Melting old metals, Heraeus in Switzerland (photo, ©2011 Heraeus)
BERN, SWITZERLAND – Deep in the trade figures published 20 July by the Swiss government is a note that imports were down largely because no gold was imported from Vietnam.
Switzerland melts down the gold for use mainly as bullion, although some is used by the watch industry and increasingly, by the electronics industry.
Switzerland is one of the world’s leading gold smelters, partly as a result of its currency being the last to be linked to gold, until 1999, when Switzerland joined the IMF (International Monetary Fund).
The Swiss trade surplus, the difference between exports and imports, grew by a mere 2.7 percent in the first half of 2011 despite a very strong franc that should have made imported goods cheaper, giving imports a boost. Imports in fact slipped, and Vietnam’s gold was the reason, or lack of it, was the reason, but mainly because imports earlier were very high.
Three factors played a role, says economist and spokesperson for the Swiss Federal Finance Department Sébastien Dupré: Vietnam’s export quotas, the record high price of gold, and the “immense” stocks of gold in Vietnam.
“The Vietnamese government delivered export quotas for gold at the end of 2008. Before then, gold exports were strictly forbidden. Companies that are active in the market tend to use their quotas as rapidly as possible in order to get a new one; in other words, before the government makes an about-face.” China Post this week in an article on the Swiss trade balance notes that media in Vietnam say the government is considering tightening gold trade restrictions.
The price of gold in mid-July rose to a record high of $1,600 per ounce, and has since continued to climb, with a dip Friday morning below $1,600 following news of a second bailout for Greece. The price rose 8.1 percent in the second quarter of 2011, compared to Q1, according to the World Gold Council.
Analysts are offering varying predictions for how high it can go, reports the Financial Times 21 July in a series of interviews.
“The high price of gold has encouraged potential sellers in Vietnam to sell their gold immediately, in other words, to fill their export quotas right away,” says Dupré. “For the Vietnamese, the rise in the price of gold is made yet more attractive by the simultaneous depreciation of their currency, the dong. As a result, theincentive to sell gold is more marked in Viettnam than elsewhere.”
Vietnam has always been a huge gold importer, he notes, with 80 to 100 tons a year. “Given the longtime ban on exporting it, the gold stocks in the country have risen so that the country now has immense stocks.”
The country is reported to make massive quantities of jewelry, which can be exported, in part to get around government restrictions on exporting it in a monetary form.
Link to: wikipedia on gold, video: the making of gold ingots at Heraeus
Swiss watch industry leads steady rise in exports
Positive October trade balance of CHF2.1 billion
Nick Hayek, chairman, Swatch Group
Biel/Bienne, Switzerland (GenevaLunch) - Nick Hayek, president of the executive group management board of the Swatch Group, showed off the new line of Ladymatic watches by Omega, one of the group’s brands, and was upbeat about the company’s performance when he met with a group of foreign journalists at Omega’s offices in Biel/Bienne.
“How many people are there in Vietnam?” he asked a Vietnam News Agency journalist. More than 80 million, Hayek quickly answered himself. “Our plan is to sell a watch every one of those 80 million” because of the market’s good potential.
Omega's new Ladymatic line breaks the mould: watches are chunky and heavy and "beautiful" says Hayek
Swatch shares closed 2.6 percent higher Thursday 18 October.
They were part of a strong upswing that saw Swiss prices at their highest in 11 weeks when the federal customs office reported that Swiss exports rose 7.8 percent (corrected for one working day less than in 2009) in October, over the same period a year earlier.
The watch industry led the way, up 18 percent compared to October 2009 and up 20 percent from January to October 2010.
The editor enjoys a too-short trial of a new Ladymatic watch by Omega
Asia and Latin America saw the strongest growth in Swiss exports in October. “We’re certainly going to expand more in China. The Chinese are enormously aware of value, of the substance of a brand,” he notes. “The Chinese understand and are sensitive to history.” Omega, he recalls, supplied the first clocks for the Chinese railways.
Hayek says that the company is doing well since the death in June 2010 of his father, Swatch founder Nicolas Hayek. “We all wish he could have continued working with us for 100 years,” but he prepared the company to continue well once he was gone, says son Nick, because he emphasized teamwork.
Hayek is pleased with the rebound in watch sales, but says he would like to see more competition within the industry, notably for movements, where Swatch’s ETA supplies the industry almost singlehandedly. ETA’s domination has been a subject of heated debate and an announcement by the group in 2008 that it would sell movements only to its own group’s brands caused an outcry. The Swiss Competition Office began to investigate the case in September 2009.
“An industry needs competition to have innovation,” Hayek insists, saying the group’s dominance should change.
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Vietnam is commemorating the 35th anniversary of the end of the war and it’s celebrating “liberation day” with public re-enactments of the last battle of “Black April.”
Many former South Vietnamese soldiers, who were backed by the US, were sent to communist re-education camps after the war ended, while hundreds of thousands fled the country.
In the US there were no victorious re-enactments but many towns remembered their veterans. US bloggers are also looking back and remembering those soldiers who never went back.
Over 58,000 American troops died during the Vietnam war.
Additional sources: Viet Nam news, Huffington Post,
Alexander Haig, a four-star general who reached the pinnacle of unelected political power, has died in Baltimore, Maryland, aged 85. A decorated veteran of the Korean and Vietnam wars, Haig served under Henry Kissinger as his deputy at the National Security Council in the 1960s. There he was instrumental in extricating the USA from Vietnam by obtaining the South Vietnamese president to agree to the Paris peace accords in 1972.
After the Watergate break-in, President Richard Nixon named Haig as his chief of staff, and he is widely credited with running the country in the dying days of the Nixon administration, as well as with convincing Nixon to resign.
President Ronald Reagan appointed Haig as his Secretary of State where he famously told a nervous country that he was “in control here in the White House”, after Reagan was shot in March 1981. Haig put his hat in the ring as a presidential hopeful in 1988, but quickly bowed out after a poor showing in Iowa.
He is survived by his wife of 60 years, Patricia, and three children.
At least 90 people have died in floods and torrential rains as tropical storm Mirinae lashed coastal regions of the central part of Vietnam 3 and 4 November. Many people are missing as their houses have been flooded and rivers have overflowed, according to official reports. In Phu Yen province, the hardest hit, 65 people have been reported dead, and 15,000 people have been evacuated. Soldiers in boats and helicopters are bringing food to people who have been without for two or three days.
In the port city of Da Nang, city officials sent a rescue vessel to take off 12 crew members from a Cambodian ship carrying rolled steel to Ho Chi Minh City shortly after it caught fire and sank as it sheltered from the storm 3 November. Press Association, Saigon GP Daily
Vietnamese authorities ordered people in southern and central coastal areas to evacuate as tropical storm Mirinae approached the Vietnamese coast, Sunday 1 November. Fishermen were advised to get out of the path of the storm. The storm was expected toreach land in the afternoon 2 November. Typhoon Ketsana last month killed more than 160 people and caused damage worth $800 million.
Mirinae caused widespread flooding and destruction, and 16 people died in the Philippines when it was still a typhoon and crossed that country’s main island Luzon. It was the country’s fourth major storm since September. AFP, Bloomberg
A tsunami washed over the Southern Pacific islands of Samoa early 30 September leaving at least a hundred people dead and many more injured. Six-metre high waves flooded up to 1.5 km inland, washing away entire villages in low-lying areas on both of the main islands of Samoa and American Samoa, a US dependency. The tsunami was triggered by an earthquake measuring 8.3 on the Richter scale about 30 km underground and only 190km off the coast. A tsunami warning went out immediately but officials said there was practically no time to heed the warning. BBC, Reuters
In the Philippines, hundreds of thousands of exhausted survivors from the weekend’s torrential rains and floods have swamped shelters in churches, schools and gymnasiums. Relief officials say they cannot keep up. Agriculture ministry officials estimated that tropical storm Ketsana, known as Ondoy in the Philippines, had destroyed more than $60 million worth of income-generating crops. The storm has continued moving west, causing death and destruction in Vietnam and Cambodia. BBC, Manila Times
Swiss foreign trade, climbing down
Bern, Switzerland (GenevaLunch) - Swiss foreign trade plummeted 16 percent in the first half of the year, according to figures published 21 July by the Swiss Federal Customs Administration (SFCA). Both import and export figures dropped to levels last seen in 2006, and the second quarter figures were much worse than those for the first quarter of the year. The fall in exports is the worst six month period decline recorded.
The balance of trade was CHF9 billion, down 10 percent over a year, a fall explained by an unusual, massive import of gold jewelry for remelting, from Vietnam.
Robert Strange McNamara is dead, age 93, at his home in Washington, DC, his family announced 6 July, without giving further details. McNamara served as US secretary of defense under Presidents John F Kennedy and Lyndon B Johnson and is widely considered to have been the architect of the US war in Vietnam. Thomas Lippman, writing about McNamara in the Washington Post, says “In that capacity he directed a U.S. military buildup in Southeast Asia during the critical early years of a Vietnamese conflict that escalated into one of the most divisive and bitter wars in U.S. history. When the war was over, 58,000 Americans were dead and the national social fabric had been torn asunder.”
The Spratley Islands in the South China Sea remain subject to claims of ownership by six countries, but the land border argument between China and Vietnam has finally been resolved, 30 years after a war over it border issues, followed by 20 years with heavy troops stationed by both sides. CNN, Xinhua
