World currency war has begun, Brazil's finance minister says
Brazil in 'Currency War' Alert
By Jonathan Wheatley and Peter Garnham
Financial Times, London
Monday, September 27, 2010
An "international currency war" has broken out, according to Guido Mantega, Brazil's finance minister, as governments around the globe compete to lower their exchange rates to boost competitiveness.
Mr Mantega's comments in Sao Paulo on Monday follow a series of recent interventions by central banks, in Japan, South Korea, and Taiwan in an effort to make their currencies cheaper. China, an export powerhouse, has continued to suppress the value of the renminbi, in spite of pressure from the United States to allow it to rise, while officials from countries ranging from Singapore to Colombia have issued warnings over the strength of their currencies.
"We're in the midst of an international currency war, a general weakening of currency. This threatens us because it takes away our competitiveness," Mr Mantega said. By publicly asserting the existence of a "currency war," Mr Mantega has admitted what many policymakers have been saying in private: A rising number of countries see a weaker exchange rate as a way to lift their economies.
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Sona Resources Expects Positive Cash Flow from Blackdome,
Plans Aggressive Exploration of Elizabeth Gold Property
On May 18, 2010, Sona Resources Corp. (TSXV: SYS, Frankfurt: QS7) announced the release of a preliminary economic assessment for gold production at its flagship Blackdome and Elizabeth properties in British Columbia.
Sona Executive Chairman Nick Ferris says: "We view this as a baseline scenario for gold production. The project is highly sensitive to the price of gold. A conservative valuation of gold at $1,093 per ounce would result in a pre-tax cash flow of $54 million. The assessment indicates that underground mining at the two sites would recover 183,600 ounces of gold and 62,500 ounces of silver. Permitting and infrastructure are already in place for processing ore at the Blackdome mill, with a 200-tonne per day throughput over an eight-year mine life. Our near-term goal is to continue aggressive exploration at Elizabeth and develop a million-plus-ounce gold resource, commencing production in 2013."
For complete information on Sona Resources Corp. please visit: www.SonaResources.com
A weaker exchange rate makes a country's exports cheaper, potentially boosting a key source of growth for economies battling to find growth as they emerge from the global downturn.
The proliferation of countries trying to manage their exchange rates down is also making it difficult to co-ordinate the issue in global economic forums.
South Korea, the host of the upcoming G20 meeting in November, is reluctant to highlight the issue on the gathering's agenda, also partly out of fear of offending China, its neighbour and main trading partner.
The US dollar has fallen by about 25 per cent against the Brazilian real since the beginning of last year, making the real one of the strongest performing currencies in the world, according to Bloomberg.
In spite of Mr Mantega's recent aggressive public statements, however, Brazil has so far held back from taking any action other than intervening in the local currency spot market.
The central bank bought as much as $1 billion a day for much of the past two weeks -- about 10 times its daily average in recent months -- but this was largely to absorb money entering the country to take part in last week’s $67 billion share issue by Petrobras, the national oil company.
"There's a real gap between the rhetoric and the action," said Tony Volpon, head of emerging market research for the Americas at Nomura Securities in New York.
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Prophecy to Become Coal Producer This Year
with 1.5 Billion Tonnes of Resource
Prophecy Resource Corp. (TSX.V: PCY) announced on May 11 that it has entered into a mine services agreement with Leighton Asia Ltd. to begin coal production this year. Production will begin with a 250,000-tonne starter pit as planned in August, with production advancing to 2 million tonnes per year in 2011. Prophecy is fully funded to production and its management team includes John Morganti, Arnold Armstrong, and Rob McEwen.
For Prophecy's complete press release about its production plans, please visit: