Dear rss free blog,
I am being attacked by peace-loving Vikings!
editor goofed last week in saying that the Swedish Academy gives out
the Nobel Peace Prize and is responsible for selecting Pres. Barack
Obama to receive it this year. When Alfred Nobel died, Sweden and
Norway were one country. But when Norway won its independence, the
Swedes handed the Peace Prize to a committee from the University of
Oslo. It is the Norwegians who give out the Peace Prize, to someone
designated by 5 unknown Norse academics.
is a ceremony in Oslo’s stripped-down Lutheran cathedral and the King
of Norway hands over the medal.
Of course I am pleased that a lady economist shared that prize today.
of the writing about the decline of the dollar is nonsensical. The
fall in the US currency (and the obverse side of the gold coin, the
rise in the price of gold) are mainly a reversal of the “flight to
quality” last year, when the dollar was designated global safe
fact, letting the greenback fall back is a long-term tactic used by
US administrations in cutting our national current account deficit.
Letting the dollar depreciate adds to the cost of imports, so we
import less. And it makes American goods more attractive so we can
also triggers investment flows. Here are two examples from today’s
headlines. Li & Fung,
the Hong Kong-based supplier to WalMart
stores, says it is looking for acquisitions in the US. Qatar
Holdings, a sovereign wealth fund, is buying a stake in the operator
of Canary Wharf in London and looking to buy more British real
estate. These are investments whose attractiveness is based on
cheaper sterling and cheaper dollars. The British Labour govt opted
to sell off state-owned goodies like the cross-Channel rail link and
the “tote” gambling den network.
there are some US govt assets that also could be cashed in? I don’t
think any rational investor would be tempted by Amtrak, but there may
be dams or highways for sale. Even the Brooklyn Bridge?
10.2% drop in the US exchange rate with our
principal trading partners over the past 5 months is easily explained
and probably good for America.
is an inverse linkage between the role of the dollar as a reserve
currency or currency of denomination for many commodities and its
exchange rate. In a period of global downturn (like now), the falling
dollar helps disguise what is really a drop in global savings and
has nothing to do with the rise of China. In fact, for now the
Renminbi exchange rate is actually fixed to the US dollar. China’s
rulers are terrified of letting the RMB appreciate for fear that
their already shrinking export markets will shrink further.
the supposed beneficiaries of the declining US currency in fact are
its victims. The euro block of countries are facing greater economic
woes because the RMB is so cheap that it can wipe out local
industries in sectors like shoes and textiles. And popular Chinese
imports like cognac are becoming costlier, so that even nouveau riche
Chinese plutocrats are buying less imported drink.
too are Asian countries which compete with China for global market
share. Many of these countries have currencies which are less closely
regulated than China’s (or Hong Kong’s). This hurts low-level exports
from the least developed Asian countries, although some sectors can
benefit from a dominant position in commodities or specialties.
editor’s remarks about her curious interrogation from the US Social
Security Administration elicited this comment from an American who
called himself “Angry Reader in Spain”.
the 1960s, when there was no tax treaty between the US and the UK, I
was forced to pay into government retirement plans in both
countries. At that time, I was working in London for an American
news agency, not making a great deal of money, and supporting two
children and a wife–who could not work in Britain because she had
no working papers . The contribution to British
National Insurance (old age pension) was money I could ill afford
and on which I would not receive any return unless I lived and
worked in the UK for at least ten years.
“That was the
case with the vast majority of such American expatriates.How do
I get my money back, now that the SSA and the IRS want to tax foreign
pensions? Will they make me whole?”
note about the extraterritorial reach (or overreach) of US tax and
pension rules was picked up by www.liveandinvestoverseas.com
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