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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Llizxa-EQQg/story01.htm EconMatters

 

I wrote this in early November. A US District Court decision yesterday (Dec 16, 2013) found that parts of the NSA’s mass data gathering are unconstitutional. It’s a small victory but a step in the right direction. In light of this decision, this article takes on renewed importance.

 

Before the Edward Snowden story broke, I watched a movie about East Germany. It was set in the time when East Germany was a communist dictatorship walled off from the world, like a huge maximum-security prison. The Lives of Others is a gripping drama that shows what that life was like. To say it was dehumanizing, that there was no justice, that people lived in constant terror of the secret police—the Stasi—does not even begin to describe it. For example, the Stasi had forensic information on every typewriter in the country. They could find the author of anything they didn’t like, and disappear him.

See the movie. By the way, the lead actor was hated in East Germany after the movie came out. Even years after communism collapsed, many of its victims are so scarred that they would prefer to blank it out. This is testimony to how horrific it was.

I normally write about gold and economics, but Edward Snowden has brought to the attention of America—and the whole world—a different issue. We advocates of the gold standard are, at root, fighting for freedom. So we should pay attention to this front in the same battle. There are many similarities with the fight for a free market in money, the unadulterated gold standard.

One of them is that the old notions of “liberal” and “conservative” seem almost inapplicable. It used to be that “conservatives” in the U.S. were in favor of more freedom and less government, at least nominally. But today, that’s not necessarily so. Wall Street is generally “conservative” and they are for a central bank, and its endless acts of Quantitative Easing.

Similarly, Republicans and “conservatives” are now coming out in favor of the National Security Agency, and defending its spying on American citizens. They do this in the wake of pervasive abuses that Snowden has disclosed. The Stasi could never have dreamed of some of the capabilities used against every American every day by the NSA, such as mass scanning of emails and phone calls, much less automatically building a list of contacts for each citizen or tracking everyone’s whereabouts in realtime.

Support for the NSA fits with conservatives’ strong support for “homeland security”. This term has been completely perverted, in a way that would make George Orwell proud. It is now about subjecting citizen-serfs to every conceivable inconvenience and intrusion, especially when they dare to travel by airplane, talk on the phone, send an email, get health care, or pay taxes. Instead of protecting the rights of the people, security agencies now exist to attack them.

Those who would defend the security establishment and the nascent police state may be “conservative” but they are no friends of man’s rights or of freedom. Some are blind ideologues, others are ignorant dupes, and many are just profiteering government contractors. It doesn’t matter; they are defending the indefensible.

It is shocking that people who grew up in a free country would staunchly support “fundamentally transforming” America into tyranny. And that’s what it’s about, tyranny and ultimately murder. There is no other reason to build a surveillance machine capable of watching everyone constantly, a healthcare system in which government bureaucrats make every life or death decision, a tax agency that knows what you think and who you voted for—and a militarized police force.

It’s a good thing that information disclosed by Edward Snowden has roiled the American electorate. He just may have gotten through to people with a wake-up call. I hope it is in time to change course.

The fight against surveillance, censorship, and pseudo-security has another similarity with the fight against fiat currency. If we lose the battle, it’s lights out. Our civilization will collapse into a new Dark Age.

The fight for honest money is linked to the fight against the police state. A police state will destroy the productivity that still props up the debt that backs the dollar. Alternatively, a dollar collapse will drive desperate, hungry people into the streets. This would provide cover for a crackdown and dictatorship.

Liberty had better achieve victory on both fronts!

 

 

Keith Weiner is the president of the Gold Standard Institute USA

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/5UBMYAOmy3c/story01.htm Gold Standard Institute

 

I wrote this in early November. A US District Court decision yesterday (Dec 16, 2013) found that parts of the NSA’s mass data gathering are unconstitutional. It’s a small victory but a step in the right direction. In light of this decision, this article takes on renewed importance.

 

Before the Edward Snowden story broke, I watched a movie about East Germany. It was set in the time when East Germany was a communist dictatorship walled off from the world, like a huge maximum-security prison. The Lives of Others is a gripping drama that shows what that life was like. To say it was dehumanizing, that there was no justice, that people lived in constant terror of the secret police—the Stasi—does not even begin to describe it. For example, the Stasi had forensic information on every typewriter in the country. They could find the author of anything they didn’t like, and disappear him.

See the movie. By the way, the lead actor was hated in East Germany after the movie came out. Even years after communism collapsed, many of its victims are so scarred that they would prefer to blank it out. This is testimony to how horrific it was.

I normally write about gold and economics, but Edward Snowden has brought to the attention of America—and the whole world—a different issue. We advocates of the gold standard are, at root, fighting for freedom. So we should pay attention to this front in the same battle. There are many similarities with the fight for a free market in money, the unadulterated gold standard.

One of them is that the old notions of “liberal” and “conservative” seem almost inapplicable. It used to be that “conservatives” in the U.S. were in favor of more freedom and less government, at least nominally. But today, that’s not necessarily so. Wall Street is generally “conservative” and they are for a central bank, and its endless acts of Quantitative Easing.

Similarly, Republicans and “conservatives” are now coming out in favor of the National Security Agency, and defending its spying on American citizens. They do this in the wake of pervasive abuses that Snowden has disclosed. The Stasi could never have dreamed of some of the capabilities used against every American every day by the NSA, such as mass scanning of emails and phone calls, much less automatically building a list of contacts for each citizen or tracking everyone’s whereabouts in realtime.

Support for the NSA fits with conservatives’ strong support for “homeland security”. This term has been completely perverted, in a way that would make George Orwell proud. It is now about subjecting citizen-serfs to every conceivable inconvenience and intrusion, especially when they dare to travel by airplane, talk on the phone, send an email, get health care, or pay taxes. Instead of protecting the rights of the people, security agencies now exist to attack them.

Those who would defend the security establishment and the nascent police state may be “conservative” but they are no friends of man’s rights or of freedom. Some are blind ideologues, others are ignorant dupes, and many are just profiteering government contractors. It doesn’t matter; they are defending the indefensible.

It is shocking that people who grew up in a free country would staunchly support “fundamentally transforming” America into tyranny. And that’s what it’s about, tyranny and ultimately murder. There is no other reason to build a surveillance machine capable of watching everyone constantly, a healthcare system in which government bureaucrats make every life or death decision, a tax agency that knows what you think and who you voted for—and a militarized police force.

It’s a good thing that information disclosed by Edward Snowden has roiled the American electorate. He just may have gotten through to people with a wake-up call. I hope it is in time to change course.

The fight against surveillance, censorship, and pseudo-security has another similarity with the fight against fiat currency. If we lose the battle, it’s lights out. Our civilization will collapse into a new Dark Age.

The fight for honest money is linked to the fight against the police state. A police state will destroy the productivity that still props up the debt that backs the dollar. Alternatively, a dollar collapse will drive desperate, hungry people into the streets. This would provide cover for a crackdown and dictatorship.

Liberty had better achieve victory on both fronts!

 

 

Keith Weiner is the president of the Gold Standard Institute USA

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/5UBMYAOmy3c/story01.htm Gold Standard Institute

Bill Binney is the high-level NSA executive who created the agency’s mass surveillance program for digital information.  A 32-year NSA veteran widely regarded as a “legend” within the agency, Binney was the senior technical director within the agency and managed thousands of NSA employees.

Binney has been interviewed by virtually all of the mainstream media, including CBS, ABC, CNN, New York Times, USA Today, Fox News, PBS and many others.

Last year, Binney held his thumb and forefinger close together, and said:

We are, like, that far from a turnkey totalitarian state.

But today, Binney told Washington’s Blog that the U.S. has already become  a police state.

By way of background, the government is spying on virtually everything we do.

All of the information  gained by the NSA through spying is then shared with federal, state and local agencies, and they are using that information to prosecute petty crimes such as drugs and taxes. The agencies are instructed to intentionally “launder” the information gained through spying, i.e. to pretend that they got the information in a more legitimate way … and to hide that from defense attorneys and judges.

This is a bigger deal than you may realize, as legal experts say that there are so many federal and state laws in the United States, that no one can keep track of them all … and everyone violates laws every day without even knowing it.

The NSA also ships Americans’ most confidential, sensitive information to foreign countries like Israel (and here), the UK and other countries … so they can “unmask” the information and give it back to the NSA … or use it for their own purposes.

Binney told us today:

The main use of the collection from these [NSA spying] programs [is] for law enforcement. [See the 2 slides below].

 

These slides give the policy of the DOJ/FBI/DEA etc. on how to use the NSA data. In fact, they instruct that none of the NSA data is referred to in courts – cause it has been acquired without a warrant.

 

So, they have to do a “Parallel Construction” and not tell the courts or prosecution or defense the original data used to arrest people. This I call: a “planned programed perjury policy” directed by US law enforcement.

 

And, as the last line on one slide says, this also applies to “Foreign Counterparts.”

 

This is a total corruption of the justice system not only in our country but around the world. The source of the info is at the bottom of each slide. This is a totalitarian process – means we are now in a police state.

Here are the two slides which Binney pointed us to:

(Source: Reuters via RT)

We asked Binney a follow-up question:

You say “this also applies to ‘Foreign Counterparts.’”  Does that mean that foreign agencies can also “launder” the info gained from NSA spying?  Or that data gained through foreign agencies’ spying can be “laundered” and used by U.S
. agencies?

Binney responded:

For countries like the five eyes (US, Canada, UK, Australia, New Zealand) and probably some others it probably works both ways.  But for others that have relationships with FBI or DEA etc.,  they probably are given the data to used to arrest people but are not told the source or given copies of the data.

(See this for background on the five eyes.)

View past discussions between Washington’s Blog and Binney here, here, here and here.

Bonus:

• “These Programs Were Never About Terrorism: They’re About Economic Spying, Social Control, and Diplomatic Manipulation. They’re About Power”

• The NSA and Its Partners Are Getting Hit In Their Ability to Hire and Keep Personnel … and in their Pocketbooks

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/DeEUcGqS2L4/story01.htm George Washington

Authored by Andrew Batson and Tom Miller of Evergreen Gavekal,

As China’s leaders in recent weeks have laid out an ambitious agenda for market-driven economic reforms, one element has been strangely lacking: urbanization. Premier Li Keqiang made this his signature issue during his years as deputy to the former premier, and has frequently talked up the potential for urbanization to drive China’s future growth. Yet, a coherent urbanization policy has been nowhere to be found, as Li’s desire for a healthier, more “people-focused” mode of urban growth clashed with local governments’ desire to keep spending on infrastructure and real estate.

This logjam looks to have finally broken over the weekend, when top Chinese leaders held both the annual Central Economic Work Conference to set policy goals for 2014, and a Central Urbanization Work Conference to lay the groundwork for an urbanization plan to be published next year. On balance, the news from these events is good for current and future residents of Chinese cities—but bad for those investors who may still be bullish on commodity prices.

As the chart below shows, the acceleration in urbanization over the last decade was accompanied by a rise in global commodity prices, thanks to a surge in raw material demand from construction. However, the pace of physical urbanization is far more likely to slow than to accelerate—a trend already reflected in the flat performance of global commodity prices. Rather than dreaming up new ways of driving urban expansion, the leadership in Beijing has become increasingly concerned about the excesses committed by city governments who all want to be the next Shanghai. “Not every city can become a giant,” warned the statement released from the urbanization conference. It emphasized that urbanization is a natural economic process, and that the government should be removing artificial barriers rather than trying to force urban growth through administrative decrees.

At the Central Economic Work Conference held a year ago, the top six priorities included a call for “actively promoting” urbanization since it has “the most potential for expanding domestic demand.” At this year’s conference, promoting urbanization did not make it into the list of priorities at all; in its place was a call to control the risks of the debts accumulated by local governments in their heedless drive for expanding cities. The change in direction could not be clearer. Rather than try to launch a new round of urbanization-led growth, the new leadership is instead focused on cleaning up the social and financial consequences of the past decade’s urbanization boom. The issues that need tackling include: a marginalized population of rural migrant workers; high local government debt; an oversupply of housing in many cities.

As we have long argued, the issue that China faces is not that urbanization is too slow and needs to accelerate, but that the urbanization that is happening is incomplete. Ineligible for core urban services like education and healthcare, most rural migrants find it hard to settle down permanently in cities or advance into higher-paying white-collar jobs. The “new-style” and “people-focused” urbanization that Premier Li has been promoting is essentially about better integrating existing migrants into the urban economy and society. Ultimately this is a question of money: allowing rural migrants to access the same benefits as existing urban residents will require new sources of and structures for public spending. The details of how this change will work are still unclear, but will likely involve both the central government taking more fiscal responsibility for public services, and local authorities getting more fund-raising powers.

As these problems are sorted out, the pace of urbanization will decelerate—a natural consequence of the slowdown in overall economic growth, and therefore of the job creation that drives rural-urban migration. The urban population has grown by about 21mn people a year since the late 1990s. Some scholars at the Development Research Center, a government think tank, expect the rate of urbanization is unlikely to exceed 17mn a year over the next decade—though we are somewhat more optimistic. In any case, the “people-focused” urbanization strategy will show up more as gains in urban incomes and consumption than as another surge in urban population growth and construction.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/8s5mN3oaMO8/story01.htm Tyler Durden

Recently some of the more naive, not to mention top-ticking, financial commentators assumed that just because US regulators had not snapped shut a trap surrounding Bitcoin and other digital currencies yet, that this state of blissful cohabitation would continue indefinitely. Unfortunately, as we warned back in March during the initial leg higher in BTC following the Cyprus deposit confiscations, the well-known “honeypot” strategy was meant to draw out as many digital currency fans and participants as possible – who after all were warned by none other than the ECB that the current regime will never adopt a parallel, and quite threatening monetary unit – only to see the regulatory and enforcement fist of the nation that (still) hosts the reserve currency slowly but surely start to clench around the binary currency.

 Because, finally, after testing the ground long enough, the fist is starting to not only close but squeeze tight. And as Reuters reports, it is the U.S. Treasury Department’s anti money-laundering unit that is now warning businesses linked to Bitcoin that they “may have to comply with federal law and regulation as money transmitters, a Treasury spokesman said. ” Specifically, the Treasury’s Financial Crimes Enforcement Network (FinCEN) has sent “industry outreach” letters to about a dozen firms, regarding potential anti-money laundering compliance obligations related to Bitcoin businesses, FinCEN spokesman Steve Hudak told Thomson Reuters’ regulatory information service Compliance Complete.

What is interesting is that unlike in traditional cases of money laundering, where the law is cut and dry, in the case of digital currencies, nobody really knows what the Treasury’s jurisdiction – if any – or the law is. Which is why FinCEN is not only treading lightly but effectively giving so-called offenders a warning in advance of potential future action.

According to Reuters, a legal expert with years of experience representing digital currency firms said FinCEN seemed to be establishing a new regulatory enforcement precedent by warning individual businesses of compliance obligations before taking action. “Is this setting a new standard that in the future if there are any questionable business models there will be notice given before any action is taken?” said Carol Van Cleef, a partner with the Washington law firm Patton Boggs LLP. In response, Hudak said the letters are an attempt at gathering information. He likened them to the letters that banks sometimes send to customers seeking information about the customer’s transactions in an effort to determine whether suspect transactions are truly linked to illicit activity.

Actually no: this is not a standard, new or otherwise, but is merely meant to telegraph the authorities displeasure with ongoing digital monetary activities, with an intent of halting all major activity before an enforcement mandate is handed down.

In the meantime, FinCEN’s letters have had a “chilling effect” on Bitcoin businesses, which are intimidated by the threat of civil and criminal sanctions for non-compliance, said Jon Matonis, executive director of the Bitcoin Foundation, an advocacy group. The firms, he said, may effectively be “put out of business in an extrajudicial manner.”

Which, basically, means the US government wants you to shut down regardless of what the law says. Which is precisely what happened with Utah’s digital-to-coin converter Casascius as we reported previously.

And, as Reuters further adds, the fist grab is almost ready to pulverize:

While some Bitcoin businesses reject FinCEN’s assertion that they are money transmitters, a number have still registered with the agency, a search of the Treasury bureau’s website shows.

FinCEN sent letters to Bitcoin-related businesses on the Internet that appeared to fall under its definition of money transmitters but had not registered, Hudak said. He said FinCEN will keep sending letters to unregistered Bitcoin businesses.

“As we come across them, and as people tip us off, we’ll make inquiries. That is part of what we do,” Hudak said.

Perhaps this explains why at last check Bitcoin was now under $700 and gradually drifting lower. After all Uncle Sam is no longer shy about his true intentions regarding the digital currency.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/IWLmo3bD4zQ/story01.htm Tyler Durden

Recently some of the more naive, not to mention top-ticking, financial commentators assumed that just because US regulators had not snapped shut a trap surrounding Bitcoin and other digital currencies yet, that this state of blissful cohabitation would continue indefinitely. Unfortunately, as we warned back in March during the initial leg higher in BTC following the Cyprus deposit confiscations, the well-known “honeypot” strategy was meant to draw out as many digital currency fans and participants as possible – who after all were warned by none other than the ECB that the current regime will never adopt a parallel, and quite threatening monetary unit – only to see the regulatory and enforcement fist of the nation that (still) hosts the reserve currency slowly but surely start to clench around the binary currency.

 Because, finally, after testing the ground long enough, the fist is starting to not only close but squeeze tight. And as Reuters reports, it is the U.S. Treasury Department’s anti money-laundering unit that is now warning businesses linked to Bitcoin that they “may have to comply with federal law and regulation as money transmitters, a Treasury spokesman said. ” Specifically, the Treasury’s Financial Crimes Enforcement Network (FinCEN) has sent “industry outreach” letters to about a dozen firms, regarding potential anti-money laundering compliance obligations related to Bitcoin businesses, FinCEN spokesman Steve Hudak told Thomson Reuters’ regulatory information service Compliance Complete.

What is interesting is that unlike in traditional cases of money laundering, where the law is cut and dry, in the case of digital currencies, nobody really knows what the Treasury’s jurisdiction – if any – or the law is. Which is why FinCEN is not only treading lightly but effectively giving so-called offenders a warning in advance of potential future action.

According to Reuters, a legal expert with years of experience representing digital currency firms said FinCEN seemed to be establishing a new regulatory enforcement precedent by warning individual businesses of compliance obligations before taking action. “Is this setting a new standard that in the future if there are any questionable business models there will be notice given before any action is taken?” said Carol Van Cleef, a partner with the Washington law firm Patton Boggs LLP. In response, Hudak said the letters are an attempt at gathering information. He likened them to the letters that banks sometimes send to customers seeking information about the customer’s transactions in an effort to determine whether suspect transactions are truly linked to illicit activity.

Actually no: this is not a standard, new or otherwise, but is merely meant to telegraph the authorities displeasure with ongoing digital monetary activities, with an intent of halting all major activity before an enforcement mandate is handed down.

In the meantime, FinCEN’s letters have had a “chilling effect” on Bitcoin businesses, which are intimidated by the threat of civil and criminal sanctions for non-compliance, said Jon Matonis, executive director of the Bitcoin Foundation, an advocacy group. The firms, he said, may effectively be “put out of business in an extrajudicial manner.”

Which, basically, means the US government wants you to shut down regardless of what the law says. Which is precisely what happened with Utah’s digital-to-coin converter Casascius as we reported previously.

And, as Reuters further adds, the fist grab is almost ready to pulverize:

While some Bitcoin businesses reject FinCEN’s assertion that they are money transmitters, a number have still registered with the agency, a search of the Treasury bureau’s website shows.

FinCEN sent letters to Bitcoin-related businesses on the Internet that appeared to fall under its definition of money transmitters but had not registered, Hudak said. He said FinCEN will keep sending letters to unregistered Bitcoin businesses.

“As we come across them, and as people tip us off, we’ll make inquiries. That is part of what we do,” Hudak said.

Perhaps this explains why at last check Bitcoin was now under $700 and gradually drifting lower. After all Uncle Sam is no longer shy about his true intentions regarding the digital currency.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/IWLmo3bD4zQ/story01.htm Tyler Durden

Submitted by Julian Adorney of the Ludwig von Mises Institute,

Many Americans, from the Glenview State Bank of Chicago to author Ellen Brown assume that the Nazi economic regime was successful, but closer examination tells a tale of rationing, shortages, and starvation. Learning why their economy failed can teach us how to avoid the same fate.

 

Background

The myth endures that after Hitler inherited a country ravaged by the Great Depression in 1933, his aggressive policies turned the nation around and created an economic powerhouse. But the truth, as Professor Evans of the University of Cambridge argues in his seminal history The Third Reich Trilogy, is something far different.

Evans, a Marxist sympathetic to Keynes and state intervention, nonetheless tells a story of rationing, shortages, and misery in the Third Reich. The Reich Food Estate, the state-controlled corporation responsible for agricultural production, regularly failed to feed its people. Agricultural output rarely surpassed 1913 levels, in spite of 20 years of technological advancement. Demand outstripped supply by 30 percent in basic foodstuffs like pork, fruit, and fats. That meant that for every ten German workers who stood in line to buy meat from the state-owned supply depots, three went home hungry.

The same story was retold when it came to cars, clothing, and iron. New houses had to be built with wooden plumbing, because iron was so scarce. Nationalized iron depots couldn’t produce enough for the army, let alone civilians. Clothing was rationed. Fuel and rubber shortages led to what one US observer called, “drastic restrictions on the use of motor vehicles.” Of course, because the state dictated which car and truck models could be produced, there weren’t very many motor vehicles to begin with.

The overall tale is one of misery for the average German citizen. So how did the Nazis so hurt their people, and what lessons can we learn?

 

Lesson 1: Military Keynesianism Produces Austerity

Hitler’s rearmament program was military Keynesianism on a vast scale. Hermann Goering, Hitler’s economic administrator, poured every available resource into making planes, tanks, and guns. In 1933 German military spending was 750 million Reichsmarks. By 1938 it has risen to 17 billion with 21 percent of GDP was taken up by military spending. Government spending all told was 35 percent of Germany’s GDP.

Many liberals, especially Paul Krugman, routinely argue that our stimulus programs in America aren’t big enough, so when they fail it’s not an indictment of Keynesianism. Fair enough. But no-one could say that Hitler’s rearmament program was too small. Economists expected it to create a multiplier effect and jump-start a flagging economy. Instead, it produced military wealth while private citizens starved. Employed on the largest scale ever seen, military Keynesianism created only ruin.

 

Lesson 2: Production, Not Jobs

Economist Joan Robinson wrote that, “Hitler had found a cure against unemployment before Keynes finished explaining it.” And indeed, rearmament and nationalized industry put every available German to work. There were so many jobs that the Nazis complained of a labor shortage and brought women in to the workplace, even though they were ideologically opposed to it. Unemployment had been cured. And yet, the people routinely suffered shortages. Civilian wood and iron were rationed. Small businesses, from artisans to carpenters to cobblers, went under. Citizens could barely buy pork, and buying fat to make a luxury like a cake was impossible. Rationing and long lines at the central supply depots the Nazis installed became the norm.

Nazi Germany proves that curing unemployment should not be an end in itself. No doubt, jobs are important. But they are important for what they produce, not just by virtue of existing. Real growth means production of what people demand. It means making cars, growing food, building laptops, or commercial planes. Private production grows the economic pie and helps everyone to prosper. Without production, all that a job does is change a man from starving and unemployed to starving and employed.

 

Moving Forward

There are a thousand lessons to be learned from the Third Reich, from the evils of totalitarianism to the dangers of racial thinking. A key economic lesson is that, rather than curing the Great Depression, Hitler’s military Keynesianism on a massive scale left the German people starving and short of goods. It’s a lesson advocates of building tanks to make us rich, from John McCain to Paul Krugman (and now Shinzo Abe), would do well to learn.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/kmJ3oJQy0I8/story01.htm Tyler Durden

With climate change impacting the poles, the potential for trade routes and resource extraction are improving.. and with that the world’s powers are rattling sabres over who owns what. From Canada’s claims to Russia’s defense forces and China’s purposeful dependence-building aid to small Arctic states, everyone knows the stakes. So, with very few big new diamond mines having been developed in recent years, the FT reports that scientists have found a site containing the rocks that often produce diamonds – in Antarctica. The problem is that the frozen continent is protected from mining for decades under an international treaty.

 

Some color on the climate change impact on arctic resource extraction…

 

Via The FT,

In a frustrating discovery, scientists have found a site containing the rocks that often produce diamonds – in Antarctica. The problem is that the frozen continent is protected from mining for decades under an international treaty. Even if it were not, the prospect of drilling through layers of ice in a harsh climate is likely to deter many would-be miners.

 

Still, the discovery is scientifically significant…

 

“It’s the first kimberlite occurrence reported in Antarctica,” he said, referring to the carrot-shaped volcanic rock formations that have been found on other continents and have been a significant source of diamonds in places such as South Africa.

 

“It’s really not very surprising there are kimberlites there. We were lucky enough to be the first ones to find one.”

 

…

 

“You could see some mining companies might argue, ‘We can do this; we don’t have to waste this resource’,” said Dr Robert Larter of the British Antarctic Survey.

 

However, the physical obstacles are immense in a continent that is 99 per cent covered in ice, some of which is 3-4km thick, he said.

 

…

 

Very few big new diamond mines have been developed in recent years, leading to expectations of a squeeze in supply by the end of the decade. At present levels of output, existing reserves will sustain global diamond production for 18 years, according to research by Bain & Co this year. About 70 per cent of the world’s 2.3bn carats of diamond reserves are in Russia and Africa.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/xFJ1zqucaEw/story01.htm Tyler Durden