Mystery of the missing Russian gold

Posted in Business, Current Affairs, European History, Gold Reserves, History, India, politics by Anuraag Sanghi on January 18, 2010

As the Soviet Empire crashed

In November 1991, the head of Gosbank the Central Bank of USSR, Viktor Geraschenko confirmed that USSR had less than 400 tons of gold reserves – and not the 1000-1500 tons as estimated. Russia, which has been one of the world’s Top 10 gold producers for the last 100 years, to have a paltry less than 400 tons of gold as reserves created a flutter in the IMF, World Bank, and the Western world. Where did this ‘estimated’ 1000 ‘extra’ gold go?

The declared gold reserves of Gosbank in mid-1937 were 374.6 tons. No additions were made after that, and the reserves were turned over to the People’s Commisariat of Finance. The size of of the reserve had been kept secret since the late 1930s. Geraschenko wrote to Gorbachev on November 15, 1991: “It was reported in October of this year that the official gold reserves of the country are only 240 tons. The declared level of official gold reserves, which is one of the most important indicators of a country’s solvency, is not commensurate with the status of a superpower and leading gold producer, according to experts. Reports of the size of the USSR gold created confusion among specialist on the gold market, who had previously estimated them to be 1,000-1,300 tons”. (via Collapse of an empire: lessons for modern Russia By Egor Timurovich Gaĭdar, page 238).

A preachy and superior writer about the Soviet implosion

A preachy and superior writer on the Soviet implosion

After Gorbachev’s ‘perestroika’ and ‘glasnost’, as the Russian economy was loosening the grip of the CCCP, the Russian Central Bank set-up an

“offshore firm, Financial Management Co., known as Fimaco, based in Jersey, the Channel Islands, to handle Russia’s foreign currency reserves. By one estimate, the offshore fund managed $37 billion between 1993 and 1998. The firm was a subsidiary of Eurobank of Paris, which is 78 percent owned by the Central Bank.”

The Washington Post revealed in another report how Russia,

funneled billions of dollars in Russia’s hard currency reserves through… Fimaco … Documents disclosed by The Washington Post showed that some of the money was then pumped back into Russia’s high-flying government bond market in 1996, in the months before President Boris Yeltsin’s reelection.

One of the few journals to get this story right was Businessweek – based ‘on-the-ground’ whispers.

Managing the Russian Central Bank during the mayhem

Described by Jeffery Sachs, repeated many times by Western bankers, as “the worst banker in the world”, Viktor Gerashchenko was chairman of the Russian Central Bank. Twice: the first time from 1992 to 1994, and the second time was after the default crisis of 1998 – upto 2002; resigning after “expressing opposition to proposed legislation that aimed to make the Central Bank subordinate to a new government led body, The National Banking Council.”

Without any conspiracy theories

For Russia, as one of the Top 10 producers of gold, to have 1000-1500 tons of gold would not be excessive. But between 1971, after the Nixon Chop, in little time, dollar value depreciated from US$35 per ounce of gold to US$800 in 1980. Over the next 20 years, through various clandestine methods (check out the Edmond Safra and the Yamashita stories below), gold prices were ‘managed’ and brought down to US$225 per ounce. Co-incidentally, along with oil prices. This reduction in gold and oil prices simultaneously, severely undermined the health of USSR’s economy – these two being the most valuable ‘hard currency’ exports from USSR.

A simple explanation may be that the central bankers of the erstwhile USSR used a lot of that gold to ‘support’ alliances. Much in the manner of the USA, which does the same with its USCAP system. To this add the possibility that Soviet apparatchiks did not want to divvy up Soviet gold with members of the CIS and the subsequent splinter countries of the USSR, or lose it to ‘impatient’ and ‘opportunistic’ Western creditors.

This ‘unexplained’ reduction in gold reserves, was done according to Gosbank head, Gerashchenko, to “to avoid the seizure of assets during talks with foreign governments and private creditors on the restructuring of Moscow’s Soviet-era debts.” Russian authorities also “questioned the $50 billion figure reported by Skuratov. They said $1.4 billion was the most FIMACO ever managed at one time, in 1994”. After his stint at Gosbank, Geraschenko became chairman of the Yukos board. Yukos is the company that belonged to the jailed billionaire, Mikhail B. Khodorkovsky.

 La Leopolda  at Villefranche sur Mer, France, the former home of King Leopold, Gianni Agnelli and Edmond Safra.

La Leopolda at Villefranche sur Mer, France, the former home of King Leopold, Gianni Agnelli and Edmond Safra.

Death Of Edmond Safra

Friday. December 3rd, 1999. TV channels (in India too) announced that Edmond Safra died in mysterious circumstances – at his villa in Monaco.

Based out of Monaco, a known off shore finance centre, Edmond Safra was reputed to have been in the know and arranged numerous gold dealings. His claim to fame was to ‘arrange’ the evacuation of Sephardic Jews, with their wealth from various West-Asian and Middle East countries between the 1920-1960s. He was ‘whispered’ to be behind the George Soros run-in with the Bank Of England gold sale and physical delivery.

The US FBI was conducting investigations about money laundering through Safra’s bank by the Russian ‘mafiya’, based on information given by Edmond Safra. Behind many of these money transfer and manipulation operations through Safra’s Bank, was the Russian ‘mafiya’ – and lubricating these transactions, were hundreds of tons of Russian-Soviet gold. Sold through Edmond Safra? Was it this investigation or a ‘double-cross’, that triggered Safra’s killing?

At the time of Edmond Safra’s death, he was negotiating the sale of his bank to The Hong Kong & Shanghai Banking Corporation.

Yamashita Gold – Underground gold from Japan

Korea claims that Japan plundered Korea of hundreds of tons of gold from 1937-1944. Philipines, Indonesia have all raised claims against Japan for war time gold loot.

Regardless, one American writer had definitely hit a jackpotGold Warriors: America’s Secret Recovery of Yamashita’s Gold (By Sterling Seagrave, Peggy Seagrave). Ian Fleming is supposed to have based his story on the Yamashita chapter of WW2.

Japan’s top underworld crime boss, Taisho (Admiral) Yoshio Kodama, (ranked as an admiral at 34 years) a major figure in the Japanese underworld was in charge of Project “Golden Lilly” – after one of Hirohito’s poems! Objective – looting gangsters in Japanese occupied territories. Supervising the operations was Emperor’s Hirohito’s brother, Prince Chicubi. Management – Japan’s top financial figures.

Central Bank - Gold Sales
Central Bank – Gold Sales

Subsequently, allegedly, a lot of this gold landed with Ferdinand Marcos; the Filipino dictator. Swiss banks, Macao criminals, American generals and politicians – all involved.

Glen Yeadon, writer of “The Nazi Hydra in America: Suppressed History of a Century” writes how Presscott Bush (grand-father of George Bush), Douglas MacArthur were involved in various launderings, diversions and subterfuge involving Nazi gold and Japanese gold after WW2.

After the Japanese surrender, Tomoyuki Yamashita, was tried by a kangaroo court, convicted of vague crimes and hung to death – which added to the rumours of Yamashita’s gold.

Recovery of Boticelli’s Venus

Sandro Botticelli’s Venus Rising, a ‘priceless’ renaissance period painting, now in the Ufizzi gallery, stolen and hidden, was ‘discovered’ by Indian soldiers, during WWII. This ‘discovery’ of Botticelli’s Venus was a highlight of the mopping up operations – and the role of the Indians soldiers has been wiped clean. No book review of a hagiographic account, The Venus Fixers: The Remarkable Story of the Allied Soldiers Who Saved Italy’s Art During World War II By Ilaria Dagnini Brey mentions this contribution by Indian soldiers. I wonder what would have happened if ‘others’ had found this painting. Blame the Nazis for the loot! The painting would never have been recovered, I presume!

Central Bank Gold Sales

Between 1999-2009, European Central Banks have sold more than 4000 tons of gold under the Central Bank Gold Agreement (CBGA).

Switzerland, which had held the most gold reserves per capita in Europe in 1999, has sold more than 1,300 tons of its gold reserves. Other major sellers in the past 10 years included France, the Netherlands, and the U.K.

Countries like France, where monetary policy is now set by the European Central Bank, still maintains its own central bank. The U.S. hasn’t sold gold.

In the past, abrupt selling has sometimes depressed gold prices. The Bank of England’s announcement in early 1999 that it was selling part of its reserves helped gold prices slump to a 20-year low. Gold traded at just above $250 an ounce by the summer of that year.

But efforts to coordinate those sales have reduced those shocks. On Sept. 26, 1999, 15 European central banks, led by the ECB, signed the first CBGA to take concerted moves on gold sales.

The banks agreed that in a five-year period, they will cap their total gold sales at around 400 tons a year, with sales in five years not exceeding 2,000 tons. The CBGA was renewed in 2004 for another five-year period. The second CBGA raised annual ceiling to 500 tons and the five-year limit to 2,500 tons.

The interesting bit was where did the European Central Banks get so much gold from! Was it the various gold hoards, that had disappeared from 1900-200o, making a re-appearance!

For long, these calls for accountability from ‘conspiracy theorists’ have been ignored. The good news. These ‘conspiracy theorists’ have not been able to locate any more of such extra sources of gold, which may disturb the market in the next few years.

Gold and currencies outlook

Posted in Business, Current Affairs, European History, Gold Reserves, India, politics by Anuraag Sanghi on January 16, 2010
Gold /Silver /Oil and the BSE-Sensex Co-relation - How will this pan out?

Gold /Silver /Oil and the BSE-Sensex Co-relation - How will this pan out?

Gold scenario for this year

With gold prices at a historic high, the future trend of gold price is the question on everybody’s mind. There are a few wrinkles which make the future of gold price a complex subject. Gold prices in the coming 1-3 years, may not be a open-and-shut case. Lending stability to gold prices are the following six factors.

  1. IMF gold sales – IMF has some 3000 tons of gold – of which,  some 400 tons have been earmarked for sale. 200 tons has been bought by RBI and another 20 tons by sundry central banks of Sri Lanka, Mauritius, etc. Leaving less than 200 tons on the table. RBI claims that they have put in a bid for the rest also – and the decision on that will be taken soon. Thus, any downward pressure on gold prices due to IMF sale is unlikely.
  2. Central Bank gold sales – Various European banks have been selling gold from their ‘reserves’ on the open market, over the last ten years. Not much is left from that quota. No downward pressure from this quarter also.
  3. Chinese Yuan appreciation – The whisper on the street is that the Chinese yuan may see 10%-15% appreciation in the next 4-8 months. This may trigger a re-balancing of the global currency equations, making the dollar weaker in narrow range. This may lead to a welcome lowering of the US trade deficit – which will strengthen the dollar, against non-yuan currency. And re-create some confidence in the US dollar.
  4. Indian business outlook – Yuan appreciation will end up making the Indian export sector, specifically and corporate sector generally, more profitable. An increase in merchandise export seems unlikely. Improvement in profitability will attract dollar inflows into India for investment in Indian stock markets; increasing liquidity in India, decreasing interest rates and mildly strengthening the rupee.
  5. Double whammy – A strengthening rupee and a stronger dollar is likely to further put downward pressure on gold prices. For the first time in many years, India has slipped to number two position (by a minor ten tons) as the largest gold ‘consumer.’ Accompanied by the drumbeat of official media, Chinese consumers have been encouraged to buy gold – and comparisons to India are being freely made.
  6. “Even if it’s sold at a market price, we should still buy,” counters Xia Bin, head of a key Beijing think tank advising the State Council cabinet (and also making plain that this is his personal view).

    “India’s okay with it, why shouldn’t we be? What’s the use for so many dollars, whose purchasing power is weakening anyway? With so many foreign reserves in hand, I think China should buy, without doubt.”

  7. Gold value is 10% of Indian capital stock – Keep in mind that India is a US$1 trillion economy and India’s 25,000 tons of private gold reserves @Rs.18,000 per tola and Rs./USS$ rate @Rs.45 to dollar converts to US$ 1 trillion also. Adopting a return on capital employed @ 10%, implies total capitalization of the Indian population at US$10 trillion. And gold forms 10% of that capital. Is this an equilibrium in India. From here on, Indian gold demand may well be damped.
What about the Eagle's loot?
What about the Eagle’s loot?

One tremor is all

What can trigger a fresh upward burst in gold prices, can be any of the following events.

One tremor, in the market, on any of these triggers, will set off another stampede towards gold.

Depending on the event, the next breather gold may then take will possibly be at US$1800 (ounce)/ INR25,000 (tola).

As the last one year unfolded, the Citi, GM, rescue plans, have strained the US Treasury. The next upheaval may be sovereign debt.

How can Greece, Spain or the UK unravel the EU

Greece, Iceland, Ireland, Spain, UK et al are tethering at the brink. If they regain their balance, world economic outlook may give reasons for optimism – and for gold prices to take a breather. To avoid a default by Greece, Spain or UK, the ECB may need to extend some really big sums of money.

What makes these five cases specially worrisome, is the near-absence of manufacturing and industrial output in these countries. Unlike France, Germany or Italy. This may make EU-member countries balk at extending lines of credit, sovereign guarantees, underwriting of new loans, interest /capital waivers, rescheduling of debts, rollovers – the works.

Defaults by any or all names. Without credit lines, loans, underwriting, guarantees to these on-the-edge countries, may set off an exodus or a break-up of the EU.

Can Russia and China become a problem?

Russia has seen a major drop in export income, due to crash in oil and raw material prices. Yuan appreciation in the China could the other trigger. But these two scenarios may take 2-5 years to play out. These may not be the reasons for the immediate run-up on gold prices.

But to get a real perspective on how changes in gold prices can happen, the Soviet Gold saga is worth looking at.

“Even if it’s sold at a market price, we should still buy,” counters Xia Bin, head of a key Beijing think tank advising the State Council cabinet (and also making plain that this is his personal view).

“India’s okay with it, why shouldn’t we be? What’s the use for so many dollars, whose purchasing power is weakening anyway? With so many foreign reserves in hand, I think China should buy, without doubt.”

Tribute to Haiti – in their hour of tragedy

Posted in Current Affairs, Environment, European History, History, Media, politics by Anuraag Sanghi on January 14, 2010
Haiti in Happier times!

Haiti in Happier times!

What Haiti needs

Haiti was stuck by an earthquake measuring7.0-magnitude quake, Haiti’s worst in two centuries, struck at 1653 local time (2153 GMT) on Tuesday, just 15km (10 miles) south-west of Port-au-Prince and close to the surface.” More than 100,000 people are estimated to have been affected. Haiti has been through worse – and the Haitians have always pulled through. What Haiti needs is non-interference.

Sordid reactions

During an earlier segment with a reporter for Robertson’s CBN News, the televangelist had questioned whether the earthquake in Haiti was a “blessing in disguise.”

“They need to have … a great turning to God,” he concluded, adding that the earthquake may have been a direct consequence of their “Satanic pact”.

“Something happened a long time ago in Haiti, and people might not want to talk about it,” Robertson said during a broadcast of The 700 Club on the Christian Broadcasting Network. (via US televangelist claims Haiti earthquake ‘a blessing in disguise’ | The Daily Telegraph).

What is it that Haiti did a ‘long time ago’ that made Pat Robertson, do rah-rah for this ‘divine wrath’!

I know what Haiti did

Haiti was the world’s first republic, set up by slaves – after a war of freedom. Haiti’s, support for Simon Bolivar ended the Spanish Empire in South America. Most importantly, it forced the West to free all African slaves across the Europe and Americas. The second major ‘crime’ that the Haitians committed was that they rejected a ‘liberating’ Christianity – and continued with their voudou religion.

For all this, the West has not forgiven Haiti!

Messianic Rev.Pat Robertson

Pat Robertson, more than 40 years ago, founded the Christian Broadcast Network (CBN), which according to “Nielsen Media Research, The 700 Club, aired each weekday, has averaged 863,000 viewers in the last year” in the US alone. Some time earlier, Pat Robertson, had called for the assassination of Hugo Chavez, President of Venezuela – for which he later duly apologized. I wonder if the West would forgive if any Iranian Ayatollah issued a fatwa against a Western leader, and later apologized! Even earlier, when the Israeli Prime Minister suffered a stroke, he pronounced that as ‘punishment from God!’ Especially malevolent, Rev.Robertson’s God is, I must say!

Voudou religion has been tarnished in Western eyes!

Voudou religion has been tarnished in Western eyes!

In 1999, he signed a deal with Bank of Scotland, part of the  Lloyd’s Banking Group, later the HBOS, for a Internet-telephone-banking venture. When the deal was called off, Pat Robertson launched a scathing attack. “In Scotland, you can’t believe how strong the homosexuals are,” Mr Robertson said on his Virginia-based Christian Broadcasting Network and his 700 Club television show. Pat Robertson, coming in at NO.2, defeated George Bush in the 1988 Republican Party’s US Presidential nomination race, at the Iowa caucuses. Robertson’s message of moral regenerationappealed to the Americans.

The Magna Carta sanctioned slavery. In various judgments, US Supreme Court, the ultimate arbiter of the US Constitution, upheld slavery. Vatican’s, Council of Gangra, re-affirmed its faith in slavery. The administrators of the teachings of the “Lord of lords, and King of kings.” (Revelation 17: 14) at the Council Of Gangra, 325 AD, issued edicts approving slavery – as did many other Vatican edicts. Pat Robertson, is just one in a long line of such Christian leaders, to support slavery.

In a twisted way, Pat Robertson maybe right.

Talking of money, rich foreigners and expats, who are keeping Haiti in misery, have lost a lot more than Haitians have.

Voodoo priestess, Gro Mambo

Voodoo priestess, Gro Mambo

Tell Haiti you care

Send Haiti your best wishes, your moral support. If you live in a less exploitative society than before, or a more exploitative society, remember, it was Haiti that stuck the first blow. A blow that en-slaver’s have not forgotten 200 years later. To Haiti, we owe whatever liberty, freedom we have – or aspire to.

I don’t know how your money will help them. They may not need your money (I guess), but you should give them your moral support (I strongly suggest). Just send a <ding> to this post. Or ping it. Whatever you do, just make it loud enough that your voice can reach Haiti.

In their hour of tragedy.

Between a rock and hard place

Posted in Desert Bloc, History, India, politics by Anuraag Sanghi on January 13, 2010

Modern Indian State has acquired Desert-Bloc-Platonic-Confucian authoritarian principles of State as parens patriae

Hitler-Gandhi meter

Hitler-Gandhi meter

Gandhi was more violent than Hitler. (It’s crucial to see violence which is done repeatedly to keep the things the way they are) …

… Though Gandhi didn’t support killing, his actions helped the British imperialists to stay in India longer. This is something Hitler never wanted. Gandhi didn’t do anything to stop the way the British empire functioned here.

For me, that is a problem. (via ‘First they called me a joker, now I am a dangerous thinker’ – All That Matters – Sunday TOI – Home – The Times of India).

Run … hide … but you can’t turn your back

Slávoj Zizek can’t (presumably) support Hitler. A status quo-ist like Gandhiji, is unacceptable to Slávoj Zizek. His dilemma! Having to choose between two दुरातान्त्रिक duratantrik systems (like socialism or communism), Slávoj Zizek’s is having a difficult time. Slávoj Zizek’s views are, to say the least, provocative, forcing you to re-think.

The world faces a Hobson's choice today. You can have any colour you want - as long as it is black. (Cartoon by RK Laxman; Courtesy - timesofindia.com). Click for larger image.

The world faces a Hobson's choice today. You can have any colour you want - as long as it is black. (Cartoon by RK Laxman; Courtesy - timesofindia.com). Click for larger image.

India itself does not know the place that भारत्तंत्र Bharat-tantra (Indic political system) has, means or stands for in the history of the world. The history of the world, till about 8 AD,  is basically torn between दुरातंत्र, duratantra, (meaning vile political systems) versus सुरातंत्र suratantra (equitable political systems) systems. भारत्तंत्र Bharat-tantra (Indic political system) was highly respected in the ancient world – went into decline from 8th century to 18th century.

Glimpses into the past

Property rights India, till the 12th century, vested property rights with the producer, upto the advent of the Islamic iqtadari system. The 200 years foreign, Islāmic rule in India, by Turko-Persian offshoots, changed Indian property holding patterns. The main Islamic dynasties, of the Middle East /West Asia, the Abbasids and Ummayads, never directly, attempted any military campaigns against India.

Slavery (distinguished by capture and recapture, buying and selling, state protection, ‘free’ slave markets) were unknown in Indic regions.

Quo Vadis (where are you going) …

The political constructs of the West have hit a wall – and there is no way, but down! Since the West is busy hiding elephants in the room, the need for a different political ideology remains unaddressed. The development of the four Western political systems – i.e. Feudalism, Capitalism, Socialism and Communism, is related to two factors. Property (and loot of property) and slavery – the two elephants in the room of Western history.

Gandhiji supporting the British in South Africa

Gandhiji supporting the British in South Africa (Gandhi, middle row 5th from left with stretcher bearers of the Indian Ambulance Corps - 1899-1900).

The costs of the Western welfare State is going up – not down, not away. Welfare bills are getting more ambitious – and the domestic lobbies want more ambitious schemes. Western  economies have become isolated, high cost protected by barriers and stockades.

Completely ignored by ‘modern’ Western education system, (which India also blindly follows), the Indian political theory and its application have been largely forgotten in India too.

Platonic-Confucian axis

The axis of Confucian-Platonic authoritarian, ‘wise’ rulers, was the alternate model for the world. Property rights remained with less than o.1% of the people. Under the CRER principle, (cuius regio, eius religio, meaning whose land, his religion; CRER) even personal religious beliefs of the individual were subject to State approval, as per law.

The West scorns the Chinese one party rule. How does one more, collusive party in the national polity, in a ‘democratic set-up, become the paragon of political virtue. Two-party democratic polity is just a more polished and conniving way of exercising the same authority – in a more invisible manner? In India, with more than 70 crore voters, the winning party got less than 13 crore votes and the final difference between the winning party and the second largest party. Approximately 5 crore voters. This leaves people with little or no choice – much like the choice between one-party ‘dictatorship’ and two-party ‘democracy’.

Now compare

The only exception to this was the Indic system of polity – where property rights were vested with the user, justice was decentralized (did any Indic king dispense justice?), religion was maya and dharma was supreme. The modern Indian State has acquired the Desert-Bloc-Platonic-Confucian authoritarian principles of the State as parens patriae. So, the power of the Indic ideas is something that India seems to have completely forgotten, missed and lost!!

One party dictatorship or two-party democracy. What's the difference? One more collusive political party!

One party dictatorship or two-party democracy. What's the difference? One more collusive political party! (Cartoonist - Matt Bors; Posted on August 4, 2008; Cartoon Source and Courtesy - cagle.com). Click for larger image.

Is there an Indic political system at all? Simple leads …

  1. What is Sanskritic word for slave? Or what does the Indian narrative call Slave owners?
  2. Why do traditional traders resist taxes even today? The biggest tax offenders of modern India are the traditional ‘marwari’ business man. Why?
  3. What triggered the persecution of the Roma Gypsies in Europe?
  4. How did the Roma Gypsies start the Church Reformation in Europe?
  5. Why does India have the lowest crime rates and incarceration rates in the world? Yet was behind the biggest crime wave in history?
  6. Why and how did India build the world’s largest private reserves of gold? Without loot, luck or slaves?
  7. From the carbon-dated 3000 BC Indus Valley to the India in 2000 AD, how could India resist cultural and military invasions?
  8. How did India emerge as software service economy in a short 15 years?
  9. India is today a counterpoint in softpower – in TV, cinema,publishing, newspapers, et al! How come?
  10. While the Western world is going public sector, how come India continues down the private sector path?

The puzzle of the missing Buddhist monk

Posted in Film Reviews, politics, Religion by Anuraag Sanghi on January 3, 2010
Will it be Chinese mafia next?

Will it be Chinese mafia next?

Disappearing act

In the last 5 years, the Buddhist monk has made an unnoticed disappearing act from Chinese films. The new idiom in Chinese films is ‘Jackie Chan goes to America’.

Instead of the Buddhist monk, the new element are characters from the Chinese underworld.

Organized crime was rampant in China before the communists took over in 1949, but was largely extinguished in the decades afterward by the totalitarian Maoist state. It has flourished since reforms began in the late 1970s.

Chinese police receive small salaries but enjoy almost unchecked power over the increasingly wealthy communities they oversee. As a result, bribery is common, experts say. Without protection from law enforcement, “criminal organizations would not be able to develop on such a large scale and to such a high level,” says Pu Yongjian, a professor at the business school of Chongqing University. (via Gangster Trials Highlight China’s Crime Battle – WSJ.com).

Insight information

Way back in 1978-79, Trial Run, a novel by Dick Francis was released. Trial Run is not among the best of Dick Francis’ novels – except for one thing. It was the first book (and the only, that I read) which predicted the Russian Mafia. Some 20 years, before the mainstream media came to know about the Russian Mafia. Not one writer on Russia – not John Le Carre, no Len Deighton, nor Martin Cruz Smith (Gorky Park) come close to Dick Francis in this respect.

Characters in Dick Francis novels are credible, his heroes are people you want to meet and count among your friends. His villains are believably evil.

Trial Run by Dick Francis (First book to talk about the Russian Mafia).

Trial Run by Dick Francis (First book to talk about the Russian Mafia).

In 1978, Trial Run seemed more like Cold War propaganda.

This report about crime in China is not at the same level as Trial Run, since 2009 China is far more open and accessible than 1978 Russia was. Reading Russia right in 1978, at the height of the Brezhnev era, was something in a different league altogether. In a league with a solitary membership – and Dick Francis alone carries a membership card of that league.

Coming to China

For unraveling China, I will take the aid of Chinese cinema, to which I am exposed. From distant Indian shores, which has limited exposure to Chinese-Hong Kong movies, three different phases of Chinese films are  apparent.

Till about 2000, Chinese movies usually revolved around a Brave Chinese, his ascetic Buddhist Teacher, who spoke in riddles and feudal warlords (Chinese and /or Japanese). Kung Fu was a major element in these movies.

Brave Chinese aided by Buddhist monks fight warlords

Brave Chinese aided by Buddhist monks fight warlords

A representative of that genre was the classic 36th Chamber of Shaolin, with Chia Hui Liu (Gordon Liu) as San Te.

The most famous (and my favorite) star  was Bruce Lee. His Enter The Dragon interestingly had a villain named Han. Played superbly by Shih Kien (a character actor known for his onscreen villainy, much like India’s Ajit, Prem Chopra, Amrish Puri).

Jackie Chan and Golden Harvest continued with this genre, spoofing it unconvincingly with movies like Drunken Master (about the folk hero, Wong Fei Hung) and Iron Monkey. Then came a new breed.

But before that …

One-and-a-half Chinese is what it takes

Hong Kong film industry does not get much respect because it is 1-and-a-half people. One is the giant Shaw Brothers Studios, based out of Singapore and Hong Kong – run by brothers, Run Me Shaw and Run Run Shaw, a 102 years old man, who last heard, was running the studio through his 73-year-old wife, Mona Fong.

They recently sold a part of their archived nearly 800 films collections for re-release – to “Celestial Pictures, a pan-Asian company run by William Pfeiffer, an American who has lived in Asia for 20 years.”. Celestial Pictures, a part of Kuala Lumpur-based Astro All Asia Networks Plc, part of Tatparanandam Ananda Krishnan’s Maxis /Astro /MEASAT group, under this purchase will get access to 760 films library of Shaw Brothers archives.

Bruce Lee in 'Enter The Dragon'

Bruce Lee in 'Enter The Dragon'

The remaining half of the Chinese one-and-a-half film industry is Raymond Chow, an ex-assistant to Run Run Shaw. An ex-VOA staffer, Raymond Chow was taken as publicist, at Shaw Brothers.

Shaw and Chow sparred over a re-make of ‘One Armed Swordsman’. The Golden Harvest version was called, “Zatoichi Meets The One-Armed Swordsman”. Raymond Chow has sold his studio to a mainland-based operation, Chengtian Entertainment Group – covering film distribution, production, investment and talent management. The new company has been renamed as Orange Sky Golden Harvest Group.

The second coming

The next phase in the Chinese film industry was the more ‘modern’ themes. The first indication was the un-funny spoofs of Jacky Chan – with more of antics and contortions, than Kung Fu or any of the classical Chinese themes. In one fight sequence, Jackie Chan in The Young Master, exclaims, “You have cut-off Buddha’s head”.

Other films from this genre include The Young Master, Drunken Master, Project A, Police Story, etc. Unremarkable films that received a tepid response. All that these films did was turn off audiences from Kung Fu theme – which in hindsight, seemed to be the objective. And made Jackie Chan into a visible Chinese ‘star’.

With low rentals, these films were run and re-run in India, giving Jackie Chan much-needed visibility.

The Third Wave

The Third Wave of the modern Chinese films are now getting positively ominous. Ranging from Jet Li in Kiss of the Dragon, (Jet Li takes on the French mafia) or Chow Yun-Fat in The Corrupter (exposing police-underworld nexus and corruption in the USA), or Jackie Chan in Rush Hour series or the Chinese Ric Young in The Transporter, Jet Li in Lethal Weapon 4. All have two elements in common.

One is the pervasive Chinese underworld. Across Europe, in the USA. In drugs, fake currency, in smuggling boat people, the Chinese are there – everywhere. Many of these movies have Chinese stars, directed by Chinese directors or even partly funded by Chinese studios .

The second is the absence of the Buddhist monk.

Why worry

This would actually seem like a benign glossing and glamorizing of the Chinese film idiom and look. Harmless entertainment, you may say. This trend is reflected in Korea with a TV series, ‘My Wife Is a Gangster’ with heroine Shu Qi as the gangster. But there is more to this China-gangster- underworld theme.

'Big Ears' Du Yuesheng, Photo: thegeneralissimo.net

'Big Ears' Du Yuesheng, Photo: thegeneralissimo.net

Both Sun Yat-sen and Chiang Kai-shek were close to the Green Gang. Some China specialists allege that both were, in fact, Green Gang members.

The Kuomintang (supported by Chinese underworld, The Green Gang, The Red Gang and The Blue Gang) was pitted against the Mao Ze Dong’s Communist Party – and both were armed and supported by Western powers. Russia deputed Borodin, who mentored Sun Yat-Sen, Chiang Kai-Shek and Mao Ze-Dong in the ways of Communism.

Major opium trading companies like Jardine Matheson, David Sasoon & Company and sundry traders set up The Hong Kong & Shanghai Banking Corporation for facilitating this misery. The Chinese Opium problem was finally solved by several draconian measures during Communist rule.

In many respects the prohibition on opium in China had similar results to prohibition on alcohol in the United States. In both countries prohibition encouraged the growth of vast, illicit traffic that provided the economic basis for development of organized crime in major cities and helped define the ways in which criminal organizations interacted with the world of politics. (from The Shanghai Green Gang: politics and organized crime, 1919-1937 By Brian G. Martin, page 44).

Much like zamindars were given ‘franchises’ in India to extort from the peasantry, colonial powers working on ‘concessions’, in China subverted local institutions into channels for funneling drugs into Chinese blood stream.

Virtually, every line of unskilled labour came to be ruled by native-place barons with gang connections – beggar chiefs, brothel madams, night soil hegemons, wharf contractors, and factory foremen. Immigrants from the villages in search of work quickly discovered that employment opportunities in the city were dependent upon criminal ties. (from Shanghai on Strike: The Politics of Chinese Labor, By Elizabeth J. Perry, page 50).

Wrapper of packet of opium, as sold in licensed opium shops of Singapore. Each packet contains enough opium for about six smokes.  |  Source - THE OPIUM MONOPOLY  By ELLEN N. LA MOTTE; Published January, 1920.  |

Wrapper of packet of opium, as sold in licensed opium shops of Singapore. Each packet contains enough opium for about six smokes. | Source - THE OPIUM MONOPOLY By ELLEN N. LA MOTTE; Published January, 1920. |

The Green Gang (the Qing Bang) was particularly powerful in Shanghai, its leader Du Yuesheng, was a member of the Chinese Triad and a general in the army of Chiang Kai-Shek.

The Red Gang (hong bang) was the other major group that operated in China – sharing the spoils of the opium trade.

To many Chinese, the capture of the opium trade from the ‘foreign devils’ by the native Chinese may have seemed a whole sight better. These ‘gangs’ were patronized by the

poor, underemployed and marginal elements from southeast China found security through membership in secret societies (banghui, huidang) they brought to Shanghai with them. Such associations were organized along lines of regional, ethnic and linguistic identity and were often coterminus with native place bang which recruited and deployed workers. Secret society networks from south were associated with Red Gang (hong men, hong bang) or Triad-type lodges. In Shanghai they would meet with a Northern Green Gang (qing bang) type of secret brotherhood. (from Native place, city, and nation: regional networks and identities in Shanghai … By Bryna Goodman, page 67).

Much before this, in 1853, “the Small Sword Society, (Xiaodaohui), a Triad offshoot, rebelled against the local Qing authorities and seized control of Chinese Shanghai which it held until February 1855.” So, Chinese warlords-underworld-secret societies seamlessly co-exist – and were present at every cusp of upheavals in Chinese society.

What is it this time?

The question

Is this ‘evolution’ of Chinese entertainment-sensibility, an accident or a co-incidence?

More worrying would be, if it were an artificial-synthetic-external influence. As long as Shaw Brothers were looking at the bottom-line, making money, enjoying the glamour and catering to popular Chinese tastes, things were simpler.

Shaw movies usually take anywhere from 35 days to three months to shoot and cost about $300,000. They are never filmed with a sound track. Instead, they are dubbed later in English, Italian, French, Portuguese and Spanish−even in their native tongue, Chinese. Run Run personally looks at all rushes. “Two reels and it’s no good, OUT!” he exclaimed. “We’re here to make money.” (from Time magazine Show Business: The Empire of Run Run Shaw, Monday, Jun. 28, 1976).

But things have changed now. Some indicator of this change can be gauged from a report in The Standard, by Timothy Kwai on Monday, December 21st, 2009.

Golden Harvest was one of the first to move into China’s film sector with the signing of the Closer Economic Partnership Arrangement in 2005. This allowed Hong Kong-owned film studios to enter the huge mainland market.

China for decades has capped the total number of imported foreign movies to twenty for any year. “Attempts to import more Indian films into China have been repeatedly scuttled by Chinese authorities. After much lobbying, India’s former foreign secretary Shiv Shankar Menon succeeded, when he was India’s ambassador in Beijing, in getting Chinese approval to import at least four Indian movies per year into China.

Like an earlier post in Quicktake pointed out earlier, the Chinese Communist Government would be afraid of Buddhist monks – and would actually encourage Confucianism. Like the Japanese are trying to revive Shintoism for slightly different reasons. Is this direction a part of that plot – a change in the wind direction?

These gangster films are bad omen. For Chinese – and the rest of us!

All that these films did was turn off audiences from Kung Fu theme – which in hindsight, seemed to be the objective. And made Jackie Chan into a visible Chinese ‘star’.
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