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To: PaulM who wrote (46561)1/3/2000 5:20:00 AM
From: Alex  Read Replies (3) | Respond to of 116759
 
Funny Money Ain't No Joke
Don't use your currency. Use ours.
Rudi Dornbusch says small economies should forget monetary independence and throw in their lot with an established currency.

When new nations are born, the first thing they do is create a new currency. Whether it is called the peso or the hrvnya, it is bound to be pathetic. Few of these currencies rise to distinction; more likely, the number of zeros will increase steadily as ever more patriotic images are printed on the back of the bill to make up for the declining purchasing power. Such is the price of misconceived national identity.

Even if it is the steady inflation of 60 to 100 per cent that Turkey has been living with, or the single digit inflation of some better behaved transition economies, the basic question remains: why do emerging economies insist on managing their own central banks?

Democratic money is bad money. The past decade has witnessed the rise of strong and independent central banks and the outsourcing of money. Countries such as Italy have narrowly escaped public sector bankruptcy by surrendering their monetary authority to the European Central Bank. In France, where the situation was somewhat less precarious, the surrender first to the Bundesbank and then the ECB has been no less unconditional and clearly for the better.

There is a message here for Europe's peripheral nations. National dilettante management of currencies is too expensive, particularly for poor countries aspiring to international respect and prosperity.

The present hype in capital markets suggests two unusual ways of putting a bright new face on a bad currency. The first strategy is a friendly takeover. The obvious candidate for such a move is the International Monetary Fund, but that could be too low key. To maximise value, perhaps a better strategy would be to focus on the owners of designer labels. Could LVMH, which already owns Krug champagne and Louis Vuitton, be persuaded to add a Ukrainian brand, the hrvnya, to its stable?

An alternative asset market strategy builds on the suggestion of Larry Summers, the US Treasury secretary, who noted that just about anything that is called dot-com can boom without much effort. Why not, he asked, lift depressed currencies by dot-coming them? Would this strategy work for, say, Turkey as the country struggles to end its double-digit inflation and fiscal turmoil?

But there are risks with the dot-com ploy. High valuation is good but overvaluation brings new risks. Moreover, if dot-com assets crash, as many surely will, this would spell an early death for the country's stabilisation plan. Better to pursue the Italian strategy of using dot-euro.

Just how would this work? It takes the practical form of a currency board - the central bank no longer issues money except in the context of purchasing foreign exchange, and the exchange rate is rigidly and forever pegged to the euro. Interest rates collapse, inflation stops dead in its tracks, the limits of tolerance for mismanagement become very tight and politics is taken out of public finance. Soon, as in Greece today, the discussion is about the finer details of convergence rather than the vulgar possibility of public bankruptcy. Needless to say, the local stock market will boom, growth will pick up sharply and the finance minister will make the front covers of People, W and Euromoney. The president will get two full terms in office.

Crummy monies are out of fashion, cool money is in. No one believes devaluation is a step towards prosperity or that inflation creates jobs; nobody can possibly believe that printing money is a particularly intelligent way to finance government. Europe's peripheral countries want to join the European Union for trade integration so they can sell their vegetables, oranges and textiles. But currency stability is more important for prosperity. There is only one way to get it: unconditional surrender, close the central bank, give up funny money.

Opposition to this modest proposal comes from many quarters - not least from central bankers. Giving up a currency means a threat to perks and privileges. Even if the central bank is kept alive, prestige will be brutally eroded. (Just look at the demoralised provincial bank the Buba is today.) The financial sector is opposed because hard money means an end to living off inflation-distorted capital markets.

The future is not on their side. Europe is about to do away with the last vestige of bad money as francs and lira and the whole obscene reminder of political money are replaced by crisp, fresh and bright single-digit euros.

It makes it that much harder to make sense of an obscure central or southern European currency, whatever its name. How can you have faith in something called a Turkish lira - the very name lira is bad, and Turkey does not make it better. All the more true of the Ukrainian hrvnya. Even if nothing else works in a country, at least good money might be a change for the better.

The author is Ford Professor of Economics and International Management at the Massachusetts Institute of Technology.

The Financial Times, Jan. 3, 2000



To: PaulM who wrote (46561)1/3/2000 8:06:00 AM
From: long-gone  Respond to of 116759
 

Monday January 3, 3:36 am Eastern Time
Shell says Nigeria oil force majeure, no Y2K link
A Shell source from Warri said the trunk line serving Opukushi, Ogbotobo and Tunu flowstations had been forced to close with the loss of up to 120,000 bpd in production.

The Shell official in Lagos said it the company faced no Y2K problems at either Forcados or its other export terminal at southeastern Bonny.

Declaring force majeure means Shell cannot guarantee to meet all its previous export commitments at Forcados.

Shell and other oil firms working in the volatile Niger Delta have faced an upsurge of attacks on oil installations in recent years which have forced repeated disruptions to oil production.
biz.yahoo.com

But of late(Y2k or no) higher oil = higher gold & this should mean higher oil



To: PaulM who wrote (46561)12/19/2000 7:54:08 AM
From: long-gone  Read Replies (2) | Respond to of 116759
 
Here it is! T.E.O.T.W.A.W.K.I.(did everything come out OK? :o) ) :

Saturday, Dec. 16, 2000. Page 1

Asteroid Could End World Monday

By Kevin O'Flynn
Staff Writer Russian scientists warned this week that life as we know it could end as early as Monday, if any one of the massive asteroids whizzing through the cosmos should happen to be making a beeline for Earth.

"There is a threat to humanity," said Vadim Simonenko, deputy head of the Institute of Technical Physics.

Simonenko was among the impressive array of experts attending a news conference with a title straight from a 1950s B-movie: "Asteroid Danger: How to Save the Earth From Cosmic Catastrophe."

The conference, held Thursday at the House of Journalists, brought together astronomers, physicists and nuclear experts to urge global cooperation in saving the world from a devastating asteroid collision that could leave millions dead or even wipe out civilization entirely.

With asteroids measuring up to 10 kilometers in diameter and traveling at speeds of up to 20,000 kilometers an hour, Earth would stand little chance if it was hit by a big one.

The Thursday gathering — including Simonenko, whose institute is a part of the Russian Nuclear Center — called for the organization of a world body to scour space for incoming objects and destroy any potentially dangerous flying objects with nuclear missiles.

In the case that preemptive measures fail, the citizens of the world should be prepared to relocate to the moon, the scientists added.

"After a collision with one of these asteroids, there'll be only fragments left of Earth," said Alexander Bagrov, senior scientist at the Institute of Astronomy.

Bagrov added that current technology allows experts to detect incoming objects no earlier than three days ahead of time — hence the suggestion that the day of reckoning may come as early as Monday.

Bagrov, a tall, thin balding man with a moonlike face, led the rallying cry of the doom-mongers, telling grim tales of other planets done in by asteroids.

Five billion years ago, he said, the planet Phaeton — located between Mars and Jupiter, the area where the orbit of most asteroids lie — exploded into millions of bits after being hit by an asteroid 1,000 meters wide.

"And [Phaeton] was many times bigger than Earth," Bagrov warned. "After a collision with one of these asteroids there'd by only fragments left of Earth."

The asteroid that destroyed Phaeton also went on to cause the demise of life on Mars, when one of the fragments of the shattered planet whacked into Mars, causing it to sink into a grim nuclear winter that killed all life forms and turned it the bright red color it is today.

The only trace of life left on Mars is a "face with tears on its cheek" visible on the planet's surface, Bragov said.

Comets and asteroids have been slamming into Earth since time began. A huge asteroid that hit the planet 65 million years ago is believed to have killed off the dinosaurs.

But it has only been in the last 10 to 20 years that scientists have started to seriously consider the threat that asteroids, comets and other so-called NEOs, or Near Earth Objects, potentially pose to contemporary civilization.

"Ten years ago it was thought fantastic," Simonenko said of the concept that life on Earth could be wiped out by a NEO hit.

Everything changed, however, when an American scientist proved that a huge crater in the state of Arizona was caused by a meteorite and not, as previously thought, by volcanic activity.

Scientists now agree that there are millions of asteroids out there that have a chance of hitting the Earth.

If an object of more than 10 kilometers in diameter hits the Earth then there's not much chance of anyone surviving, according to a British task force that earlier this year published research on NEOs. Luckily, the chance of that happening is about once every hundred million years, the research said.

More dangerous are smaller objects of one kilometer or more which could destroy cities, change the climate and cause huge tidal waves all over the Earth.

There are roughly 1,000 such asteroids, roughly half of which have been identified as unlikely to strike the Earth.

An ongoing project at NASA hopes to identify an additional 40 percent of the asteroids within the next decade.

Even smaller objects — those under a kilometer — would still cause devastation equivalent to a number of nuclear bombs, but few of these have been detected.

Russia has already been hit by two large asteroids in the last 100 years.

In 1908 an asteroid crashed into Tunguska, a remote area of Siberia, causing devastation across an area the size of London.

Nearly 40 years later another asteroid hit Sikote-Alin, also in Siberia, smashing more than a hundred craters into the land.

If one of these asteroids had hit a city then millions of people would have died.

Alone, Russia has little funding to devote to NEO studies.

According to Anatoly Zaitsev, the head engineer at the Scientific Production Association, a manufacturer of satellites, an international body is needed to track all flying objects and act quickly with nuclear missiles if needed.

Zaitsev said that there is also a need to discuss the practical and moral problems associated with NEO vigilance.

Do you really want to tell the citizens of Perm that a meteorite is headed for their town square, he wondered, pointing to the rash of suicides and general panic caused two years ago in the United States when the Haley-Bop comet came unusually close to Earth.

If the big one does come, Zaitsev added, people should be prepared to evacuate the planet — potentially relocating to the moon.

But how will we choose who goes, someone asked.

"Ah, that's the problem," Zaitsev said.

themoscowtimes.com