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Oct 30, 2009

Fibonacci in action: Gold and Euro

 In the video you are about to see, you will find how the Fibonacci Methodology  is applied  in Technical Analysis.
The Gold and Euro, is analyzed in this short video, using current prices, and what Market Club,exposed us, recently.  The exact forecast this technical tool , using  the correct drawing lines  to get expected results, are explained by renowned educator and market analyst Adam Hewison. Do not miss this  introducing great video using the Fibonacci Method, Here:


It is really a professionally outstanding video. Therefore, I recommend all my followers to watch it
ASAP


Fernando Guzmán Cavero
FGC FOREX - FGC FINANCIAL MARKETS

From The Economist Print Edition

A world apart

Oct 29th 2009 | DELHI
From The Economist print edition

India is caught in two minds about financial globalisation


Eyevine
THE world is divided into two, according to Shachindra Nath, chief operating officer of Religare Enterprises, an Indian financial firm. On one side of the divide is a world with “cash but no opportunities”; on the other, a world with “no money, just opportunities.” In October Religare announced its ambition to shepherd money across this divide, by creating an “emerging-market investment bank”. The bank will be run from London by Martin Newson, a former head of global equities at Dresdner Kleinwort.
Religare will start small, attaching itself to growing companies and expanding with them. As India’s companies go global, finding customers and buying companies abroad, they will want their banks to be global too, Mr Newson argues. His bank may still lack manpower (it has about 80 bankers) and experience (last year, it completed only two deals in its home market), but Mr Newson applauds India’s “get-up-and-go, ‘let’s attack’ attitude”.
He would find a quite different mindset at the Reserve Bank of India (RBI), the country’s central bank, which polices the flow of money across India’s borders and keeps tabs on the foreign adventures of the country’s financial firms. The RBI has a defensive approach to financial globalisation. The laws of economic gravity suggest capital should flow from where it is abundant to where it is scarce. But, the RBI fears, that flow can overwhelm an economy.
In 2007, for example, it tried to restrain a vigorous inflow of capital by making it harder for foreigners to play India’s booming stockmarket and by tightening limits on corporate borrowing abroad. When capital flows abruptly reversed in 2008, it eased these limits. Now that foreigners are again flocking to India’s stockmarket (see chart), capital inflows are once more playing on the RBI’s mind. At the IMF’s annual meetings in October, the RBI’s governor worried that if he had to raise interest rates earlier than other economies, the gap in returns might attract more foreign money. At the RBI’s latest meeting on October 27th, he kept rates on hold.

Despite these concerns, India is steadily becoming more financially stitched in to the rest of the world. Its foreign assets and liabilities add up to over 60% of GDP. In the 1990s that ratio was only about 40%. It has risen partly because India’s own companies are eager to acquire foreign firms. In March 2009 India’s stock of direct investment abroad was worth over $67 billion, more than twice the figure in March 2007.
As India’s companies straddle borders, capital controls become harder to police. Foreign affiliates can transfer money into India disguised as a payment for services provided by their parent company. But if controls don’t necessarily stop Indian multinationals raising money, they do stop India’s financial system from meeting these firms’ requirements. For example, India prohibits companies from listing their shares at home and on a foreign exchange. This ban was one reason, if hardly the only one, why Bharti Airtel, India’s biggest mobile-phone company, was unable to merge in September with MTN of South Africa.
A 2007 report commissioned by the government to assess Mumbai’s prospects of becoming an international financial centre argued that India has a comparative advantage in financial services, like the one it has in information technology. India, after all, has a common-law legal tradition and a stockmarket that is 130 years old. Many bankers working in London, Dubai and Singapore have their roots in India. Religare is hoping to hire a few of them.
It is not the only Indian financial firm with ambitions abroad. Indian banks have 141 foreign branches and 21 subsidiaries. Of the new private-sector banks, ICICI bank has the most foreign outposts. Its willingness to dabble beyond its borders marked it out for suspicion when crisis struck and doubts about its foreign exposures grew.
In November 2008 the RBI had to lend foreign currencies to Indian banks to help them meet the obligations of their foreign branches. It is now determined to monitor their activities more closely. Banks say “we know how to manage our stuff, there are no government guarantees, so why are you bothered?” says Rakesh Mohan, a former deputy governor of the RBI. But “when push comes to shove, you always have to be bothered.”
The RBI’s prudence was justified by events. But it has its costs. By reining in its domestic banks, it prevents them from serving the global needs of India’s companies. Tata Steel, for example, bought Corus with loans from banks in London, not Mumbai. The RBI worries about the foreign borrowing of Indian firms even as it makes it impossible for them to find necessary finance from domestic providers.
Mr Mohan thinks the RBI’s approach is on the right side of history. He points out that the regulatory reforms the G20 now recommends are for the most part policies that the RBI was already pursuing. This includes its willingness to supervise the foreign subsidiaries of Indian banks. Was India ahead of the curve? “Maybe accidentally”, he laughs.
But as more big Indian firms become multinational companies, it will be harder for politicians to resist the demands for a freer flow of finance. “It’s one thing for India to impose restrictions upon foreign multinationals like Enron or IBM,” says Ajay Shah of the National Institute of Public Finance and Policy, “but it’s harder for the Indian government to hobble its own multinationals. I think this is a qualitative change.” Indian companies are too ambitious to confine themselves to their borders. Likewise, India itself is too big a prize for foreign capitalists to ignore. Money has a way of finding opportunity.

Readers' comments

The Economist welcomes your views.

From the desk of Nick Nicolaas

As every Friday we have The Zeal Intelligenge Newsletter on the Mining Interactive Website, by Adam Hamilton, sent to us by our Friend Nick Nicollaas. I strongly recommend to read it:

Fernando Guzmán Cavero
FGC BOLSA - FGC FINANCIAL MARKETS














Dear Friends
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GATA DISPATCHES

A bit late, Barrick aims for 'full leverage' to gold price

Gold has been going up for 10 years and they're still short 2 million ounces.
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Barrick Gold Posts US$5.4 Billion Net loss on Windup of Gold Hedging Program
By Kristine Owram
The Canadian Press
via CanadianBusiness.com
Thursday, October 29, 2009
http://www.canadianbusiness.com/markets/market_news/article.jsp?content=...
TORONTO -- Barrick Gold Corp. lost US$5.4 billion in the third quarter due to the windup of its gold hedging program, but the big miner said this move, as well as several low-cost projects set to come online in the next few years, position it to prosper from a rising gold price.
"Our production will be higher next year and at lower costs. We have a world-class pipeline of projects under construction and a number of additional projects in various phases of feasibility studies," Barrick president and CEO Aaron Regent said on a conference call Thursday.
"Our company structure has been simplified with the elimination of the hedge book, we have a strong financial position to support our operations and projects, and finally we have a number of competitive advantages which we believe will continue to pay dividends in the future," he added.
The market agreed, sending Barrick's shares up by $2.62 or 7.1 per cent to $39.66 in Thursday trading on the Toronto Stock Exchange.
The Toronto-based gold miner, which reports in U.S. dollars, said its quarterly loss included a non-cash accounting charge of $5.7 billion related to its hedging program.
Adjusting for the accounting charge, Barrick had a profit of $473 million or 54 cents per share, up 17 per cent from $404 million or 46 cents per share last year.
Barrick is the world's biggest gold company, with third-quarter sales of nearly $2.1 billion in the third quarter -- up from just under $1.9 billion last year.
Regent said Barrick took several steps during the quarter to improve the company's performance and strategic positioning going forward.
That included plans to eliminate its gold hedging program within 12 months.
The hedging program, which was designed to lock in prices for future sales to provide insurance against a drop in gold prices, has become a drag for Barrick. The hedges prevented Barrick from taking full advantage of the rising price of bullion, which has recently been trading above US$1,000 an ounce.
"We made this decision to gain full leverage to the gold price on all future production based on an increasingly positive outlook for gold," said Barrick chief financial officer Jamie Sokalsky.
Sokalsky said the company has so far raised a total of $5.1 billion by issuing equities and long-term debt and as of Wednesday had eliminated 1.1 million ounces of gold hedges, or approximately one-third of its hedged position.
"By eliminating the gold hedge book, the company will fully participate in future gold price movements," Sokalsky said.
"Our overall leverage is reduced and the capital structure is simplified and strengthened. And we know that investors prefer fully unhedged producers and with this plan we are now better aligned with those interests."
Barrick said its average realized gold price for the quarter was $971 per ounce, or $11 higher than the average spot price of $960 per ounce.
And Regent said he expects the price of gold to continue to rise due to the current macroeconomic environment.
"Low interest rates, the increase in the money supply and current and future government deficits is continuing to put pressure on global currencies and is increasing the risk of significant inflation in the future. This has resulted in an increased demand for gold by investors around the world," he said.
"While gold prices appear high in nominal terms, in real terms they are still 50 per cent below the peak levels realized in 1980, and from an industry perspective mine supply continues to decline and we expect this trend to continue for the foreseeable future," he added.
Barrick produced 1.90 million ounces of gold in the quarter at total cash costs of $456 per ounce, or net cash costs of $371 per ounce after applying credits from sales of non-gold metals such as copper and silver that are mined along with the gold.
Revenues fell short of analyst expectations but Barrick's adjusted earnings were above a consensus estimate compiled by Thomson Reuters.
On average, analysts had called for $2.147 billion in revenue and 47 cents per share before unusual items such as the charge for the hedging program.
Barrick said it is on track with its full-year production guidance of 7.2 million to 7.6 million ounces of gold at total cash costs of $450 to $475 per ounce or net cash costs of $360 to $385 per ounce.
The company expects production in 2010 to grow to between 7.7 million and 8.1 million ounces of gold at lower cash costs than this year.
Barrick has several low-cost projects positioned to come online over the next five years, including Cortez Hills in Nevada, expected to begin production in the first quarter of 2010; Pueblo Viejo in the Dominican Republic, expected to begin production in the fourth quarter of 2011; Pascua-Lama on the border between Argentina and Chile, expected to begin production in the first quarter of 2013; and Buzwagi in Tanzania, which began production in May and is on track to produce 200,000 ounces this year.

* * *

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