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THE JEWEL OF THE BALTICS

In September this year, Latvia, and neighbouring Estonia, hold important referendums on EU membership. The latest polls released in August show the number of people in Latvia backing EU membership at 52% in favour, 31% against and 16% still undecided.

Sitting in a sidewalk café in high summer in Latvia's Old Town Riga is an unforgettable experience. The flurry of activity is indicative of the energy and vitality of its people. The atmosphere reflects the general mood of growing prosperity that has visited this former soviet state since the collapse of communism. The memories of 50 years of soviet occupation, and the resulting economic stagnation, are slowly being dissipated by the newly thriving "free market economy". The afternoon saw myself and a good friend engaged in a lively discussion. My friend, a Latvian banker, feels it is a forgone conclusion "I will be very surprised if September's referendum doesn't come up with a majority "Yes" vote, but . . . will it be a good thing ?"

This beautiful nation has many strategic features and benefits. Conveniently located on the Baltic Sea, it connects Russia's immense and rich resources to the vast markets of Europe and beyond. It has a highly developed and sophisticated banking and financial services infrastructure, and is well acquainted with servicing the Russian markets in this and other key areas. In our modern world, the nation's commitment to the free market process is quite refreshing.

On the other-hand, Latvia faces some fairly sizable challenges. A significant number of its people continue to live in relative poverty. The nation desperately requires the capital to fund the further development of its infrastructure and service industries.

Entry to the European Union will go a long way to solving the nations poverty and infrastructure requirements, but at what cost? In the long run, will it be a good thing? Will the nation end up trading off its "free market" for Brussels bureaucracy? Will its banking and other freedoms be exchanged for regulation and foreign control and supervision? Our discussion ends with the conclusion that "only time will tell."

by Philip Judge
© copyright 2003

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NEXT SCHEDULED TELECONFERENCE

"INTERNATIONAL AND PRIVATE BANKING"
(What is it, and how can we profit & benefit from it)?

AFBC hosts regular telephone conferences to keep its clients informed world-wide. Conference participants have the opportunity to have their questions addressed by qualified educators.

International Banking is an important piece in the "Building and Preservation of Wealth" puzzle.

NORTH AMERICA
Tuesday evening 16th September 2003 9.30PM Eastern Time

AUSTRALIA/NEW ZEALAND
Wednesday evening 17th September 2003 8.30PM Eastern Time (Australia)

AGENDA (total run time 60 mins)
Introduction (5 mins)
International and Private Banking (35 mins)
Q & A (15 mins)
Close (5 mins)

More information and registration LINK

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NOTES FROM THE ANGLO FAR-EAST BULLION TRADING DESK - 24st August 2003. Simon Heapes

GOLD MARKET
Gold $365 up $3.40 - Silver $5.01 up 2 cents Gold came in on the firm side, filled its gap and then took off, quickly rising to the downtrend line of the very bullish wedge formation at $365. The action was particularly impressive because the dollar was on the plus side and the stock market was mixed.

MARKET COMMENTARY
The physical market is on fire. "There is a "Paradigm Shift" out there as far as interest in gold is concerned. The swift bond collapse shook big player investors up. Major investors want into gold as a conservative investment and financial catastrophe insurance"!

I agree with John Brimlow's commentary above especially after looking at the 10yr & 30yr long bond charts myself. Most gold market commentators seem perplexed by gold's relentless rally in the face of a steady to rising dollar.

Traditionally when ever the US$ rises the price of Gold falls. When the price of Gold begins to rally with the US$ and rise independantly regardless of the Dollar, indicates extremely Bullish fundamentals are at work in the Free Market!

PHYSICAL DEMAND
India is the markets most promenant buyer on the Physical market, purchasing approximately 50% of annual supply. More prominent though & of interest was Middle Eastern buying. The Istanbul Gold Exchange report for last week stated, " While gold strengthened and mostly traded above US$ 360per ounce level during this week. Healthy physical gold demand from Turkey this week lent support to trading volume of the Precious Metals Market of Istanbul Gold Exchange. Middle Eastern buying was, not surprisingly, prominent yesterday".

Besides the obvious tensions in the Middle East we have a trading block of people who are becoming increasingly aware of the supply short positions in the metals markets. Not to mention that they have a long history when it come to Gold as being realmoney!

MARKETS
AUSTRALIAN Stock Exchange chief Maurice Newman has painted a pessimistic view of the US economy, warning business to be prepared for another global retreat. "I don't think one should underestimate the impact of a significant decline in the US economy and how that would cascade to Europe and Japan," he said yesterday. "I hope people will reflect and not simply accept without question what is constantly being fed up to us as being that she'll be right". "We are, in my view, in uncharted waters". He further warned of the increased "spin" emerging from Wall Street, which he described as symptomatic of the market bubble of the 1990s.

As I look back at the information that's coming across my desk daily I see a Gold price that has increased by 40% in 2yrs, a physical market that is on fire, a Paradym shift in investors thinking towards Bullion, a market demand that out strips supply, a media that is not feeding the public complete truth and a world that has perplexing problems that are not going to go away over night!

GOLD & SILVER
At the end of the day the real question is wether you own some or not!

Simon Heapes is a contributor to the AFBC research team.AUSTRALIAN AFFILIATE OFFICE
EMAIL

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INTERNATIONAL INVESTOR - 24TH August 2003. Philip Judge

USA PATRIOT ACT - Further Update
In our last International Update we briefed on the growing opposition to the Patriot Act from within the USA itself.

Opposition to the Act continues to grow including now formal opposition from 150 local governments. Further Alaska, Hawaii and Vermont, all that have passed resolutions condemning ALL or parts of the Act.

Recently founder and president of the Cato Institute, Edward Crane has said, "America must safeguard its freedoms in the fight against terrorism, but protect itself from pernicious policies that erode freedom in the name of liberty." Meanwhile Attorney General Ashcroft obstinately argues against curbing the vast police powers in the Act, claiming: "To abandon these tools would senselessly imperil American lives and American liberty."

I like the way Bob Bauman puts it "The greatest danger to American liberty is the unbridled powers granted police in the Act, a grotesque piece of lawmaking rushed through Congress, sight unseen, in the emotional wake of the 9-11 terrorist attacks. And it is a fact that the Act would have done nothing to stop the 9-11 attacks, that US "intelligence" failures played a major part.

Why is the Patriot Act important to the (non-US) International Investor? Well, simply put, in the post 9-11 world, the Patriot Act is the number one single thing that attempts to control and undermine the privacy, security and personal sovereignty of the International Investor.

ISRAEL FOLLOWS WESTERN WORLD TREND OF BANK ACCOUNT FREEZES
Last week 190,000 bank accounts were frozen in Israeli banks as new money laundering laws come into effect. Account-holders who failed to sign an "accounts without beneficiaries" declaration under the Prohibition on Money Laundering Law, were affected. Of the 190,000 frozen accounts, 70,000 were those of foreign residents and a further 60,000 Israeli company accounts.

I don't see this as a good sign for the Israeli economy. Israel is fighting a difficult war. Its opponent is unsophisticated and requires little or no funding to create massive social and economic damage. Locking up and freezing bank accounts sends out the wrong message to the right people, just at a time when Israel desperately requires foreign investment, and in the long run it will do little or nothing to reduce the effectiveness of its enemy.

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Q : When I have precious metals in an Anglo Far-East account, do I actually OWN the metals in my account and where are they held ?

A: YES, when you have credited your account with gold and/or silver, you have full outright ownership of those precious metals. This means that we have gone into the physical gold and silver markets and purchased precious metals on your behalf.

We have then taken actual-physical-delivery of the gold and silver and are now storing those metals exclusively for you in a pool of precious metals. Your gold and silver is being independently vaulted outside the institutionalised bullion banks and is at all times managed under our strict custodial governance.

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