Global Turmoil on Coast to Coast

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Netanyahu Will Represent ’4000 Year’ Jewish Rights at the UN

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At the last weekly Cabinet meeting before his scheduled trip to meet with President Barak Obama and address the United Nations, Prime Minister Benjamin Netanyahu characterized his General Assembly speech as “important … to represent both the State of Israel and the truth.”

He recalled the multiple offers to the Palestinian Authority to negotiate towards peace, while the PA remained “unwilling to come and negotiate”…re iterating that “peace will be achieved only through direct negotiations.”

“Their attempt to be accepted as a member of the UN will fail,” declared the PM, noting that the United States will veto the attempt in the Security Council, and noted that Israel was “coordinating our efforts with those of the US and with other important countries, in Europe and beyond.”

Netanyahu said “we are not foreigners in this country, that we have rights in this country that go ‘only’ 4,000 years.” He acknowledged the upheavals in the Middle East saying “we do not know what will happen from day to day and how things will go,” and stressed Israel’s continuing readiness to “return to the table in order to achieve peace and security both for us and our neighbors.”

In Geneva, announcement has been made of Israel’s enhanced status at CERN, the European Organization for Nuclear Research, where the Jewish State has gained Associate Membership, a preliminary step towards full membership. Israel has been an Observer at the CERN Council since 1991.

CERN Director General Rolf Heuer said “I am very pleased that CERN’s relationship with Israel is moving to a higher level.” The status change symbolizes the increasing recognition of the Israeli contributions, both scientific and technological to CERN over the years. “The Israeli scientific community is looking forward to the continuation of this joint venture,” said Eliezer Rabinovici, Professor and Director of the Institute for Advanced Study at the Hebrew University in Jerusalem and Israel’s scientific observer to Council. He noted that “Israel has also supported Palestinian students at CERN, notably sending mixed Israeli-Palestinian contingents to CERN’s summer student program.”

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China to Sell U.S. Debt ASAP

China will sell its U.S. government debt as soon as it can safely do so, top adviser to the Chinese central bank Li Daokui said at the World Economic Forum in Dalian.

“Once the U.S. treasury market stabilizes we can liquidate more of our holdings of treasuries,” Li said, according to an article by the Telegraph’s international business editor, Ambrose Evans-Pritchard, published on September 15.

“To my knowledge, this is the first time that a top adviser to China’s central bank has uttered the word ‘liquidate,’” writes Evans-Pritchard.

China is believed to own $2.2 trillion of U.S. debt.

“The Chinese are clearly vexed with Washington, viewing the Fed’s QE [quantitative easing] as a stealth default on U.S. debt,” writes Evans-Pritchard. “Mr. Li came close to calling America a basket case, saying the picture is far worse than when Ronald Reagan and Margaret Thatcher took over in the early 1980s.”

China is still keeping its renminbi artificially cheap, which means it must keep selling yuan. So it must keep buying foreign assets or debt. Li said China “would like to buy stakes in Boeing, Intel and Apple, and maybe we should invest in these types of companies in a proactive way.”

“It is bad for bonds—or will be,” writes Evans-Pritchard. “The money will go into strategic land purchases all over the world, until the backlash erupts in earnest. It will go into equities, until Capitol Hill has a heart attack. It will go anywhere but debt.”

And when the Chinese stop buying America’s debt, it will mean the end of cheap credit for the already cash-strapped U.S. government. •
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“Everyone, everywhere, is buying gold”

Gold, a safe haven just like the Swiss franc, is breaking records and should continue on its upwards spiral, expert Frédéric Panizzutti tells swissinfo.ch.

Panizzutti, vice president at Geneva-based gold trading group MKS Finance, says gold’s advantage is that it can be exchanged all over the world and against all currencies.

But some are convinced that the gold bubble will burst. What is true is that gold has been hovering above the $1,800 (SFr1,421) per ounce (around 31 grams) threshold in recent days, reaching a record $1,900 per ounce for a time on Tuesday – and price of the metal has risen by almost a third since the beginning of the year.

swissinfo.ch: Why has gold become a safe investment?

Frédéric Panizzutti: All the securities that you can buy today – bonds, shares, currencies – have a credit risk. Gold is one of the only monetary securities which doesn’t have a debtor-creditor relation. The only risk is a price and fluctuation one.

Furthermore, gold can be exchanged pretty much all over the world quite easily and it can be exchanged against all types of currencies. This is what fundamentally makes it a safe investment.

swissinfo.ch: Gold is breaking records over price. Would you say there is a bubble?

F.P.: The issue today is not whether gold is worth its value or not. It is worth its value because people are buying it at that price. The fundamental problem is the lack of low-risk investments on the world markets.

The currencies – the dollar, euro and the stock markets are the problems. Bonds can also become a problem with the current and future lowering of credit ratings. Governments and individuals are therefore interested in gold to reduce risk and to diversify. They are not buying gold for gold’s sake, but because there isn’t anything else.

swissinfo.ch: What makes up the demand for gold?

F.P.: One can divide purchases into the groups: jewellery, speculation and savings, which can be either a security or a safe investment. The largest part is clearly safe investment, which in turn is largely make up of physical gold [coins, bullion].

This is the only way of avoiding credit risk. If you buy institutional gold [as, for example, an exchange-traded fund, futures or shares in a gold company] you will always have a risk.

swissinfo.ch: Who is buying gold?

F.P.: Everyone – and that’s what’s really changed over the past years in the market. Ten years ago, the dealers in gold were specialists, jewellers, traders and certain investors. Today gold has become much more popular. Everyone, everywhere, is buying gold.

swissinfo.ch: Where and how do you buy it?

F.P.: For physical gold the situation varies from one country to another. Big consumers like India, the Middle East or Asia are well organised and gaining access to gold is very easy. There are gold sellers at every street corner, who buy and sell.

In Europe it used to be more difficult to access physical gold. But the big demand these past three years has led to more sales outlets and to gold becoming more accessible, with little specialist stalls but also more and more banks selling physical gold at their counters. The system has adapted to demand.

swissinfo.ch: Since when has gold been undergoing this boom?

F.P.: At the end of the 1980s and in the 1990s the trend was to sell gold and certain central banks were liquidating their gold. The criteria for selling were mostly storage costs, lack of performance, financial stability and the view that gold was no longer a necessary reserve.

But the market panicked after the September 11, 2001 attacks and this issued in a change. People went back to gold and central banks slowly stopped selling it. The successive crises, including this last one, have reinforced this feeling that gold is a risk insurance against bear markets.

Added to this is the fact that today, as their balance sheets show, central banks are also buying gold… Many central banks have a large part of their reserves in dollars [currency, bonds, shares]. One of the easiest ways of reducing a small part of this dependency it to buy gold and sell dollars. There are other currencies, but the choice of currencies in which most of the market can have confidence is rather limited.

Swiss Info
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Holy Land clerics bless Palestinian UN bid

Priests in the Holy Land used their sermons on Sunday to give their blessing to the Palestinians' bid for United Nations membership.

The retired Latin Patriarch of Jerusalem, Michel Sabbah, the first Palestinian to hold the post since the Crusades, was to preach in the Roman Catholic church in the northern West Bank city of Nablus.

A joint statement by Catholic, Orthodox, Anglican and Lutheran priests pledged their "support for the diplomatic efforts being deployed to win international recognition for the State of Palestine... on the June 1967 borders with Jerusalem as our capital." The priests went further than their bishops, who in a statement this week confined themselves to a call for intensified prayer and diplomatic efforts ahead of the Palestinian membership request, to be sent to the UN Security Council on Friday.

"Palestinians and Israelis should exercise restraint, whatever the outcome of the vote at the United Nations," the bishops said.

"We call upon decision-makers and people of good will to do their utmost to achieve the long-awaited justice, peace and reconciliation between Israelis and Palestinians." Palestinian president Mahmud Abbas and Israeli Prime Minister Benjamin Netanyahu look set for a UN showdown next week, with Abbas planning to push for membership for a Palestinian state and Netanyahu arguing against it.

"Despite the pressures that we face, Palestine goes to the UN on the 23rd of this month to seek admission as a full member," Abbas told Egyptian television on Wednesday.
Daily News

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Deadly earthquake rocks India, Tibet and Nepal

The epicentre of the earthquake was in India's mountainous Sikkim state, where at least 18 people were killed.

Rain and landslides are hindering search and rescue operations there and officials in Sikkim fear that the toll could rise further.

Several earthquakes hit the region this year, but none caused major damage.

At least five people were killed in Nepal, police there say, and at least seven died in Tibet, China's official Xinhua news agency reported. At least six other people were killed in other Indian states.

Officials in all regions say the death toll is likely to rise as rescuers reach the remote mountainous areas struck by the quake.

Power cuts

The quake struck the mountainous north-eastern Indian state of Sikkim at 18:10 (12:40 GMT) on Sunday, according to the US Geological Survey, and was followed by two strong aftershocks.

Telephone lines were knocked out across the state, while power cuts plunged Gangtok, the capital, into darkness just seconds after the quake hit.

Hundreds of people there spent the night on the streets after buildings developed cracks, reports say.

Tremors were felt in the north-eastern Indian states of Assam, Meghalaya, and Tripura. They were also felt in regions of India: West Bengal, Bihar, Jharkhand, Uttar Pradesh, Rajasthan, Chandigarh and Delhi. Bangladesh and Bhutan also felt the quake.

One person was killed during a stampede as people panicked in a town in the eastern state of Bihar, and other deaths were reported near Darjeeling, in West Bengal.

Landslides have blocked the two main highways linking Sikkim with the rest of the country making it difficult for the rescue workers to reach the area, reports say.

Buildings evacuated

Just over the border in Tibet's Yadong County, just 40km (miles) from Sikkim, the earthquake caused hundreds of landslides disrupting traffic, telecommunications, power and water supplies.

Dozens of people were injured due to building collapses and falling debris

Chinese authorities said relief supplies were on the way to the area.

In Kathmandu, 270km (170 miles) west of the quake's epicentre, buildings were evacuated and traffic came to a standstill.

Three people died when a wall of the British Embassy collapsed. Those dead included a motorcyclist and his eight-year-old child who were struck as they rode past, police said.

Two others died in Dharan in Sunsari district, including a five-year-old child, according to the the Himalayan Times newspaper.

Lawmakers in parliament hurried out of the building shouting when the quake struck in the middle of a debate on the budget, witnesses said.

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Europe hits back after US debt jibe

"Taken as a whole, it is probably better than other major advanced economies," ECB chief Jean-Claude Trichet said at the close of talks in Poland among European Union finance ministers marred on Friday by a spat with guest US Treasury Secretary Timothy Geithner.

As unions prepared a mass protest against European austerity measures, Trichet described the eurozone's medium-term prospects as "quite encouraging compared with other major advanced economies" and also tipped a combined year-end, annual deficit level of 4.5 percent of GDP.

Hosts Poland, the current EU chair, took the decision to invite Mr Geithner to the talks on Friday, in a sign of spiralling global concerns - and EU ministers said the American was there to pass on lessons from stateside.

"Governments and central banks need to take out the catastrophic risk to markets," Geithner said on the sidelines of the talks, although Washington later denied he was writing "prescriptions" for Europe.

Mr Geithner and German Finance Minister Wolfgang Schaeuble clashed sharply on Friday over the way forward.

Mr Geithner urged eurozone leaders to bolster a €440bn rescue fund for troubled member states, but saw that demand instantly rebuffed by Germany.

Berlin instead demanded Washington drop its opposition to a global financial transactions tax - "emphatically" resisted by Mr Geithner, according to Austria's Maria Fekter.

Both Mr Schaeuble and Belgian Finance Minister Didier Reynders had highlighted the United States as carrying the world's heaviest debt burden going into the discussions.

"Yes it's better to organise something on financial transactions on the worldwide level, but it's impossible," Reynders said in Wroclaw on Saturday.

"We will do that within the European Union, and maybe also if it's impossible for the entire EU in the eurozone," he added.

Europeans have sought to implement either a tax on profits or turnover from the financial sector since governments were forced to bail out banks caught up in the 2008 credit crunch that started in the United States.

But Polish Finance Minister Jacek Rostowski said a preliminary debate on Friday "raised a lot of emotions" and outlined "considerable divisions."
The Telegraph

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