Uzbekistan

With gold and silver down this morning - following a mysterious vertical plunge last night (once again) - we thought ConvergEx's Nick Colas' timely discussion of gold was worthwhile. As he notes, Gold is the ultimate personality test for investors.  Some hate it, excoriating its adherents for their lack of faith in human ingenuity – gold has been valuable since before humans could write. And some swear by the yellow metal, in the belief that it is the last vestige of rationality in a world of financial assets manipulated by central banks and opaque trading venues.  What gets lost in the wash is that gold is a commodity and can be analyzed as such. On that basis, here is the 'Top 10' list of real-world fundamentals for gold.

The Wars in the Middle East and North Africa Are NOT Just About Oil ... They're Also About GAS

All you can read.

NATO recently literally shot itself in the foot, imperiling the resupply of International Assistance Forces (ISAF) in Afghanistan by shooting up two Pakistani border posts in a “hot pursuit’ raid. Given that roughly 100 fuel tanker trucks along with 200 other trucks loaded with NATO supplies cross into Afghanistan each day from Pakistan, Pakistan’s closure of the border has ominous long-term consequences for the logistical resupply of ISAF forces, even as Pentagon officials downplay the issue and scramble for alternative resupply routes. Pakistan, long angry about ISAF/NATO cross border raids, has apparently reached the end of its tether. Following the 26 November NATO aerial assault on two border posts in Mohmand Agency in Pakistan’s turbulent NorthWest Frontier Province, Islamabad promptly sealed its border with Afghanistan to NATO supplies after the allied strikes killed 24 Pakistani soldiers.

We have good reason to be waiting for Lehman—our current situation is simple and stark: Sovereign nations and individual citizens are over-indebted—to the point where they cannot pay back what they owe. We all know that this overindebtedness at the sovereign and individual level is going to end, and end badly: Worse than 2008.  So along with everyone else, I’ve been waiting for Lehman—and fruitlessly trying to guess which will be the Lehman-like event this time around. Will it be the bankruptcy of Dexia? BofA? UniCredit or SocGen or one of the Spanish banks? Will it be a war in the Middle East? Bad producer index numbers from China? A fart by a day-trader in Uzbekistan?

When will Lehman arrive!?!?

But lately, my thinking has changed: Like the characters in Godot, I think that we’re waiting in vain. The Lehman-like event will never arrive because it won’t be allowed to arrive. So this miserable slog we are going through will continue—indefinitely. (Yeah, I know: Sucks to be us.)

All you need to read.

The Numbers Behind the Middle Eastern and North African Revolts

WikiLeaks has teased the genie of transparency out of a very opaque bottle, and powerful forces in America, who thrive on secrecy, are trying desperately to stuff the genie back in. The people listed below this release would be pleased to shed light on these exciting new developments.

How far down the U.S. has slid can be seen, ironically enough, in a recent commentary in Pravda (that’s right, Russia’s Pravda): “What WikiLeaks has done is make people understand why so many Americans are politically apathetic … After all, the evils committed by those in power can be suffocating, and the sense of powerlessness that erupts can be paralyzing, especially when … government evildoers almost always get away with their crimes. …”

So shame on Barack Obama, Eric Holder, and all those who spew platitudes about integrity, justice and accountability while allowing war criminals and torturers to walk freely upon the earth. … the American people should be outraged that their government has transformed a nation with a reputation for freedom, justice, tolerance and respect for human rights into a backwater that revels in its criminality, cover-ups, injustices and hypocrisies.

After recent reports that Afghan President Hamid Karzai and other government officials received bags of cash from Iran, it's no surprise that Afghanistan would be near the top of a ranking published last week of the most corrupt countries in the world. The Corruption Perceptions Index from Transparency International, a nongovernmental organization based in Berlin and operating in 70 countries, ranked the Central Asian country second only to Somalia and tied with Myanmar for its perceived level of government corruption.

• 68 Dead in Karachi, Pakistan Political Killing Spree
• Russia, Venezuela Sign Nuclear Power Station Deal
• Washington Eyes Billions in India Deals
• Netherlands Antilles Ceases to Exist
• Iran Lashes Out at BP for Refusing to Refuel Commercial Jets
• Tajikistan Attempts to Buy Russian Help over Uzbek Water Dispute

Part four of David DeGraw book "The Road Through 2012: Revolution or World War III.”: "Now that we have an understanding of how the Global Banking Intelligence Complex ran operations through BCCI, let’s look at how some of BCCI’s key players kept operating after the bank was finally shut down. As discussed in the last chapter, during the 1980s and early ’90s, the CIA worked in partnership with BCCI in what was, at the time, the agency’s largest covert operation ever, pumping an estimated $10 billion into funding the Afghan Mujahideen. Through this operation, Osama bin Laden’s al Qaeda network was formed. Bin Laden had accounts in BCCI and ran CIA/BCCI-funded camps."

As oil sees its image tarnished from the disastrous oil spills that took place off the coast of the Gulf of Mexico and off the coast of Dalian, China, and as the most promising oil fields remain off limit to the Western oil majors, gas is gaining in popularity. Gas is present in large quantities and in many countries of less questionable reputation such as in the United States and is also less harmful to the environment than oil. Though gas is not intended to replace oil, some gas-rich countries such as Russia and Iran are strongly advocating for a gas cartel to regulate the industry, which can explain the reluctance of Russia to adopt sanctions towards Iran at the United Nations as both countries heavily rely on the income generated by their natural resources.

Stop the presses. The United States is no longer the world’s biggest consumer of energy.

After topping the energy consumption charts for more than a century, the U.S. has been left behind as China leapfrogged past. According to the International Energy Association’s (IEA) latest report, China burned its way through 2,252 million tonnes of oil equivalent last year – about 4% more than the U.S.

His face wracked by age and his voice rasping after decades of chain-smoking coarse tobacco, the former long-time Russian Minister of nuclear energy and veteran Soviet physicist Viktor Mikhailov knows just how to fix BP's oil leak in the Gulf of Mexico.

"A nuclear explosion over the leak," he says nonchalantly puffing a cigarette as he sits in a conference room at the Institute of Strategic Stability, where he is a director. "I don't know what BP is waiting for, they are wasting their time. Only about 10 kilotons of nuclear explosion capacity and the problem is solved."

The chances of the Euro contagion being contained are quite slim, and the Spanish government is saying it is "madness" that they will be needing a bailout. While they may not be needing a bailout now, it is far from "madness" to speculate on such matters. After all, it is the Spanish government itself that set itself up for such speculation by using pie in the sky numbers to justify their claims of having things under control. Once their projections are seen for what they really are, we shall see what "madness" truly entails...