Why Montenegro is unable to pay its debt towards Chinese Banks?

Abazovic: Montenegro loses one highway in 20 years due to cigarette smuggling. And this is just one of the reasons why Montenegro is unable to pay its debt for a new highway to Chinese Banks

A dose of panic and nervousness was introduced among the people who participated in the smuggling

He said that 247 thousand boxes of cigarettes, which were smuggled from the territory of Montenegro without appropriate excise stamps, and seized on the territory of Bosnia and Herzegovina, were actually cigarettes that were stolen recently from the Port of Bar.

The Deputy Prime Minister of Montenegro, Dritan Abazović, said that the state budget loses 30-35 million euros a year through cigarette smuggling, which is 350 to 400 million euros in 10 years. 

– It is a business that involves hundreds of millions of euros in traffic and has created a situation where Montenegro loses one highway in 20 years. We do not think that such a practice should be continued. The state has launched investigations that will show who was involved in cigarette smuggling in the previous period and lead to the punishment of those who caused damage to the state budget.

Analyzes also show that there will be aggravating circumstances for companies that operate legally, and which store cigarettes in the port of Bar. The agreement is that all contracts are respected to the end. Some have expired, some expire in February 2021, but this is a measure that must be implemented – said Abazović as a guest in the daily of Television Vijesti.

He said that 247 thousand boxes of cigarettes, which were smuggled from the territory of Montenegro without appropriate excise stamps, and seized on the territory of Bosnia and Herzegovina, were actually cigarettes that were stolen recently from the Port of Bar.

– A part of the stolen cigarettes owned by the companies “Aurora” and Atlant Mont “were confiscated and it was located with the help of our administration and the administration in Bosnia and Herzegovina. “Please be patient because these are the most complicated operations in the country. The network of smugglers is large in Montenegro and abroad. We work with the modest help of institutions,” Abazovic said.

Speaking about the decision of the Government to ban the storage of cigarettes in the Port of Bar, Abazović said that it is one of the historical ones, along with the one concerning the Ulcinj Solana.

– Montenegro is recognized as a country that is smuggled and from which 20 percent of smuggled cigarettes are transferred to the countries of the European Union and Great Britain. This Government has decided to put an end to this. The decision to prevent storage in the port of Bar, which is the main smuggling point, is a big blow to the organized crime scene, but that is just the beginning – said Abazović.

He said that the Bureau for Operational Coordination expressed suspicion that they were performing illegal activities in the new tobacco factory, which is why he will also be subject to control.

– I cannot accuse anyone without evidence, but I can say that illegal activities are being carried out in the new tobacco factory and that we have well-founded suspicions. The behavior of the management of the new tobacco is not as it should be. The government and the state must not declare themselves smugglers. This was possible earlier while certain parts of the Government were involved – said Abazović.

He said that the citizens view the fight against cigarette smuggling as a grand finale, and that it will not be completely stopped until there are changes in the prosecution.

– Evidence is being gathered. A dose of panic and nervousness was introduced among the people who participated in the smuggling activities. However, we must establish a new Prosecutorial Council as soon as possible, because without a prosecutor we cannot determine the things that citizens expect – said Abazović.

Many people in Vesna Bratić’s team work against her

Commenting on the controversial decisions of the Minister of Education, Science, Culture and Sports, Vesna Bratic, regarding appointments in education, Abazovic said that there were debatable decisions, such as the appointment of Rade Visnjic, but they were immediately corrected.

– This is a government that certainly makes decisions that are debatable. There was a situation with the director in Bar but the mistake was corrected immediately. I talked to Vesna Bratic and I think that a lot of people in her team work against her. Some do not want to accept the extended hand to work in the interest of Montenegro. It is not a problem to say that something is wrong, but I want to say that only in Montenegro can the appointment of a director cause a storm and cigarette smuggling be relativized. The focus of our citizens is on the wrong things, concluded Abazović.

There is absolutely no doubt that Montenegro is not a victim of Cinese “debt trap” policies as claimed by most (almost all) western media. Previous government and current president of Montenegro (from the same political party) were in charge in Montenegro for more than three decades. During that time Montenegro became a country ruled by mafia. Cigarettes are not the only criminal activity being allowed and protected by Djukanovic and his political party. Montenegrin mafia is well known as very successful smugglers of cocaine from South America. Two cocaine smuggling clans from city of Kotor are literally killing each other on streets of Montenegro and some neighboring countries.


The Great Physical Gold Supply And Demand Illusion

By Koos Jansen


Gold supply and demand data published by all primary consultancy firms is incomplete and misleading. The data falsely presents gold to be more of a commodity than a currency, having caused deep misconceptions with respect to the metal’s trading characteristics and price formation.

Numerous consultancy firms around the world, for example Thomson Reuters GFMS, Metals Focus, the World Gold Council and CPM Group, provide physical gold supply and demand statistics, accompanied by an analysis of these statistics in relation to the price of gold. As part of their analysis the firms present supply and demand balances that show how much gold is sold and bought globally, subdivided in several categories. It’s widely assumed these balances cover total physical supply and demand, which is incorrect as the most important category is excluded. The firms though, prefer not to share the subtle truth or their business models would be severely damaged.

The supply and demand balances by the firms portray gold to be more of a commodity than a currency, as the gist of the balances reflect how much metal is produced versus consumed – put differently, the firms mainly focus on how much gold is mined versus how much is sold in newly fabricated products. However, in reality gold is everlasting and cannot be consumed (used up), all that has ever been mined is still above ground carefully preserved in the form of bars, coins, jewelry, artifacts and industrial products. Partly because of this property the free market has chosen gold to be money thousands of years ago, and as money the majority of gold trade is conducted in above ground reserves. Indisputably, total gold supply and demand is far in excess of mine production and retail demand.

As most individual investors, fund managers, journalists, academics and precious metals analysts consider the balances by the firms to be complete, the global misconception regarding gold supply and demand is one of epic proportions. Physical gold is a profound anchor in our global financial system and thus it’s of utmost importance we understand the fine details of its trading characteristics. 

Supply & Demand Metrics By The Firms

The firms can argue that the difference between what they present as supply and demand (S&D), as opposed to what I deem to be a more unadulterated approach of S&D is due to contrasting metrics. Accordingly, we’ll discuss their metrics to reveal their infirmity. In a nutshell, the firms only count the physical gold S&D flows that are easy to measure, while leaving out the most important part: institutional supply and demand. 

Although the firms all have slightly different methodologies to measure S&D, from comparisons the numbers appear to be quite similar. For our further investigation we’ll spotlight the metrics and models by GFMS. The reason being, GFMS has been the only firm that was willing to share a full description of their methodology for publication – to be viewed here. Metals Focus (MF) provided a partial methodology, the World Gold Council and CPM Group declined to comment.

Let’s have a look at GFMS its S&D categories. On the supply side is included:

  • Mine supply (newly mined gold)
  • Scrap supply (gold sourced from old fabricated products)

On the demand side is include:

  • Jewelry demand (gold content used in newly manufactured jewelry products bought locally at retail level, adjusted by jewelry exported and imported).
  • Industrial demand (the volume of gold used in industrial applications, for example bonding wire, products used in semiconductors/electronics and dental alloys).
  • Retail bar investment (the net volume of bars that are purchased by individual investors through retail channels).
  • Coin investment (a combination of published data from mints and also a proprietary survey conducted by GFMS detailing where coins are sold).

The above four demand categories summed up are often referred to as “consumer demand” by the firms.

Furthermore GFMS includes:

  • Net hedging (change in physical market impact of mining companies’ gold loans, forwards, and options positions)
  • Net official sector (total central bank selling or buying)
  • ETF inventory build (change in ETF inventory)
  • Exchange inventory build (change in exchange inventory)

The last four categories can be either supply or demand. In example, when central banks (the official sector) in total are net sellers this will be listed as a negative demand figure, as is shown in the S&D balance by GFMS below from 2006 until 2009, when central banks in total are net buyers this will be listed as a positive demand figure, as is shown in the balance from 2010 until 2015. For a clear overview of the GFMS S&D balance please have a look at all line items below.

Please follow the link to finish reading of the original article published by



Yanis Varoufakis – views


The former Greek finance minister has a laundry list of suggestions to fix Australia’s economy. Here for Sydney Writers’ festival, he doesn’t hold back




There are two seats to choose from: a deep, soft black-leather couch, or a red one that has the utilitarian look of a school chair. Yanis Varoufakis – a man who has described himself as an “erratic Marxist” – chooses the red, and somehow it is obvious that he, with his vibrant purple shirt and erect posture, would never have deigned to sit in that sprawling old couch.

The former Greek finance minister is in town for the Sydney Writers’ festival to promote his new book, And the Weak Suffer What They Must?, and he’s touched down at an excellent time for an interview: on the verge of an election, Australia is having the most fervent debate about fairness that it’s had in decades.

Varoufakis is quite possibly the man who made fairness fashionable again. His anti-austerity views may have been dismissed in Brussels, but they earned him a global audience. He contributes articles to news organisations from the BBC andthe Guardian to CNN, Le Monde and the Financial Times. He is also a star recruit on the speaker circuit, addressing parliaments, financial institutions (“the fact they want me to talk to them is a sign of how deep this crisis is,” he told the Australian) and universities. He recently appeared in conversation with Noam Chomsky to a sold-out audience at the New York Public Library, in what looked suspiciously like a passing of the mantle.

“The vast majority of the social net funding comes from the poorer people,” he says. “If you look at how the system works – and this is how it was designed from 1945 onwards, in Britain where it started, and in Australia afterwards – it’s the working class paying for the working class, primarily. The rich contribute a very small quantity of money to this. Don’t forget they have the best lawyers, and they have the best accountants, and they know how to work the system.

“In Australia we have a scandalous system called negative gearing, the purpose of which is to subsidise the rich.”

Varoufakis is no stranger to Australia. He lived in Sydney from 1988 to 2000, teaching economics at the University of Sydney. As a dual national, he returns regularly to spend time with his daughter – and he’s been following the current election campaign with an eagle’s eye.

“The first thing that has to happen in this country is to recognise two truths that are escaping this electorate, and especially the elites.

“Firstly, Australia does not have a debt problem. The idea that Australia is on the verge of becoming a new Greece would be touchingly funny if it were not so catastrophic in its ineptitude. Australia does not have a public debt problem, it has a private debt problem.

“Truth number two: the Australian social economy is not sustainable as it is. At the moment, if you look at the current account deficit, Australia lives beyond its means – and when I say Australia, I mean upper-middle-class people. The luxurious lifestyle is not supported by the Australian economy. It’s supported by a bubble, and it is never a good idea to rely on the proposition that a bubble will always be there to support you.

“So private debt is the problem. And secondly, because of this private debt, you have a bubble, which is constantly inflated through money coming into this country for speculative purposes.”

Varoufakis is unequivocal in his conviction that current growth – which he likens to a Ponzi scheme – needs to be replaced with growth that comes from producing goods.

“Australia is switching away from producing stuff. Even good companies like Cochlear, who have been very innovative in the past, have been financialised. They’re moving away from doing stuff to shuffling paper around. That would be my first priority [if I were Australian treasurer]: how to go back to actually doing things.”

Producers are the foundation of society

Varoufakis wouldn’t be the first to compare the Australian economy to a Ponzi scheme. Economist Lindsay David has made a similar criticism of the housing market, and has also heavily criticised Australia’s reliance on Chinese investment. David and fellow economist Philip Soos have predicted the economy is heading for a crash, and Varoufakis thinks they might be right. He is quick to point out that crashes can never be predicted, but he is in little doubt that it will happen if Australia doesn’t change direction soon.

“There is no doubt, if you look at the pace of house prices over the past 20 years in Australia and the pace of value creation; they’re so out of kilter that something has to give.”

But Australia seems to be doing the exact opposite of what Varoufakis is recommending, with successive governments moving away from supporting manufacturing. This became a policy flashpoint when the Abbott government was negotiating subsidies to the car industry shortly after being elected in 2013. The result was the exit of Holden and Toyota from car manufacturing in Australiawhich, according to some estimates, could result in the loss of up to 200,000 jobs. Varoufakis calls that decision a “major error”.

“Once you lose this capacity to manufacture you can’t get it back,” he says. “It took centuries to develop it.”

Regardless of short-term trends that reduced the significance of manufacturing in the developed world, he says, the kind of accumulated knowledge that car manufacturing represented should not have been jettisoned without something to replace it. There appears to be an expectation that the Chinese will replace that loss of value by investing their money in Australia. But if that happens, it could lead to boosting the existing bubble in the property market, warns Varoufakis.

“When this flow of capital from China to Australia severs, or comes to a natural end, the crash is going to be much much bigger and the foundations of the society – which are the sectors that produce stuff – are going to be much weaker. So it was such a short-sighted policy.”

Please click on the link TO FINISH READING of the original article published by The Guardian