Friday, February 12, 2016

Gold shines as punters seek safe havens; The unending debate over wealth and income; Pope, Patriarch meet after 1,000 years

1 Gold shines as punters seek safe haven (Marissa Lee in Straits Times) Gold is making a comeback as stock market turbulence across the world drives investors into safe havens. Phillip Futures senior commodities manager Avtar Sandu said: "The US is going to slow down with their interest rate hikes - the market is expecting the next hike no earlier than December."

The US dollar is losing some of the strength it gained at the end of last year, making a stronger case for investors to hold on to gold, although the metal pays no dividends. Which is not so bad, given that a rising number of institutions, like the European Central Bank, are charging negative interest rates, while many others have their rates close to zero.

Even central banks were buying more gold. Central bank purchases of the metal rose 25 per cent to 167 tonnes in the fourth quarter, as they saw a greater need to diversify amid a "tumbling oil price and reduced confidence in the global economy", said a World Gold Council report.

Most analysts predict that gold's rally will be over soon. Mr Sandu sees it trading at around $1,280 in the next few months. Then again, the metal has already outrun their forecasts for the first two months of this year.

2 The unending debate over wealth and income (Antonio Foglia in Gulf News) Everyone seems to be talking about – and condemning – today’s rising level of economic inequality. Fueled by jarring statistics like Oxfam’s recent revelation that the world’s richest 62 people own as much wealth as the poorest 3.6 billion, popular support for left-wing figures like America’s Bernie Sanders and Britain’s Jeremy Corbyn is rising.

But today’s ideology-driven debates oversimplify an issue that is exceedingly complex – and affected by processes that we do not fully understand. Many of those engaged in the debate on inequality nowadays cite the French economist Thomas Piketty’s 2014 book Capital in the Twenty-First Century, which makes three key points.

First, over the past 30 years, the ratio of wealth to income has steadily increased. Second, if the total return on wealth is higher than the growth in incomes, wealth is necessarily becoming increasingly concentrated. Third, this rising inequality must be reversed through confiscatory taxation before it destroys society.

The points might seem convincing at first glance. But the first statement is little more than a truism, and the second is falsified by Piketty’s own data, making the third irrelevant.

Economic inequality is a highly complex phenomenon, affected by a wide variety of factors – many of which we do not fully understand, much less control. Given this, we should be wary of the kinds of radical policies that some politicians are promoting today. Their impact is unpredictable, and that may end up doing more harm than good.

Perhaps a new approach is not necessary at all. After all, globally, standards of living are continuously improving and converging. That is something that everyone, from the emerging populists to the hardened capitalists, should be able to agree on.

3 Pope, Patriarch meet – first time in 1,000 years (Alec Luhn in The Guardian) Pope Francis has met the head of the Russian Orthodox church, Patriarch Kirill, in Cuba. The meeting marks the first encounter in history between a Roman Catholic pope and a Russian Orthodox patriarch in the nearly 1,000 years since Eastern Orthodoxy split with Rome.

“Finally!” the pope exclaimed as he embraced Patriarch Kirill in the small, wood-paneled VIP room of Havana’s airport, where the three-hour encounter was taking place. “We are brothers.”
Pope Francis, dressed in white with a skullcap, and Patriarch Kirill, wearing a tall, domed hat that dangled a white stole over black robes, joined arms and kissed one another three times on the cheek when they met inside the terminal.

The patriarch told the pope: “Now things are easier.” They then sat down for a chat with aides on either side. Church officials have insisted that Patriarch Kirill’s historic meeting with Pope Francis is apolitical and meant to address the persecution of Christians in the Middle East.

But Russian media have speculated that the visit with Pope Francis was actually a political mission to reduce the country’s isolation amid western sanctions over Ukraine and criticism for its Syria bombing campaign.

The Russian Orthodox church has historically had close ties to the state, and Patriarch Kirill and Putin have an especially close relationship, with the patriarch calling Putin a “miracle from God” and backing him in the 2012 election. Furthermore, to organise the meeting, Patriarch Kirill had to outmaneuver hardliners in the church, and Orthodox fundamentalist websites have branded him a “heretic” for agreeing to speak with the “antichrist” pope.

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