Current reading...

For those that are interested, (and no I am not linking to Amazon with these to earn money) I recommend:



Just finished

Tescopoly - by Andrew Simms.

Not just a "Tesco Bashing Fest" although that's not such a bad thing, this is about the corporate food chain, the alleged abuses of planning rules, and touches on the effects of Peak Oil and Climate Change on the distribution of food and goods and the creation of CO2 for some pointless plastic that we all seem to "need". (We don't, we're just told we do). Great book, but if you are already well versed on corporate affairs and plutocracy, then it's probably only useful as a reference when seeking out stats for articles etc. One criticism, which is a personal opinion; I think there could have been more criticism of us, the public, because we demand this stuff. A direction to the reader to understand there are no "rights to choice", and to reject 20 different brands of tomato soup. As a sidenote, I haven't shopped at Tesco's since October 2006, although I do go to Sainsbury's once per month. However after reading this book, Tesco is certainly the bad boy on the block in my opinion.

8/10


Current reading:

The Secret History of the Amercan Empire - John Perkins.

So far so good, up to page 60 and this is very engaging. Perkins is (by his own definition) an Economic Hit-Man (EHM). He was employed by the US Government to meet with foreign government officials to "encourage" them to assist US corporations to extract natural resources amongst other things, including oil, copper, minerals etc. Countries would be encouraged to take huge loans from the IMF and World Bank at interest which could be used to build infrastructure such as hospitals, schools, transport systems etc. However, most of this money, according to Perkins, ends up in corrupt officials pockets, who in return allow various corporations access to the wealth of resources, including cheap labour.

Will do an update of this when I've finished the book.


Next reading:

The Ascent of Money: A Financial History of the World - Niall Ferguson.

Saw Professor Fergusons wonderful series on Channel 4, looking forward to reading this book soon.

Don't panic Mr. Mainwaring!

Recent Gold Price Falls.

I had an email from a concerned reader of my blog whether the recent fall in gold prices is the "sell-off" that I have predicted recently. I can assure you that it's not. The sell-off to manipulate the gold price will be fast and of cliff-edge proportions.

It has to be said that this reader was in the UK, so that explains why the recent fall has occurred. It's not the price of gold that has fallen (although it has very slightly) it's the UK pound strengthening against the dollar.

Let's do some simplistic figures. These are not indicative of current trends, purely easy to understand examples.

First thing to remember, is like almost all commodities on the global markets, gold is traded in US Dollars. (USD).

Let's assume on 1st August 2010 the USD and GBP exchange rate is: 1 GBP = 1.5USD

Also, on this date, 1 ounce of gold equals US$1000

Therefore, on the UK market, 1 ounce of gold is UK£750

Now let's go forward one week.

On 8th August 2010, the exchange rate has changed and it is now 1 GBP = 2 USD (i.e the pound has strengthened against the dollar).

On this date, i ounce of gold, is still US$1000

However, because of the different exchange rate, the cost of 1 ounce in the UK is now only £500.

The perception is that the gold price has fallen (in the UK), however it has remained the same price on the open market. Of course if you hold gold, then it looks a lot worse, but do remember:

The actual gold is still exactly the same, but it is being compared to a fiat currency, so do remember this when you see prices quoted in currencies other than USD, to look deeper.

I hope that gives you an alternative insight into holding gold.

Kieran.