Could this happen to gold?

Is gold just another bubble?

THE COPPER BELT
During the 70’s, at the height of the last copper boom, it said that shops in Kitwe, Zambia, were stocked with Caviar. Today, the city is in shambles. Roads are unpaved, the sewer system is non-existent, schools lack basic resources, hospitals continue to run out of medication…in short, Kitwe is a rag tag rats hole of its old self.

This shabbiness is surprising given that the price of copper has risen four-fold in the last 10 years. Why is there no investment in the social services? Why isn’t the booming mining industry benefiting the people? The same question can be asked about the Niger Delta in Nigeria. Where are the new roads, schools and hospitals? What is the benefit of owning national resources?

ZAMBIA’S SECRETS
The reason there are no benefits, lies in the secret deals that the Zambian government concluded with the new mining companies when the state copper giant was privatized in the 90’s. These agreements, also called development agreements, are still shrouded in mystery. Majority of the people of Zambia still don’t know how they were negotiated.

Research by John Lungu, Professor of economics at the copper belt University in Zambia, revealed that the mining companies were given generous tax breaks and a special tax deal on their profits. The killer punch was the amount of tax the mines would pay on the price they sold the copper on the world market. The royalty.

The Zambian Mines and Minerals act stipulates that mining companies should pay a 3 percent royalty on sales. Professor Lungu discovered that the rate agreed in the development agreements was just 0.6 percent. Now, not only were the mines paying nothing in taxes, they were also paying nothing in royalties. No wonder the local government in Kitwe could not raise enough money to hire a cockroach exterminator (let alone building roads). But how did the situation get like this?

NEGOTIAITING WITH A GUN TO THE HEAD
In the Late 90’s Edith Nawakwe, was the finance minister in the negotiations between the private mine companies (colonial), and the Zambian government. During a recent interview with the BBC, she revealed that the mines were loosing an average of 1 million dollars a month when she took office in 1997. Her first task as minister was to borrow $50 million to pay wages to the mining employees on the copper belt. On hearing this, the IMF and World Bank concluded that the mines needed to be disposed of. They were sucking the exchequer dry.

Ms. Nawakwe maintains that the government was in a weak position when they went into the negotiations. Zambia was broke and in dire need of cash. The IMF and World Bank arm-twisted the state to privatize the National Mine Company or risk loosing a loan to help plug their coffers, which had a large deficit due to a drop in copper prices. Thus Zambia was forced to negotiate with the mining companies.

HANDICAPPED NEGOTIATIONS
In Africa you have some governments that are quite honestly, not fit to run a village post office. When these governments face off with the Maradonna’s of business sophistication ,(the huge resource extraction companies that have the money to hire the brightest and the best around the world), all you can expect is a 10-0 thrashing. It’s a very unequal negotiation, not just in terms of power, but also in terms of knowledge.

Zambia is a good example of this imbalance. During the privatization negotiations in the 90’s the mining companies told the Zambian governments that some mines were near exhaustion and would only last for a few more years. Oddly enough, these mines are still producing copper today. The Zambians were ‘had’. What’s that saying about candy and a baby?

THE CROOKED ADVISER
The World Bank and the IMF were Zambia’s advisers during the negotiations. Just why they pressured the government to sell off it’s assets for nothing, to receive nothing in royalties, beats me. Instead of placing their expertise at the service of the African government to even up the negotiations, the Bretton Woods organizations misled Zambia.

THE NEED FOR ACTION
Handling the worlds commodity markets to make sure that history doesn’t repeat itself and that Africa isn’t looted like it was in the past, is the big challenge. Copper prices are at an all time high, Diamonds and Gold continue to sell like crazy and oil prices being manipulated at will. If history repeats itself the biggest opportunity that we’ve ever had for African countries to transform themselves and move out of poverty will be missed.

I would love to hear your thoughts on this

Cheers,

Mark Gaya

P.S This week (December 07), Africa was ranked by the UN as the worst place to live in the
world. Frosty Iceland was ranked number one…can you believe these people… (today November 08 Iceland is bankrupt. The NWO's game are so obvious when looking at it retrospectively)

Posted by Mark Gaya jr. at 1:39 AM
2 comments:
waweru said...
Hi Mark,
My comments are short - for anyone thinking about responding to this issue, i highly recommend the book "Confessions of an economic hitman: by John Perkins."

in my opinon, lack of integrity in our political rulers (not leaders!)and economic managers has not helped us very much. Until this issue of integrity is resolved it does not matter whether the people who negotiate for us are the most educated, experienced or sophisticated. Accepting and demanding bribes equals selling our birth rights

December 1, 2007 5:21 PM

Lynda said...
waweru is right. IMO as of today 11/25/08 it certainly looks as if all the Nations of the world who have any type of natural resources coveted by the Illumati families puppet masters IMF, World Bank, Federal Reserve Bank, CFR, Bilderbergers, etc. etc., have all fallen victims of Economic Hitmen. Those countries have all been enslaved with subprime type loans and can only repay the masters with their natural resources and/or high taxation of the people.
These egomaniacs are taking great pleasure in watching the world crumble even when there's really nothing to gain in the end. Here this old saying applies totally: "Don't try to make sense of insanity".

November 25, 2008 5:29 PM
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(excert from this forum topic "Thieves and their victims"
http://villagevolunteersforum.blogspot.com/2007/11/thieves-a...)