Susan Herbert wants to secure her inheritance of over $8 million

Ah, L'Amour..., originally uploaded by Marcela P..

I received a message from Miss Susan Herbert through my Flickr account along with a photo purportedly of hers, which is posted above courtesy Flickr photo-blogging facility. The message reads as follows:

“Hello,

My name is Miss Susan Herbert from Sierra Leone adopted daughter of Late Mr. Gue Herbert who resides in Ivory Coast. Please I need your assistance to secure my inheritance which I inherited from him, the sum of $8,200,000.00 (eight Million, Two Hundred Thousand United States Dollars) which he willed to me before his death as his adopted daughter.

What I need from you is to provide where to transfer this fund and to invest it for me in your country while I further my education when I join you because the wife of Late Mr. Gue Herbert is not happy about the money I inherited from the family due to religion differences; therefore I need to transfer it out of here as fast as possible.

I will send you the documents when I hear from you and also I will offer you 10% of the total money for providing account and assistance and 30% of any profit made out of the money when invested in your country. We will discuss more when I hear from you. Let this be as a top secret between me and you for security reasons and for my future. Reply to susan.herbert1@yahoo.com,

Regards,

Miss Susan Herbert”

First of all, sorry Susan, I reproduce your message here though you said, “Let this be as a top secret between me and you for security reasons and for my future”. And I know it is a breach of trust to reproduce your message, and also because of the situation you are in as explained by you. But I have my own reasons to cause such an inconvenience to you and to commit the breach of trust. I explain the reasons as below.

If what you explain is true, you have several options to secure your inheritance legally and securely, and contacting an unknown person like me whom you searched out of Flickr is NOT at all secure. Moreover, I have reasons to believe that I am not the only person to receive this message. You must have sent similar Flickr mail to several others.

I get similar messages regularly from other social networking sites and through emails. Coincidentally, almost all messages have either the same text/language or the overall content of the text mean the same as your message. And all such messages originate from Sierra Leone, or some other African country, mostly from Nigeria. It gives the impression that there are several super rich persons in such countries who donate huge inheritance of several millions of dollars to persons like you for strange reasons. And such millionaires and billionaires die leaving huge inheritance to strangers! Hard to believe!

And if at all what you write is true, being Mr. Gue Herbert’s adopted daughter, and the money being legally willed to you, it is already secure and the unhappiness of the wife of Late Mr. Gue Herbert ‘due to religion differences’ is in no way going to affect your inheritance. So, it is already secure and without the help of a stranger like me, you can invest it in Sierra Leone or outside of the country if the laws of Sierra Leone permit you to invest out side the country. If it does not permit you, no one can help you to take the money legally outside Sierra Leone.

The next thing is if you have problems in securing your inheritance in Sierra Leone itself you have to seek the assistance of an attorney or lawyer in Sierra Leone. No outsider can help you in that case.

Now, let me consider the case where I want to help you (of course for the 10% share of $8,200,000.00 + 30% of returns on investments). In that case, I think you may need my bank account number, credit card details, etc. Is it not? And you can quietly empty my accounts?

Dear Susan Herbert, it all reeks of the old Nigerian Scams running for several years. I get one variation or the other of such scam offers several times a day! If I add the incentives and the total sums offered to me every day, it will add up to several millions per day, or several billions per month! Wow! I am going mad at the thought of earning so much money by just helping a beautiful young woman like you! Try something new Susan, this trick is quite old!

Bottom line: Beware of scams! Do not reply to such scam offers or part with your personal details, bank and credit card details, etc. There are several persons who were defrauded by such scam offers.

The serious business of dating

Image: Oil painting titled ‘A couple dating in a café’ (Au Café) by the renowned French Impressionist painter and commercial artist Jean Béraud (1849-1935).

Dating is a word that I have been hearing or reading as often as words like family, birthday, love, and many more. I neither had any doubt about its meaning, nor did I feel the need to find out what it is all about. However, as I have to edit the pages of my friendship and dating site www.nexusinternational.biz almost every day I come across the word ‘dating’ used in some weirdest contexts in the ads submitted by users seeking dating singles or marriage partners. Some advertisers use dating just to say they want to get to know their future lovers, marriage partners or whatever, and some others use it to describe one-night stands. So, I too got confused and consulted the mother-of-all 'confusers', Google.

Here are some related terms that my search (or research) took me to: bonding, courtship, mating, boyfriend, girlfriend, domestic partnership, cohabitation, romantic friendship, sexual partner, soulmate, meet market, romance, bromance, singles event, wedding, concubinage, marriage, mistress, same-sex relationship, and many more. Reluctantly though, I read through all these keywords, and I must confess, I did not become better-informed than I was earlier, but more confused. So, I decided to stick to what I knew of dating, and to let the users use the term as they want it. However, the search led me to the online business potential of dating that promises to be a big money-spinner, both for dating site owners and affiliate marketers.

The most common definition of dating I found is: ‘a form of courtship, and may include any social activity undertaken by two persons with the aim of each assessing the other's suitability as a partner in an intimate relationship or as a spouse’. As an explanation it said Internet dating has become popular in recent times, and sometimes dating refers to activities that cost money (for example, a meal) and says traditionally the man was expected to pay; but in recent times the practice of ‘going Dutch’ (splitting the expenses) has become acceptable.

Typically, a dating system aims at simplifying matchmaking process and it can involve traditional matchmaking methods or it can be better facilitated by technology including internet dating sites, phone dating or chat-based systems. The following are some aspects of development of technology-driven dating systems.

Computer dating systems became popular in the 1960s and 1970s but unlike today’s dating systems, they were simply to match the compatibility of customers who filled out their data forms including tolerances and preferences, and some of their services were simply extensions of horoscope-matching for marriage. It was followed by video dating of the 1980s and 1990s in which customers gave their performances on video, which was viewable by other customers, usually in privacy.

In phone dating that emerged almost in the same period, customers can call a common voice mail or phone-chat server, and they are connected with other singles or partner-seekers. For the services, they are charged by the minute, often at very expensive rates. These services were sometimes misused by fraudulent service providers who used to exploit the customers by making paid-women to pretend to be potential future dates or brides.

Online dating services of the 1990s and present times, which may incorporate or integrate all the technologies to provide multiple means to communicate, including phone, video, mail, etc. have evolved to be the most popular and reliable services. With dating and marriage sites offering single women of countries such as Russia, Ukraine, Belarus, and some other nations of former Soviet Union (USSR) and East European countries, the most popular search term is mail order brides, and several dating and marriage sites operate from these countries or even from USA, offering mail order brides seeking men for marriage. The combined annual revenues of all dating and marriage sites is estimated to be in billions of dollars, though reliable audited data is hard to come by.

The concept of dating is also used in the business world, though their main business has nothing to do with dating, relationships or marriage. Instead of virtual social networking platforms, they use real meetings among business people, and as reports show, even trade fair organizations also find this concept an added value for their exhibitors.

Online dating systems use targeted websites to allow their customers meet new singles and others. These are very popular with single women and men seeking life partners and they mostly display photos, and even videos in the profiles. Men seeking women are expected to pay on certain conditions, though membership to men also are usually free. Such sites are big moneymakers and often employ affiliate marketers to promote their sites, paying affiliate marketing commissions as high as 50%. Some of the popular online dating websites are chemistry.com (a sister site of match.com), compatiblepartners.net, eharmony.com, lavalife.com, match.com, okcupid.com, parship.com, plentyoffish.com, shakemyworld.com, speeddate.com, spraydate.se and true.com.

Online dating allows singles, couples and groups to contact and communicate with each other over the Internet for developing a romantic or other relationship, often leading to marriage or long-term relationships or living-in arrangements. Such services provide matchmaking services over the Internet, through personal computers or cell phones. Dating sites may offer additional services, such as webcasts, online chat, phone chat (VOIP) and message boards.

In speed dating, a group of people get together for hours, and a member is given a fixed amount of time to sit and talk to a particular person before moving on to the next. Speed dating is a formalized matchmaking or dating system whose purpose is to encourage people to meet a large number of new people. According to various accounts, the first speed dating event took place at Pete’s Café in Beverly Hills in late 1998. Soon several others began offering such dating events across the United States. By 2000, speed dating was very popular, perhaps boosted by its portrayal in shows such as ‘Sex and the City’ as something that glamorous people enjoyed doing.

Mobile phone dating, also known as cell dating, cellular dating, or cell phone dating heavily depends on text messages to and from mobile phones, and can be web-based. Mobile dating services allow individuals to chat, flirt, meet, and possibly become romantically involved by text messaging, mobile chatting and mobile web sites. Usually these sites are free, though standard text messaging fees may still apply as well as a small fee for the dating service.

Some mobile companies offer services such as homing devices to alert users when another user is nearby, in what is known as proximity dating. Some such systems involve Bluetooth technology to connect users in locations such as bars and clubs. These are more popular in some countries in Europe and Asia than online dating. With the advent of GPS phones and GSM localization, proximity dating is rising fast in popularity. According to reports, over 3.6 million cell phone users logged onto mobile dating sites in March 2007, and mobile dating market is expected to grow to $1.4 billion by 2013.

In singles events where a group of singles are brought together, the events may include parties, workshops and games. Many events are aimed at singles of various affiliations, interests, or religions, often with the purpose of fostering dating or relationship. Singles events are frequently run by organizations focused on building stability in their areas, such as religious organizations and community groups. Some local businesses, sports and cultural organizations also organize singles events. The themes of singles events can include ski trips, celebrity parties, dinners, holiday, art gallery visits, and even Valentine's Day mixers. Singles events have been an area of certain growth in singles-related commerce.

Singles events have been often criticized for being meet/meat markets, places where attendees are rapidly sizing up members of the opposite sex with objectifying criteria, such as attractiveness, wealth, and fashion. By the 1970s, singles events had drawn flak as a ‘ritual of lies and mistrust’. The nature of meet markets has changed since the 1980s, becoming more meaningful and positive.

Online dating is the second largest segment of paid content on the web, according to studies conducted by the Online Publishers Association (OPA) and others. Some dating sites provide free registration, but may offer services which require a monthly fee. Other sites depend on advertising, including Google AdSense, for their revenue.

Naked Kate Moss photos up for sale in auction

These are iconic photos of the British model Kate Moss crouching on sand in Marrakech, Morocco, taken in 1993 when she was waif-like and in her late teens. Albert Watson, the famous fashion photographer, chose to shoot Moss without clothes or jewellery.

Over a dozen photographs of naked Kate Moss record the entire shoot showing the different poses and moods Kate Moss pulls in. The pictures are very big for contact sheet images that a photographer keeps and they are mounted on aluminium and offered along with the artist's letter of authenticity.

The photos will be sold at an auction this Friday, and they are expected to fetch up to £30,000 when they go under the hammer at the auction. It could be more and a golden opportunity for collectors of celebrity memorabilia and props, because there was another print from this shoot which was enlarged and sold for £50,000.

Alexander Montague-Sparey, photography expert from Christie's auction house which is selling the photos, has said that Albert Watson is a famed photographer known for his work in black and white. He added that ‘there is a contact sheet with 14 photographs and they are very large for contact sheet photos.’

“The photographs are like looking through a keyhole into an intimate moment and they draw you in. There is an intimacy between the photographer and his muse. She is crouching trying to hide as much of her body as possible. There are those who collect Watson photographs and Kate Moss is very commercial and they are a safe investment."

Moss was plucked from obscurity in 1988 at the age of 14 by the founder of Storm Model Management Sarah Doukas at JFK Airport in New York City, after a holiday in the Bahamas. With her ‘waif look’ and height of only 5 feet 6.5 inches, Moss went on to become the ‘anti-supermodel’ of the 1990s in contrast to the ‘supermodels’ of those times such as Cindy Crawford, Claudia Schiffer and Naomi Campbell, who were all known for their curvaceous and tall figures.

Black and white images of Kate Moss, courtesy: www.telegraph.co.uk

Naked short selling and other spicy stories

All on a sudden there is a big buzz about ‘naked short selling’ and the fall of Euro to its lowest in four years, since a German ban on it sent the stock market tumbling worldwide. But what is naked short selling? It simply refers to a type of bet investors make in the financial markets when they believe a share or bond will fall. The deal becomes ‘naked short selling’ or ‘naked shorting’ when the seller makes the bet without having the stock or bond to back up his commitment.

When a short seller thinks a bond is going to go down, he will borrow the bond from others, sell it to a buyer at its current market value, and then buy it back after its price falls. He pockets the difference in prices and returns the security to the original owner from whom he borrowed it.

But in a ‘naked’ short sale, the seller makes the deal without having the securities. Until the short-seller has bonds to deliver, the buyer does not have to pay. But by showing that a sale has taken place even though the bonds have not actually been transferred, a naked short-sale artificially drives a stock's price down to a level that is not reflective of true supply and demand.

Germany banned such naked short selling on government debt and large financial firms late Tuesday, in order to stabilize the bond market for Europe, as countries in eurozone try to finance their debts. The purpose is to make their financial markets more transparent and for prices to better reflect true supply and demand.

Historically, governments have cracked down on short selling at times of economic recessions. In the United States, at the peak of the financial crisis in September 2008, the Securities and Exchange Commission (SEC) temporarily banned investors from short selling 799 financial companies.

When the seller does not deliver the stocks within the stipulated date, it is termed as a ‘fail to deliver’. Naked short selling can be used to fraudulently manipulate the price of securities by driving their prices down, which is considered illegal in many jurisdictions.

In 2008, the SEC issued a temporary order restricting short selling in the shares of 19 financial firms deemed systemically important. From September 18, 2008, amidst claims that aggressive short selling had played a major role in the failure of the financial giant Lehman Brothers, the SEC extended and expanded the rules to remove exceptions and to cover all companies, including market makers.

One of the complaints against naked shorting is that it dilutes a company's shares for as long as unsettled short sales remain open on the books, creating ‘phantom’ or ‘counterfeit’ shares, without connection to any physical shares, and artificially depressing the share price.

Robert J. Shapiro, a former US Undersecretary of Commerce for Economic Affairs, and a consultant to a law firm suing over naked shorting, has claimed that naked short selling has cost investors $100 billion and driven 1,000 companies to collapse.

Richard Fuld, the former CEO of Lehman Brothers, during hearings on the bankruptcy filing, and bailout of AIG before the House Committee on Oversight and Government Reform, alleged that a host of factors including a crisis of confidence and naked short selling attacks followed by false rumors contributed to the collapse of both Bear Stearns and Lehman Brothers.

However, on the issue of whether ‘naked short selling’ was in any way a cause of the collapse of Bear Stearns or Lehman, some securities experts are said to have reached the conclusion that the alleged ‘naked short sales’ occurred after the collapse and therefore played no role in the collapse.

In March 2008, SEC Chairman Christopher Cox, in his speech ‘Naked' Short Selling Anti-Fraud Rule’, announced new SEC efforts to combat naked short selling. Accordingly, SEC would create an antifraud rule targeting those who knowingly deceive brokers about having located securities before engaging in short sales. Cox said the proposal would address concerns about short selling abuses, particularly in the market for small-cap stocks. The SEC estimated that about 1 per cent of shares that changed hands daily, about $1 billion, were subject to delivery failures.

In July 2008, SEC announced emergency measures to limit the naked short selling of government sponsored enterprises (GSE) such as Fannie Mae and Freddie Mac. SEC noted that the emergency order was ‘not a response to unbridled naked short selling in financial issues’. The emergency actions rule expired August 12, 2008. However, on September 17, 2008, SEC issued new, more extensive rules against naked shorting, making ‘it crystal clear that the SEC has zero tolerance for abusive naked short selling’.

In July 2009, the SEC made an interim rule that obliges brokerages to promptly buy or borrow securities when executing a short sale. The SEC said that since the fall of 2008, abusive naked short selling had been reduced by 50 per cent and the number of threshold list securities declined from 582 in July 2008 to 63 in March 2009.

In March 2007, Goldman Sachs was fined $2 million by the SEC for allowing customers to illegally sell shares short prior to secondary public offerings. Naked short selling was allegedly used by the Goldman clients. The SEC charged Goldman with failing to ensure those clients had ownership of the shares.

In October 2008 Lehman Brothers was fined $250,000 by the Financial Industry Regulatory Authority (FINRA) for failing to document the ownership of short sales as they occurred, and for failing to annotate an affirmative declaration that shares would be available by the settlement date.

The Depository Trust and Clearing Corporation (DTCC) has been criticized for its approach to naked short selling, and it has been sued with regard to its alleged participation in naked short selling. The suit by Pet Quarters Inc. was dismissed by a federal court in Arkansas, and upheld by the Eighth Circuit Court of Appeals in March 2009. Pet Quarters alleged the DTCC's stock-borrow program resulted in the creation of nonexistent or phantom stock and contributed to the illegal short selling of DTCC shares.

The court ruled, "In short, all the damages that Pet Quarters claims to have suffered stem from activities performed or statements made by the defendants in conformity with the program's Commission approved rules. We conclude that the district court did not err in dismissing the complaint on the basis of preemption."

Several international exchanges of countries, such as Australia, India, the Netherlands, Japan and Switzerland, have either partially or fully restricted the practice of naked short selling of shares and stocks.

In March 2007, the Securities and Exchange Board of India (SEBI), which disallowed short sales altogether in 2001, reintroduced short selling under regulations similar to those developed in the United States. In conjunction with this rule change, SEBI outlawed all naked short selling.

Japan's naked shorting ban started on November 4, 2008, and was originally scheduled to run until July 2009, but was extended through October of that year.

The Singapore Exchange started to penalize naked short sales in September, 2008. The initial penalties started at $100 per day, and later increased it, starting at $1,000 per day. There would also be fines for brokerages who fail to use the exchange's buying-in market to cover their positions, starting at $5,000 per day.

On May 18, 2010, the German Minister of Finance announced that naked short sales of euro-denominated government bonds, credit default swaps based on those bonds, and shares in Germany's ten leading financial institutions will be banned effective that night and is set to expire on March 31, 2011.

Video on naked short selling ban and Euro collapse

In this video clip from Russia Today (RT) William Engdahl, author and economic researcher, answers questions like, ‘Euro collapse looms?’ and the effect of the ban on naked short selling announced by Germany.

Engdahl thinks the Euro faces the greatest challenge since 1999 when the euro was created, and said the crisis is the result of an orchestrated attack by the U.S. on the dollar's main rival.

“The whole attack on Greece and the attack on the euro originated from a concerted strategy of Wall Street and US Institutions to permanently cripple or try to cripple the only alternative reserve currency anywhere in the world that can challenge the dollar,” Engdahl told RT.

The German Chancellor Angela Merkel has said the Euro is at risk and that Europe faces its greatest challenge since the EU was formed. Her remarks come as stock markets in Europe and Asia tumbled on the surprise news that Berlin was banning types of short selling and banning some of the activities of hedge funds.

Consequently the euro is under pressure after nations using it had to pull together to bail out Greece, which is struggling under a massive debt, the worst GDP ratios, and from strikes against austerity measures, falling wages, and unemployment that are bringing the country to a halt. There is a widespread belief that the aid package for Greece came too late and that the crisis in Athens may be a prelude to the euro crumbling.

The American-German William Engdahl, who grew up in Texas and the author of "A Century of War: Anglo-American Oil Politics and the New World Order", in which he discussed the role of Zbigniew Brzezinski and George Ball and of the USA in the 1979 overthrow of the Shah of Iran, which was meant to manipulate oil prices and to stop Soviet expansion, is a contributor to the left-wing publications and has been living for more than two decades in Germany. He also has been reported to have said that the ‘Euro slump is due to planned Wall Street and Washington’s attack’.

Why does Germany want to curb hedge funds’ activities?

More or less in line with the ECB’s warning in June 2006 against the systemic risks hedge funds can pose to economies, news reports now have emerged that Germany aims to curb the activities of speculators, particularly hedge funds, who are blamed for exacerbating the financial crisis. Hedge funds have reacted angrily to Germany's decision to ban some naked short-selling.

Here is a feature on hedge funds and how they operate.

Hedge funds are investment funds operating for investors looking for a wider range of investment and trading activities, in addition to traditional investments. Usually hedge funds seek to bypass risks inherent in investments using a variety of methods, notably shortselling and derivatives. But some hedge funds also use short selling and other hedging methods to increase risks, rather than reduce risk, with the hope of higher returns on investment.

In many countries hedge funds are open only to a limited range of wealthy investors who meet certain criteria set by regulators, and hedge funds are exempt from many regulations that govern ordinary investment funds. They are allowed to use methods such as short selling, use of derivatives and leverage.

The stakes involved are often heavy. The Net Asset Value (NAV) of a hedge fund may be in several billions of dollars, and the gross assets of the fund will usually be still higher due to leverage. It is estimated the hedge fund industry might have managed about $2.5 trillion in mid-2008. Though recession might have caused Assets Under Management (AUM) to fall due to trading losses and withdrawals by investors, recent revised estimates find that hedge funds had more than $2 trillion in AUM.

Though hedge funds were devised to reduce investment risks, it has been found that investing in certain types of hedge funds can be riskier than investing in a regulated fund. Most of the hedge funds have some of the following characteristics.

Leverage: In addition to the investors’ money, a hedge fund may borrow many multiples the initial investment, which can be dangerously risky. For instance, if $9 is borrowed for every $1 received from investors, a loss of 10 per cent of the value of the investments will wipe out 100 per cent of the value of the investors’ stake in the fund, if creditors withdraw their loans. As a study case, in September 1998, just before its collapse, Long-Term Capital Management had $125 billion of assets on a base of $4 billion of investors' money, a leverage of over 30 times. It also had off-balance sheet notional value of about $1 trillion.

Short-selling: Due to the inherent nature of short-selling, the losses that can be incurred on a losing bet are limitless unless the short position directly hedges a corresponding long position that can take care of such huge losses.

Tendency for high risk-taking: Hedge funds tend to take on underlying investments that carry high degrees of risk, such as high yield bonds, distressed securities, and collateralized debt obligations based on subprime mortgages.

Lack of transparency: Hedge funds are mostly private entities with very few public disclosure requirements, due to lack of legal regulation. So, investors cannot to assess their trading strategies, investment/trading portfolios and other factors relevant for making an investment decision.

So, investors in hedge funds are expected to be aware of these risks and willing to take such risks. And mostly only heavy investors opt for investing in hedge funds, because the rewards can also be correspondingly very high returns, more or less like gambling. The reasons are: leverage amplifies profits as well as losses, short-selling opens up new investment opportunities, riskier investments typically provide higher returns, secrecy helps to prevent imitation by competitors, and being unregulated reduces costs and allows the more freedom to make decisions on a purely commercial basis.

On an elementary level, a hedge fund collects the money from investors and invests their money in seemingly profitable ways. The fund is managed by an investment manager, and the functions of a hedge fund are delegated to a number of other service providers, such as:

Prime broker: Prime broker’s services include lending money, acting as counterparty to derivative contracts, lending securities for the purpose of short-selling, clearing and settlement, etc.

Administrator: The administrator deals with the issue and redemption of interests and shares, determines the Net Asset Value (NAV) of the fund and performs related back office functions.

Distributor: The distributor markets the fund to potential investors.

The legal and corporate structure of a hedge fund depends on the tax environment of the fund’s expected investors and legal regulations of the country. The preferred popular destinations are offshore tax havens, like The Cayman Islands, so that the hedge fund can avoid paying tax on the increase in the value of its portfolio. But the investor will have to pay tax when he realizes his investments and profits. In contrast to the hedge funds themselves, investment managers are mainly located onshore to attract investors. Europe’s leading hedge fund managers are based in London, managing 75 per cent of European hedge fund investments of about $400 billion at the end of 2009.

Mostly, hedge funds are open-ended, and they periodically issue partnership interests or shares directly to new investors at the price of Net Asset Value (NAV) per interest/ share. To realize the investment, the investor will have to redeem the interests or shares at the NAV per share prevailing at that time. If the value of the investments has increased (NAV), then the investor will receive a larger sum on redemption than the original investment.

Tax havens encourage the establishment of hedge funds by offering a combination of professional services, favorable tax environment and business-friendly laws. Major hedge fund centers include Cayman Islands, Dublin, Luxembourg, British Virgin Islands, and Bermuda. The Cayman Islands is estimated to be home to about 75 per cent of the world’s hedge funds with nearly half the hedge fund industry's estimated $1.225 trillion Assets Under Management (AUM).

After the collapse of Long-Term Capital Management (LTCM) in 1998, hedge funds came under increased scrutiny, as hedge funds pose systemic risks. The excessive leverage through derivatives used by hedge funds to achieve their return on investments is pointed out as the main factor contributing to systemic risks.

The ECB (European Central Bank) issued a warning in June 2006 on hedge fund risks saying, “... the increasingly similar positioning of individual hedge funds within broad hedge fund investment strategies is another major risk for financial stability, which warrants close monitoring despite the essential lack of any possible remedies. Some believe that broad hedge fund investment strategies have also become increasingly correlated, thereby further increasing the potential adverse effects of disorderly exits from crowded trades."

So, as the German position on hedge funds now shows, while speculative investments through hedge funds may come down drastically if the regulations are strictly implemented, it can produce negative financial results because hedge funds bring in a lot of mobility to the financial markets and the sudden withdrawal of it can cause severe stagnation to the economy of not only Germany and eurozone counties, but it will have a severe impact on the entire world economy. The proof is in the sudden and unprecedented fall of euro in terms of the dollar immediately after the announcement.

Gold prices hit high as investors turn to gold

It was on November 24, 2009 that I wrote last on more reasons to invest in gold, when after fluctuating between $870 and $993 till September first week, when gold prices broke the psychological barrier of $1000 an ounce, and hit yet another milestone of $1,174 an ounce. At that time, the price of gold in India, one of the biggest traditional gold markets, had hit a record high of Rs 17,557 per 10 grams, after the dollar fell due to speculations that U.S. monetary policy would stay ultra-loose for a prolonged period. Usually, the weak dollar enhances gold's appeal as an alternative investment. I also suggested then that the trend is expected to continue at least till February 2010. As you can see, the price rise trend has continued to push ahead past February, and continues to do so even now.

Now, here is all the more reason to celebrate for those who invested in gold in 2009, as months past February 2010, now the markets report the price of gold struck an all-time high of about $1,250 an ounce on Friday. If it was a weak dollar that pushed up gold prices in the last quarter of 2009, now the investors are concerned over the eurozone financial crisis, despite the big bail out offered to Greece. No doubt the market sentiments looked up on the announcement of the huge Greece-bailout, but the surge in gold prices remains almost unaffected. This trend is expected to continue for some more months.

Now the big question making the rounds in investment circles is, ‘how much do you expect prices gain up from here?’ The simplest answer is, irrespective of other market forces, gold prices are expected to be on the rise for quite a few months from now, just as gold price has not hit below the key $1000 psychological barrier since early October 2009. It is also worth noting that this rise has come without the support of two ready key influences on the gold market, a weaker dollar and strong jewellery demand, which has been languishing pretty much throughout last year. Yet another strong indicator is some better signs in early 2010 from key gold consumers like Turkey and India.

The dollar also has been strengthening so far this year, particularly against the Euro and other major world currencies, but that is not enough to have a massive impact on gold prices. Also, some of the strong market fluctuating causes like the short-term Dubai debt crisis, the lingering economic crisis in Greece and some other European countries, and other causes inherent in a world economy trying to overcome recession, etc. only strengthened the investors confidence in precious metals like gold.

Market analysts feel that the main drivers of all the financial markets at the moment is fear of losses from other volatile investments and that has tended to pressure the more industrial commodities like copper, aluminium and oil. Also, though silver does have a very strong industrial component, it has tended to be pressured a little bit by losses in more industrial metals. However, two of the last trading sessions have seen foreign investment vehicle and prices have risen quite strongly but they have still not reached the stellar levels of gold, still quite away from its record or even at the highs of last year.

The Indian market, as on May 16, shows the current high gold prices in the market may hit demand for the yellow metal on Akshay Tritiya this Sunday. In India, traditionally, Akshay Tritiya is considered an auspicious day for buying precious metals, particularly gold. After a gold price decline by Rs75 per 10 gram on Saturday, gold was being traded at a record price of Rs18,500 per 10 gm in most markets on an average. Phenomenally, prices of gold have risen sharply from below Rs17,000 per 10 gram to Rs18,500 in less than three weeks, as a result increased demand and the European debt crisis.

The Indian customers are seemingly more driven by reasons of traditional thinking than market forces. For instance, gold and silver jewellery trade sources are of the opinion that high prices will not deter customers, because many customers wait for auspicious days to buy precious metals, and such customers will buy gold irrespective of prices. Moreover, the ongoing marriage season will also encourage buying of gold jewellery. Indian gold jewellers also expect brisk sales of gold coins and gold bars this season, in addition to jewellery. It also shows a clear indication that Indians no longer use gold only for jewellery, but also as a major investment avenue.

In retrospect, since 1968 the global price of gold has fluctuated very widely, from a high of $850 an ounce on 21 January 1980 to a low of $252.90 an ounce on June 21, 1999. The period from 1999 to 2001 marked what is known as the ‘Brown Bottom’ after a 20-year bear market. Gold prices increased rapidly from 1991, but the 1980 high was not exceeded until January 3, 2008 when a new maximum of $865.35 per troy ounce was set. Another record price was set on March 17, 2008 at $1023.50 an ounce. In the fall of 2009, gold markets experienced a renewed momentum upwards due to increased demand and a weakening US dollar. On December 2, 2009, gold passed the important benchmark of $1200 per ounce to close at $1215. Gold further rallied hitting new highs in May of 2010 after the European Union debt crisis prompted further purchase of gold, as a safer means of investment compared to other assets.