Five killed by Vietnam War shell
CNN, Saturday, December 25, 2004 Posted: 6:38 AM EST (1138 GMT)
HANOI, Vietnam (Reuters ) -- Four children aged between nine and 14 and a 20-year old man were killed in southern Vietnam when a war-time mortar shell they were playing with exploded, state media reported on Saturday.
The five were killed instantly on Tuesday in a field where they were tending a herd of cows in the southern province of Binh Thuan, the Thanh Nien (Young People) newspaper reported.
Since the U.S.-led Vietnam War ended, nearly 40,000 Vietnamese have been killed by leftover ordnance.
...it seems ironical that they were killed in a war which "got over" more than a decade before they were even born!!!
Sunday, December 26, 2004
Thursday, December 09, 2004
Is the US$ - and the global dollar economy - heading for a collapse?
[This is continuation of a theme, on which I had twice written earlier: once, in April '03 about how the Iraq Invasion was/is a last ditch attempt to save US$, and then again, when a whole issue of Alternative Perspective in Feb'04 was devoted to this topic]
Even if the idea seems far-fetched, it is worth a serious thought.
Most such speculations focus only on the US Current Account Deficit, which has grown to disproportionate dimensions. It is true that US consumes more than it produces, imports more than it exports. Financing this deficit would require an inflow of $2.6bn/day... that, incidentally, is 80% of world's daily savings!!!...
In contrast, since lst year or so, US is able to attract only $1.7bn/day back into economy (Visit the U.S. National Debt Clock)
Perhaps a greater cause for worry should be the increasing cumulative US National Debt, which now is more than $7.5trillion, i.e., statistically, an average American child is born with $25,000 debt. 40% of this is foreign debt.
Interestingly, the US government's response to this impending economic disaster has been to keep increasing the permissible debt-limit.... This year in October, when US reached the $7.4trillion debt-limit set by the senate/congress, it just raised the limit to $8.2trillion. At the present rate of debt-accumulation, this is just postponing the debt-bubble to burst by just another 470 days... Given the present promises of the "foreign policy" - preemptive strike, regime change, "democratisation" of Middle-East, war on terror, etc. - this will keep on increasing.
Moreover, if one looks at the "hidden debt" - US Government's future commitments - the numbers are staggering. In 2008, when the 78mn baby-boomers start retiring, US will need more than $50 trillions to pay for the medicare, pension, social security, etc.!!!
It is not surprising that Stephen Roach (Chief economist of Morgan Stanely) predicts that America has no better than a 10 percent chance of avoiding economic "armageddon."
So why is America, consciously and deliberately, continuing to slide down this path?
In my understanding, there are two mindsets/hope/assumptions behind taking these risks:
However, given the required inflows, these assumptions do not seem viable in the long run (or perhaps, even in the short run).
Apart from the simple economic reality that there is not enough surplus money in the world to continue supporting US debt, there are two other emerging reasons, which contradict these assumptions:
1. Crisis of Credibility & Legitimacy
US, admittedly, has been a debt-based economy since long. During last couple of decades, the deficit had kept on accumulating, but the US economy has continued to grow.
So what has changed now, that the rest of the world not continue to provide debt to US?
One simple reason why this may not happen, is because globally, US has been losing its credibility as a moderate, peace-loving nation - not only in the Muslim world, but even among its traditional European allies.
One reason for this loss of US legitimacy and moral supremacy has been its unilateral dismissal of multilateral mechanisms and treaties (see the list)
In their recent article in Foreign Affairs (Nov/Dec, 2004), The Sources of American Legitimacy, Robert W. Tucker (Professor Emeritus of American Foreign Policy, Johns Hopkins University) & David C. Hendrickson (Robert J. Fox Distinguished Service Professor at Colorado College) observed:
"The 18 months since the launching of the second Iraq war have brought home, even to its advocates, that the United States has a serious legitimacy problem. The pattern of the first Iraq war, in which an overwhelming victory set aside the reservations of most skeptics, has failed to emerge in the aftermath of the second. If anything, skepticism has deepened. The United States' approval ratings have plunged, especially in Europe-the cooperation of which Washington needs for a broad array of purposes-and in the Muslim world, where the United States must win over "hearts and minds" if it is to lessen the appeal of terrorism. In both areas, confidence in the propriety and purposes of U.S. power has dropped precipitously and shows little sign of recovery.... Legitimacy arises from the conviction that state action proceeds within the ambit of law, in two senses: first, that action issues from rightful authority, that is, from the political institution authorized to take it; and second, that it does not violate a legal or moral norm."
The fallout of losing moral legitimacy on economic was summed up by the economist James Galbraith a couple of days back (Tompaine.com, Dec 6, 2004):
"For decades, the Western World tolerated the "exorbitant privilege" of a dollar-reserve economy because the United States was the indispensable power, providing reliable security against communism and insurrection without intolerable violence or oppression, thus conditions under which many countries on this side of the Iron Curtain grew and prospered. Those rationales evaporated 15 years ago, and the "Global War on Terror" is not a persuasive replacement. Thus, what was once a grudging bargain with the world's stabilizing hegemon country is now widely seen as a lingering subsidy for a predator state."
Similarly, another article by Joseph Quinlan (Chief Market Strategist at Banc of America), Behind the Sinking Dollar: America’s Image as a "Rogue Nation? (The Globalist, Dec 7, 2004) notes:
"...the dollar’s decline mirrors America’s plunging approval rating with the rest of the world. Concerns over the U.S.-led war in Iraq, the Kyoto agreement, the U.S. relationships with international institutions and its allies, U.S. visa restrictions and burdensome custom procedures all could have converged to taint America’s global image."
And one lends money only if one trusts the person's intentions, integrity and repaying capacity.
2. The Rise of an Alternative Currency - Euro!!!
Some of the reasons why, inspite of its "weak fundamentals", US$ has remained a global currency-of-choice, are/were:
However, since 1999, Euro has emerged as a strong contender for this spot. Starting weak at $0.85, over the last 4-5 years, it has been gaining strength over US$ to the current exchange rate of $1.33... And even though a strong Euro would hurt the European exports, and the European central banks would try to correct the situation), the global trade is gradually - and often imperceptibly - shifting to Euro. Consider, for instance:
And Most importantly, during the last three years, OPEC is also shifting to Euro. According to a report by Bank of International Settlement, "At the end of June 2004, OPEC members' Euro denominated deposits reached 44 billion Euro nearly doubled compared to 23.5 billion Euro held in the third quarter of 2001... By comparison, OPEC dollar denominated deposits stood at $132.1 billion, down from $145.3 billion in the third quarter of 2001."
So do all these trends portend the end of global dollar economy?
Tuesday, December 07, 2004
The following is not written by a Jihadi, or anyone from the liberal left. It is quoted from a 122-page Pentagon Report of the Defense Science Board Task Force on Strategic Communication (click to download - pdf document). The report was submitted in September this year, but was made public only in the end of November, after the US Presidential elections were over: