Geopolitical Tensions And Currency Debasement Will Push Gold Prices Higher

by David Levenstein, Gold Silver Worlds The global gold markets were subdued on Monday as volumes were low mainly on account of the short trading day in the U.S. markets due to Presidents Day. Gold fell last week, but managed to bounce off their weekly lows. After slipping briefly below $1220 an ounce on Thursday, the price recovered later in the day and edged slightly higher on Friday to close out the week at $1227.90 per ounce. Although a ceasefire between Ukraine’s army and pro-Russian rebels came into effect from 22:00 GMT Saturday, there have been several accounts of fresh gunfire. Associated Press journalists traveling toward Debaltseve from the north on Sunday morning heard explosions from about 25 kilometers (15 miles) away. A Ukrainian officer, whose unit’s tanks were parked by the side of the road, said it was the sound of rebels firing. This could not be confirmed independently. Donetsk, the main large city under separatist control, was quiet on Sunday morning with no shelling from government forces, the Donetsk News Agency, a separatist mouthpiece, reported, citing the city administration. Despite the fact that Ukraine is one of the most corrupt countries in the world, the International Monetary Fund (IMF) announced a new $17.5 billion lifeline for Ukraine, which would bring the total bailout package to $40 billion. The new sum would be a four-year program. The IMF chief, Christine Lagarde will propose the $17.5 billion expansion program to the IMF by the end of the month. “The program is not yet approved by the governing council. I hope to offer it for approval by the end of February,” she said Thursday. “This new four-year arrangement would support immediate economic stabilization in Ukraine as well as a set of bold policy reforms aimed at restoring robust growth over the medium term and improving living standards for the Ukrainian people,” Lagarde said in a statement. In return Ukraine will have to present a “program of deep economic reforms,” which includes the whole economy and a plan to transform, Naftogaz, Ukraine’s state oil and gas company. “The sum includes funds from the IMF and the EU, and also bilateral and multilateral loans.” Earlier this month, the US promised Ukraine as much as $2 billion in loan guarantees, while the EU said it would disburse €1.8 billion ($2.1 billion). Corruption is a widespread and a growing problem in Ukrainian society. In 2014’s Transparency International Perceptions Index, Ukraine was ranked 142nd out of the 175 countries investigated (tied with Uganda and Comoros).Back in 2007 Ukraine had taken 118th place (179 countries investigated that year). Ernst & Young (in 2012) put Ukraine among the three most corrupted nations of the world together with Colombia and Brazil. It remains a mystery to me why the major financial organisations such as the World Bank and the IMF as well as major governments are so willing to squander billions on useless loans to countries that are rife with corruption. There have been countless cases of this throughout Africa where only a small percentage of the money loaned was ever spent on the intended causes, while politicians in the respective countries suddenly became very wealthy for doing nothing. I wonder why? It seems to me that as long as you are a politician, you can lie, cheat and steal. It is evident that governments have no problems squandering billions of dollars or lending tax payers money to corrupt governments, yet, at the same time attack hard working individuals who try to protect their own wealth. It is a disgrace! These politicians should be held accountable for these massive losses. Talks between Greece and Eurozone finance ministers over the country’s debt crisis broke down on Monday when Athens rejected a proposal to request a six-month extension of its international bailout package as “unacceptable”. Failure to reach any agreement has increased doubts about Greece’s future in the single currency area after a new leftist-led government vowed to scrap the 240 billion euro ($272.4 billion) bailout, reverse austerity policies and end cooperation with EU/IMF inspectors. Dutch Finance Minister Jeroen Dijsselbloem, who chaired the meeting, said Athens had until Friday to request an extension, otherwise the bailout would expire at the end of the month. The Greek state and its banks would then face a looming cash crunch. Continue Reading>>>

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