The Most Over/Under-Valued Housing Markets In The World

This is very inter­est­ing (and seri­ous):

OECD compare the prices

OECD com­pare the prices

House prices — with respect to both lev­els and changes — dif­fer wide­ly across OECD coun­tries. As a sim­ple mea­sure of rel­a­tive rich or cheap­ness, the OECD cal­cu­lates if the price-to-rent ratio (a mea­sure of the prof­itabil­i­ty of own­ing a house) and the price-to-income ratio (a mea­sure of afford­abil­i­ty) are above their long-term aver­ages, house prices are said to be over­val­ued, and vice-ver­sa. There are clear­ly some nations that are extreme­ly over-val­ued and oth­ers that are cheap but as Soc­Gen’s Albert Edwards notes, it is the UK that stands out as author­i­ties have gone out of their way to prop up house prices — still extreme­ly over-val­ued (20–30%) — despite being at the epi­cen­ter of the glob­al cred­it bust. Sum­ming up the cen­tral bankers anthem, Edwards exclaims: “what makes me gen­uine­ly real­ly angry is that bur­den­ing our chil­dren with more debt to buy ridicu­lous­ly expen­sive hous­es is seen as a solu­tion to the prob­lem of exces­sive­ly expen­sive hous­ing.”

Screwed (ie SELL!):

  • UK
  • Spain

Not-Screwed (ie BUY!):

  • Por­tu­gal
  • Switzer­land

So quite sim­ply sell any prop­er­ties that you have in the screwed group and buy them back in the not-screwed group. Voila! These coun­tries break down into Five Cat­e­gories:

Where hous­es appear broad­ly cor­rect­ly val­ued. This cat­e­go­ry includes the Unites States, where prices have start­ed ris­ing again after a sub­stan­tial cor­rec­tion; Italy, where prices are falling rapid­ly; Aus­tria, where prices are ris­ing; and Ice­land, Korea and Lux­em­bourg where prices are rough­ly flat.

Where hous­es appear under­val­ued and prices are still falling. This cat­e­go­ry includes Euro­pean coun­tries hit hard by the cri­sis – Greece, Ire­land, Por­tu­gal, Slove­nia, Slo­va­kia and the Czech Repub­lic – but also Japan.

Where hous­es appear under­val­ued but prices are ris­ing. This cat­e­go­ry includes only Ger­many and Switzer­land, two Euro­pean coun­tries where strong growth in house­hold dis­pos­able income and favourable financ­ing con­di­tions have boost­ed prices (despite macro-pru­den­tial mea­sures in Switzer­land).

Where hous­es appear over­val­ued but prices are falling. This cat­e­go­ry is the largest as it includes many Euro­pean coun­tries where the post-cri­sis hous­ing mar­ket cor­rec­tion is still ongo­ing, most notably Spain, but also the Unit­ed King­dom, Bel­gium, Den­mark, Fin­land, the Nether­lands and one non-Euro­pean coun­try, Aus­tralia. While price cor­rec­tions in these coun­tries are nec­es­sary, they are also con­cern­ing as they weak­en house­holds’ finan­cial health and poten­tial­ly frag­ilize bank­ing sec­tors.

Where hous­es appear over­val­ued but prices are still ris­ing. This is the case in Cana­da, Nor­way, New Zealand and, to a less­er extent, Swe­den. Economies in this cat­e­go­ry are most vul­ner­a­ble to the risk of a price cor­rec­tion – espe­cial­ly if bor­row­ing costs were to rise or income growth were to slow.

Get the full scoop:

The Most Over/Un­der-Val­ued Hous­ing Mar­kets In The World

Hap­py House Hunt­ing …

© Copy­right MMXIII

IMF “to admit mistakes” in handling Greek debt crisis and bailout — My response…

Here is a short piece that I felt I had to inter­ject at The Guardian (UK)

RagingGoldenBul unleashes on The Guardian (UK) about the IMF (International Mafia Federation)

Rag­ing­Gold­en­Bul unleash­es on The Guardian (UK) about the IMF (Inter­na­tion­al Mafia Fed­er­a­tion)


Rag­ing­Gold­en­Bul — 05 June 2013 6:54pm

Rec­om­mend: 77

Let us not ponce about the prover­bial bush here my brethren:

The IMF (short for: Inter­na­tion­al Mafia Fed­er­a­tion) is noth­ing more than anoth­er pho­ny instru­ment cre­at­ed by the US gov­ern­ment, for the US gov­ern­ment, along with World Bank at that infa­mous Bret­ton Woods (1944) meet­ing where they strong armed the rest of the world over 21 long, gru­el­ing, and I would put it to you ardu­ous days (blood must have been pour­ing from the poor del­e­gates ears after day 12) while the world was still at WAR. Pic­ture it.

Oh how they seized their chance, dragged in John May­nard Keynes (UK in col­lu­sion – spe­cial rela­tion­ship you know), and invent­ed a crock, because no one had any choice. No Choice.

It is well known that M. Lagarde (after they ditched DSK) let the cat out of the “bail-in” bag way too ear­ly for the FedReserve, and the ECB, and thus both the Bernanke and the Draghi are now sour-puss­es. After those tril­lions of USDs that heli­copter Ben print­ed-up, M. Lagarde blew it in one momen­tary lapse of rea­son. Now Ben will bail-out him­self of the pic­ture at end of the cur­rent term as Gov­er­nor of the Fed.

Every­one knows that “Bail-ins” are com­ing now to a Bank near you real soon.…Are you ready for that?

Why does any­one lis­ten to a word these guys (Inter­na­tion­al Mafia Fed­er­a­tion) say any­more? Why do they point to them as if they are cred­i­ble?

It all leads back to one thing — US Dol­lar hege­mo­ny, and any­thing to keep that pup­py alive – alas brethren, the end is nigh.

Please excuse my rather fruity and col­or­ful lan­guage (sausage I hate US Eng­lish 😉 )…

Orig­i­nal Arti­cle:

The Inter­na­tion­al Mon­e­tary Fund is to admit that it has made seri­ous mis­takes in the han­dling of the sov­er­eign debt cri­sis in Greece, accord­ing to inter­nal reports due to be pub­lished lat­er on Wednes­day.

Doc­u­ments pre­sent­ed to the Fund’s board last Fri­day will reveal that the Wash­ing­ton-based organ­i­sa­tion under­es­ti­mat­ed the dam­age aus­ter­i­ty would cause to the euro­zone coun­try, which has required two bailouts in the past three years.

The Wall Street Jour­nal report­ed that the papers would say that finan­cial sup­port from the Fund, the Euro­pean Cen­tral Bank and the Euro­pean Com­mis­sion had bought time for Greece but had only been made pos­si­ble because the IMF had bent its own rules to make the coun­try’s debt look more sus­tain­able than it was. Accord­ing to the WSJ report, Greece failed to meet three of the Fund’s four tests to qual­i­fy for help.

A Fund spokes­woman said: “We will be pub­lish­ing a num­ber of papers on Greece lat­er today. The board met last Fri­day to dis­cuss sev­er­al doc­u­ments on Greece includ­ing the review of its pro­gramme and its annu­al eco­nom­ic assess­ment.”

Greece became the first euro­zone nation to require a bailout by the inter­na­tion­al com­mu­ni­ty in 2010, but need­ed a sec­ond round of finan­cial assis­tance in ear­ly 2012 when a deep reces­sion and high inter­est pay­ments threat­ened to send its debts spi­ralling out of con­trol.

The so-called troi­ka of the IMF, ECB and EC forced pri­vate sec­tor bond­hold­ers to write down the val­ue of their Greek bonds in an attempt to bring the coun­try’s debts down to sus­tain­able lev­els of 120% of nation­al income by 2020.

Chris­tine Lagarde, the man­ag­ing direc­tor of the Fund, has said many times over the past year that Greece should now be in a posi­tion to pay off its debts, but the WSJ reports that IMF staff believe this can­not be said with any cer­tain­ty.

In Athens, offi­cials react­ed with bare­ly dis­guised glee to the news.

The report con­firms what Greek offi­cials have long said: that the first bailout of uncom­pro­mis­ing bud­get cuts and tax increas­es, the price of 110 bn euro in emer­gency funds in May 2010, was the wrong pre­scrip­tion for a coun­try not only bat­ting a mon­u­men­tal debt load but ram­pant tax eva­sion and a flour­ish­ing black econ­o­my.

Under the weight of such mea­sures – applied across the board and hit­ting the poor­est hard­est – the econ­o­my, they said, was always bound to dive into an eco­nom­ic death spi­ral. “For too long they [troi­ka offi­cials] refused to accept that the pro­gramme was sim­ply off-tar­get by hid­ing behind our fail­ure to imple­ment struc­tur­al reforms,” said one insid­er. “Now that reforms are being applied they’ve had to accept the bit­ter truth.”

The Greek media recent­ly quot­ed IMF man­ag­ing direc­tor Chris­tine Lagarde describ­ing 2011 as a “lost year” part­ly because of mis­cal­cu­la­tions by the EU and IMF. The author­i­ta­tive Kathimeri­ni news­pa­per said the report iden­ti­fied a num­ber of “mis­takes” includ­ing the fail­ure of cred­i­tors to agree to a restruc­tur­ing of Greece’s debt bur­den ear­li­er – a fail­ure that had had a dis­as­trous effect on its macro-eco­nom­ic assump­tions.

From what we under­stand the IMF sin­gles out the EU for crit­i­cism in its han­dling of the prob­lem more than any­thing else,” said one well-placed offi­cial at the Greek finance min­istry. “But acknowl­edge­ment of these mis­takes will help us. It has already helped cut some slack and it will help us get what we real­ly need which is a hair­cut on our debt next year.

See the full sto­ry:

© Copy­right MMXIII

UBS to Pay Over $450 Million to Settle Libor Probe

UBS are get­ting ham­mered (as they should be):

ZURICHUBS AG (UBS) is close to a set­tle­ment with U.S. and U.K. author­i­ties and is expect­ed pay more than $450 mil­lion over claims that some of its employ­ees report­ed false Libor rates to boost the bank’s prof­it, the New York Times report­ed Sun­day, cit­ing anony­mous offi­cials briefed on the mat­ter.

If the Zurich-based bank agrees to the deals with var­i­ous author­i­ties, the col­lec­tive penal­ties would yield the largest total fine to date relat­ed to the rate-rig­ging inquiry and would increase the like­li­hood that oth­er finan­cial insti­tu­tions would face stiff penal­ties, it report­ed.

UBS was­n’t imme­di­ate­ly avail­able to com­ment on the report.

Author­i­ties dealt their first blow in the rate-rig­ging case in June, when U.K. bank Bar­clays Plc (BARC.LN) agreed to a $450 mil­lion set­tle­ment.

U.S. offi­cials are hop­ing to com­plete a deal with UBS by the mid­dle of the month, accord­ing to offi­cials briefed on the mat­ter, the paper report­ed.”

see the full sto­ry:–00132

© Copy­right MMXII

Mark Carney Announced as next Governor of the Bank of England

A shock and sur­prise announce­ment from George Osbourne today as he announced the Cana­di­an Mark Car­ney as the next Gov­er­nor of the Bank of Eng­land. Do not doubt that this is one of the top jobs in the UK.

Mr. Mark Car­ney will be next Gov­er­nor of the Bank of Eng­land

George Osbourne defend­ed his deci­sion by stat­ing that Mr. Car­ney was:

The out­stand­ing Cen­tral Banker of his gen­er­a­tion.”

He also said that he was the best man for the job in the whole world bar none. I think it speaks more for how unsuit­able the home grown UK tal­ent was than any­thing else.

This is the first time since the cre­ation of the Bank of Eng­land back in 1694 that it has been gov­erned by a non British sub­ject, in this case a Cana­di­an. But Mr. comes high­ly qual­i­fied for the job.

He has man­aged arguably the best econ­o­my in the world Cana­da which has not had one bank bailout. In fact he has come through with his rep­u­ta­tion enhanced. He under­stands Cap­i­tal Mar­kets. He worked for Gold­man Sachs for 13 years (pos­si­bly not such a good thing! Could this be a case of Gold­man get­ting “their man” into the BoE, and a “print­er” into the sys­tem?). He speaks flu­ent French, went to Oxford Uni­ver­si­ty, already lived in the UK for a decade, his wife and chil­dren are British sub­jects, and he will apply for British cit­i­zen­ship.

Mr. Car­ney is also the cur­rent chair­man of the board of the Finan­cial Sta­bil­i­ty Board (FSB) which in itself is a con­sid­er­able achieve­ment and vote of con­fi­dence as this orga­ni­za­tion includes all G20 nations

This is a slap in the face for Mr. Paul Tuck­er who was tout­ed as the next Gov­er­nor . Too bad, LIBOR scan­dal for sure screwed that one up, and his deal­ings with Mr Bob Dia­mond.

In anoth­er depar­ture from the norm he will only serve a 5 year term instead of the more usu­al 8 year, and Char­lie Bean will stay on serv­ing his cur­rent term.

Big Ques­tion: How will this effect the UK mon­ey print­ing prac­tices and will we see more Quan­ti­ta­tive Eas­ing with Mr. Car­ney at the helm?

© Copy­right MMXII

CFTC Whistle-Blower Web Site Post Deleted

The CFTC Whis­tle-blow­er Arti­cle from the last post has now been pulled from the web­site:


What happened to this post - hoax or cover-up?

CFTC Whis­tle Blow­er Post Dis­ap­pears

But not before I got a copy to post here for eter­ni­ty. Maybe it was a hoax, but most prob­a­bly not. I find it always handy to keep a copy of stuff for ref­er­ence pur­pos­es.


© Copy­right MMXII

So They Really Do Manipulate The Price Of Gold and Silver …



The sit­u­a­tion real­ly is get­ting real­ly, real­ly, real­ly weird. And then some.

If I did not know bet­ter I would say some­things gonna blow. After the now infa­mous let­ter from Greg Smith enti­tled “Why I Am Leav­ing Gold­man Sachs” to the New York Times, anoth­er open let­ter has been post­ed around same time, this time to the CFTC (Com­mod­i­ty Futures Trad­ing Com­mis­sion), but this time from JP Mor­gan Chase. Here’s a taster:

I believe I have worked here long enough to under­stand the tra­jec­to­ry of its cul­ture, its peo­ple and its iden­ti­ty. And I can hon­est­ly say that the envi­ron­ment now is as tox­ic and destruc­tive as I have ever seen it.”

If this is true — the impli­ca­tions are scary (and some­one is going to be fired in the morning…“I don’t care…Just fire some­one!”)

Of most inter­est to us Gold/Silver Bulls is that there is direct men­tion of con­trived manip­u­la­tion and even co-coor­di­nat­ed efforts from the Big 5 Invest­ment Banks to actu­al­ly dri­ve down the price of gold and sil­ver. The Bernanke (“Bilder­berg” Ben as he is now known) inci­dent (tes­ta­mo­ny — Feb 29 — leap year day) where Gold dropped 100 USD in a day (yes I was trad­ing at the time and watched the ver­ti­cal drop yel­low line with a sick­en­ing stom­ach sourced, nau­se­at­ing swelling and spin­ning sen­sa­tion ris­ing up through my body — get­ting gid­dy and heady — as only a trad­er could know — espe­cial­ly as I had just put in two large buys min­utes before …Bug­gerus Max­imus!) is explic­it­ly men­tioned which is a good thing:

Jan­u­ary is right around the time we start­ed increas­ing our short posi­tions quite sig­nif­i­cant­ly again and this most recent crash in gold and sil­ver dur­ing Bernanke’s speech on Feb­ru­ary 29th is of notable impor­tance, as we along with 4 oth­er major insti­tu­tions, orches­trat­ed the vio­lent $100 drop in Gold and sub­se­quent drops in sil­ver.”

I do lots of trades and every now and then you won­der “Is it me?… Or maybe I just can’t cut the mus­tard to trade any­more.” and then “Maybe I should just apply for that part-time job I saw in the win­dow of the florists”. Then you find out some­one is manip­u­lat­ing the bloody mar­ket. The game is rigged. Well ulti­mate­ly they won’t win THIS game with gold — that is why I am play­ing this game.

Seri­ous­ly, for years I read, and heard about the manip­u­la­tion of the Gold mar­kets, prices being con­trolled and my atti­tudes was that it can’t be true. As I get old­er I have to admit that that was naive to say the least.

If this let­ter (see below) is a hoax at least it will make peo­ple think. If it is true, maybe we could see a turn around in Wall Street men­tal­i­ty of staff who are actu­al­ly as sick­ened (maybe even more — I know how it is to work in a hell-hole cor­po­ra­tion) as we are! Maybe we will have a stream of whis­tle blow­ers come out of the woodwork…Weird, weird times my friend.

Here is the full open let­ter:

From: Z A N
JPMor­gan Chase

Com­ment No: 57019
Date: 3/14/2012

Com­ment Text:

Dear CFTC Staff,

Hel­lo, I am a cur­rent JPMor­gan Chase employ­ee. This is an open let­ter to all com­mis­sion­ers and reg­u­la­tors. I am email­ing you today b/c I know of insid­er infor­ma­tion that will be damn­ing at best for JPMor­gan Chase. I have decid­ed to play the role of whistle­blow­er b/c I no longer have faith and belief that what we are doing for soci­ety is bring­ing val­ue to peo­ple. I am now under the opin­ion that we are actu­al­ly putting hard work­ing Amer­i­cans unaware of what lays ahead at extreme mar­ket risk. This risk is unnec­es­sary and will lead to wide-scale mar­ket col­lapse if not han­dled prop­er­ly. With the release of Mr. Smith’s open let­ter to Gold­man, I too would like to set the record straight for JPM as well. I have seen the dis­rup­tive behav­ior of supe­ri­ors and no longer can say that I look up to employ­ees at the ED/MD lev­el here at JPM. Their smug exu­ber­ance and arro­gance per­me­ates the air just as pun­gent­ly as rot­ting veg­eta­bles. They all know too well of the back­door crony con­nec­tions they share inti­mate­ly with elect­ed offi­cials and with oth­er insti­tu­tions. It is appar­ent in every­thing they do, from the mea­ger attempts to manip­u­late LIBOR, there­fore con­trol­ling how almost all deriv­a­tives are priced to the inher­it and fraud­u­lent com­modi­ties manip­u­la­tion. They too may have one day stood for some­thing in the past in the client-employ­ee rela­tion­ship. Does any­one in today’s mar­ket real­ly care about the pro­tec­tion of their client? From the ruth­less and scan­dalous treat­ment of MF Glob­al client asset funds to the exces­sive bonus­es paid by com­pa­nies with bur­geon­ing lia­bil­i­ties. Yes, we at JPMor­gan that are in the know are fear­ful of a cas­cad­ing cred­it event being trig­gered in Greece as they have hid­den deriv­a­tives in excess of $1 Tril­lion USD. We at JPMor­gan own enough of these through coun­ter­par­ty risk and out­right prop trad­ing that our entire IB EDG space could be anni­hi­lat­ed with­in a few short days. The last ten years has been mar­ket by inflex­ion point after inflex­ion point with the most notable com­ing in 2008 after the acqui­si­tion of Bear.

I wish to remain anony­mous as of now as fear of ter­mi­na­tion mounts from what I am about to reveal. Robert Got­tlieb is not my real name; how­ev­er he is a trad­er that is involved in a law­suit for manip­u­la­tive trad­ing while work­ing with JPMor­gan Chase. He was acquired dur­ing our Bear Stearns acqui­si­tion and is known to be the noto­ri­ous per­son short­ing in the sil­ver future mar­ket from his trad­ing space, along with Blythe Mas­ters, his IB Glob­al boss. How­ev­er, with that said, we are manip­u­lat­ing the sil­ver futures mar­ket and play­ing a small­er (but still mas­sive­ly manip­u­la­tive) role in manip­u­lat­ing the gold futures mar­ket. We have a lit­tle over a 25% (give or take a per­cent­age) posi­tion in the short mar­ket for sil­ver futures and by your def­i­n­i­tion this denotes a larg­er posi­tion than for spec­u­la­tive pur­pos­es or for hedg­ing and is beyond the line of manip­u­la­tion.

On a side note, I do not work direct­ly with accounts that would have been direct­ly impact­ed by the MF Glob­al fias­co but I have heard through oth­er col­leagues that we have involve­ment in the hid­ing of client assets from MF Glob­al. This is anoth­er fraud­u­lent effort on our part and con­sti­tutes theft. I urge you to for­ward that part of the inves­ti­ga­tion on to the respec­tive author­i­ties.

There is some­thing else that you may find strange. Dur­ing month-end Decem­ber, we were all told by our man­agers that this was going to be a dis­mal year in terms of earn­ings and that we should not expect any bonus­es or pay rais­es. Then come mid-late Jan­u­ary it is made known that every­one received a pay raise and/or bonus, which is inter­est­ing b/c just a few weeks ago we were told that this was not like­ly and expect­ed to be paid noth­ing in addi­tion to base salary. Jan­u­ary is right around the time we start­ed increas­ing our short posi­tions quite sig­nif­i­cant­ly again and this most recent crash in gold and sil­ver dur­ing Bernanke’s speech on Feb­ru­ary 29th is of notable impor­tance, as we along with 4 oth­er major insti­tu­tions, orches­trat­ed the vio­lent $100 drop in Gold and sub­se­quent drops in sil­ver.

As reg­u­la­tors of the free peo­ple of this coun­try, I ask you to uphold the most impor­tant job in the world right now. That job is judge and over­seer of all that is jus­tice in the most sen­si­tive of com­mod­i­ty mar­kets. There are many mid­dle-income peo­ple that invest in the phys­i­cal assets of sil­ver, gold, as well as min­ing stocks that are being finan­cial­ly impact­ed in a neg­a­tive way b/c of our unscrupu­lous shorts in the pre­cious met­als com­mod­i­ty sec­tor. If you read the COT with intent you will find that com­mer­cials (even though we have no busi­ness being in the com­mer­cial sec­tor, which should be reserved for com­pa­nies that tru­ly pro­duce the met­al) are net short by a long shot in not only sil­ver, but gold.

It is rather sur­pris­ing that what should be well known lia­bil­i­ties on our bal­ance sheet have not erupt­ed into wider scale scru­ti­niza­tion. I call all hon­est and coura­geous JPMor­gan employ­ees to step up and fight the crony­ism and wide-scale manip­u­la­tion by report­ing the truth. We are only help­ing real­i­ty come to light there­fore allow­ing a real val­u­a­tion of our bank­ing indus­try which will give investors a chance to prop­er­ly adjust with­out being total­ly wiped out. I will be con­tact­ing a lawyer short­ly about this mat­ter, as I believe no oth­er whistle­blow­er at JPMor­gan has come for­ward yet. Our deep­est secrets lie with­in the hands of hon­est employ­ees and can be revealed through hon­est reg­u­la­tors that are will­ing to take a look inside one of Amer­i­ca’s best kept secrets. Please do not allow this to turn into anoth­er Enron.

Kind Regards,
‑The 1st Whistle­blow­er of Many

I eager­ly await the devel­op­ment of this sto­ry with bat­ed breath.

P.S. Gold is still floun­der­ing around 1,650 USD/Oz, dazed and con­fused (but not for long!).

© Copy­right MMXII

Billionaire Saudi Finds 113 Tons Of Gold In Ethiopian Sands

Sau­di bil­lion­aire Mohammed al-Amou­di and reg­u­lar all round geezer has just found even more gold. In fact 113 Tonnes of it. Could be one for the port­fo­lio in the Gold-Bull run-up, but 24 months sounds very opti­mistic, but let’s see. Check back here in 24 months. OK?

Here is the Bloomberg report:

Nation­al Min­ing Corp., a close­ly held com­pa­ny owned by Sau­di bil­lion­aire Mohammed al-Amou­di, said it found gold deposits in south­ern Ethiopia that may pro­duce at least 10 met­ric tons a year, almost dou­bling nation­al out­put.

Explo­ration con­duct­ed over 15 years shows the Okote site in Ethiopia’s Oro­mia region has more than 550 tons of gold, of which 73 tons may be ready for extrac­tion with­in 24 months, Chief Exec­u­tive Offi­cer Melaku Beza in an inter­view on March 12 in Addis Aba­ba, the cap­i­tal. The com­pa­ny plans to invest $150 mil­lion in the ini­tial phase of pro­duc­tion, he said.

This area has huge poten­tial,” he said. “The rev­enue will be about $4 bil­lion in 20 years’ time” from the 73 tons and the gov­ern­ment will receive $1 bil­lion from tax and roy­al­ty pay­ments over that peri­od.

Ethiopia, the world’s third-biggest cof­fee grow­er, is diver­si­fy­ing its econ­o­my to reduce its reliance on agri­cul­ture, which accounts for 43 per­cent of the gross domes­tic prod­uct, accord­ing to African Devel­op­ment Bank data. Gold exports surged 75 per­cent to 11 tons in the fis­cal year through July 7, 2011, gen­er­at­ing $485.3 mil­lion. Earn­ings totalled $258.8 mil­lion in the first half of the cur­rent fis­cal year from $179.2 mil­lion a year ear­li­er, accord­ing to Trade Min­istry data.

I think min­ing devel­op­ment in Ethiopia will be the future hope of the coun­try for for­eign-cur­ren­cy income,” Melaku said. Last year, cof­fee ship­ments earned the coun­try about one-third of its total for­eign-exchange rev­enue of $2.8 bil­lion.

Gold Survey

Sur­veys con­duct­ed by South Africa’s Ven­myn Rand Ltd. have shown deposits of 113 tons of gold in the south­ern part of Okote, which is about 600 kilo­me­ters (373 miles) south of Addis Aba­ba, Melaku said. The area may con­tain more than 425 tons, Melaku said.

Ethiopia’s only com­mer­cial pro­duc­er of the pre­cious met­al is Midroc Gold, anoth­er com­pa­ny owned by al-Amou­di that was formed out of NMC to devel­op the Leg­edem­bi deposit. That mine, which is about 100 kilo­me­ters north of Okote, pro­duces about 4 tons of gold a year, said Melaku.

At peak pro­duc­tion, Okote may employ 5,000 work­ers and earn the com­pa­ny more than $500 mil­lion a year from 10 tons of the met­al, he said.

NMC, which is based in the cap­i­tal, was formed in 1993 when al-Amou­di bought the state-owned Ethio-Libyan Joint Min­ing Co. The sale was the first of a state-owned com­pa­ny to pri­vate investors by Prime Min­is­ter Meles Zenawi’s two-decade old gov­ern­ment, accord­ing to Melaku.

The state owns 5 per­cent of all gold oper­a­tions, levies an income tax of 35 per­cent and col­lects roy­al­ties of 8 per­cent, accord­ing to Melaku. Aus­tralia’s Nyota Min­er­als Ltd. (NYO) and Van­cou­ver-based Tigray Resources Inc. (TIG) both have dis­cov­ered gold deposits in the Horn of Africa nation. NMC also has found 18 tons of gold in the north­ern Tigray region, said Melaku.

Ethiopi­an-born Al-Amou­di is the world’s 61st rich­est man and is worth $12.5 bil­lion, accord­ing to Forbes mag­a­zine. His Ethiopi­an invest­ments include cement, hotel, soft drink and agri­cul­ture com­pa­nies.

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