When confronted with the ferocity of the rally in gold, the fact that the third quarter demand for gold was below the seasonal average is surprising. The dynamic between price and demand suggests some fall in supply perhaps led by increased hoarding.

According to the council mining supply is fairly inelastic.

Supply of recycled gold generally helps stabilise the price, in recent years this has been 28 percent of annual supply.   Between 2003 and 2008 central bank sales represented the third biggest source of supply.

It remains unclear what the recent gold purchases from the Central Bank of India means for the demand/supply dynamic of gold going forward.

What is clear, is that the gold rally has been exacerbated by dollar weakness, but this only offers a partial explanation.  The dollar index is at 15-month lows.  In August 2008, gold traded at an average rate of $836.84.  Other factors that have chased gold prices higher include the lack of return on cash and fear of inflation.   The former will almost certainly support gold in the coming months, but the inflation argument has no legs.

Following a year packed with fiscal spending and the introduction of Quantitative Easing, Fed chief Bernanke recently said “inflation seems likely to remain subdued for some time”.  If high unemployment and rising savings rates are insufficient evidence of subdued price pressures, lessened availability of credit at a consumer level should drive home the point.

Tightening the availability of credit on Main Street has been an inevitable and necessary consequence of the subprime crisis. Not only should this ensure that consumer activity going forward stays relatively subdued but is also implies that firms will have less pricing power.

Rather the causing domestic inflation, cheap money provided by the Fed and other central banks can be linked with speculator inflows into high yielding markets.  Some asset prices in Hong Kong, China and Singapore are arguably seeing the beginnings of bubbles and this talk alone is supporting gold.

The Fed could hinder this by hiking rates so the dollar was no longer an attractive funding currency but it is unlikely to do so when its domestic economy is weak and expectations for domestic inflation are low.  Like the Bank of Japan in the 1990s, it is possible that the Fed’s ability to create inflation domestically may be lessened in the post crisis era.

While it is difficult to find signs of inflation in the US, Eurozone or UK, near zero interest rates are clearly providing a significant support for gold.  Speculation in general is being fuelled by cheap USDs but in addition, conservative and retail investors are being forced to look outside cash deposits for positive return.  Also, retail investors cannot be blamed for enjoying the intrinsic quality of gold following last year’s banking crisis.

Assuming the Fed starts to hike rates in the second half of 2010 the dollar could see a cyclical recovery on a 6 month view.  Anticipation of higher Fed rates and a stronger dollar should reverse some of this year’s flows into gold.  While this suggests that the gold rally may yet run for another 6 months , the third quarter demand data for gold implies the rally may tire as soon as the first quarter.

“The idealised free market is a fiction, an invention: it has never existed and it never will exist,” he writes in “How Markets Fail: The Logic of Economic Calamities.”

Cassidy, who has covered economics and finance at the New Yorker magazine since 1995, explained the basic premise of the book to Reuters before giving a talk at the London School of Economics this week.

Big bonuses have dominated headlines in recent weeks, and it is expected that David Walker’s review of corporate governance in British banks, due out on Thursday, will add fuel to the debate. While remuneration is likely to steal the limelight, deeper in the darkness lies a less emotive evil – risk.

Risks, particularly financial risks, have been taken by our most powerful organisations to a disconcerting degree - one that our current corporate governance system and non-executive directors were not able to control. So did non-executives fail to understand the scale of the risks involved, or did they not deem it their responsibility to challenge their respective boards?

Arguably both are to blame. Let’s first consider board directors’ understanding of the risks. Structural issues currently hamper non-executive director’s access to information.  Non-execs are not super-human, but they are set with a phenomenal task - to supervise these vast multinationals with little support, limited capacity and restricted resources, relying almost exclusively on information provided by the executive. It is like trying to gauge the severity of an upcoming volcanic eruption with a thermometer.

And setting aside these structural constraints how accountable and responsible do non-executives feel? One of the things we hear most commonly is that it is not a non-executive’s job to second-guess the executive; they are part of a united body which they are not there to unsettle.

Culturally there is a perception that non-execs feel actively discouraged from challenging decisions – that it is seen as a form of betrayal. But boardrooms need to cultivate curiosity and an environment in which challenge is encouraged. If directors wont question the executive on behalf of the shareholders, who will?

For the Walker Review to tackle the issue of risk, the cultural and structural obstacles need to be addressed. In a stronger, more effective corporate governance structure, non-execs will be revered: not because of their past accolades but because they have the strength and the understanding to stand up to the Board, promoting the best interests of shareholders  and stewarding our most powerful organisations to future success.

The scenes of flooding in Cumbria are a shocking illustration of how Britain’s ageing drainage infrastructure is failing.

The function of the majority of drainage structures is to remove water from inhabited areas as soon as possible via so-called receiving watercourses as conduits to carry excess water away. Unfortunately, cities and towns have grown beyond capacity, back-up floodplains are built upon, and water overflow has nowhere to go.

Householders are shown on television blaming the government and demanding that something must be done to prevent flooding.

In my opinion, part of the solution lies in sustainable drainage, which mimics nature by encouraging filtration via permeable and vegetated surfaces and detention via ponds, wetlands and slowly flowing water.

By slowing the water flow, SUDs offers a way of attenuating the storm peak, allowing the water to slowly dissipate. As it does this, pollutants are sifted out of the water. Since many SUDs devices involve vegetation, the sustainable approach also enhances biodiversity, amenity and local landscapes.

You would think planners, Local Authorities and even individual householders would be falling over themselves to incorporate SUDs into their built environment. But no. While SUDS have been around for several decades, particularly in the U.S., Sweden, France and latterly in Scotland, uptake in England and Wales has been slow.

People argue that the cost is prohibitive and that it is difficult to maintain. Negative views could be countered by research and development, education and information.

There is also the issue of money. Research and development is expensive.

Legislation in England and Wales does not necessarily encourage the implementation of SUDs. Rather, it has get-out clauses to enable SUDs to slip down the agenda.

The problem is more wide-ranging than this, involving everything from the trend for paving front gardens, to wider issues of SUDs devices such as wetlands actually being used as water treatment installations rather than “natural” ecosystems which area protected from dirty urban water.

There is no way I would suggest that SUDs would have prevented the current flooding, but it could have helped. The likelihood is that winters in Britain will be wetter, and the weather more stormy in general. We need, therefore, to plan now for what looks like uncertain times ahead for the British weather. If the future is wet, then the future has to be SUDs.

Three things to keep in mind for defined contribution pensions:

Higher earners

Pension plans help build financial security in retirement, and in the face of a looming pensioner crisis the government continues its efforts to increase the number of savers. There is one exception: if you earn more than 150,000 pounds all bets are off.

In April 2010, we will see these high earners lose their tax-free allowance and suffer further through the introduction of a 50 percent income tax rate. A year later, an effective charge of up to 30 percent on all pension contributions will bring an immediate cost for a benefit realised later in life.

This substantial change to pension tax relief may dramatically affect the suitability of pension saving when compared with other investments and disengage the decision maker in the company from pension provision.

Employers would be well advised to ensure pension scheme members are aware of these changes, along with the thorough “anti-forestalling” rules already in place. They may also wish to review traditional pension provision as an effective reward strategy for key employees.

Concerns of employers about priorities

Punter Southall has completed a series of successful seminars across the UK, focused on these issues and addressed employers concerns for the provision of defined contribution pensions.

Around 250 finance directors, HR managers and pension managers representing employers attended the seminars, and the majority were surveyed on their views on the top concerns for DC pensions going into 2010.

Top of the list was the selection of the DC pension provider and design of a pension scheme (based on the closure of existing “defined benefit” final salary schemes), closely followed by the upcoming challenges created by the shift to Personal Accounts planned for 2012, along with concerns about the choice of a “default” investment fund (which scheme members who don’t pick another option are automatically placed into).

Sadly, issues such as member engagement, at-retirement education (i.e. advice for scheme members about to retire on how to get the most from their pension pot), and scheme governance scored poorly and audience interaction revealed that these areas were not considered a priority – this is despite the Pensions Regulator only last week stressing his concerns about these areas not being fully considered by employers.

These responses from the attendees closely reflect our experience in dealing directly with UK employers.

For most employers, getting the new scheme design right and selecting the most suitable provider means the challenge of balancing the need to create something of value to members along with the cost of providing it. Many large corporates are also reconsidering Trust based schemes in the light of auto-enrolment planned for 2012 and the ability to refund employee contributions within the first two years.

It is not surprising that investment is a concern given recent turmoil in markets and the swings in volatility of between 40 percent and 50 percent (in both directions) in value that many default funds have suffered. Worryingly many employers are not taking action to remedy this problem and still need further guidance on how to achieve a more consistent performance in the future.

But the issue of Employer Duties in 2012, and accompanying Personal Accounts is one that worries many employers as they are uncertain how it will impact their business.

Challenges posed by “auto-enrolment”

One particular area of concern that Punter Southall has relates to auto-enrolment (where new joiners are automatically enrolled into a pension scheme). We whole heartedly support the view that the sooner it happens, the better to encourage participation in UK contract-based DC schemes en masse.

However, the National Association for Pension Funds has echoed the views of many by telling the Department of Work and Pensions that the proposed reforms need an “injection of common sense” and has made several recommendations to improve the auto-enrolment process.

Our desire is that we look at the bands of people who are enrolled automatically and ask that this is reviewed. Auto-enrolment may be a necessary evil to force retirement saving for the disenfranchised masses but it is important to ensure that the masses are identified correctly.

The bands we suggest are those that under 30 years old are not automatically enrolled, as student debt and lifestyle apart means pensions are not really affordable. They are also all going to be working a lot later in life, probably retiring at 70 or older, so why force saving so early? Whilst Pension Credit is being washed out of the system I would also suggest that those over 55 years old are also exempt, along with greater consideration given to those at the lower end of the pay scale.

This leaves the real core market to aim at. Take-up rates will therefore be higher and more importantly, we believe it will be deemed a success.

After the talk, Straw told Reuters that the most pressing issue in UK democracy is the need for politicians to restore public trust following an expenses scandal that forced the main political parties to work together to resolve the crisis.

“People feel a bit detached from the political system,” Straw said, adding that it is important to work out ways to “get people back into connection.”

Disclosures earlier this year that MPs claimed on their expenses for everything from manure to porn films triggered public outrage. The controversy led MPs to oust parliament’s speaker for the first time in 300 years.

Before Darwin’s discovery, the world was generally thought to have remained more or less the same since its creation. This belief, based on Biblical interpretations, was contested through fossil studies showing that species change over time.

Darwin’s legendary round-the-world 1831-1836 voyage aboard the HMS Beagle generated his most significant observations and discoveries, inspiring his work on natural selection.

Although Darwin first used the term “natural selection” in a paper in 1842, it wasn’t until 1859 that he published his controversial theory that all living beings share a common ancestry — a discovery that remains vital to modern biology.

Author Nick Spencer, director of studies at Theos, a research organisation launched in 2006 with the support of the Archbishop of Canterbury, explained why the debate persists to this day.

“People are encountering evolution not so much as a science but as a philosophy,” he told Reuters ahead of a Nov. 24 lecture at Westminster Abbey to mark the anniversary of the exact date on which Darwin’s book was first published.

The Reuters Memorial Lecture commemorates journalists who have lost their lives in pursuit of their profession.

The lecture will be followed by a panel discussion chaired by John Lloyd, with Timothy Garton Ash and Paolo Mancini. Reuters correspondents will be live blogging throughout.

To join the discussion click on the ‘make a comment’ link at the top of the liveblog panel.

Since the emergence of digital technology and global networks, forgetting has become an exception, Mayer-Schonberger writes in “Delete”.

“Forgetting plays a central role in human decision-making,” he argues. “It lets us act in time, cognizant of, but not shackled by, past events.”

Mayer-Schonberger shared his theory on how to fight back against the digital panopticon with Reuters before giving a lecture at the Royal Society for the encouragement of Arts, Manufactures and Commerce in London.

Disappointed, but not surprised, was my first response to hearing President Barack Obama’s announcement on Wednesday that he would not make the January 22 deadline for closing the prison in Guantanamo Bay.

During attorney visits over the past few weeks, Reprieve’s clients in Guantanamo have expressed their doubts regarding whether President Obama can live up to his promise to close the prison within a year of assuming office. ‘What is he going to do,’ one man asked, “put 200 people on a plane on the 22nd?”

And it is true – the maths doesn’t work.  Around 245 prisoners were being held in Guantánamo when Obama was inaugurated in January of this year and only around 30 men have left since then. If releases continue at this snail’s pace, the prison won’t close until at least 2017.

Who are the people who are left in the prison and why is it proving so hard to close? First there are the 90 or so prisoners from Yemen who the United States will not repatriate because of the country’s instability.  Another 65 people are considered prosecutable in federal courts or military commissions, the details of which are still being hammered out (the latest development being the recent announcement of the future transfer of five men, accused of involvement in Sept. 11 to U.S. Federal Courts for prosecution).

Then there is a group of around 60 men - Guantanamo’s refugees - 18 of whom are represented by Reprieve. Many of these people have been “cleared for release” by United States authorities, meaning they have been deemed to present no threat whatsoever.  These men would be free to leave Guantanamo tomorrow but they remain stranded there because they cannot return to their countries of origin for fear of torture.

They are from places like Uzbekistan, Syria, China, Algeria and Tunisia, countries where their being branded “terrorists” - despite them having been cleared - will make them sitting ducks for authorities with Kafka-esque human rights records.

In June, there was optimism that European states would offer homes to these men, but only a few countries have moved from talk to action. France, Portugal, Ireland, Belgium and the United Kingdom have accepted former prisoners, as well as the unlikely resettlement locations of Bermuda and Palau.  Why has Europe been so reluctant to assist?

Congress’s refusal – stoked by a scaremongering media - to accept any former prisoners onto American soil, has presented a huge stumbling block that Obama is struggling to scale. It is much more difficult for the U.S. (and Reprieve) to persuade European countries to take former prisoners when the U.S. refuses to do so.  In addition, governments have been hugely wary of the reactions of their political rivals and publics in determining whether to take former prisoners.

It has not helped that Obama himself persists in talking about “The Terrorists” and does not differentiate between the men held in the prison, the bulk of whom were sold for bounties and are far from being the hardened “worst of the worst” some paint them to be. It is worth making the point that the U.S. government has lost 30 of 37 habeas cases – that means that, in 30 instances, a judge, on reviewing the evidence against a prisoner, has found him not to be a threat to the U.S.

It is also worth mentioning the splendid Amherst, Massachusetts, which passed a resolution stating that that the town would welcome ex-Gitmo-prisoners.  This has not and will not happen, but the town’s spirit is commendable.

If European States want Guantánamo to be closed they must do more than continue to shake their collective heads and mutter about Obama’s naivety and optimism in setting so short a deadline.  It is true that it was a meet-able deadline.  But Obama not only needed support from Congress but also from his European allies.  Europe needs to step up and offer a home to the cleared prisoners and perhaps then the U.S. will follow its lead.  Only then can Obama’s promise of change really begin.