile, the French central bank has said it expects the country's economy to contract in the third quarter.

This is despite figures showing a surprise rise in industrial production.'Nasty surprise'

Italy's economy shrank by 2.6% compared with a year earlier, compared with the previous estimate of 2.5%, the national statistics institute Istat said.

Compared with the previous quarter, domestic consumption fell by 0.7%, while investment dropped by 2.3%.

"It's worse than we expected and the size of the contraction in consumer spending is a particularly nasty surprise," said Unicredit economist Loredana Federico.

The Italian economy - the eurozone's third largest - has contracted for the past four quarters as the government has implemented a series of drastic spending cuts designed to cut its debt levels, which currently stand at more than the country's annual economic output.

Another eurozone heavyweight economy, France, is also set for contraction, following three consecutive quarters of zero growth.

On Monday, the country's central bank confirmed it expected the economy to shrink by 0.1% in the current quarter.

This is despite figures from the national statistics institute, Insee, showing that industrial production rose by a higher-than-expected 0.2% in July compared with the previous month.

On Sunday, French President Francois Hollande said he expected economic growth in France to be "barely above zero" in 2012, which chimes with the latest forecast from the OECD of 0.1% growth this year.

The body has forecast a contraction in the Italian economy of 2.4% this year.


Yangtze River Turns Red and Turns Up a Mystery

For a river known as the "golden watercourse," red is a strange color to see.

Yet that's the shade turning up in the Yangtze River and officials have no idea why.

The red began appearing in the Yangtze, the longest and largest river in China and the third longest river in the world, yesterday near the city of Chongquing, where the Yangtze connects to the Jialin River.

The Yangtze, called "golden" because of the heavy rainfall it receives year-round, runs throughChongqing, Southwest China's largest industrial and commercial center, also known as the "mountain city" because of the hills and peaks upon which its many buildings and factories stand.

The red color stopped some residents in their tracks. They put water from the river in bottles to save it. Fishermen and other workers who rely on the river for income kept going about their business,according to the UK's Daily Mail.

While the river's red coloring was most pronounced near Chongqing it was also reported at several other points.

Officials are reportedly investigating the cause.


How the feds are tracking us

Evidence continues to mount that the U.S. government is keen on tracking its citizens.

The FBI has started rolling out its $1 billion biometric Next Generation Identification (NGI) system, a nationwide database of mug shots, iris scans, DNA samples, voice recordings, palm prints, and other biometrics collected from more than 100 million Americans and intended to help identify and catch criminals.

The FBI has been piloting the program with several states and by the time it’s fully deployed in 2014 will have at its fingertips a facial recognition database that includes at least 12 million photos of people’s faces.

Privacy watchdog groups have some concerns. According to the Electronic Frontier Foundation, the NGI system will allow photo submissions independent of arrests.

“This is a problem because the FBI has stated it wants to use its facial recognition system to ‘identify subjects in public datasets’ and ‘conduct automated surveillance at lookout locations,’” the EFF writes in a blog post. “This suggests the FBI wants to be able to search and identify people in photos of crowds and in pictures posted on social media sites—even if the people in those photos haven’t been arrested for or even suspected of a crime. The FBI may also want to incorporate those crowd or social media photos into its face recognition database.”

When an EFF representative testified at a U.S. Senate Subcommittee hearing on facial recognition in July, the organization said Americans should be concerned about the government’s plans to bolster its facial recognition capabilities because it “allows for covert, remote, and mass capture and identification of images, and the photos that may end up in a database include not just a person’s face but also what she is wearing, what she might be carrying, and who she is associated with.”

And there’s much more.

TrapWire is 'person of interest' technology
Last month Wikileaks released a huge cache of leaked e-mail from private intelligence firm Stratfor regarding surveillance software called TrapWire. Used by both private industry and the U.S. government and its allies, TrapWire lets both public and private sector users contribute to counter-terrorism and anti-crime efforts.

“The software uses algorithms and data from a variety of surveillance sources -- including CCTV and human-input from spotted 'suspicious' behavior -- to, in essence, 'predict' potentially criminal activity,” explained ZDNet’s Zach Whittaker in a fantastic FAQ on the subject.

According to the leaks, TrapWire is in use in public places in Washington D.C., New York, Los Angeles, Seattle, London, some Canadian cities, and in privately owned Las Vegas casinos.

Apple IDs pilfered from an FBI laptop
A hacker collective known as AntiSec this week published more than a million UDIDs—Unique Device Identifier numbers associated with Apple mobile devices—that the group claims it stole from the laptop of an FBI agent. The information was acquired and released as a political statement by the hackers.

“[Expletive] FBI IS USING YOUR DEVICE INFO FOR A TRACKING PEOPLE PROJECT OR SOME [expletive],” reads AntiSec’s announcement on Pastebin.

The details stolen from the FBI laptop included more personal information as well—such as full names, cell phone numbers, addresses, and zip codes, but AntiSec did not release that data.

The FBI says there’s no evidence one of its laptops was compromised and AntiSec has followed up with cryptic evidence that it says validate its claims.

In any case, the UDIDs are legit and many people who have looked up the alphanumeric string of characters associated with their Apple devices are finding them on AntiSec’s list. So if what AntiSec says is true, the big question is why does the FBI have people’s device identification and personal info?

Other Evidence
Legislation pending in the U.S. Congress—CISPA in the House and SECURE IT in the Senate—aims to protect the U.S. from cyberterrorism but would actually make it easier for the government to spy on people. The measures would allow companies to share users’ private data with the government without a warrant or any oversight.

And in January the Supreme Court ruled that police and the FBI violated the Fourth Amendment when they secretly attached a GPS tracker to a man’s car and tracked him for 28 days. However, in preliminary proceedings surrounding the man’s retrial,his attorney says prosecutors have records that indicate the locations of his cell phone for five months.

The American Civil Liberties Union takes issue with this and says tracking someone’s cell phone without a warrant is also unconstitutional, yet hundreds of law enforcement entities do it all the time.

The ACLU says the Geolocation Privacy and Surveillance (GPS) Act currently in Congress would require law enforcement agents to obtain a warrant before accessing a person’s location information. To support the legislation, the ACLU has a tool on its website that will auto-generate a message to your legislators urging them to vote for the bill.


China Now Using a Cruise Ship to Haul Troops and Tanks

The media freaked out about China’s crappy aircraft carrier and hyperventilated over the J-20 stealth fighter. But China’s newest addition to its military is more subtle, and stylish. It’s a 36,000-ton pleasure boat capable of disgorging thousands of troops and hundreds of vehicles held inside its belly.

That would be the Bahai Sea Green Pearl, a 36,000-ton ferry and cruise ship commissioned in August at Yantai Port in China’s northeastern Shandong Province. At heart a vessel for pleasure and civilian transport, the ship is intended to normally ferry cars and passengers across the Yellow Sea. But when needed by the People’s Liberation Army, the Green Pearl can double as a troop carrier. During its launching ceremony and demonstration on Aug. 8, PLA troops could be seen loading dozens of tanks, artillery pieces and armored vehicles on board.

Photos from Chinese state television posted to the China Defense Blog show some of the action, including what looks like fully loaded soldiers running through a corridor. Tanks and artillery pieces are also seen inside one of the ship’s three vehicle compartments. How they got there: via the ship’s roll-on/roll-off (or ro-ro) ramp on its stern.

China also has three more of the vessels under construction, which Zhang Wei, chief of the PLA’s Military Transportation Department under the PLA General Logistics Department, said is a “new leap in our military use of civilian vessels to improve the strategic projection.” The Green Pearl reportedly has room for more than 2,000 people and 300 cars. It’s even got a helicopter pad.

It’s also got luxury. When the ship isn’t ferrying civilians, China’s troops could take in the pleasure of tall windows for observing “the beautiful scenery of the sea,” reported the Yantai Daily Media Group. Not only that, but rooms — which range from first to third class — are equipped with televisions, cellphone signal amplifiers and wireless internet access. And if the troops get bored in their rooms, there’s always mingling in one of two staterooms and a cafe. There are even rooms set aside for reading and chess. And no cruise ship would be complete without some collective entertainment at a multi-purpose auditorium. If troops are feeling cooped up, they can always go above deck for excursions in the sun.

Armored vehicles from China’s People’s Liberation Army prepare to board the Green Pearl in August 2012. Photo: CCTV via China Defense Blog

However, the Green Pearl is by no means a true amphibious assault ship. There’s no indication of any landing craft, or any ability to launch them. The ship needs a proper dock to gets its heavier equipment onto land. That mostly rules out launching an invasion of troops while sitting (relatively) safely off-shore. Instead, the ship is more accurately called something like an “amphibious augmentation” platform. It can base a helicopter, and it can follow up an amphibious assault with more troops — after a landing site is secure.

It’s also not a new concept. Using civilian ships for double duty is “entirely in keeping with Chinese practices reaching back for centuries,” Jim Holmes, an associate professor of strategy at the Navy War College, tells Danger Room. For Western navies, that practice dated up until the 18th century. And today, the U.S. uses mixed military and commercial ships to refuel at sea, Holmes says.

China has also been building up its fleet of amphibious assault ships, which could be at the front line of an invasion of Taiwan, say. That is, if China could conceivably launch one. But probably not. Since 2008, China has launched four Yuzhao-class, or Type 081 amphibious assault ships. The lead ship was deployed to fight pirates near Somalia. China is also reportedly working on a newer, bigger amphibious ship called the Type 081.

What’s more likely is using the Green Pearl for “soft power” operations distant from China’s shores. “Beijing seems rather comfortable with the situation in the Taiwan Strait and is clearly looking beyond Taiwan, as it has been for some time now,” Holmes says. “Such a vessel could be a workhorse for any mission involving amphibious operations, meaning humanitarian relief.”

That could mean delivering aid, transporting doctors and engineers to a country beset by an emergency. And there’s always port calls. That is, making stops in countries friendly to China while carrying a contingent of visiting officers and diplomats on board.

And not that China’s new cruise ships of war have any chance of matching the United States’ own massive fleet of commercial transport ships available for military duties. The U.S. has 60 privately owned commercial ships available to be called upon by the Navy under the Department of Transportation’s Maritime Security Program. Most of those are heavy-duty container vessels, but 17 of them are ro-ro ships.

According to the DoT’s Maritime Administration (.pdf), the Navy has relied on them to lift troops during the Persian Gulf War, and into Bosnia, Somalia and Kosovo, and has had to rely on those commercial ships even more in recent years to fight the war in Iraq. The United Kingdom famously hauled troops during the Falklands War with the Queen Elizabeth 2.

In the meantime, let the PLA take in the scenic views and relax to the soothing hum of the Green Pearl‘s engines. Unlike the U.S. and British cruise and ro-ro ships of war, there’s not a huge chance of China’s new pleasureboat invading anyone any time soon.


Govt. launches $1 billion face recognition project

"FACE recognition is 'now'," declared Alessandro Acquisti of Carnegie Mellon University in Pittsburgh in a testimony before the US Senate in July.

It certainly seems that way. As part of an update to the national fingerprint database, the FBI has begun rolling out facial recognition to identify criminals.

It will form part of the bureau's long-awaited, $1 billion Next Generation Identification (NGI) programme, which will also add biometrics such as iris scans, DNA analysis and voice identification to the toolkit. A handful of states began uploading their photos as part of a pilot programme this February and it is expected to be rolled out nationwide by 2014. In addition to scanning mugshots for a match, FBI officials have indicated that they are keen to track a suspect by picking out their face in a crowd.

Another application would be the reverse: images of a person of interest from security cameras or public photos uploaded onto the internet could be compared against a national repository of images held by the FBI. An algorithm would perform an automatic search and return a list of potential hits for an officer to sort through and use as possible leads for an investigation.

Ideally, such technological advancements will allow law enforcement to identify criminals more accurately and lead to quicker arrests. But privacy advocates are worried by the broad scope of the FBI's plans. They are concerned that people with no criminal record who are caught on camera alongside a person of interest could end up in a federal database, or be subject to unwarranted surveillance.

The FBI's Jerome Pender told the Senate in July that the searchable photo database used in the pilot studies only includes mugshots of known criminals. But it's unclear from the NGI's privacy statement whether that will remain the case once the entire system is up and running or if civilian photos might be added, says attorney Jennifer Lynch of the Electronic Frontier Foundation. The FBI was unable to answer New Scientist's questions before the magazine went to press.

The FBI hasn't shared details of the algorithms it is using, but its technology could be very accurate if applied to photographs taken in controlled situations such as passport photos or police shots.

Tests in 2010 showed that the best algorithms can pick someone out in a pool of 1.6 million mugshots 92 per cent of the time. It's possible to match a mugshot to a photo of a person who isn't looking at the camera too. Algorithms such as one developed by Marios Savvides's lab at Carnegie Mellon can analyse features of a front and side view set of mugshots, create a 3D model of the face, rotate it as much as 70 degrees to match the angle of the face in the photo, and then match the new 2D image with a fairly high degree of accuracy. The most difficult faces to match are those in low light. Merging photos from visible and infrared spectra can sharpen these images, but infrared cameras are still very expensive.

Of course, it is easier to match up posed images and the FBI has already partnered with issuers of state drivers' licences for photo comparison. Jay Stanley of the American Civil Liberties Union urges caution: "Once you start plugging this into the FBI database, it becomes tantamount to a national photographic database."

New Scientist

The Signs of Thy Coming & The End of the Age

Earthquakes hit Kuril Islands

On Sunday, two earthquakes hit Kuril Islands in the Russian Far East. The first quake of 5.6 point magnitude on the Richter scale was recorded near the island of Paramushir, says seismological station in the city of Severo-Kurilsk. Glass-ware ringed in cupboards for ten seconds, and ceiling lamps rocked.

The second earthquake with a magnitude of 5.3 points in Richter scale took place in the deep-water Kurilo-Kamchatka trench. The epicenter was located 270 kilometers east of the city of Kurilsk on the island of Iturup.

There was no tsunami warning.

The Voice os Russia

Israel could send Iran back to Stone Age

British newspaper Sunday Times has exposed one of the "surprises" the Israel Defense Forces has in store in case of a military strike in Iran.

According to the Sunday morning report, the Jewish state could cripple the Islamic Republic's power grid with electromagnetic pulses as part of a concerted attack to halt Iran's military nuclear program, which could "send Iran back to the Stone Age."
The report, by Uzi Mahnaimi, claims that the possible use of such a weapon has been raised in several quarters as a debate rages among Israel’s politicians about whether a swift strike should be launched against Iran's nuclear facilities.

Bill Gertz, a veteran American defense specialist, is quoted as saying that US intelligence agencies have reported “growing concerns that Israel will conduct a strike on Iran using a high-altitude nuclear burst aimed at disrupting all electronics in the country."

The technology behind EMP, which is regarded as non-lethal, has been known for decades, the Sunday Times reports.

An electromagnetic pulse is an intense burst of gamma energy that reacts with the Earth’s magnetic field to produce a powerful current. This sets off a shockwave with the potential to “fry” electronic devices and circuits.

Although the potential of EMP was first noted as a side effect of high-altitude nuclear tests in the 1950s and 1960s, the report says, a pulse can also be produced by non-nuclear means such as a microwave generator.

Such a pulse could knock out the power grid and communications for transport, financial and emergency services.

The newspaper quotes Uzi Rubin, who helped develop Israel’s anti-missile defense shield, as saying that “the use of a nuclear device even for non-lethal use such as EMP is out of the question. There are methods to operate EMP from the ground.”


Ahmadinejad to address UN on Yom Kippur

WASHINGTON – A PR duel will be in two and a half weeks during the United Nations General Assembly discussions in New York between Prime Minister Benjamin Netanyahu and Iranian President Mahmoud Ahmadinejad.

The Iranian leader is expected to address the GA on the Jewish holy day of Yom Kippur, while Netanyahu will speak the next day after arriving in the United States.

According to diplomatic sources in New York, the Iranian issue will be at the top of the agenda of the GA's speakers, although there will be no votes during the 10-day assembly.

All Western leaders – including German Chancellor Angela Merkel, British Prime Minister David Cameron and French President Francois Holland – are expected to speak. Their presence in New York will pave the way for discussions on the Iranian issue.

US President Barack Obama's address will open the GA on September 25, and the Iranian president's address is expected the next day.

Obama will not wait in New York to meet with Netanyahu, especially in light of his pressingelection campaign. The window of opportunities for a meeting between the American and Israeli leaders will thus open on September 28 in Washington.

In his address, Obama will be expected to demonstrate his leadership skills on the Iranian and Syrian issues, which will be at the focus of Western leaders' discussions.


IMF chief Lagarde highlights perils of US fiscal cliff

Speaking at the Asia-Pacific Economic Co-operation Summit in Vladivostok, Russia, the head of the International Monetary Fund said the US tax increases and spending cuts that come into effect in the new year, were one of the largest risks to the global economy.

She also named the eurozone crisis and medium-term public financing, as the two other greatest risk factors.

Her comments came as jitters grew over China, the global engine of growth, as it said its factories ran last month at their slowest rate for three years. It is the latest sign of a deepening slowdown in the world’s second-largest economy.

Data published yesterday by China’s National Bureau of Statistics showed that industrial output increased 8.9pc in August from a year earlier. Compared with a 9.2pc gain in July, August’s rise undershot market forecasts for a 9.1pc rise and is the weakest since May 2009.

China’s factory sector has been hit by slowing new orders. Surveys of purchasing managers earlier this month showed heightened concerns about

new business, suggesting that manufacturers will run inventories down further before they can begin to turn production up again.

The data could spur speculation that China will further adjust policies soon to lift an economy mired in its softest period of growth in three years.

China’s economy expanded 7.6pc in the second quarter, the worst performance in three years and the sixth straight quarter of slower growth.

Urban fixed asset investments – a key measure of government spending on infrastructure – rose 20.2pc in the first eight months of 2012, compared with the same period the year before, the statistics bureau also said yesterday.

Retail sales, China’s main gauge of consumer spending, were 13.2pc higher in August year-on-year, slightly better than the 13.1pc increase recorded in July.

Chinese authorities have taken steps this year to boost growth by cutting interest rates twice in quick succession and slashing the amount of funds banks must keep in reserve to boost lending.

But a separate report yesterday showed that inflation accelerated, with consumer prices rising at a faster pace for the first time in five months, increasing to 2pc in August from July’s 30-month low of 1.8pc.

Those figures suggest that room to ease monetary policy to shore up growth may be narrowing. Dong Xian’an, economist with Peking First Advisory, said: “Inflation is coming back quickly. Together with rising home prices, it will limit the scope for further policy relaxation.”

President Hu Jintao reiterated on Saturday that China will work to balance “steady and robust growth, adjusting economic structure and managing inflation expectations.” He pledged to boost domestic demand and ensure “basic price stability”.

The Telegraph

Vietnam hit by new ‘highly-toxic’ bird flu

HANOI: A new highly-toxic strain of the potentially deadly bird flu virus has appeared in Vietnam and is spreading fast, according to state media reports.

The strain appeared to be a mutation of the H5N1 virus which swept through the country’s poultry flocks last year, forcing mass culls of birds in affected areas, according to agriculture officials.

The new virus “is quickly spreading and this is the big concern of the government”, Deputy Minister of Agriculture and Rural Development Diep Kinh Tan said, according to a Thursday report in the VietnamNet online newspaper.

Experts cited in the report said the new virus appeared in July and had spread through Vietnam’s northern and central regions in August.

Outbreaks have been detected in six provinces so far and some 180,000 birds have been culled, the Animal Health department said.

The Central Veterinary Diagnosis Centre said the virus appeared similar to the standard strains of bird flu but was more toxic.The centre will test how much protection existing vaccines for humans offer, the report said.

Some experts suggested that the new strain resulted from widespread smuggling of poultry from China into the northern parts of Vietnam.

According to the World Health Organisation, Vietnam has recorded one of the highest numbers of fatalities from bird flu in southeast Asia, with at least 59 deaths since 2003.

The avian influenza virus has killed more than 330 people around the world, and scientists fear it could mutate into a form readily transmissible between humans, with the potential to cause millions of deaths. — AFP

Read more: http://www.theborneopost.com/2012/09/09/vietnam-hit-by-new-highly-toxic-bird-flu/#ixzz264TtWf42