Gold Forecaster
- Global Watch
Platinum - Zimbabwe - Send
not to know for whom the bell tolls, it tolls for thee!
Julian D.W.
Phillips
Gold Forecaster snippet
Jul 23, 2007
- Below is a snippet from the
latest weekly issue from www.GoldForecaster.com
By far the greatest majority
of you who read this article live in well-ordered societies,
where the bulk of your problems can be contained within the good
order of the rest of your life. Indeed, from this position
it seems easy to couch your views and criticisms of others, from
within this secure framework.
Now look away from the civilized
parts of the earth to those where there appears to be a veneer
of civilization such as Zimbabwe. A despot rules but he is
old and no doubt once he offends the people sufficiently the
Democratic process will enable the voters to replace him and
his party with a reasonable opposition who will no doubt repair
any damage done. Such is the faith in Democracy and decency
and the decency of neighbors, isn't it?
Oh were that true, even to
a small extent. The truth of the matter is that it is possible
to watch a nation decay beyond basic human decency.
We write this in the context
of the Platinum mines and their future because the events in
Zimbabwe have decidedly affected the future of the South African
owned Platinum mines of Anglo Platinum and Impala Platinum [Zimplats],
already facing the potential appropriation of 51% of their shares.
The author began visiting Zimbabwe
in 1981 when the U.S.$ fetched Z$1. This was when there was
a semblance of good order and morality, despite the growing greed
of President Mugabe. The beauty of this country is intoxicating,
while it was then the bread basket of Africa. In the previous
30 years it had been developed from bush to a wealthy nation,
prior to it being handed over to Zanu-PF by the British government.
Today, after more than 2 decades
of rapacious assault on and the collapse of the economy, of the
remaining businessmen, more than 1,300 shop owners and business
managers were arrested there as part of a crackdown on firms
accused of flouting government-imposed price controls. The
inflation rate in April was 3,714% and is now believed to be
well beyond 5,000% and headed towards 1.5 million%. The real
exchange rate to the US$ is currently running at about 250,000,
though it has gone higher, much higher.
Mugabe had earlier ordered
companies to restore prices to their June 18th levels after a
sudden surge of inflation trebled or quadrupled prices within
a week. This has already created a serious shortage of goods
on shelves and forced some businesses to close rather than continue
operating at a loss.
Zimbabwe's Industry Minister
Obert Mpofu ordered businesses a fortnight ago to halve the prices
of all goods and services in a bid to curb spiraling inflation
but the edict has been widely ignored. Many manufacturers say
the government-set prices mean they cannot cover their costs
and have stopped production, leading to widespread shortages
of basics such as cooking oil and salt. President Robert Mugabe,
unable to stem the rise of what is the world's highest rate of
inflation, warned last week that his government would seize and
nationalize firms found to be profiteering. In imposing the
order, shops sold their goods at these low prices, to the police
and to those who could afford them, emptying the shops of stock,
which then found its way onto the black market where they are
sold at the far higher [more than double] 'black market' prices.
Of course nationalizing companies doesn't give them money to
buy goods to fill the shelves, particularly a government that
cannot afford to import fuel and soon electricity.
It is thought that this potential
shutdown of the economy may force Mugabe and his henchmen to
step down from power and their source of wealth.
The Southern African Development
Community (SADC) is preparing a dramatic plan to rescue the shattered
Zimbabwean economy by extending the Rand monetary area into Zimbabwe.
Tomaz Salamao [late the Prime Minister of Mozambique], the
SADC executive secretary, is drafting the plan, which would also
include the South African and Botswana reserve banks pumping
millions into the Zimbabwe reserve bank. The aim of these
measures would be to stabilize the exchange rate of the Zimbabwe
$ and curb inflation so that the country could buy foreign exchange
and continue importing essential goods.
But to get the rescue package,
President Robert Mugabe would first have to agree to fundamental
political reforms in the negotiations with the opposition Movement
for Democratic Change (MDC), which were snubbed by Mugabe this
week. A superficial knowledge of Mugabe's history affirm
that such plans are doomed to failure, because he would have
to sacrifice his present [5000 strong at lest] closest supporters
sources of wealth and therefore his own position of strength.
Despite the fact that it is a last desperate plan, Mugabe lacks
the concern for his people tat would be required for this solution
to work. Recent history and the collapse of the economy and
the suffering this is causing testifies to this.
With his henchmen able to buy
the U.S.$100 for Z$25,000 and sell it for Z$3 million [1200%
profit - no risk], their source of revenue would disappear immediately
such a plan were implemented. With it would go Mugabe's power.
With this in mind we as writer
on precious metals look at the remaining economic crown jewels,
the Platinum mines [particularly Zimplats of Impala and Angloplat's
new mine set to provide huge future sources of income for the
mining companies. With the recent law past that requires these
companies to pass ownership of 51% of their Zimbabwean subsidiaries
to Zimbabwean ownership it is only a matter of time before they
are lost to the companies as a source of future income, despite
the Mugabe promise of being able to avoid such loss of control
if infrastructural developments were undertaken by the mines.
With the moral capacity to
keep such promises gone from the Zimbabwean government and the
presence of a willing Chinese government investor, the mechanics
of taking the deposits and the mines away from the South African
mining companies is simple.
We therefore suggest that any
Investors in Anglo Platinum or Impala Platinum, write off the
contribution their Zimbabwe investments may have now or in the
future on the companies balance sheets, when assessing the shares
values.
As we can see such hyperinflation
is usually accompanied by moral turpitude.
Please subscribe to www.GoldForecaster.com
for the entire report.
Jul 20, 2007
-Julian
D.W. Phillips
email: gold-authenticmoney@iafrica.com
321gold Ltd
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