Category Archives: International

How the U.S. Could Pressure North Korea Tomorrow: Quit the $100 Bill; North Korea is minting superdollars

How the U.S. Could Pressure North Korea Tomorrow: Quit the $100 Bill; North Korea is minting superdollars | Business | TIME.com.

 

 

 

Photo-Illustration by TIME

Photo-Illustration by TIME

U.S. negotiators are heading into a second day of what have been dubbed “serious and substantial” talks with North Korean officials. Yet amidst all the discussion of how the U.S. will attempt to work with Kim Jong Un, there has been little (open) speculation as to whether Dear Leader Junior might crank up production of $100 and $50 bills. No, not North Korean 100- or 50-won banknotes, worth about as much as old tissues. I’m talking about fake greenbacks — or, as the U.S. Secret Service has dubbed them, “superdollars.”

 

These ultra-counterfeits are light years beyond the weak facsimiles produced by most forgers, who use desktop printers. As an anti-counterfeiting investigator with Europol once put it: “Superdollars are just U.S. dollars not made by the U.S. government.” With few exceptions, only Federal Reserve banks equipped with the fanciest detection gear can identify these fakes.

Yet as unpatriotic as this may sound, perhaps America would be better off if Kim Jong Un were to try and enrich himself with D-I-Y Benjamins. Let me explain, by way of a little background about superdollars.

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The “super” moniker does not stem from any particular talent on the part of the North Koreans. It’s a matter of equipment. The regime apparently possesses the same kind of intaglio printing press (or presses) used by the U.S. Bureau of Engraving and Printing. A leading theory is that in 1989, just before the collapse of the Berlin Wall, the machines made their way to North Korea from a clandestine facility in East Germany, where they were used to make fake passports and other secret documents. The high-tech paper is just about the same as what’s used to make authentic dollars, and the North Koreans buy their ink from the same Swiss firm that supplies the US government with ink for greenbacks.

Forging $100 bills obviously gels with the regime’s febrile anti-Americanism and its aim to undercut U.S. global power, in this case by sowing doubts about our currency. State level counterfeiting is a kind of slow-motion violence committed against an enemy, and it has been tried many times before. During the Revolutionary War, the British printed fake “Continentals” to undermine the fragile colonial currency. Napoleon counterfeited Russian notes during the Napoleonic Wars, and during World War II the Germans forced a handful of artists and printing experts in Block 19 of the Sachsenhausen concentration camp to produce fake U.S. dollars and British pounds sterling. (Their story is the basis for the 2007 film “The Counterfeiters,” winner of the 2007 Oscar for Best Foreign Language Film.)

Superdollars can be viewed as an act of economic warfare, but Pyongyang’s motive is probably more mundane: The regime is broke. The 2009 attempt to raise funds by devaluing its already pathetic currency revealed not only the country’s fiscal desperation, but also the abuse Dear Leader was willing to inflict on his people. The won was devalued 100-fold, which meant 1,000 won suddenly had the purchasing power of 10 won. (Imagine waking up to a learn that a slice of pizza costs $250.) Officials set a tight limit on how much old money could be exchanged for new, so whatever value existed within people’s paltry savings evaporated overnight. Compared to devaluation, generating quick cash by counterfeiting some other country’s more stable currency looks downright humanitarian.

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The superdollar affair has a certain comic-book quality: copying the currency of the evil capitalists so you can buy cognac and missiles. But Washington isn’t laughing. At the end of December, Ireland’s high court rejected a U.S. request to extradite former Workers Party president and IRA veteran, Sean Garland, for his alleged involvement with the superdollar plot. There is also the question of what exactly the North Koreans hope to procure with all of this “money.” According to the House Task Force on Terrorism and Unconventional Warfare, superdollars may be part of the regime’s effort to acquire materials for nuclear weapons.

Since the superdollars were first detected about a decade ago, the regime has been pocketing an estimated $15 to $25 million a year from them. (Other estimates are much higher—up to several hundred million dollars’ worth.) That sounds like a lot of money, but compared to the $1 trillion in cash circulating in the great ocean of commerce, a few hundred million is chump change. Although certainly costly for small business owners who unknowingly accept a bunch of forgeries, counterfeits probably won’t bring about a crisis of faith in our paper money anytime soon.

Yet taking the long view, maybe a rash of new superdollars from the hermetic regime of Kim Jong Un would be beneficial. How so? Because counterfeits have a way of reminding people of what material money is and how it functions, and that could lead to a discussion of its pros and cons. Cash is, and always has been, such an uncontested part of everyday life that we rarely stop to consider its toll on society as the currency of crime, to say nothing of the heaping expense of printing, transporting, securing, inspecting, shredding, redesigning, reprinting, re-inspecting, and redistributing it ad nauseum, plus the broader costs of prosecuting and incarcerating the thousands, if not millions, of people who commit cash-related crimes. That’s not to suggest we could get rid of paper money tomorrow; we still don’t have a substitute that’s equally convenient, universally accepted, and adequately secure. But that day may be closer than you think. (Coins, however, we could—and should—do away with. As in, right now.)

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Superdollars, and the untold billions of (electronic) dollars spent combating them could be the wake-up call that finally forces us to think more clearly about the costs of physical money. If killing all cash strikes you as a little too radical, consider for a moment what it would mean to get rid of high-denomination banknotes. Who would be most inconvenienced if Washington were to outlaw $100 and $50 bills tomorrow? Cartel bosses in Juarez, Mexico jump to mind. So do human traffickers in China and Africa, aspiring terrorists in Afghanistan, wildlife poachers, arms dealers, tax evaders, and everyday crooks who hold up mom and pop groceries. And, or course, North Korean government officials.

So then. At the risk of infuriating cash-hoarding militia members, anonymity-obsessed ACLU’ers, the U.S. Treasury, Russian mob, Laundromat owners, and just about every person who has ever hid a purchase from a spouse or income from the government, I would say this to Kim Jong Un and his posse of counterfeiters: Bring it.

David Wolman is a contributing editor at Wired and the author of The End of Money: Counterfeiters, Preachers, Techies, Dreamers—and the Coming Cashless Society, out this month from Da Capo Press. Follow him on Twitter: @davidwolman

Read more: http://business.time.com/2012/02/24/how-the-u-s-could-pressure-north-korea-tomorrow-quit-the-100-bill/?iid=biz-article-mostpop1#ixzz1nVl122r1

Horn of Africa Famine: Millions at Risk

Horn of Africa Famine: Millions at Risk in “Deadly Cocktail” of War, Climate Change, Neoliberalism.

The United Nations has called an emergency meeting to discuss the Horn of Africa drought, which it says has already claimed tens of thousands of lives. Famine was declared in two regions of Somalia on Wednesday where 3.7 million people are in need of urgent humanitarian assistance. Another eight million people need food assistance in neighboring countries including Kenya and Ethiopia. United Nations Secretary-General Ban Ki-moon calls the situation a “catastrophic combination of conflict, high food prices and drought” and has appealed for immediate aid. We go to Nairobi for an update from Kiki Gbeho of the U.N. Office for the Coordination of Humanitarian Affairs. We also speak with Christian Parenti, author of “Tropic of Chaos: Climate Change and the New Geography of Violence.” “This was predicted long ago by people on the ground,” Parenti says. “It’s a combination of war, climate change and very bad policy, particularly an embrace of radical free market policies by regional governments that mean the withdrawal of support for pastoralists, the type of people you saw with their dead cattle.” [includes rush transcript]

Can disaster aid win hearts and minds?

A Friend in Need – By Charles Kenny | Foreign Policy.

BY CHARLES KENNY | OCTOBER 31, 2011

On Tuesday last week, Turkey reversed its previous stand and decided to accept aid from Israel to help deal with the tragic earthquake that had stricken the country’s east. Shipments of portable housing units began the next day. Turkey’s Foreign Minister Ahmet Davutoglu was quick to emphasize that accepting aid did not signal an improvement in diplomatic relations between the two countries, strained ever since Israel’s raid of a Turkish aid flotilla bound for Gaza in 2010 — likely a response to the perception that aid can buy off recipient governments, even if it can’t change popular attitudes. The irony is that the humanitarian assistance that responds to disasters — unlike the majority of aid that goes to long-term development projects — might be the one case where that logic is sometimes reversed.

At a time when the United States’ aid budget is confronted by an army of hatchet-wielding deficit hawks among the Republican Party’s congressional majority and presidential candidates, some aid proponents are making the case that development and humanitarian assistance are powerful tools to buy friends and influence people. And it is true that aid has long been used to grease the often-rusty wheels of diplomacy. The Camp David Accords between Egypt and Israel were cemented with the help of an aid package worth an average of $2 billion a year to Egypt. Since 1985, U.S. law has mandated that the U.S. Agency for International Development (USAID) take account of would-be aid recipients’ voting patterns at the United Nations — rewarding larger aid packages to those who vote with America. Political Scientists David Carter at Pennsylvania State and Randall Stone at the University of Rochester note that this kind of carrot-minded approach has been successful, influencing countries’ votes on decisions that the U.S. State Department declares as politically important.Watch movie online The Lego Batman Movie (2017)

Twisting politicians’ arms is one thing, but changing popular attitudes is another matter entirely. Look again at Egypt: Despite being one of the largest recipients of USAID financing over the past 30 years, Pew surveys suggest only 20 percent of Egyptians have a favorable view of the United States — considerably less than half of the U.S. favorability rating in former Cold War foe Russia. Popular opinion in Egypt is driven by other factors, not least broader U.S. foreign policy in the region. (A propensity to invade neighboring countries doesn’t help.) And development assistance just isn’t a major factor in the financial fortunes of the average citizen. Maybe that was true back in 1990, when net overseas development assistance to the country equaled 36 percent of government expenditures. But by 2008, that figure was just 3 percent — only a little more one-tenth the value of tourism and one-seventh that of manufacturing exports.

Aid’s limited impact on public opinion usually applies even when the aid is specifically focused on winning converts. A study by consultant Michael Kleinman and Mark Bradbury, a director at the Rift Valley Institute, looked at U.S. military aid for small projects in Kenya designed to improve popular support for the U.S. military presence there, and found that it didn’t. Attitudes were shaped by faith, the relationship between target populations and the Kenyan state, U.S. foreign policy, and events in Somalia — not by a U.S.-financed well or asphalt road. A German aid agency-financed 2010 study, using repeated surveys in Afghanistan’s Takhar and Kunduz provinces, found that in a comparatively peaceful period between 2005 and 2007, development aid did have a small, short-lived positive impact on the general attitudes of Afghan respondents towards foreign peace-building operations in their backyard. But this impact disappeared as threat perceptions rose between 2007 and 2009. Not surprisingly, other factors — in this case, how many people were getting shot — were just more important than who was cutting the checks.

But there is evidence of an exception to the rule that money can’t buy love, and it involves disaster assistance. Four years after a 2005 earthquake in northern Pakistan, economists Tahir Andrabi of Pomona College and Jishnu Das of the World Bank surveyed attitudes towards foreigners in the region. They found trust in foreigners was significantly higher in areas where humanitarian aid had been concentrated than in other areas — dropping off by six percentage points for each 10 kilometers of distance from the fault line.

Why might recipients react differently and more positively to disaster relief assistance than they do to other forms of aid? In part it is surely related to the simple gratitude felt by people who have just lost much of what they had in a flood or earthquake. But it is also more plausible that such aid is given without a broader political motive. Although U.S. food aid flows according to the size of the surplus domestic crop as much as recipient need, using humanitarian relief to reward or punish countries for U.N. voting records or other diplomatic policies presents a practical challenge — you can’t schedule a disaster. Recipients appear to understand that, and are more likely to view such aid as given in good faith. In the Pakistan case, for example, Andrabi and Das note that the positive impact on attitudes was related to a significant on-the-ground presence of foreigners who were assumed to have purely humanitarian motivations — aid distribution was not perceived to be (and wasn’t) linked to war-fighting efforts.

Aid is likely to be a more effective foreign policy tool when it comes to persuading governments to do things that lack popular support. Creating that popular support in the first place is much harder. Perhaps Turkey’s Davutoglu is right to say that even government relations won’t improve in the case of Israeli disaster aid — after all, U.S. humanitarian support in the aftermath of Iran’s Bam earthquake only temporarily thawed diplomatic tensions. On the other hand, maybe the assistance can play a small role in improving popular opinion towards Israel in Turkey. For good or ill, that’s one more reason for governments to respond with open hearts and open checkbooks whenever disaster strikes worldwide.

Will the Thailand floods drown the hard drive?

Will the Thailand floods drown the hard drive? | ExtremeTech.

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There’s fresh news on the imminent hard drive shortages the IT industry is facing, and it isn’t particularly good. Asus’s CFO, David Chang, has warned that the company’s supplies of HDDs will run out by the end of November.

“Substitutes for HDD are very few, so if the situation persists, not only notebook production will be affected but also desktops, and other component shipments will also drop,” Chang told Reuters. Retail prices on HDDs are already skyrocketing. The 1TB Samsung Spinpoint F3?s price has risen to $79 at Newegg, up from $69 not two weeks ago. It’s now the only 1TB drive south of a Benjamin. WD’s Caviar Green series is now up to $109 with high performance drives like the Caviar Black all the way back to $169 for a 1TB model.

Hitachi’s Deskstar 7K3000, which debuted this spring at $180 for a 3TB drive, is now selling on Newegg for a cool $399. Consumer prices are being driven by speculation, though its impossible to say if Newegg or the drive manufacturers themselves are responsible. Between the two, Newegg seems the more likely suspect. Raising HDD prices immediately may win the HDD manufacturers greater profits in the short term, but it erodes the crucial cost/GB ratio between HDDs and SSDs. Even at current retail prices, there’s still no real subsitute for a hard drive. At a certain point, however, customers will stop preferring large capacity drives at purchase, and begin opting for smaller SSDs, possibly with plans to pick up a USB 3.0-powered external once HDD prices fall again.

WD Factory, Thailed

The best way to keep that from happening is for the HDD manufacturers to keep as tight a reign on OEM costs as possible. Thus far, the price spikes here have been more modest; Asus reports jumps of 20-40 percent on certain models. Drive sourcing could become a major problem in the months to come as this type of shortage provides explosively fertile ground for a gray market in HDDs and HDD components. OEMs on razor-thin margins are going to be under enormous pressure to keep costs low, and aren’t likely to ask too many questions when it comes to securing drives.

Thailand, meanwhile, has no quick relief to offer. The government has stated that it hopes to have factories up and running again in three months, though it will take still more time for swamped industrial complexes to return to full output.

Space Junk Collision Could Set Off Catastrophic Chain Reaction, Disable Earth Communications

Pentagon: A Space Junk Collision Could Set Off Catastrophic Chain Reaction, Disable Earth Communications | Popular Science.

 

Orbital Debris The dots on this NASA-generated chart represent known pieces of large orbital debris. NASA

Every now and again someone raises a stern warning about the amount of space junk orbiting Earth. Those warnings are usually met with general indifference, as very few of us own satellites or travel regularly to low Earth orbit. But the DoD’s assessment of the space junk problem finds that perhaps we should be paying attention: space junk has reached a critical tipping point that could result in a cataclysmic chain reaction that brings everyday life on Earth to a grinding halt.

Our reliance on satellites goes beyond the obvious. We depend on them for television signals, the evening weather report, and to find our houses on Google Earth when we’re bored at work. But behind the scenes, they also inform our warfighting capabilities, keep track of the global shipping networks that keep our economies humming, and help us get to the places we need to get to via GPS.

According to the DoD’s interim Space Posture Review, that could all come crashing down. Literally. Our satellites are sorely outnumbered by space debris, to the tune of 370,000 pieces of junk up there versus 1,100 satellites. That junk ranges from nuts and bolts lost during spacewalks to pieces of older satellites to whole satellites that no longer function, and it’s all whipping around the Earth at a rate of about 4.8 miles per second.

The fear is that with so much junk already up there, a collision is numerically probable at some point. Two large pieces of junk colliding could theoretically send thousands more potential satellite killers into orbit, and those could in turn collide with other pieces of junk or with satellites, unleashing another swarm of debris. You get the idea.

To give an idea of how quickly a chain reaction could get out hand consider this: in February of last year a defunct Russian satellite collided with a communications satellite, turning 2 orbiting craft into 1,500 pieces of junk. The Chinese missile test that obliterated a satellite in 2007 spawned 100 times more than that, scattering 150,000 pieces of debris.

If a chain reaction got out of control up there, it could very quickly sever our communications, our GPS system (upon which the U.S. military heavily relies), and cripple the global economy (not to mention destroy the $250 billion space services industry), and whole orbits could be rendered unusable, potentially making some places on Earth technological dead zones.

World will miss economic benefit of 1.8 billion youth

UN: World will miss economic benefit of 1.8 billion young people | Environment | guardian.co.uk.

Population report says lack of education, infrastructure and jobs will mean a generation’s potential will be wasted

Write a letter to the 7 billionth person

Shoeshine boys wait for customers in New Delhi, India

Shoeshine boys awaiting customers in New Delhi, India. Photograph: Kevin Frayer/AP

The world is in danger of missing a golden opportunity for development and economic growth, a “demographic dividend”, as the largest cohort of young people ever known see their most economically productive years wasted, a major UN population report warned on Wednesday.

The potential economic benefits of having such a large global population of young people will go unfulfilled, as a generation suffers from a lack of education, and investment in infrastructure and job creation, the authors said.

“When young people can claim their rights to health, education and decent working conditions, they become a powerful force for economic development and positive change. “This opportunity [for] a demographic dividend is a fleeting moment that must be claimed quickly or lost,” said the UN Population Fund (UNFPA), in its Global Population Report, published just days before the UN forecasted the world population will pass 7 billion. Of this 7 billion, 1.8 billion are aged between 10 and 24, and 90% of those live in the developing world.

The report also reveals average life expectancy across the globe has risen by 20 years since the 1950s, from 48 to 68, as healthcare and nutrition have improved, while infant mortality has fallen fast, from 133 deaths per 1,000 births in the 1950s to 46 per 1,000 today.

These successes area a cause to celebrate, the United Nations said. Fertility has also halved, from 6 births per woman to 2.5 over the same period, though there are stark regional differences – fertility is 1.6 births per woman in east Asia but 5 per woman in some parts of Africa.

The report found a “vicious cycle” of extreme poverty, food insecurity and inequality leading to high death rates, that in turn encourages high birth rates. Only by investing in health and education for women and girls can countries break the cycle, as improving living conditions will allow parents to be more confident that their children will survive, and therefore have smaller families.

Crucial to this will be allowing women and girls greater freedom and equality, in order to make their own choices about fertility. Hundreds of millions of women would prefer to have smaller families, but are unable to exercise this preference owing to a culture of repression.

“Governments that are serious about eradicating poverty should also be serious about providing the services, supplies and information that women need to exercise their reproductive rights,” said Babatunde Osotimehin, executive director of the UNFPA. On the empowerment of woman, he said at a press conference in London: “we have come a long way, but we are not there yet. There is no group that gives up power voluntarily. Men will not give up power to women voluntarily. Women have to fight. Women need to work together.”

One way of doing so highlighted in the report is to provide a good level of sex education to adolescents, and access to modern methods of contraception.

The report said: “When women have equal rights and opportunities in their societies and when girls are educated and healthy, fertility rates fall … the empowerment of women is not simply an end in itself, but also a step towards eradicating poverty.”

The difference between a future of high fertility rates and one where people are better able to choose is stark: if fertility rates in areas of high population growth come down towards the global average, the world will reach a global population of about 9.3bn in 2050, and about 10bn in 2100. But if fertility rates remain high in the most populous countries, the 2100 population will be more than 15bn.

Osotimehin said countries must do more to help themselves: “It is unacceptable for countries to rely on donor money for reproductive health. The welfare of their people is their mandate.” He said it would cost only $2bn to give access to family planning to the 250 million women who would like it but lack access. “The budget of the average developing country does not give enough money to issues of women and reproductive health. That has to change. If it does not change, it becomes unsustainable.”

But he also said donors were failing to make sufficient commitments. “Family planning has not been funded as it should have been. Donors need to provide resources … there has been a reduction [in money made available].”

Osotimehin also said at the press conference that the opportunity had been missed to educate people on reproductive health and family planning, during a drive to prevent HIV infection, echoing comments he made to the Guardian earlier in the month.

With high population growth, many scientists predict thatthe pressure on food and agricultural productivity and other natural resources may become intolerable, and conditions for the poorest people will deteriorate further, rather than improving.

John Cleland, of the London School of Hygiene and Tropical Medicine, said: “The escape from poverty and hunger is made more difficult by rapid population growth.”

Rapid growth will also exacerbate the impact of other global problems, such as climate change and other environmental impacts. Steven Sinding, a population expert at Columbia University, said: “The pace of growth poses enormous challenges for many of the poorest countries, which lack the resources not only to keep up with demand for infrastructure, basic health and education services and job opportunities for the rising number of young people, but also to adapt to climate change.”

Separately on Wednesday, the Official for National Statistics forecast that the UK population would grow to 70 million by 2020, up from 62.3 million in 2010.

Marcoule, France nuclear site explosion kills one

BBC News – France nuclear: Marcoule site explosion kills one.

One person has been killed and four injured, one seriously, in a blast at the Marcoule nuclear site in France.

There was no risk of a radioactive leak after the blast, caused by a fire near a furnace in the Centraco radioactive waste storage site, said officials.

The owner of the southern French plant, national electricity provider EDF, said it had been “an industrial accident, not a nuclear accident”.

The cause of the blast was not yet known, said the company.

The explosion hit the area at 11:45 local time (09:45 GMT). A security cordon was set up as a precaution.

But interior ministry spokesman Pierre-Henry Brandet later said there had been no leak of radiation, neither inside nor outside the plant.

None of the injured workers was contaminated by radiation, said officials. The worker who died was killed by the blast and not by exposure to nuclear material.

The Centraco treatment centre belongs to a subsidiary of EDF. It produces MOX fuel, which recycles plutonium from nuclear weapons. There are no nuclear reactors on site.

Analysis

The French nuclear programme does not have a stellar record of transparency. In environmental circles, particular opprobrium is reserved for officials who in 1986 claimed the Chernobyl accident would have no impact on France – a statement lampooned as indicating officials believed radioactive fallout observed national boundaries.

What this incident implies for the future of the French nuclear programme is not entirely clear. If it remains a relatively minor matter, it will probably be passed off as the type of thing that regrettably happens in all types of industrial facility.

However, Marcoule is on the list of candidate sites to host one of the European Pressurised Water Reactors (EPRs) that according to government policy are to provide the next generation of French citizens with nuclear electricity.

The EDF spokesman said blast happened in a furnace used to burn waste, including fuels, tools and clothing which had been used in nuclear energy production but had only very low levels of radiation.

“The fire caused by the explosion was under control,” he said. Another official later said the incident was over.

The International Atomic Energy Agency (IAEA) said it was in touch with the French authorities to learn more about the nature of the explosion.

Speaking on the sidelines of a scheduled meeting of the IAEA’s board, Director General Yukiya Amano said the organisation’s incident centre had been “immediately activated”.

France’s Environment Minister Nathalie Kosciuscko-Morizet visited the site on Monday, to “help carry out a precise evaluation of the possible radiological impact of this accident”.

“For the time being, no exterior impact has been detected,” the AFP news agency quoted a ministry spokesman as saying.

“There are several detectors on the outside and none of them detected anything, the building is sound.”

Stress tests

Marcoule was opened in 1955 and is one of France’s oldest nuclear sites, though it has been extensively modernised.

It is located in the Gard department in Languedoc-Roussillon region, near France’s Mediterranean coast.

Macoule nuclear site, France (12 Sept 2011) Marcoule is one of France’s oldest nuclear facilities but has no reactors on site

All the country’s 58 nuclear reactors have been put through stress tests in recent months, following the disaster at Japan’s Fukushima nuclear plant which was hit by an earthquake and tsunami.

EDF’s share prices fell by more than 6% as news of the blast emerged.

France is the world’s most nuclear-dependent country, relying on nuclear power to meet 75% of its energy needs, so safety in the industry is a highly sensitive issue, says the BBC’s Christian Fraser in Paris.

In June, France announced it was investing 1bn euros (£860m) in nuclear power, including a significant boost for safety research.

French nuclear giant Areva is developing the next generation of nuclear reactors and has been involved in a huge publicity campaign since the Fukushima disaster to reassure the public of the safety of nuclear energy.

Other countries in Europe, including Germany, Italy and Switzerland, have said they will reduce or phase out their use of nuclear power over the next few years.

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An Impeccable Financial Disaster

An Impeccable Disaster – NYTimes.com.

 

On Thursday Jean-Claude Trichet, the president of the European Central Bank or E.C.B. — Europe’s equivalent to Ben Bernanke — lost his sang-froid. In response to a question about whether the E.C.B. is becoming a “bad bank” thanks to its purchases of troubled nations’ debt, Mr. Trichet, his voice rising, insisted that his institution has performed “impeccably, impeccably!” as a guardian of price stability.

Fred R. Conrad/The New York Times

Paul Krugman

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Indeed it has. And that’s why the euro is now at risk of collapse.

Financial turmoil in Europe is no longer a problem of small, peripheral economies like Greece. What’s under way right now is a full-scale market run on the much larger economies of Spain and Italy. At this point countries in crisis account for about a third of the euro area’s G.D.P., so the common European currency itself is under existential threat.

And all indications are that European leaders are unwilling even to acknowledge the nature of that threat, let alone deal with it effectively.

I’ve complained a lot about the “fiscalization” of economic discourse here in America, the way in which a premature focus on budget deficits turned Washington’s attention away from the ongoing jobs disaster. But we’re not unique in that respect, and in fact the Europeans have been much, much worse.

Listen to many European leaders — especially, but by no means only, the Germans — and you’d think that their continent’s troubles are a simple morality tale of debt and punishment: Governments borrowed too much, now they’re paying the price, and fiscal austerity is the only answer.

Yet this story applies, if at all, to Greece and nobody else. Spain in particular had a budget surplus and low debt before the 2008 financial crisis; its fiscal record, one might say, was impeccable. And while it was hit hard by the collapse of its housing boom, it’s still a relatively low-debt country, and it’s hard to make the case that the underlying fiscal condition of Spain’s government is worse than that of, say, Britain’s government.

So why is Spain — along with Italy, which has higher debt but smaller deficits — in so much trouble? The answer is that these countries are facing something very much like a bank run, except that the run is on their governments rather than, or more accurately as well as, their financial institutions.

Here’s how such a run works: Investors, for whatever reason, fear that a country will default on its debt. This makes them unwilling to buy the country’s bonds, or at least not unless offered a very high interest rate. And the fact that the country must roll its debt over at high interest rates worsens its fiscal prospects, making default more likely, so that the crisis of confidence becomes a self-fulfilling prophecy. And as it does, it becomes a banking crisis as well, since a country’s banks are normally heavily invested in government debt.

Now, a country with its own currency, like Britain, can short-circuit this process: if necessary, the Bank of England can step in to buy government debt with newly created money. This might lead to inflation (although even that is doubtful when the economy is depressed), but inflation poses a much smaller threat to investors than outright default. Spain and Italy, however, have adopted the euro and no longer have their own currencies. As a result, the threat of a self-fulfilling crisis is very real — and interest rates on Spanish and Italian debt are more than twice the rate on British debt.

Which brings us back to the impeccable E.C.B.

What Mr. Trichet and his colleagues should be doing right now is buying up Spanish and Italian debt — that is, doing what these countries would be doing for themselves if they still had their own currencies. In fact, the E.C.B. started doing just that a few weeks ago, and produced a temporary respite for those nations. But the E.C.B. immediately found itself under severe pressure from the moralizers, who hate the idea of letting countries off the hook for their alleged fiscal sins. And the perception that the moralizers will block any further rescue actions has set off a renewed market panic.

Adding to the problem is the E.C.B.’s obsession with maintaining its “impeccable” record on price stability: at a time when Europe desperately needs a strong recovery, and modest inflation would actually be helpful, the bank has instead been tightening money, trying to head off inflation risks that exist only in its imagination.

And now it’s all coming to a head. We’re not talking about a crisis that will unfold over a year or two; this thing could come apart in a matter of days. And if it does, the whole world will suffer.

So will the E.C.B. do what needs to be done — lend freely and cut rates? Or will European leaders remain too focused on punishing debtors to save themselves? The whole world is watching.

Nukes: a Problem That Hasn't Gone Away

The Final Failure – By Samuel R. Berger and Steve Andreasen | Foreign Policy.

In the decade since Osama bin Laden masterminded the 9/11 attacks, U.S. security policy has centered on al Qaeda and the wars in Iraq and Afghanistan — fueled by a deep and bipartisan concern that a terrorist group might acquire the means to strike again, this time perhaps with nuclear weapons.

Although al Qaeda, Iraq, and Afghanistan still present major challenges, their decade of dominance over U.S. security policy is at an end — broken by an increasingly successful effort to destroy al Qaeda’s ability to target the United States, the withdrawal of U.S. military forces from Iraq, and the Obama administration’s commitment to turn security in Afghanistan over to the Afghan government by 2014. A new set of challenges is emerging to occupy the attention of U.S. policymakers: reducing instability in Pakistan; rebuilding the American and global economies; advancing the U.S.-China relationship; making progress on global energy and climate policy; enhancing cybersecurity; and most recently, managing the risks and opportunities presented by the Arab Spring.

As this new set of challenges unfolds over the next decade, American leaders must increase their focus on what remains a vital U.S. national interest: nuclear threat reduction. As the 2012 U.S. presidential campaign inevitably creates an increasingly acrid partisan atmosphere, it is incumbent on all leaders to maintain a nonpartisan approach to reducing nuclear dangers.

There have been bipartisan successes in combating nuclear threats under the past four U.S. presidents — two Democrats and two Republicans. Thousands of nuclear weapons, along with their missiles and launchers, were removed and dismantled from Ukraine, Belarus, and Kazakhstan; the Nuclear Non-Proliferation Treaty was extended indefinitely; a comprehensive global ban on nuclear testing was concluded (though ratification by key states, including the United States, is still necessary for the treaty to enter into force); A.Q. Khan’s illicit trafficking in nuclear weapons designs, technologies, and materials was shut down; the Proliferation Security Initiative to interdict trade in weapons of mass destruction was launched; and the United States and Russia enacted the New START agreement, which reduced nuclear stockpiles further.

Yet even with these important steps — along with the killing of bin Laden in Pakistan, the weakening of al Qaeda, and the drive to “reset” relations with Russia — the amount of nuclear tinder that remains in the world today could still ignite a calamity of historic proportions, one that would change our world forever. Matthew Bunn, a Harvard University expert on nuclear proliferation and terrorism, recently stated that a 10-kiloton nuclear bomb — somewhat smaller than the one dropped on Hiroshima — detonated in Midtown Manhattan could kill a half-million people and result in $1 trillion in direct economic damage.

The nuclear bottom line remains ominous. The spread of nuclear weapons and know-how continues in unstable regions where the potential for conflict is high — including Northeast Asia, South Asia, and the Middle East — and in countries like North Korea and Iran that threaten the United States and its friends and allies. Even with the Cold War now 20 years behind us, the United States and Russia still deploy thousands of strategic nuclear weapons on high alert and tactical nuclear weapons throughout Europe, unnecessarily heightening the risk of accidental, unauthorized, or mistaken nuclear use, and of terrorist groups acquiring a weapon or dangerous nuclear material.

During the last two U.S. presidential elections, both the Republican and Democratic nominees recognized the nuclear danger and agreed on the broad outlines of a response. In 2004, when asked during the first presidential debate to identify the most serious threat to U.S. security, both President George W. Bush and Sen. John Kerry were unequivocal: the proliferation of nuclear weapons and the possible use of these weapons by terrorists. In 2008, both Sen. John McCain and Sen. Barack Obama embraced the policy framework outlined in two Wall Street Journal essays by national-security wise men George Shultz, Henry Kissinger, William Perry, and Sam Nunn. These articles called for a global effort to pursue practical steps that would reduce reliance on nuclear weapons, prevent their spread into potentially dangerous hands, and ultimately end them as a threat to the world.

Can this consensus hold during the 2012 presidential campaign? As non-incumbents in 2008, both McCain and Obama were able to lay claim to this new, nonpartisan, nuclear policy initiative by senior American statesmen. Now that Obama has adopted this approach, his eventual opponent will likely face pressure to differentiate himself or herself from the president by finding fault in his policies. One can already predict the political arguments that might be used against Obama — too accommodating to the Russians on New START and missile defense, too unrealistic to pursue steps toward a world free of nuclear arms.

A partisan political debate over nuclear threat reduction would not be without costs. If such a debate unfolds over the next 18 months, nuclear nonproliferation initiatives could be put on hold and the nonpartisan foundation built over the past four administrations could be dangerously eroded.

What will it take to avoid such an outcome? First, Obama must continue to lead — as only the president can. He will have the opportunity to do so when he meets with Russian President Dmitry Medvedev this fall and when he hosts the NATO summit in Chicago next May. At those events, he can advance U.S. and NATO cooperation with Russia on missile defense, which represents a potential game-changer in Euro-Atlantic security. He can also press for a reduction of tactical nuclear weapons in Europe, whose continued deployment provides more opportunities for terrorists than it does security for either Washington or Moscow.

Second, leaders in both parties should encourage their presidential candidates to underscore the continuing need for a nonpartisan approach to reducing nuclear threats. While it’s unreasonable to expect complete agreement on every point, the public deserves a debate whose goal is not to score political points, but to focus solely on reducing nuclear threats to the American people.

Too much to ask? Not if we expect to act with the urgency necessary to avoid what President John F. Kennedy once referred to as “the final failure.”

Samuel R. Berger, chairman of Albright Stonebridge Group, was U.S. national security advisor from 1997 to 2001. Steve Andreasen, consultant to the Nuclear Threat Initiative, was director for defense policy and arms control on the U.S. National Security Council staff from 1993 to 2001.

Bangladesh's 'golden fibre': Jute makes a comeback

BBC News – Bangladesh’s ‘golden fibre’ comes back from the brink.

WATCH: Jute has been processed in the same way for generations

Jute, a vegetable fibre that can be spun into sackcloth, used to be the ‘golden fibre’ of Bangladesh.

Technology of Business

It brought much-needed foreign income to the impoverished nation.

But it lost its lustre in the 1980s after synthetic materials like polythene and plastics were introduced.

Now the natural fibre has made a spectacular comeback.

Exports of jute and jute products from Bangladesh this fiscal year crossed a record billion dollars as demand for the natural fibre is steadily increasing.

Jute Jute is grown all over Bangladesh

With growing environmental awareness, jute, which is bio-degradable, has become the preferred alternative to polluting synthetic bags.

Jute is considered to be the second most important natural fibre after cotton in terms of cultivation and usage. It is mainly grown in eastern India, Bangladesh, China and Burma.

Until recently the fibre was used mostly as a packaging material. With a diversification of jute products, the demand for jute has increased.

“By processing the fibre mechanically and by treating it chemically, now jute can be used to make bags, carpets, textiles and even as insulation material,” says Mohammad Asaduzzaman, a scientist at the Bangladesh Jute Research Institute in Dhaka.

Jute being soaked After harvesting, the jute is stored in water until it begins to rot

When synthetics like polythene bags came into widespread use, the demand for jute declined and many jute mills in countries like Bangladesh were shut down.

Thousands lost their jobs and farmers shifted from jute to more profitable rice cultivation.

Today, as demand increases, more farmers are returning to this traditional crop.

It is estimated that nearly five million farmers are involved in jute plant cultivation in Bangladesh. It plays a key supportive role to the rural economy of Bangladesh.

Once the jute plants are harvested they are bundled together and immersed in running water and allowed to rot.

Jute being separated One it has become soft, the jute fibre is separated by hand

Then the fibres are stripped from the plant. The stripped fibre is dried and later sent to mills for processing.

Golam Moazzam, a research fellow at the Centre for Policy Dialogue, in Dhaka says: “It is important to note that policy support also contributed to its widespread use of jute both locally and internationally.

“For example, the Bangladeshi government has made it compulsory to use jute bags for packaging of food grains.”

New uses

Jute is also versatile, strong and long-lasting and scientists say they are discovering more uses for it in different sectors.

For example, Geotextiles, a diversified jute product, is used for soil-erosion control and also used in laying roads to give more durability. The natural fibre is also used to make pulp and paper.

Jute bundles Once dry, the jute fibres are bundled and sent to factories to be processed

Bangladeshi scientists are now working on an ambitious project to blend jute fabric with cotton to produce denim fabric.

They say if the jute plant is harvested earlier than the usual period of 120 days, then it gives a softer fabric.

“If this special quality of fibre is chemically modified and bleached then it becomes softer. If we can blend it with cotton then we can manufacture denim fabric and diversified textile products,” says Mr Asaduzzaman

If this process can be commercialised, he says, it will bring down the demand for cotton, which is also becoming dearer day by day.

The price of fabric can be reduced by a half, bringing benefits to the country’s garment sector.

Jute delivery The resurgence of the jute industry has created jobs for many local people

However, there are bottlenecks.

Special machines are required to blend this fibre with cotton and they are yet to be produced commercially. Scientists hope spinning factories will be able to install these machines in the near future.

“Unfortunately, there is not much research going on in terms promoting diversified jute products,” says Mr Moazzam.

“Countries like Bangladesh and India, who are the major jute exporting countries, should conduct collaborative research to find out diversification of jute products.”

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