Leading Canadian banker recommends gold, denounces fiat system


11a ET Sunday, January 21, 2007

Dear Friend of GATA and Gold:

Gold got a stirring endorsement and the central bank system of infinite money a denunciation last week from a remarkable source -- a leading banker in Canada's financial establishment.

The banker, Anthony S. Fell, chairman of RBC Capital Markets and former president of Royal Bank of Canada, delivered the endorsement and denunciation at RBC's client appreciation dinner in Vancouver.

China's reserves reach trillion; premier promises to start spending


From Xinhua News Agency
via China Daily, Beijing
Sunday, January 21, 2007


Chinese Premier Wen Jiabao said that China would steadily push forward the foreign exchange rates reform and actively explore and expand the use of its US$1.06-trillion foreign exchange reserves.

China would strengthen operation and management of foreign exchange reserves and facilitate the balance of international payment, said Wen at the two-day Third National Financial Work Conference.

Chinese govt. economist says yuan requires big revaluation


From Reuters
Sunday, January 21, 2007


BEIJING -- China's policy of allowing the yuan to gain a modest 3-5 percent a year is not sustainable as the cost of preventing a faster rise will crush the central bank, a Chinese economist said.

Zhong Wei, a professor at Beijing Normal University and an editor of a magazine run by the State Administration of Foreign Exchange, told a weekend forum in Beijing that China needed another revaluation to build up a properly functioning exchange rate system.

Ecuador calls foreign debt 'illegitimate,' may default on 60%


By Lester Pimentel and Jeb Blount
Bloomberg News Service
Friday, January 19, 2007


Ecuador's credit rating was cut by Standard & Poor's two days after the country's economy minister told investors the government was considering repaying only 40 percent of its foreign debt.

S&P cut the rating one level to CCC, leaving it four levels above default, from CCC+ and lowered the rating outlook to negative from stable. Economy Minister Ricardo Patino, speaking today in Rio de Janeiro, said he expects to finish a debt restructuring plan by the end of the month.

Venezuelan legislature votes to give Chavez dictatorial power


By Natalie Obiko Pearson
Associated Press
Friday, January 19, 2007


Venezuelan lawmakers gave initial approval to a bill granting President Hugo Chavez the power to rule by decree for 18 months so that he can impose sweeping economic, social, and political change.

Emboldened by his landslide re-election last month, the leftist leader has called for "revolutionary laws" to accelerate the country's transformation into a full socialist state.

Young euro threatens dollar supremacy


By Barrie McKenna
The Globe and Mail, Toronto
Thursday, January 18, 2007


WASHINGTON -- Flash the greenback just about anywhere in the world, and chances are you'll seal the deal.

The mighty U.S. dollar remains the world's default currency. Central banks keep two-thirds of their reserves in dollars.

Ted Butler: Changing of the guard?


8:40p ET Tuesday, January 16, 2007

Dear Friend of GATA and Gold:

Silver market analyst Ted Butler writes that the technical futures trading funds that have been milked regularly by the commercial shorts are withdrawing from the silver market and being replaced by commodity index funds that are not so easily shaken out at a loss. Butler's new commentary is titled "Changing of the Guard?" and you can find it at GoldSeek's companion site, SilverSeek, here:

India approves exchange-traded funds for gold


From Press Trust of India
via NewKerala.com
Tuesday, January 16, 2007


MUMBAI, Jan. 15 -- Market regulator SEBI today gave a go-ahead to mutual funds for floating gold exchange-traded funds (GETF), thus enabling the investors to trade in gold as shares in the stock market.

In a notification, SEBI said: "The gold held by a gold exchange-traded fund scheme shall be valued at the AM fixing price of London Bullion Market Association (LBMA) in US dollars per troy ounce for gold having a fineness of 995.0 parts per thousand." The Custodian of Securities Act has also been amended, enabling custodians of the proposed gold funds to outsource safekeeping of bullion to other agencies.

Dollar's prestige falls among Russians


By Yekaterina Dranitsyna
St. Petersburg (Russia) Times
Tuesday, January 16, 2007


Russians are increasingly losing confidence in the U.S. dollar, experts from the Public Opinion Foundation said last week as it published its report, "The Dollar in Russia."

"In recent years the dollar in Russia has lost significantly more in prestige than in real exchange value," POF's Grigory Kertman said.

Goldman expects 'modest' fall in dollar, interest rate cuts


By Jessica Mortimer
AFX News via Forbes.com
Monday, January 15, 2007


LONDON -- The dollar is set for modest declines in 2007 as US growth continues to slow, prompting the Federal Reserve to start cutting interest rates, according to Goldman Sachs.

"We see a modest decline in the dollar over 2007, which will be good for world markets rather than bad," Goldman's head of global economic research Jim O-Neill told a conference on global strategy here.