With the drop in demand for the dollar, as less and less people accept the dollar or accept it on less favorable terms, the devaluation will take down the value of a lot of foreign investments in America. Essentially there are two scenarios. One is the Hold scenario and the other is the Sell scenario.
In the Hold scenario, people accept the devaluation which effectively kills their invested assets in the United States. It’ll wipe out a third to half of their value probably. If they hold then things won’t be that bad. What will happen is that the Treasury will have to offer a lot higher interest rates to float debt. Debt service will increase, and become a major part of our budget. As for how big it is, well the military budget is $400 billion base not counting wars such as Iraq. The debt service budget item is something like $300 billion with interest rates at about 2%. If interest rates rise for Treasuries just to say 6% which would be entirely reasonable we will end up paying nearly a trillion dollars a year just for debt service. That will cripple Federal spending. The reason why interest rates will have to rise is that they will need to compensate to attract new foreign investment.
That’s the good news scenario. Believe it or not that is the White House fallback plan, such as it is. Their main plan is to play chicken with Europe and bully Europe into eating inflation through lowering the ECB (European Central Bank) interest rates for the EU. That won’t work. So the White House fallback plan if it works is the most likely outcome, except that it’s not. The bad news scenario is if capital flight happens. That’s the Sell Scenario. In this scenario people sell here and buy elsewhere in order to premptively prevent their investment assets in the US to prevent devaluation.
That means Treaury interest rates will have to be in the double didgits, there’s a stock market crash, and the equity premium upon which the economy of scale for middle-class retirement portfolio investments rely will vanish – 401ks will only be for six figure plus people. It also means that the budget will have to be cut. Even if they could raise interest rates high enough to maintain foreign investment after a Sell scenario the debt service at higher interest rates would kill us. It would eat the entire Federal Budget alive.
Last night, with the federal government warning that it was on the verge of defaulting on its debts, the House rejected efforts to reimpose restrictions on tax cuts and spending, then joined the Senate to raise the federal debt limit by $800 billion, to $8.18 trillion.
The collapse of statutory restraints on the growing budget deficit has alarmed Wall Street, befuddled the Treasury Department and elicited calls for a rethinking of the way the government handles its authority to tax its citizens and spend those proceeds.
Poppy cultivation in Afghanistan, the source of most of the opium and heroin on Europe’s streets, was up sharply this year, reaching the highest levels in the country’s history and in the world, the United Nations announced on Thursday.
“In Afghanistan, drugs are now a clear and present danger,” said Antonio Maria Costa, director of the United Nations Office of Drugs and Crime, on the release of the 2004 Afghanistan opium survey. “The fear that Afghanistan might degenerate into a narco-state is becoming a reality.”
Afghan officials and foreign diplomats called the sharp rise in cultivation and production a major failure for President Hamid Karzai and the international effort to counter narcotics.
More than 321,236 acres of land were planted with poppy in 2004, a 64 percent increase over last year, the United Nations survey found. Poppy has spread to every province in the country, it said.
A specter is haunting America, and it ain’t the specter of communism (however much George W. Bush and company might like to describe it that way). Barely a decade after the definitive collapse of the Soviet bloc, the United States finds itself in a new cold war, one being fought simultaneously on economic, political and cultural fronts, and one it is by no means certain to win. The unipolar world of uncontested American hegemony that we were told to expect into the indefinite future has come to an end; it lasted just about long enough for us to scratch our heads and wonder what was happening next.
Yes, “Old Europe,” to borrow Donald Rumsfeld’s famous quip, is back, and it’s looking pretty spry for its age. As Americans are finally beginning to notice, Europeans (or most of them, anyway) have reconstituted themselves into an enormous transnational superstate of 25 nations, 455 million people and an $11 trillion economy. This is, of course, the European Union, and its aims have become much broader and deeper than the stuff you’ve probably heard about, like allowing citizens to drive from Seville to Sicily without a passport, or to use the same anonymous-looking currency to buy a pint of Guinness in Cork and a glass of ouzo in Crete.
American heavyweights like Alan Greenspan and Henry Kissinger, by the way, publicly predicted that the euro, now the common currency of 12 European countries (with many more to follow), would never work. This week the euro is trading at an all-time high of about $1.30 against an ever weaker Bush-economy dollar. Other confident-sounding things that you hear Americans say about the EU — that it’s plagued by a sclerotic bureaucracy, that it squelches entrepreneurship and initiative with overregulation, that its cradle-to-grave welfare states are dragging down its economy — should be viewed with similar skepticism.
The fliers arrived three weeks ago. Some came over the fax machines of local churches, and others appeared mysteriously around town. Printed in bold was the heading “Westboro Baptist Church.” No seeming cause for alarm. Sand Springs, population 18,500, is a Christian stronghold in the gently rolling hills of eastern Oklahoma.
But the message that followed was a rant against a 17-year-old Sand Springs resident named Michael Shackelford and his mother, Janice, the subjects of a recent Washington Post series examining Michael’s struggles as a young gay man in the Bible Belt. The fliers posted a photo of Michael, called him a “doomed teenage fag” and announced that followers of Westboro Baptist in Topeka were on their way from Kansas to stage antigay protests in Sand Springs.
(no, it’s a positive story for a change. read it)
Mark Cuban, owner of the Dallas Mavericks NBA team has a weblog. In it, he writes (not ghostwrites like other executives may be compelled to do) about real subjects that pertain to his life, his basketball franchise, and other things that Mavs fans would love to read about. The coolest thing about Cuban’s weblog is that he leaves the comments open so he can hear what the Mavericks’ fanbase thinks of his decisions and opinion — an absolutely brilliant decision in my mind.
The NBA held its opening night on election night last Tuesday, a dumb move because Cuban thought (correctly, I might add) that the kickoff games would get zero TV coverage the day after the election. So Cuban decided to inform his readers of his opinion on his weblog, and the NBA fined him for this. That’s right everyone, the NBA fined Mark Cuban because of a weblog entry he wrote.
Asian governments using Linux will be sued for IP violations, Microsoft CEO Steve Ballmer said today in Singapore. He did not specify that Microsoft would be the company doing the suing, but it’s difficult to read the claim as anything other than a declaration of IP war.
According to a Reuters report (which we fervently hope will produce one of Ballmer’s fascinating ‘I was misquoted’ rebuttals*), Ballmer told Microsoft’s Asian Government Leaders Forum that Linux violates more than 228 patents. Come on Steve, don’t hold back – what you mean ‘more than 228′ – 229? 230? Don’t pull your punches to soften the blow to the community. “Some day,” he continued, “for all countries that are entering the WTO [World Trade Organization], somebody will come and look for money owing to the rights for that intellectual property.”
This reference is possibly more interesting than the infringement number scare itself, because it suggests that Microsoft sees the wider implementation of corporation-friendly IP law that is part of the entry ticket to the WTO as being a weapon that can be used against software rivals. More commonly, getting WTO members to ‘go legit’ is viewed as having a payoff in terms of stamping out counterfeit CDs, DVDs and designer gear, but clearly Microsoft’s lawyers are busily plotting ways to embrace and extend this to handy new fields. It could be used to throttle emergent OSS companies, and it could conceivably be used to take the new generation of US (and maybe EU too) anti digital piracy and IP laws global.
Well, that’s one way of getting patent law revised into something sensible…
In Nederland verzandt het debat over intolerante gelovigen in gesteggel over de strafbaarheid van godslastering. Geen burger die het nog begrijpt. Juist nu de kritiek op de islam meer dan ooit nodig is, gaat er een signaal naar de moslims uit dat hen sterkt in hun “kwetsbaarheid”. Zaken worden hierdoor moeilijker bespreekbaar.
Er is momenteel een cultuurstrijd gaande die – ben ik bang – door de gelovigen (deels door intimidatie) zal worden gewonnen.
De religieuzen eisen meer rechten op, nu een groot criticus van religies is vermoord, zogenaamd om te voorkomen dat een voedingsbodem ontstaat voor nieuwe moorden…
Een braaf verhaal dat gepaard gaat met een verholen dreigement. Christenen en moslims willen waarschuwen tegen sterke anti-godsdienstige “signalen” uit de maatschappij die als uitdaging opgevat kunnen worden door gelovige terroristen. Moord en doodslag lijken zo het gevolg van de “intolerantie” van ongelovigen, terwijl het juist veroorzaakt wordt door geradicaliseerde gelovigen.
Ondertussen laat dit kabinet de burgers elkaar vasthouden; hen blijft immers niets anders over, nu ze wat betreft de vrijheid van meningsuiting behoorlijk in de kou staan.
De spannningen tussen allochtonen (weer helemaal terug in de knuffelzone) en de autochtonen (een gevaarlijk atheïstisch klootjesvolk) worden hierdoor alleen maar groter.
De verbittering bij autochtone Nederlanders wordt een voedingsbodem voor rechtse partijen als die van Geert Wilders. Hoe zal het establishment het “gevaar” van een “tweede Fortuyn” gaan aanpakken; toch wel anders dan in 2002, hoop ik…
egisseur Albert ter Heerdt denkt erover het vervolg op de succesvolle komedie Shouf shouf habibi! in de ijskast te zetten. De moord op filmmaker Theo van Gogh is hier de aanleiding voor. Dat zei Ter Heerdt woensdag tijdens het Najaarsoverleg in Het Ketelhuis in Amsterdam.
,,Ik sta op het punt om de film uit te stellen”, zei de regisseur. ,,Ik hoef geen mes in mijn lijf.” Onder anderen Mimoun Oassa, acteur en initiatiefnemer van de productie, heeft tegen Ter Heerdt gezegd dat het te gevaarlijk is om bepaalde grappen over de islam te maken.
,,Een voorbeeld is de seksuele ontdekkingstocht van een meisje in de film”, zei Ter Heerdt. ,,Uit de moslimhoek is tegen me gezegd dat ik dat beter niet kan doen. Ik denk erover om eerst een andere film te maken, want ik kan me er nu niet toe zetten een komische film over de islam te maken.”
Eens kijken wat cultuurcommissaris Donner hiervan vindt.
The United States has seen information suggesting Iran is working on the technology to deliver a nuclear warhead on a missile, Secretary of State Colin Powell said on Wednesday.
“I have seen some information that would suggest they have been actively working on delivery systems … you don’t have a weapon until you can put it in something that can deliver a weapon,” he told reporters during a brief stop in Brazil on his way to an Asia-Pacific Economic Cooperation meeting in Chile.
“I’m talking about what one does with a warhead,” Powell said. “We are talking about information that says they not only have (the) missiles but information that suggests they are working hard about how to put the two together.”
I hope Colin remembers what happened last time he thought a country had WMD’s…
Camouflage was in and cross-dressing was out at a rural East Texas school district after a Christian legal group complained a long-standing school tradition of reversing social roles for a day would promote homosexuality.
Students in Spurger, Texas were encouraged by school officials to wear camouflage hunting gear to class on Wednesday after they called off their annual “TWIRP Day” in which boys dressed as girls and vice versa.
The cross-dressing tradition began some years back as a kind of Sadie Hawkins Day where girls ask boys to go out on dates.
TWIRP stands for “The Woman Is Requested To Pay.”
But Delana Davies, who has two children in the Spurger school, complained this year that the tradition could promote homosexuality and got the Liberty Legal Institute, a right-wing Christian legal group, to take up the cause.
“It might be fun today to dress up like a little girl — kids think it’s cute and things like that. And you start playing around with it and, like drugs, you do a little here and there (and) eventually it gets you,” Davies told reporters.
What a drag.
Comparing pornography to heroin, researchers on Thursday called on Congress to finance studies on “porn addiction” and launch a public health campaign about the dangers.
“We’re so afraid to talk about sex in our society that we really give carte blanche to the people who are producing this kind of material,” said James B. Weaver, a Virginia Tech professor who studies the impact of pornography.
Internet pornography is corrupting children and hooking adults into an addiction that threatens their jobs and families, a panel of anti-porn advocates told the hearing organized by Sen. Sam Brownback, R-Kan., chairman of the Commerce subcommittee on science.
Brownback, a father of five, said when he was a boy, the typical kid’s exposure was limited to occasional peeks at dirty magazines illicitly obtained by a buddy.
Now, he said, pornography seems pervasive. Children run across it while researching homework on the Internet. Vulgar ads arrive unexpectedly by e-mail. Some of his middle-age male friends limit their time alone in hotel rooms to avoid the temptation of graphic pay-per-view movies, Brownback said.
Mary Anne Layden, co-director of a sexual trauma program at the University of Pennsylvania, said pornography’s effect on the brain mirrors addiction to heroin or crack cocaine. She told of one patient, a business executive, who arrived at his office at 9 a.m. each day, logged onto Internet porn sites, and didn’t log off until 5 p.m.
Layden called for billboards and bus ads warning people to avoid pornography, strip clubs and prostitutes.
The panel discussion ranged from hardcore, violent pornography to audience complaints about a sexually suggestive promo that aired prior to this week’s “Monday Night Football” game.
Brownback, an outspoken Christian conservative who has championed efforts to curb indecency on television and the Internet, said the public is beginning to realize “they don’t just have to take it.”
But he acknowledged the First Amendment right to free speech has limited congressional efforts.
Well then! Repeal the damn thing, I say!
Bill Gates might not use AOL, but he’s definitely got mail. The Microsoft Corp. chairman receives millions of Internet messages a day, said Steve Ballmer, the company’s chief executive. “Bill literally receives 4 million pieces of e-mail per day, most of it spam,” Ballmer said Thursday.
Spam or junk e-mails are unsolicited messages, generally advertising goods or services and usually sent to many e-mail accounts simultaneously.
Ballmer said Microsoft has special technology that just filters spam intended for Gates. In addition, several Microsoft employees are dedicated to ensuring that nothing unwanted gets into his inbox.
“Literally there’s a whole department almost that takes care of it,” he said.