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“Gold Gives You Extremely Important Signals”.An Interview with David P. Goldman by Lars Schall

David P. Goldman / Spengler, “the world’s most brilliant intelligence service,” discusses in this exclusive interview some of his thoughts on various aspects related to gold. Inter alia, he explains why he supports a commodity price rule for monetary policy that is connected to the yellow metal.

Gold_Bars nsnbc archivesDavid P. Goldman, in our view one of the most outstanding and relevant essayists of this time and age, has been in the past the global head of the fixed income research department at Bank of America (2002-2005) and global head of credit strategy at Credit Suisse (1998-2002). In addition, he worked in senior positions at Bear Stearns, Cantor Fitzgerald, and Asteri Capital. Today he runs the consulting service Macrostrategy.

During the 1980s, he served Norman A. Bailey, then Director of Plans of the National Security Council of the United States. From 1994 to 2001, Goldman was a columnist of Forbes magazine.

At Asia Times Online he regularly publishes since 2000 his “Spengler” essays (named after Oswald Spengler, the German historian and philosopher). An overall index of those columns can be found here.

“Ask anyone in the intelligence business to name the world’s most brilliant intelligence service, and we’ll all give the same answer: Spengler. David P. Goldman’s ‘Spengler’ columns provide more insight than the CIA, MI6, and the Mossad combined.” — Herbert E. Meyer, Special Assistant to the CIA Director and as Vice Chairman of the CIA’s National Intelligence Council, Reagan Administration.

In addition, Goldman writes for the monthly magazine First Things essays that also address a wide range of topics – from Jewish theology and economics to literature, mathematics, and foreign policy. Moreover, he is a columnist at PJ Media, while at Tablet he contributes music reviews. Goldman is the author of the book How Civilizations Die (and why Islam is Dying, Too)”, published by Regnery Press. A collection of his essays, It’s Not the End of the World – It’s Just the End of You,” was published by Van Praag Press.

He has spoken at many important business conferences, such as the annual meetings of the World Bank. His chapter on market failure in the “Bloomberg Book of Master Market Economists” (2006) is one of the examination scripts for the Certified Financial Analyst exam. He received a B.A. from Columbia University and entered a doctoral program at the London School of Economics. At the City University of New York he studied music theory. He taught music appreciation at Queens College of New York. At Mannes College of Music he taught music theory. He currently serves there on the Board of Governors. He also sits on the Board of Directors of the America-Israel Cultural Foundation and is a Fellow of the Jewish Institute for National Security Affairs. David P. Goldman lives in New York City, U.S.A.

Lars Schall: Mr. Goldman, what are your thoughts in general on the re-emergence of gold in international finance?

David P. Goldman: Gold is essentially a political issue. As long as you have positive real interest rates on relatively safe debt either of governments or private issuers, there is in my opinion no real reason to hold gold at all except as an emergency fallback. Gold is costly to store, you have to put it in a vault, you have to hire guards, and it’s inconvenient to transfer (if you want to pay somebody in gold you have to physically load it on some means of conveyance). As long as the governments of major countries can be trusted to manage their public debt in a sound way there is really no particular reason to hold gold. That’s of course a very big caveat, because governments can’t be trusted to manage their finances properly, and the reason that the gold price has risen from a few hundred dollars to nearly 2000 dollars an ounce over the last ten years is because of the markets’ lack of confidence in the debt management of major governments.

L.S.: But then also private banks are now interested in gold these days as a more or less zero-risk asset.

D.P.G.: Yes, but I consider that a marginal development at this point. One of the most important issues in the banking industry right now is the availability of sound collateral. The value of very high quality government securities is that you can use them to borrow against it at very low interest rates very flexibly. So the financing value of high quality government securities is an extremely important component of their desirability as an asset. There is now a global shortage of high quality collateral, and the reason is that government debt of many major countries has become compromised by extremely poor economic and financial management. So because there is a shortage of high quality collateral, banks are experimenting with gold as an asset because you can borrow against gold collateral at extremely low interest rates. So it’s beginning to filter into the banking system because of this collateral shortage.

This not just driven by the market, but it’s also driven in part by the regulators. You may be aware that the Bank for International Settlements’ supervisory committees have insisted that banks maintain a much higher degree of liquidity, in other words that a larger portion of their portfolio than in the past should be invested in highly liquid assets. That is from a supervisory standpoint a very reasonable suggestion. Remember that one of the big problems the banks had in 2008 was that they had levered enormous amounts of supposedly high quality assets, which turned out to be completely illiquid in the event of the crisis such as collateralized mortgage obligations with Triple A rating. As you are aware, the rating agencies are being sued by the government of the United States for billions of dollars for allegedly falsifying such ratings.

So with the demand from the regulators that banks maintain essentially a higher liquidity profile, it is physically difficult for them to do so because of the lack of high quality collateral. That’s why banks at the margin are interested in gold. And again, emphasizing the point that to the extent that governments mismanage their finances and the quality and the liquidity of government debt is compromised, gold will be seen as an important alternative. However, I think we are a very long way from a proper restoration of gold in the monetary system.

L.S.: China is buying gold big time.

D.P.G.: Yes, China is buying gold, but from a very low base. China has $ 3 trillion of foreign exchange reserves. If China were buying gold seriously, the gold price wouldn’t be at $ 1.600 / 1.700 an ounce, it would be at $ 5000 an ounce. As far as I can determine – remember it’s a state secret, the Chinese do not tell you what they own – and infer from partial data, the Chinese are buying everything – they are buying raw materials, they are buying technology, they are buying machine factories in Germany (last year, Chinese direct investment in Germany was three times the level of German direct investment in China, which is quite a difference from the past, and there had be some very high-profile acquisitions). From the Chinese standpoint, yes they want to increase their gold reserves, but they also want to increase their portfolio of technologies, they want to increase their access to raw materials, they want to do many different things. Their interest goes far beyond the monetary.

They have been very modest net-sellers of US treasury securities, I think they were down a bit less than $ 200 billion in holding US treasury securities last year, if I remember the numbers correctly. It’s a small but significant amount. I don’t see China engaging in a massive gold buying campaign. Instead I see it as a steady increase, but from an extremely low base. A couple of years ago Chinas gold reserves were only 2 or 3 percent of their total reserves, which is extremely small. So it makes sense for them to increase from that little base.

There is another reason for the US dollar to remain an important reserve instrument for some time, and that is Japan. Here is where the politics come in: there has been a great deal of discussion, and I am sure that you are aware of it, about the possible development of an Asian reserve currency, which would perhaps involve a gold anchor. I think that’s idle speculation for a very simple reason: the Asians don’t get along with each other politically. The Japanese and the Chinese are at odds with each other, and as we have just seen today (referring to the Russian fighter incursion into Japanese airspace on February 7) the Japanese and the Russians are at odds with each other as well. If you look at the major economic powers outside of the United States – China, Japan, India, Russia, and after that you have to go to places such as Brazil, which really don’t count for much –, there is no possibility for any significant agreement among them, let alone a monetary agreement.

The Japanese according to reports that we have seen over the last months are expected to increase their reserve holdings of US treasuries by between $ 400 and $ 500 billion per year, as they intervene in the market to weaken the yen. Now, there are other ways to weaken the yen, and so the buying of that much US treasuries suggests to me that the Japanese still consider themselves pretty much as part of the American sphere in a monetary as well as in a military sense. Japans Prime Minister Abe has called for an alliance between the United States, Japan and India to contain China. This is a very popular theme among some American strategists as well – you read about it everywhere. So the idea that Japan would shift its reserve position – which is huge – away from the United States and towards some kind of Asian bloc is politically impossible. It’s completely unforeseeable in the existing constellation of world forces. That’s why I say that the emergence of gold as a reserve instrument or actually a gold standard of any kind is extremely unlikely for the foreseeable future – the politics simply aren’t there.

L.S.: However, you support a commodity price rule for monetary policy connected to gold.

D.P.G.: Yes, sure.

L.S.: Could you explain the concept behind that and why you support it, please?

D.P.G.: This is an idea that was advanced by Robert Mundell, but actually it goes all the way back to David Ricardo’s idea of the gold standard. Robert Mundell, of course, is the father of the euro and the father of supply-side economics, he’s a Nobel Prize winner, and he has been the most prominent economist advancing this idea; he has talked about it for roughly the last thirty to forty years. The idea is pretty simple: to create some kind of objective market-based rule which would limit the ability of central banks to create money and to debase their currencies, or on the other hand to act as a break against deflation. In other words: to use market observations of auction prices that reflect expectations of the overall price level in order to correct central bank errors.

There has been an enormous amount of debate for centuries now about what the criterias should be for central bank money creation and how important that is. Mundell’s argument is that the quantity of money is much less important than the way the market responds to central bank increases in high-powered money or in bank reserves and how that affects expectations of the price levels. So central banks should listen much more to the market.

And gold among all the commodities probably gives you the purest signal about future price expectations. There is a very simple reason for that: the amount of gold in stockpiles is many times – 25 to 30 times – annual consumption. So a change in desire to hold gold as an investment is a much more important determinant of the gold price than changes in current mining supply or changes in current consumption of jewelry or industrial applications. If you use copper or platinum or bauxite or other commodities, the stockpiles are extremely low relative to current use.  And you also might have a technological change or an economic slump or a big increase of demand which would drastically affect the prices. So it’s much more difficult to interpret price signals from industrial commodities as an indication of expectations about the future price level. Gold gives you much better information. So it certainly has pride of place among all commodities as an indicator of expectations about the price level and as a guide to central bank activity.

That idea of a commodity-based standard which is to create confidence in the market place and to correct for central bank errors is the core of Mundell’s concept. I think it is an extremely good idea and I firmly believe monetary management in general would have done much better if we would have followed Mundell’s view and not the guess work of central bankers.

Certainly errors committed by the Federal Reserve in monetary policy contributed to the development of the financial bubble during the 2000s. During 2003, as you recall, the Federal Reserve eased because they were afraid of deflation – there was a big drop in the bond yield and they saw it as a deflationary signal. At the time my department at Bank of America produced a large body of research, arguing that this was not a deflationary signal, that the Federal Reserve was in error, and the Federal Reserve’s ease was mistaken. Therefore, I can think of a number of instances where the Federal Reserve would have been much better off to watch the gold price rather than bond yields or consumer price indexes or other things that they were watching.

L.S.: Do you consider it worthwhile to follow the gold market?

D.P.G.: Oh, absolutely! Gold gives you extremely important signals. The question that financial analysts should ask is not simply what the market expects, but what is the range of possibilities that the market expects and what probabilities are assigned. In other words, expectations should not be thought of as a point in the future – I think that the stock market is going up by 7.38 percent next year, that’s my expectation. Instead the expectation should be thought as a probability distribution. For example, if you are going off to rob a bank, you have a very screwed distribution – on the one hand you come away with 50.000 euros, on the other hand you get shot dead. If you invest in government bonds there you got a much narrower distribution.

So the willingness of the market to pay for hedges against extreme outcomes – and gold at this point is a hedge against extreme outcomes – is a very important indication of the market’s thinking. One interesting comparison is between gold and inflation tracking securities, like TIPS (Treasury Inflation-Protected Securities) in the United States. There is a very close relationship in the last five years between the gold price and inflation trackers as I have pointed out numerous times in the past in my research for clients. Both of them are hedges against extreme outcome. Right now when you buy into an inflation tracker in the United States, or in fact any of the better quality countries, you have a negative interest rate – that is, you invest a hundred euros at principle, and if nothing unexpected happens in ten years you get 99 euros back. Why would you accept a negative yield? Because if you have other extreme inflation or extreme deflation, TIPS will outperform other bonds and probably other stocks as well. So the fact that gold and TIPS track each other extremely closely is an indication that both of these instruments are hedges against extreme outcomes.

So the gold market is an extremely important signal, but it needs to interpreted carefully. Gold is not a good forecaster of inflation in any reasonable time horizon, say five to ten year time horizon. At this point gold is not a hedge against inflation, but a hedge against a very big change in unexpected inflation, a very big inflation surprise. So again, the gold market is extremely important analytically. I personally own gold as a hedge against extreme outcomes. It’s not really a great deal in my portfolio, but I have a substantial amount of gold as insurance.

L.S.: So I would guess that you don’t think the gold price is a bubble?

D.P.G.: No, absolutely not. The proof that gold is not a bubble is that gold and TIPS track each other so well. If that were true, one would have to say that TIPS is in a bubble, but that would make no sense. I’ve never heard anyone say the TIPS market is a bubble.

L.S.: Since you were once Bank of America’s global head of bond research: is the bond market mispriced?

D.P.G.: I think the Spanish bond market is mispriced. I wouldn’t own Spanish bonds at these levels because I think the Spanish government is covering up the real extent of their banking problems. I think the European Community made a decision to let the Spanish underestimate substantially how severe the problems are, because they want to dampen the perspective of the crisis. But as far as the United States is concerned, I think as long as growth is in the 1 to 2 percent range and you have a very substantial increase in government debt and the prospect of serious increase in inflation due to the American budget problems, the bond market is not necessarily in a bubble at all.

I like to look at American bond yields broken down to two components: TIPS, that is the inflation protected yield, versus the ordinary coupon yield. The difference between the TIPS yields and ordinary coupon treasury yields is typically called “break-even inflation”. The difference between those two yields is the inflation rate that will be required for TIPS and coupons to produce the same total returns. And in the last few weeks as bond yields have gone up, in fact TIPS yields have gone down, they have become more negative, which shows that people are willing to pay more for protection against an extreme outcome, but break-even inflation has gone up, it has gone up more.

So the fact that TIPS have such an enormous support, because yields have gone even more negative, tells me that bonds are still an important portfolio hedge against certain kinds of extreme outcomes. I also see a lot of international demand for US treasuries, particularly by the Japanese. So I don’t think we are going to see huge moves in bond yields. I do think that a large part of the credit market is much too optimistic. I think that the Federal Reserve’s purchases of mortgage backed securities have distorted the market, and so I think the price of risk in the credit market is much too low, I think there is some mispricing there.

L.S.: One final question: usually, debt crises end ultimately in a write-down of the debt. Do you think that we will see in the next few years an international summit where exactly this will happen because it needs to happen?

D.P.G.: Well, the write-down of government debt – that’s conceivable more in some of the European countries, but it is very unlikely. The reason why I think it is unlikely is because if you look at the amount of private wealth available in most European countries compared to government debt, private wealth vastly exceeds government debt. What governments do when they are in trouble to pay back their debt, as in Argentina, is to expropriate private wealth. So what I believe will happen in the extreme case well before you have any default on government debt, say in places like Italy or Spain, you will have some substantial wealth taxes.

In the case of the United States, we will add a lot of inflation. Inflation is a partial default on government debt. For example, let’s say that I lend you a hundred euros for a month, and a month later you come back and give me a hundred dollars. So I say: Well, Lars, what’s that – I gave you a hundred euros and you give me a hundred dollars? And you say: Look, a hundred is a hundred, take it or leave it. This is what governments do to bond holders when they devalue their currencies. A dollar worth euro 1.35 is not the same thing as a dollar worth euro 1.70. But if the United States were to continue a reckless fiscal policy and it lead to the devaluation of the dollar, then in effect you’ll be giving bond holders a different devalued debt repayment. The typical way governments default on their debt is through inflation. And I think that’s a very significant probability, that’s exactly why TIPS are considered so valuable and why people accept negative interest rates, because people are afraid that the government will do precisely that. But a global rescheduling of debt, I just don’t see it as very likely at all.

L.S.: Thank you very much for taking your time, Mr. Goldman!


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EU Stability Fund releases 20 Million to Mali for Joint European-African Economic Suicide

christof-lehmann-20112Christof Lehmann (nsnbc) The European Instrument for Stability (IfS), has released a 20 Million Eur stabilization support package to provide immediate support for Mali´s law enforcement and justice services, local authorities in Mali, dialog and reconciliation initiatives and support for the first phase of the upcoming elections in Mali. In the light of Europe-wide austerity cuts, the systematic abuse of Mali´s police and security forces to oppress any opposition to interim-President Traoré and the French backed ADEMA party, and in the light of a French Africa policy that prevents the development of the African market economies as a trading partner for Europe, the hard-earned European tax funds are wasted on financing a joint European-African Suicide of both the African and the European security and economy.

The European Union describes the Eur 20 Million grant as an early installment of the EU´s comprehensive response to the crisis in Mali, while it is complementing the ongoing efforts of the Union through other instruments, in particular the financial and logistical support to the Africa-led International Support Mission to Mali (AFISMA), the EUTM and EUCAP Sahel CDDP missions, the current long-term Counter-Terrorism project for the Sahel, and a number of other projects supported by the European Union. The 20 Million Eur grant is, according to the EU, meant to swiftly deliver concrete results under the first stabilization support package.

A closer look at the realpolitic behind the technocratic euphemisms of Bruxelles discloses, that the 20 Million Eur as a swift initial boost for what is yet to come, is financing everything but security, justice or democracy.

Oumar MARIKO - schönes Photo

Dr. Oumar Mariko, kidnapped by Securité d´Etát

The kidnapping of Mali´s opposition leader Dr. Oumar Mariko on 11 February, by Mali´s Securité d´Etát, Mali´s security police, which is under the direct control of the French-backed interim-President Dioncounda Traoré, is just one of many examples, that demonstrate how the EU is wasting taxpayer money. That is, provided that the EU wants to finance reconciliation efforts, justice and fair elections.

Dr. Mariko is the presidential candidate for the SADI party and the COPAM coalition of opposition parties, who oppose the reversal of the results of the popular coup d´etat via the military forces of Mali, which ousted the former President Ammandou Touré. Dr. Mariko is also opposed to the inherent corruption in Mali and to the French system of usurpation, which prevents the development of Mali´s economy, in spite of the country´s resources.


Ammandou Toumani Touré

The event that triggered the coup against Touré was not only, that he had signed an agreement with elements within the administration of French President Hollande, the Touareq and Touré´s long term friend and party associate Iyad Ag Ghali, to literally sell off northern Mali. What triggered the ouster of Touré was, that he got caught red-handed while  using his satellite phone for giving explicit orders to an Al-Qaeda commander, to attack Malian military forces.

The arrest of the SADI party and the COPAM coalition´s Presidential Candidate and Member of Parliament, Dr. Oumar Mariko can hardly be called an arrest. Every single rule of a legal arrest was broken, when civilian dressed gunmen, of Dioncounda Traoré´s Securité d´État, armed with assault rifles, broke through the doors of Mariko´s party´s offices in Bamako, threatened Dr. Mariko at gunpoint while failing to identify themselves; when they put him in hand-caught, hoodwinked him with a bag, forced him into an unregistered 4×4 and drove away with him at high speed, while firing warning shots into the air to prevent the intervention from bystanders. Dr. Mariko was released after two days, and attempts to manufacture charges against him, which could prevent him from legally leaving Mali for political talks abroad.

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Interim President Dioncounda Traoré

To grant 20 Million Eur to the administration of interim-President Dioncounda Traoré, who is in direct control of Mali´s state security and responsible for the kidnapping of the opposition leader, is everything but securing safety or justice in Mali. The less euphemistic version of Bruxelle´s explanation why 20 Million Eur had to be sent to Mali, would be “we sent 20 Million Eur to secure that France can protects its interests in Mali by letting its protegé abuse the country´s police forces and justice system before a democratic discourse ruins Hollande´s plans for Mali“. European tax money is used to finance a French-backed tyrants State Security police, and the 20 Million Eur was just the beginning, a swift installment for immediate action.

However, the madness with EU funds does not stop there. The most likely candidate whom France will support during the presidential elections is Modibo Sidibe. Sidibe is a party coalition associate of both the ousted President Touré, of interim-President Traoré, of Al Qaeda leader and party associate Ihyad Ag Ghali, and the inner circle of the Hollande administration´s Africa “experts”.

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Likely French Choice for President, Modibo Sidibe

Modibo Sidibe has, according to well-informed sources, earned large sums of Eur´s when he offered himself as “mediator” during the kidnapping of German businessmen, after reportedly passing on information to the kidnappers, about whom to kidnap, when and how. The question is, how would a German taxpayer feel about his money being used to finance a kidnapping scam for the benefit of his French neighbors while German investors are harassed. European “fraternité” the French way.

To grant 20 Million Eur, earmarked for Mali´s police and justice system is about as justified as bailing out Wall Street banksters, while pulling the wool of austerity cuts over the eyes of European taxpayers. However, the madness does not stop there either, and yes, it can get worse. Much worse.

Provided, that France succeeds at installing its preferred candidate as President of Mali, by ruthless oppression of the opposition, and with the friendly financial support of its European neighbors; by subsidizing a regime that consequently denies opposition parties and even Members of Parliament and Presidential Candidates like Dr. Oumar Mariko access to TV, Radio and the print press; that kidnaps Presidential Candidates by abusing the states security apparatus and tries to stop members of the opposition from taking part in political meetings abroad; provided, that France can keep up its status quo in its former Central-African colony with the help of European tax payers heard earned money; and lets assume for a moment, that we don´t really care much about human rights, freedom and democracy in Mali after all; can we, that is the EU at least expect a reasonable return on our investment in a French-backed totalitarian regime in Mali ?

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Hollande, a “European” Statesman ?

The answer depends entirely on who is meant when we say “we“. If “we” means we the member states of the European Union, the answer is no. France has for years done its utmost to keep investors from other European countries out of its former colonies. If “we” on the other hand means “we the French” the answer is a definite oui, yes“, and “we the other Europeans” will have to pay for it in terms of security, extremism, terrorism, as well as in terms of a lost market opportunity that has the potential to turn both the African and the European economies around.

France has, since 1946 exercised full control over the 15 Central African economies by installing commissioners with veto right in the regions three central banks. The 15 Central African countries currency, the F-CFA, is printed in France, its value is regulated by France, and France keeps 50 % plus 15 % of the 15 countries foreign reserves in France. France earns about 3 % on the interests, and lends the profit back to the African countries at 5 % – 6 % or higher. France is playing the benefactor, and of course it can do that, while keeping the 15 countries gold reserves in its own national bank.

The French Africa policy, which the European Union kindly sponsored with 20 Million Eur for the regime of interim-President Traoré, is not only assuring  that the people of Mali will continue to rise up against the European backed usurpers and an oppressive state security apparatus that is financed by Europe; the French Africa policy will not only continue to aggravate the presence of extremism in Northern and Central Africa; it will not only keep the populations of the former French colonies impoverished by preventing the development of a healthy middle class, it also prevents the development of Africa´s National Economies, the development of a colossal market potential and a genuine African-European cooperation, that would make austerity cuts in Europe ridiculously obsolete. Sending 20 Million Eur to Mali was equal to financing a joint African-European suicide. It is a bad investment and we should be able to expect better from our elected and unelected officials in Europe.

Related articles:

French Africa Policy Damages African and European Economies.

Kidnapping and Release of Mali Opposition Leader Mariko an additional Chapter of Modo-Colonialism in Africa

Neo-Colonialism, Subversion in Africa and Global Conflict

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Zimbabwe Elections: Sekeramayi rallies cadres for massive victory

Sydney Kawadza Assistant News Editor The Herald – Zimbabwe. – Zimbabwe is going to a penaltimate poll that will determine its lasting sovereignty, National Security Minister Sydney Sekeramayi has said. Speaking at the burial of liberation war hero Cde Peter Nyakuba at Riwonde Farm in Goromonzi on Saturday, Cde Sekeramayi urged Zanu-PF cadres to mass-mobilise their colleagues for an emphatic vote against elements trying to reverse the gains of Zimbabwe’s independence.

Cde Nyakuba

Cde Nyakuba

Cde Nyakuba died  when the vehicle he was traveling in failed to cross a flooded river.
He was mobilising villagers to register as voters when the incident occured. Cde Sekeramayi, who is the party’s secretary for national security, said the forthcoming elections, likely to be held in July would give Zimbabwe the direction to pursue for the future.

These elections would determine that Zimbabwe would not go back into the hands of the imperialists with the influence of outsiders or would be led by people who understand its principles and sovereignty,” he said.

Cde Sekeramayi urged Zimbabweans to vote overwhelmingly for Zanu-PF. “Zanu-PF is the only party that has the people’s interests at heart. The weapon to secure our future is our vote and all party cadres should go out and vote for President Mugabe for Zimbabwe’s future,” he said, urging Zimbabweans to remain peaceful in the run-up to the elections.

There are people who are waiting to blame Zanu-PF for violence especially when they know that we are headed towards an election victory. We need to campaign peacefully so that we leave our detractors in no doubt when we win the elections,” he said.

Zanu-PF secretary for indigenisation and empowerment Cde Saviour Kasukuwere said Zanu-PF had no option but to win the next elections.

Let’s stand by our commitment to empowerment so that Zanu-PF, the party that stands for the people’s sovereignty, carries out its obligation to empower the masses,” he said.

The Youth Development, Indigenisation and Empowerment Minister said beneficiaries of Zimbabwe’s land reform programme needed financial support.

We need to support the farmers. We are, however, afraid to take on the banks that are still under the control of foreigners and are fighting against the land reforms. The time has come for Zimbabweans to be in charge. Zimbabweans cannot be poor forever hence the need to assume total control of its natural resources,” he said.

Zanu-PF provincial chairman for Mashonaland East Cde Ray Kaukonde castigated party leaders fighting for positions without working for the people.

We are busy fighting for positions when we should be working for the people. Its important to work for the development of the party and its people not as individuals. Our fight is for the people not for self enrichment.

Cde Kaukonde said most aspiring candidates were interested in benefits of being in Parliament.

They are interested in the benefits, supposed deals that can be concluded but we are saying a leader should have the people at heart and work for their development. Let’s be careful when we choose our leaders and for the development of the people,” he said.

Cde Nyakuba (49) who was the Zanu-PF deputy provincial political commissar joined the liberation struggle as a collaborator and survived many battles while assisting combatants. He was elected youth chairman for Goba branch in Bangauya district in Mudzi before being elevated to the district’s information and publicity secretary in 1995. He was appointed secretary to the provincial youth league before becoming the deputy political commissar in 2008. Cde Nyakuba was also a councillor in the Mudzi Rural District Council. He is survived by his wife Constance and four children.

Via: The Herald – Zimbabwe

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Brazilian Defense Minister arrives on an official Visit to Angola today

(nsnbc) Brazilian Defense Minister Luís Nunes Amorin, will arrive on a 48 hour visit in Angola today, 18 February 2013, to reinforce the two countries bilateral relations and friendship. In 2012 Brazil and Angola signed a comprehensive defense agreement. Brazil was one of the first countries to recognize Angola after its independence in 1975.

celso amorinnsnbc archiveThe two countries, led by Angola´s Defence Minister Cândido Pereira dos Santos Van-Dúnem and Brazil´sDefence Minister Celso Luís Nunes Amorin, will assess progress in the two countries defense cooperation and discuss initiatives to further strengthen bilateral relations. Angola´s Defense Minister Pereira will receive his Brazilian counterpart with military honors at the Angolan Ministry of Defense in Luanda. The Ministers will hold meetings with representatives of the Armed Forces of Angola (FAA), before visiting the Luanda naval base. The official talks will end on Tuesday after signing a final document and issuing a press release.

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Standoff in Sabah could derail Southern Philippines Peace Process

Christof Lehmann (nsnbc) Only days after a peace accord between the Philippine government and the secessionist Moro Islamic Liberation Front (MILF) was negotiated, and a declaration that about a lasting peace accord would be signed by March, an armed group, which claims to be the Royal Armed Forces of the Sultanate of Sulu, has occupied the Malaysian town of Tundao, Lahad Datu in the Malaysian state of Sabah an hours boat ride away from the Southern Philippines. Fighting between the insurgents and Malaysian police forces, which have surrounded the intruders, have lasted throughout the weekend. Malaysis´s government offers to negotiate in the hope that the intruders would to leave again peacefully.

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MILF militant. Photo: Keith Baconcgo

According to Malaysian and Philippine news agencies and TV, the insurgents decided on a standoff over their claim to Sabah on the island of Borneo, after they were left out of the peace process between the Philippine government and the MILF. A report from the Inquirer states, that the Sulu Sultanate Crown Prince Rajah Mudah Agbimuddin Kiram has said, that the government appeared to have ignored their stand that their claim to Sabah should be made an ” integral and essential” aspect of any peace agreement with any armed group in Mindanao.

The secretary-general and spokesman of the Sultanate of Sulu, Abraham Julpa Idjirani, reportedly said that the decision to show not just physical presence but actual occupation of Sabah came late last year, shortly after the Aquino administration had signed a Framework Agreement on the Bangsamoro with the MILF. The government of the Philippine´s President Beningo Aquino III and the MILF signed a framework agreement that would end the decades-old Muslim insurrection in Mindanao by the creation of a new political entity called Bangsamoro in October 2012. Idjirani reportedly said, that before the Presidential adviser on the Peace Process has failed to honor an agreement to invite the Sultan of Sulu before consulting with the MILF.

According to Malaysian government informations, the Malaysian Security Forces have surrounded the intruding insurgents, whom they believe to be Philippine rebels who are unhappy over the Peace Deal between the Aquino administration and the MILF. Malaysia´s Minister of Foreign Affairs, Anifa Aman, has assured the Philippine Foreign Affairs Secretary Albert del Rosario, that Malaysia would respect the rights of the Filipinos in the Sabah standoff. According to a statement of the Malaysian government, the Malaysian government has encouraged negotiations with the Philippinos in the hope that they would leave peacefully.

According to a Philippine scholar with extensive knowledge about the dynamics of the conflict, who contacted nsnbc but choses to remain anonymous of fear for reprisals, this weekends violence is, at its root cause by the aftereffects of colonialism and still ongoing but dormant territorial disputes between Malaysia and the Philippines over parts of Borneo island. According to the Philippine scholar, this weekends violence may make a final peace accord between the MILF and the Philippine government more complicated and derail it in terms of set dates, but it is unlikely, that the MILF per se will take up arms again over this weekends incident.

Related article:

Philippine Peace Accord expected by March

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St John´s Wort for Depression – Yes But !

christof-lehmann-20112The medicinal effect of St John´s Wort or Hypericon Perforatum, has been known and documented for centuries. Over time, it has been recommended and used for a cohort of ailments, conditions and diseases. For many years its effect was attributed to astrological and occult powers. 1652 Nicolas Culpeper, who used the old astrological medicinal system, wrote in Culpeper´s Herbal (Culpeper Nich 1652) (1) about St John´s Wort´s beneficial effect on the gall, the liver, its effect against women problems, (not problems with women), about its beneficial effect on the mood, and an almost endless list of other sufferings.  St John´s Wort was for centuries cultivated in Europe and in countries where European monks.. It is still found in the gardens of many old monasteries. St John´s Wort has a documented effect in the treatment of depression, but its use can have unwanted, even lethal consequences. St John´s Wort for Depression – Yes But !

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St John´s Wort. Photo, Danny S

St John´s Wort is often used in herbal alcoholic drinks. It taints the “spirit” with a pleasant red color. The most common and best documented use of St John´s Wort is its use as a remedy against melancholia or depression. Today, we have a better understanding of the plants active ingredients, its medicinal effect, as well as the risks as we had during the time of Culpeper.

With regard to the modern “over the counter” sale of St John´s Wort as non-prescription drug or as a food additive it is worth noticing, that the monks of centuries past, and others who were trained in pharmacological and medical skills, were, in spite of many superstitions, highly qualified for their time. Also others used herbs with caution and not without knowledge and consideration. Herbal remedies were generally administered by people who had the necessary pharmacological skills, who knew the growth conditions of the herb and much effort was made to secure a standardized quality of the product. Today´s over the counter sale of medicinal herbs can easily make us believe that the products are harmless. Rather than restrictive laws, what is needed, is to make unbiased information available to both health-care providers and those who buy the product over the counter.

The flower of St John´s Wort looks pretty. Its easy to forget that it can cause severe side-effects, such as the rejection of implanted organs. If it is used together with certain other products, there can arise serious problems, such as unwanted pregnancies. Even though St John´s Wort products can be freely bought over the counter in many supermarkets and stores, there is an acute lack of unbiased and detailed information.

The herb is widely used as a remedy against mild to moderate depressive spectrum disorders. The active ingredients in St John´s Wort are comparable with other SNRI/SSRI medicines – happy pills – anti-depressants. It is  commendable to use the same carefulness and responsibility with St John´s Wort, as one would use with the synthesized SNRI / SSRI medicines. Before using it against depression or other mood disorders, I recommend to consult a medical doctor and/or a clinical psychologist.

St John´s Wort, Yes……. But !

Before considering whether to use St John´s Wort or not, let’s have a closer look at the plants known active substances, the justification of its use as a remedy against depressions, and a look at its metabolism, its interactions, and not least, at the known side-effects and the risks which are correlated with its use.

Hyperikon Perforatum contains a cohort of different components, but the primary active components are naphthodianthrones. The most biologically active naphtodianthrones in St John´s Wort are pseudohypericine and hyperforin. The herb also has flavones, xanthoids and quercetine.

One of the biggest problems with the pharmacological use of Hyperikum Perforatum is, that there are significant variations in the content of the active substances in different products. A study by Draves and Walker (Drawes & Walker 2003)(2) analyses the content of naphthodianthrone in 54 different St John´s Wort products on the Canadian market.The study documents, differences between the declared content of naphthodianthrone and the real content; from 0 %  to 109 % for capsules and from 31 % to 80 % for tablets.

The study by Draves and Walker is supported by many other studies, which confirm, that both the amount of the active substances, as well as the variance between the different active substances varies considerably from product to product, and even between different patches of the same product.

Of course this variance would not even be worth mentioning if we were talking about a cup of tea or coffee, but when we are dealing with remedies and substances, which impact our serotonine, dopamine and norepinephrine receptors, when we are talking about serious conditions, or when we are talking about a substance which can cause severe, even lethal side-effects, it is an entirely different cup of teal all together.

Mood Disorders, the Depressive Spectrum, Bipolar Disorder, and St John´s Wort.

The most active substance in St John´s Wort, in terms of the treatment for depressive spectrum disorders, is hyperforine, but Hypericon Perforatum also contains a cohort of other pharmacologically active substances, which will not be accounted for in detail in this article. The intention here, is to tell those who prescribe St John´s Wort products, as well as users, about the fact that there are some serious issues which need to be taken into account, to explain what these issues are, why they are serious, and to advise, that those who prescribe the herb or use it, should involve a medical doctor or a clinical psychologist prior to subscribing or using it.

Hypericine and hyperforin inhibit the re-uptake of serotonine, dopamine and norepinephrine in the synapsomes. Hypericine has a significant impact on the activity of the D3 and D4 dopamine receptors. Long-term treatment of rats with St John´s Wort remedies results in an upward adjustment of the post-synaptic 5-HT1A and 5-HT2A receptors. The beneficial effect of St John´s Wort on mild to moderate depressions is most likely caused by the interaction of these two effects.

If it is indicated, that a patient is suffering from cyclothymia or bipolar disorder, I recommend not to prescribe/ use St John´s Wort, unless the use it is closely monitored by a medical doctor or a clinical psychologist.

Also the treatment of patients with depression, who have never suffered from hypomania or a manic episode must be closely monitored. The use of St John´s could, potentially trigger the first hypomanic or manic episode in patients with a disposition for cyclothymia or bipolar disorder. In other words, frequent contact to a medical doctor or clinical psychologist are necessary, and particularly so, at the onset and the end of the treatment.

The same considerations, which are necessary when prescribing or using a SNRI / SSRI product are necessary when using St John´s Wort too. The fact that medical doctors are over-prescribing those products is, of course, an entirely different matter all together. Plant substances are not necessarily more harmless than synthesized substances. Some of the most potent psyko-active substances and some of the most potent poisons are produced by mother nature.

The effect on Metabolism and Interactions with other Medicines.

Hyperikon Perforatum is effective at inducing hepatic CYPs, and in particular CYP3A4, CYP2C9 and CYP1A2. Hyperforine induces CYP3A4 through the activation of Pregnan X, which is a vacant nuclear receptor. Access Medicine (Access medicine, Mc Graw & Hill 2009)(3) and a cohort of other publications, draw attention to interaction with a long list of other medicines. These interactions must be taken into account before prescribing or using St John´s Wort. Some of these interactions are serious and even lethal. If a patient, for whom treatment with St John´s Wort is indicated, is on any other medication it is absolutely vital to avoid unintended interactions.

Photo by Melimamma

St. John´s during use of oral contraceptives can result in unwanted pregnancies.Photo by Melimamma

I advise psychologists, psychotherapists and medical doctors alike, to urge increased professional as well as general awareness of both the beneficial and the harmful effects of St John´s Wort remedies. I also recommend, that St John´s Wort remedies, which are openly sold, should be marked with appropriate warnings about the potentially harmful effects, interactions and dangers, recommending the use of the product only, after previous consultation with a medical doctor or a clinical psychologist. If you should be suffering from a mood disorder and consider to use St John´s Wort, I highly recommend that you consult with your doctor first.

Effectiveness in the Treatment of Depressive Spectrum Disorders.

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Depression and Bereavement, Photo: Baker 131313

Even though the herb was used for centuries, any treatment that includes the use of St John´s should be considered as an experimental treatment, and all the necessary methodological and ethical precautions should be considered. The patient has to be informed about the treatments experimental character. If a patient is self-medicating, which in my opinion is fine, the patient should be offered all necessary and possible guidance and information about the beneficial as well as the side-effects and the risks which are involved. Too many health-care professionals are ignorant about which “alternative” medications their patients are on, and too many, honestly don´t care.

A meta-analysis is not more reliable than the studies it includes, but it “can” give useful indications.

One meta-analysis, about the use of St John´s Wort for  depressive spectrum disorders, by Linde and Berner (Linde, Berner & Kriston 2008) (4) indicates that St John´s Wort remedies are as effective for mild to moderate depressions, as synthetically manufactured SSRIs, and more effective than a placebo. However, there were no double-blind studies with placebo used in the meta-analysis. An effect on severe depressions could not be registered, but also that coincides well with other SSRIs.

Yes But ! Some Serious Considerations.

Even though St John´s Wort seems to have relatively few side-effects, other than those which are common for most SSRIs, some of the interactions with other medicines, like unwanted pregnancies, and the rejection of heart implants are very serious. Taken these serious interactions into account, and taking into account that the herb is sold in over the counter products, I recommend that the manufacturers of St John´s Wort products voluntarily give detailed information together with the product, and that a recommendation to consult with a medical doctor or clinical psychologist is given.

All SSRI / SNRI products must be taken with precaution and under professional supervision. Cognitive Behavior Therapy, adjustment in life-style, habits, thinking and nutrition often make any treatment with SSRI / SNRIs unnecessary. The fact that St John´s Wort can be bought over the counter can make people believe, that it is an easy, harmless,  and inexpensive fix for a depression. It is not.

Countless studies show that depressive symptoms tend to recur when treatment with SSRI / SNRIs is stopped. The treatment of mild to moderate depression with St John´s can cause the onset of a first hypomanic or manic episode in patients with have not yet been diagnosed with cyclothymia or bipolar disorder. It is also worth mentioning, that treatment with all SSRI / SNRIs requires a gradual increase of the dose at the start, and a slow and gradual teetering off of the medication. Failure to do so can worsen symptoms of depression.

The best advise I can give to health-care professionals is, that St John´s Wort probably is as good or bad as other SSRI / SNRIs and that any treatment with it is experimental. The positive side of the herb is, that it could be an inexpensive and safe alternative to expensive  pharmaceutical products if more research is done, the quality standardized, and the necessary care is taken. The best advise I can give with regard to St John´s Wort, if you consider it because you are feeling depressed is, seek help from a professional health care provider first and try Cognitive Behavior Therapy before you take “any” medication for depression.

Christof Lehmann Psy.D.

1) Culpeper Nich. ”Culpeper Index of Herbs” Printed by Peter Cole, pp. 70 – 80 London, 1652, at the Sign of the Printing Press in Cornhill, near the Royal Exchange.
2)  Drawes A.H. and Walker S.E. 2003.” Analysis of the hypericin and pseudohypericin content of commercially available St. John´s wort preparations. ” Canadian Journal of Clinical Pharmacology 10, pp. 114-118, 2003. (PMID:14506510)
3) Access Medicine © 2009 Mc Graw & Hill
4)  Linde K., Berner M.M., Kriston L. ”St. John´s wort for major depression ” . Cochrane Database of Systematic Reviews 2008, Issue 4, Article No.CD000448. DOI: 10.1002/14651858.CD000448.pub3. [PMID:
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