SavvySugar

Could a new currency save the US?

cheekyredhead — Sun, 26 Apr 2009 14:00:21 -0700

The Swiss Solution by Bernard Lietaer, April 2009 issue, Ode Magazine

A new form of currency could help us in economic crisis. How a complementary currency helped save Switzerland from economic ruin in the 1940’s and could do the same for us today.

The travails of the banking crisis have been front-page news for months, and the biggest bailout inhuman history is underway. However, the real economy-the one in which businesses manufacture and sell goods and a service-is turning out to be the next victim. Whatever governments do for the banks, credit will be a lot harder for businesses to obtain for many years to come.

The trickiest part of the situation is the simultaneous nature of the crisis. When one bank-or an entire country’s bank-gets into serious trouble, healthy companies can find credit from other banks or countries. But when the meltdown happens across the global financial system, another dynamic comes into play. The world economy predictably veers toward a simultaneous recession, which in turn worsens the banks’ balance sheets, motivating financiers to reduce credit further. When all banks cut back on their loan portfolios simultaneously, it deepens the hole being collectively dug for the world economy.

Under these circumstances, businesses can take two strategies: they can try to get help form governments when their individual problems become unmanageable, or take the initiative to save themselves cooperatively. The first option isn’t new. But governments the world over have just bled themselves dry to save the banking system. So depending on them to save important businesses could resemble waiting for Godot. Therefore, the second option is clearly better, and there is a very successful precedent even if it is surprisingly little-known.

Once upon a time, during a crisis similar to today’s, 16 business people got together to see how they could help themselves. They or their clients had received a notice from their banks that their credit lines were going to be reduced or eliminated. Bankruptcy was only a matter of time. They realized that business A needed a loan to buy goods from business B, which in turn needed money to pay its suppliers. So they decided to create a mutual credit system among themselves, including their clients and suppliers. They created their own currency, identical in value to the national money-with the interesting feature that these funds didn’t bear interest. A debt in this currency would be reimbursed with sales to a participant in the network or settled in national money. This system saved many of the businesses involved.

A cooperative was set up among the users to keep the accounts dealing with this currency. Soon, participants could also borrow in that currency from the cooperative at the remarkable low interest rate of 1 to 1.5 percent. These loans needed collateral, exactly as in a conventional bank. Over time, the system grew to include one-quarter of all businesses in the country. The secret of the nation’s legendary economic stability was that strange little unofficial currency.

Whenever there was a recession, the volume in the currency grew significantly, thereby reducing the negative impact on sales and employment. Whenever there was a boom, business in national currency expanded, while activity in the alternative currency dropped again. The spontaneous counter-cyclical behavior of this little system helped the central bank of the country stabilize the economy.

This isn’t a fairy tale, but a true story of the WIR system (WIR, an abbreviation for Wirtschaftsring, “economic circle.” Also means “we” in German”. The country in Switzerland and the 16 founders met in Zurich in 1034. Within a year, some 3,000 participants were benefiting. And the system still works; the annual volume of WIR business is about $2 billion.

I propose businesses create such systems at whatever scale makes sense. This approach will prevent or reduce the strangulation of the real economy by the credit contradiction. It will avoid duplicating the worst of the 1930’s: massive bankruptcies, intolerably high unemployment and untold suffering. Such a system, scaled to make a real difference, can be set up in a fraction of the time it took in the 1930’s.

Time is of the essence, if we want to avoid the social and economic ravages unleashed by the unraveling of today’s complex business supply chains. As the rot spreads from the banking system to non-financial businesses, a lot of damage will be done quickly. We shouldn’t wait to act until supplier or clients are in trouble. Why wait to grab a candle until it is too dark to find one?
Why should we be any less entrepreneurial than the Swiss in 1934?

*Bernard Lietaer (lietaer.com) is a Belgian economist and author of 14 book, including The Future of Money.
This article is reposted from the pages of Ode Magazine.

Dollar's fall is felt around the globe: Weakening U.S. currency harms overseas markets

justingirl1989 — Mon, 24 Dec 2007 11:47:40 -0800

The sharp decline of the U.S. dollar since 2000 is affecting a broad swath of the world's population, with its drop on global markets being blamed at least in part for misfortunes as diverse as labor strikes in the Middle East, lost jobs in Europe and the end of an era of globe-trotting rich Americans.

It marks a shift for Americans in the global economy. In times of strength, a mightier dollar allowed Americans to feed their insatiable appetite for foreign goods at cheap prices while providing Yankees abroad with virtually unrivaled economic clout. But now, as the United States struggles to fend off a recession, observers say the less lofty dollar is having both a tangible and intangible diminishing effect.

"The dollar was the dominant force in world economics for 100 years -- we had no competition," said C. Fred Bergsten, an American economist and director of the Washington-based Peterson Institute for International Economics. "There was no other economy close to the size of the United States. But all that is now changing."

The dollar is down more than 40 percent against the euro over the past seven years, taking a particularly sharp drop last month. Despite a bit of a rebound in recent weeks, the dollar is still off nearly 12 percent since Jan. 11, when it hit its peak for 2007.

For now, that drop is allowing the U.S. economy to reap rewards. American products have become exceedingly competitive, boosting exports ranging from Caterpillar tractors to Boeing jumbo jets that are now relative blue-light specials in the global marketplace. Using the same logic of chasing cheaper local production costs that has driven many U.S. factories to China, a few iconic European companies, including Airbus, are set to shift some manufacturing lines to the United States.

But for untold millions worldwide, the weak dollar has emerged as a troubling dark spot. Take Ngengi Mungai, a Nairobi coffee exporter trapped between the weaker dollar and the rapidly appreciating Kenyan shilling -- which gained as much as 12 percent against the dollar this year amid an export-driven economic surge across much of Africa. His coffee sales overseas, as with the bulk of global commodities, are priced in weaker dollars. But he must then convert them into stronger shillings to cover his local costs for local labor, materials, even the clothes on his back. It has cut sharply into his annual income.

"Basically," Mungai said, "it's bad."

Lost its bling for good?
It has left many wondering whether the dollar has lost its bling for good. Even rapper Jay-Z dissed the dollar in his recent video, "Blue Magic." In scenes celebrating the excess of wealth in Manhattan's shimmering glass canyons, the cameras cut repeatedly not to images of $100 bills -- but of crisp, 500 euro notes.

Though still the primary choice for global reserves and commodities, some countries have begun to diversify their dollar holdings, while a nascent push is afoot to re-price some commodities in currencies other than the dollar. In May, Kuwait dropped its currency peg to the dollar and other oil-rich Gulf states have threatened to follow. Perhaps most telling: In recent months, the euro surpassed the dollar as the currency with the largest global circulation.

In very real terms, it has forced Americans to rethink their lust for foreign goods. Sales of luxury, British-made Jaguars and Land Rovers, for instance, are declining in the United States because of the weak dollar, while fewer North American tourists -- a 10 percent drop in the third quarter of 2007 compared with the same period last year -- treated themselves to trips to England.

The chink in the dollar's armor has dealt a blow to American pride -- at least to the kind of pride that comes with buying power.

Nowhere is that more visible than with Americans overseas. "It's changed our lifestyle," said Lauren Amlani, 48, who moved to Paris from California with her husband and young son in March 2006. "A meal with pizza and drinks for the three of us comes to over $75. That's ridiculous!"

Amlani's husband, Aslam, a project manager at Disneyland Paris, is paid in dollars. To compensate for the plunge of the dollar against the euro, the Amlanis are buying clothes and electronics in the United States and hauling them back to Paris.

With the exception of November, when the dollar dropped sharply after bearish remarks by Chinese officials, the fall has been gradual. It is unclear what will happen in the future. The dollar has fallen because of a combination of fears over the U.S. economy, including the subprime mortgage crisis that may worsen.

Although considered unlikely, analysts say a more rapid decline could prove disastrous. A global run on the dollar would force the Federal Reserve to hike interest rates to prop up the U.S. currency just as lower interest rates may be needed to stimulate the domestic economy.

Impact grows
Already, however, the impact of the weaker dollar is growing. Rolls-Royce has proposed moving some operations from Liverpool to its factory in Mount Vernon, Ohio. Airbus has said it will shift more of its production to the United States, home turf of rival Boeing, to offset the cost of the stronger euro. As the dollar has weakened over the past seven years, Airbus has opened assembly lines and other operations in Wichita and Mobile, Ala.; as well as in Moscow and Beijing.

"Every time the euro increases by 10 cents towards the dollar we lose $1 billion in our operations," said an Airbus official at the company's headquarters in Toulouse, France. "Aircraft are sold in U.S. dollars, but most of our production costs are paid in euros."

Losses in Europe have been blunted, however, because fewer euros now buy more raw materials that continue to be priced in dollars. In addition, the British pound has depreciated recently over investor fears that England's real estate market may be vulnerable to the same factors that caused the subprime mortgage crisis in the United States.

Many nations that have pegged their currencies to the dollar have become boxed in by the Fed's moves to lower interest rates. While that may be wise for policymakers in the United States, where the fear is slipping into recession, it is exactly the wrong medicine for red-hot economies such as those in the Persian Gulf that are in far greater risk of overheating from a massive, oil-fueled economic expansion.

The dramatic surge in oil revenue along with the weakening dollar has sparked a rise in inflation in the Gulf states -- hurting most those who have the least. In recent months, it has wiped out much of the gains from years of hard labor for the thousands of South Asian workers who moved to Dubai for a piece of its multibillion-dollar construction boom. With employers slow to raise salaries as low as $109 a month, workers' savings have diminished in buying power as costs have jumped for vegetables, cooking gas and other essentials. This has triggered wage strikes and a rock-throwing protest this fall that set back construction of the 150-story Burj Dubai, planned to be the world's tallest building.

"We don't have a single penny," said Ram Chandra, a 33-year-old mason who moved to the United Arab Emirates from India five years ago to seek his fortune in a sand-blown and crowded construction camp on the fringes of the desert. Back home in India, where the dollar has fallen 14 percent against the rupee in the past 18 months, the remittances he has sent to his family have steadily lost value.

Rallying point for anti-Americanism
The declining dollar's role in fueling inflation has become a piÂ¿ata for barbs across the Muslim world, where furious residents and leaders, including Iran's President Mahmoud Ahmadinejad, have sought to turn the weaker greenback into a new rallying point for anti-Americanism. "They get our oil and give us a worthless piece of paper," Ahmadinejad told reporters after the OPEC summit in the Saudi capital of Riyadh last month.

Some countries with strict controls over their currencies have managed to share in the U.S. windfall from the dollar's drop. Vietnam, for instance, where the tightly controlled currency has stayed relatively constant against the dollar, is enjoying an influx of investors fleeing nearby Thailand -- where the baht's sharp rise against the dollar has made doing business there far less attractive.

In China, where the currency still trades on a narrow, government-controlled band linked to the dollar, authorities have resisted global pressure to allow its currency to appreciate faster. The Chinese currency has gained about 11 percent against the dollar since 2005. But by keeping the currency relatively weak, Chinese companies have managed to ride the weak-dollar export boom -- making their products even cheaper in countries where the greenback has sharply dropped.

But now, some in China are turning their noses up at the dollar. Lin Jing, a sales manager at Shanghai Shuangyuan Import & Export Co., which exports garlic oil, said the company has begun to demand euros from its overseas customers instead of dollars. "The use of euros enables us to shy away from losses caused by the conversion between the [Chinese currency] and the weakened dollar," he said.

Correspondents Kevin Sullivan in London, Stephanie McCrummen in Nairobi, Ellen Knickmeyer in Cairo, Faiza Saleh Ambah in Jiddah, and special correspondents Corinne Gavard in Paris and Wu Meng in Shanghai contributed to this report.

source:http://www.msnbc.msn.com/id/22386732/page/2/

From Canada: Conrad Black: Incompetent Obama teeters on the edge

Grandpa — Fri, 22 Jan 2010 22:10:56 -0800

Conrad Black: Incompetent Obama teeters on the edge
Posted: January 22, 2010, 11:00 AM by NP Editor
Conrad Black, U.S. Politics

The burning question after the Massachusetts Senate election is whether the administration responds by making a course correction to survive politically by jettisoning its policy core and cleaning up its methods, or 'doubles down,' as President Obama has implied, and escalates the ideological and guerrilla war for direction of public policy. This was a referendum on the Obama administration, including health care, not just on health care. Even less was it just the rejection of an astonishingly unappealing candidate, predestined to glory as a trivia question. John F. Kennedy took that seat with lashings of his father's money in an anti-Brahmin revolt against Henry Cabot Lodge in 1952, and was reelected by 864,000 votes in 1958. In the intervening years of Teddy Kennedy, the Democrats could have won with a candidate not confined to two legs and one head. This was less a wake-up call than a Te Deum for a dying and sweaty dream.

The president has three principal problems. He is well to the left of the public and of what he promised the voters in 2008, and it is an old, passe leftism, that is authoritarian, deviously presented and was discredited in this country decades ago; the sort of nostrums that caused Bill Clinton and others to become 'New Democrats.' He is increasingly perceived as having credibility problems and of being cold, cocksure, narcissistic and intoxicated by what he modestly called 'the gift' of his own articulation. And as president, he has been quite, and quite surprisingly, incompetent.

The second of these problems seems to prevent the president from appreciating the last. The only serious domestic initiative to show for the last year is an obscene stimulus bill that has had to be defended by the spurious supposition of 'jobs saved' since, contrary to promises, unemployment has risen by over five million after it was enacted. That target could have been attained without squandering 787 billion borrowed dollars.

Current economic projections call for massive debt increases of $1 trillion a year for a decade, with huge money supply increases that will make history not only by their size but, according to forecasts, by their non-inflationary nature, accompanied by tax increases that will, also miraculously, not retard recovery from the recession. No audible sane person believes this arithmetical fairy tale, including, one dares to hope, the president himself. It is a recipe for guaranteed stagflation and currency devaluation.

The administration bought wholly into the unproved claim that carbon emissions are causing global warming, but global warming has not, for the last ten years, been happening. The president padded around the Copenhagen global warming conference trying to generate enthusiasm for $100 billion annual transfers to the Mugabes and Chavezes, as well as the Chinese (the world's largest carbon emitters), as conscience-alleviating payments for the carbon emissions of the economically advanced countries. America's fellow culprits found less tangibly burdensome expiations. So will America.

Mr. Obama must have noticed that the science and the politics were wrong, and that the arithmetic was too. The whole concept, like his promotion of renewable energy, his cap-and-trade bill, his redesignation of carbon dioxide as a pollutant, and his pursuit of complete nuclear disarmament, is mad. It was a worthy encore to the president's previous cameo appearance in the Danish capital, where his and his wife's prodigies managed to bring Chicago in fourth in contention for the 2016 Olympics, (out of four competing cities).

In foreign policy, engagement with Iran and North Korea, appeasement of Russia, over Georgia and missile defense, attempting to bully Israel and to deny that there was an agreement between the Sharon and Bush (Jr.) regimes over settlements, and siding with Chavez and the Castros in the Honduran crisis against constitutional democracy and America's legitimate interests, have all failed, practically and morally, at least without knowledge of indiscernible and unlikely, contrary intelligence.
There have been no initiatives to reform NATO, the UN, the IMF, all in need of modernization, and there has been a regrettable delay in launching the long-promised and necessary measures to turn the Afghan operation into a success, while the U.S. and its allies have been milling about, losing ground and taking increasing casualties.

The fumbling over Guantanamo has been another fiasco, as attorney general Holder has acknowledged that it is an exemplary prison. But Obama has been entrapped by Teddy Kennedy's unfounded identification of Gitmo with Abu Ghraib. The president's reaction to the near disaster of the panties-terrorist in the skies over Detroit began with waffling from a Hawaiian luau, and gained altitude agonizingly slowly.

No one is audibly lamenting the retirement of George W. or throwing shoes at his successor's head because he speaks in sentences, but this president is bestriding the world as a flake, cow-towing to the Mikado, apologizing for President Truman's use of the atomic bomb, criticizing Roosevelt and Churchill's uninclusive approach to winning World War II, and Churchill and Eisenhower for disposing of the pajama-clad hysteric Mohammed Mossadegh as head of Iran.

And instead of sending the Congress completed bills and drumming up public support for them, as legislatively successful past presidents like FDR, LBJ, and Reagan did, he just rolls a Christmas tree into the Capitol Rotunda and invites Reid and Pelosi and their vacuum-cleaner committee chairmen to festoon it with their favorite pork baubles. Stealing the Alaska Senate election with the fraudulent prosecution of Senator Stevens, (since retracted), the Minnesota Senate election with the fraudulent recounts against Senator Coleman, and the unchallenging seduction of Senator Specter as he was circling the Republican primary drain in Pennsylvania, to get 60 Democratic senators, enabled the public purchase of party loyalty, the dismissal of sincere moderates like Senator Olympia Snow, (whose furrowed brow is a mortal challenge to Botox), for a bad health care bill that is not a reform. This was not what was thought to be meant by the slogan 'Yes we can!,' is not leadership, and the people, even in Massachusetts, don't like it.

It has been a year of fecklessness, amateurism, and posturing. Less that is useful has been accomplished by this president in his first year than by any president since Herbert Hoover, and he was ambushed by the Great Depression after seven months.

President Obama rose with astonishing speed from a more improbable sociological provenance than any of his 42 predecessors, an alumnus both of the genteel finishing school of Harvard Law and of the Chicago boiler room for hardball politicians. Neither his radical nor sleazy connections stuck to him. He deftly made an unspoken arrangement to liberate white liberal America from its guilt complex over historic treatment of African-Americans, and to banish the down-market Al Sharptons, Jesse Jacksons and Charlie Rangels as black spokesmen, in exchange for a one-way ticket to the White House. With this implicit, non-refundable offer in his back pocket, he almost effortlessly seemed to take the Democratic Party away from the Clintons and rode the trends, the economy, and the sclerosis of his opponent's campaign straight into the White House, with professional skill and elegance.

Withal, this president seems overwhelmingly confident, strangely detached, and, as Peggy Noonan, Ronald Reagan's leading speech-writer, and now one of the leaders of the Obama Buyers' Remorse Movement, wrote, 'cold and faux eloquent.' He is fluent and sonorous, but rather vapid. And now, Maureen Dowd, foxy doyenne of New York Times columnists and pin-up girl of the D.C. Democratic establishment, niece of FDR's top fixer, former co-leader, with Michelle, Caroline Kennedy and Oprah Winfrey, of the Obama massed, synchronized cheerleaders, has apostacized and reviled the president as a nasty egotist. When A Democratic president has lost Ms. Dowd and the Kennedys' Senate seat, it is time to return to the drawing boards.

If the president has a Damascene rendezvous with the real wishes of the American people and turns the White House bowling alley into a cram-course charm school, he can be a popular and successful president yet. An excellent bi-partisan health care bill that really is a reform can still be had and would be hugely admired, especially after this debacle. If he wants to double down on what we have seen in the last year, he will leave the White House in a submersible in three years.

For all the claims that the Republicans are too influenced by religious zealots and country club knuckle-draggers, the administration may be in the hands of 'redistributive,' pacifistic Kool Aid drinkers. If it is, the Republicans will have to elevate their 2012 presidential candidate this year. The office may, 213 years after the retirement of George Washington, actually seek the (wo)man, but not from what is conspicuously on offer now, from either party.

National Post

http://network.nationalpost.com/np/blogs/fullcomment/archive/2010/01/22/...

Our "War" With Al Qaeda Is Getting Us Nowhere

stephley — Mon, 18 Jan 2010 06:40:48 -0800

By Thomas L. Friedman, The New York Times
Posted on January 18, 2010
http://www.alternet.org/story/145225/

Dick Cheney says President Obama is "trying to pretend that we are not at war" with terrorists. There is only one thing I have to say about that: I sure hope so.

Frankly, if I had my wish, we would be on our way out of Afghanistan not in, we would be letting Pakistan figure out which Taliban they want to conspire with and which ones they want to fight, we would be letting Israelis and Palestinians figure out on their own how to make peace, we would be taking $100 billion out of the Pentagon budget to make us independent of imported oil - nothing would make us more secure - and we would be reducing the reward for killing or capturing Osama bin Laden to exactly what he’s worth: 10 cents and an autographed picture of Dick Cheney.

Am I going isolationist? No, but visiting the greater China region always leaves me envious of the leaders of Hong Kong, Taiwan and China, who surely get to spend more of their time focusing on how to build their nations than my president, whose agenda can be derailed at any moment by a jihadist death cult using exploding underpants.

Could we just walk away? No, but we must change our emphasis. The "war on terrorists" has to begin by our challenging the people and leaders over there. If they’re not ready to take the lead, to speak out and fight the madness in their midst, for the future of their own societies, there is no way we can succeed. We’ll exhaust ourselves trying. We’d be better off just building a higher wall.

As the terrorism expert Bruce Hoffman noted in an essay in The Washington Post: "In the wake of the global financial crisis, Al Qaeda has stepped up a strategy of economic warfare. ‘We will bury you,’ Soviet Premier Nikita Khrushchev promised Americans 50 years ago. Today, Al Qaeda threatens: ‘We will bankrupt you.’ " And they will.

Our presence, our oil dependence, our endless foreign aid in the Middle East have become huge enablers of bad governance there and massive escapes from responsibility and accountability by people who want to blame all their troubles on us. Let’s get out of the way and let the moderate majorities there, if they really exist, face their own enemies on their own. It is the only way they will move. We can be the wind at their backs, but we can’t be their sails. There is some hope for Iraq and Iran today because their moderates are fighting for themselves.

Has anyone noticed the most important peace breakthrough on the planet in the last two years? It’s right here: the new calm in the Strait of Taiwan. For decades, this was considered the most dangerous place on earth, with Taiwan and China pointing missiles at each other on hair triggers. Well, over the past two years, China and Taiwan have reached a quiet rapprochement -on their own. No special envoys or shuttling secretaries of state. Yes, our Navy was a critical stabilizer. But they worked it out. They realized their own interdependence. The result: a new web of economic ties, direct flights and student exchanges.

A key reason is that Taiwan has no oil, no natural resources. It’s a barren rock with 23 million people who, through hard work, have amassed the fourth-largest foreign currency reserves in the world. They got rich digging inside themselves, unlocking their entrepreneurs, not digging for oil. They took responsibility. They got rich by asking: "How do I improve myself?" Not by declaring: "It’s all somebody else’s fault. Give me a handout."

When I look at America from here, I worry. China is now our main economic partner and competitor. Sure, China has big problems. Nevertheless, I hope Americans see China’s rise as the 21st-century equivalent of Russia launching the Sputnik satellite - a challenge to which we responded with a huge national effort that revived our education, infrastructure and science and propelled us for 50 years. Unfortunately, the Cheneyites want to make fighting Al Qaeda our Sputnik. Others want us to worry about some loopy remark Senator Harry Reid made about the shade of Obama’s skin.

Well, what is our national project going to be? Racing China, chasing Al Qaeda or parsing Harry? Of course, to a degree, we need to both race China and confront Al Qaeda - but which will define us?

"Our response to Sputnik made us better educated, more productive, more technologically advanced and more ingenious," said the Johns Hopkins foreign policy expert Michael Mandelbaum. "Our investments in science and education spread throughout American society, producing the Internet, more students studying math and people genuinely wanting to build the nation."

And what does the war on terror give us? Better drones, body scanners and a lot of desultory T.S.A. security jobs at airports. "Sputnik spurred us to build a highway to the future," added Mandelbaum. "The war on terror is prompting us to build bridges to nowhere."

We just keep thinking we can do it all - be focused, frightened and frivolous. We can’t. We don’t have the money. We don’t have the time.

Fun Facts

Cherlene — Sat, 09 Jan 2010 05:51:14 -0800

China Holds Firm on Major Issues in Obama’s Visit

amybdk — Wed, 18 Nov 2009 08:29:35 -0800

President Obama toured the historic Forbidden City in Beijing on Tuesday during a break from meetings with Chinese leaders.

Source

BEIJING - In six hours of meetings, at two dinners and during a stilted 30-minute news conference in which President Hu Jintao did not allow questions, President Obama was confronted, on his first visit, with a fast-rising China more willing to say no to the United States.

On topics like Iran (Mr. Hu did not publicly discuss the possibility of sanctions), China’s currency (he made no nod toward changing its value) and human rights (a joint statement bluntly acknowledged that the two countries “have differences”), China held firm against most American demands.

With China’s micro-management of Mr. Obama’s appearances in the country, the trip did more to showcase China’s ability to push back against outside pressure than it did to advance the main issues on Mr. Obama’s agenda, analysts said.

“China effectively stage-managed President Obama’s public appearances, got him to make statements endorsing Chinese positions of political importance to them and effectively squelched discussions of contentious issues such as human rights and China’s currency policy,” said Eswar S. Prasad, a China specialist at Cornell University. “In a masterstroke, they shifted the public discussion from the global risks posed by Chinese currency policy to the dangers of loose monetary policy and protectionist tendencies in the U.S.”

White House officials maintained they got what they came for - the beginning of a needed give-and-take with a surging economic giant. With a civilization as ancient as China’s, they argued, it would be counterproductive - and reminiscent of President George W. Bush’s style - for Mr. Obama to confront Beijing with loud chest-beating that might alienate the Chinese. Mr. Obama, the officials insisted, had made his points during private meetings and one-on-one sessions.

“I do not expect, and I can speak authoritatively for the president on this, that we thought the waters would part and everything would change over the course of our almost two-and-a-half-day trip to China,” said Robert Gibbs, the White House spokesman. “We understand there’s a lot of work to do and that we’ll continue to work hard at making more progress.”

Several China experts noted that Mr. Obama was not leaving Beijing empty-handed. The two countries put out a five-point joint statement pledging to work together on a variety of issues. The statement calls for regular exchanges between Mr. Obama and Mr. Hu, and asks that each side pay more attention to the strategic concerns of the other. The statement also pledges that they will work as partners on economic issues, Iran and climate change.

But despite a conciliatory tone that began weeks ago when Mr. Obama declined to meet the Tibetan spiritual leader, the Dalai Lama, before visiting China to avoid offending China’s leaders, it remains unclear whether Mr. Obama made progress on the most pressing policy matters on the American agenda in China or elsewhere in Asia.

The president has had to fend off criticism from American conservatives that he appeared to soften the American stance on the positioning of troops on the Japanese island of Okinawa, and for bowing to Japan’s emperor.

At a regional conference in Singapore, Mr. Obama announced a setback on another top foreign policy priority, climate change, acknowledging that comprehensive agreement to fight global warming was no longer within reach this year.

Past American presidents have usually insisted in advance on some concrete achievements from their trips overseas. President Bush received vigorous endorsements of his top foreign policy priority, the global war on terrorism, during his visits to Beijing, and President Bill Clinton guided China toward joining the World Trade Organization after prolonged negotiations. When either of those presidents visited the country, China often made a modest concession on human rights as well.

This time, Mr. Hu declined to follow the lead of President Dmitri A. Medvedev of Russia, who, after months of massaging by the Obama administration, now says that he is open to tougher sanctions against Iran if negotiations fail to curb Iran’s nuclear program. The administration needs China’s support if tougher sanctions are to be approved by the United Nations Security Council. But during the joint appearance in Beijing on Tuesday, Mr. Hu made no mention of sanctions.

Rather, he said, it was “very important” to “appropriately resolve the Iranian nuclear regime through dialogue and negotiations.” And then, as if to drive home that point, Mr. Hu added, “During the talks, I underlined to President Obama that given our differences in national conditions, it is only normal that our two sides may disagree on some issues.”

White House officials acknowledged that they did not get what they wanted from Mr. Hu on Iran but said that Mr. Obama’s method would yield more in the long term. “We’re not looking for them to lead or change course, we’re looking for them to not be obstructionist,” one administration official said.

In a meeting in Beijing with a senior Chinese official on Wednesday morning, Secretary of State Hillary Rodham Clinton again pressed China on Iran. She told the official, Dai Bingguo, that even if China had not decided what sanctions on Iran it would accept, “you need to send a signal,” said a senior American official, who spoke on condition of anonymity so he could describe the exchange.

Mr. Obama did not appear to move the Chinese on currency issues, either. China has come under heavy pressure, not only from the United States but also from Europe and several Asian countries, to revise its policy of keeping its currency, the renminbi, pegged at an artificially low value against the dollar to help promote its exports. Some economists say China must take that step to prevent the return of large trade and financial imbalances that may have contributed to the recent financial crisis.

Mr. Obama on Tuesday could only cite China’s “past statements” in support of shifting toward market-oriented exchange rates, implying that he had not extracted a fresh commitment from Beijing to move in that direction soon.

There are many reasons the White House may have heeded China’s clear desire for a visit free of the polemics that often accompany meetings between leaders of the two countries. Mr. Obama’s foreign policy is rooted in recasting the United States as a thoughtful listener to friends and rivals alike. “No we haven’t made China a democracy in three days - maybe if we pounded our chest a lot that would work,” Mr. Gibbs said in an e-mail message on Tuesday night. “But it hasn’t in the last 16 years.”

Kenneth Lieberthal, a Brookings Institution scholar who oversaw China issues in President Clinton’s White House, agreed. “The United States actually has enormous influence on popular thinking in China, but it is primarily by example,” he said. “If you go to the next step and say, ‘You guys ought to be like us,’ you lose the impact of who you are.”

The National Security Council’s spokesman, Michael A. Hammer, added, “What we did come to do is speak bluntly about the issues which are important to us, not in an unnecessarily offensive manner, but rather in the Obama style of showing respect.”

Mr. Obama, even as he projected a softer image, did nudge the Chinese on some delicate issues.

On Tuesday, standing next to Mr. Hu, Mr. Obama brought up Tibet, where Beijing-backed authorities have clamped down on religious freedom. “While we recognize that Tibet is part of the People’s Republic of China, the United States supports the early resumption of dialogue between the Chinese government and representatives of the Dalai Lama to resolve any concerns and differences that the two sides may have,” he said.

Reporting was contributed by Sharon LaFraniere, Edward Wong, Michael Wines and Mark Landler.

The dollar demise has begun' to group

Grandpa — Tue, 13 Oct 2009 15:43:45 -0700

Dollar loses reserve status to yen & euro By PAUL THARP Last Updated: 3:16 AM, October 13, 2009 Posted: 1:44 AM, October 13, 2009 Ben Bernanke's dollar crisis went into a wider mode yesterday as the greenback was shockingly upstaged by the euro and yen, both of which can lay claim to the world title as the currency favored by central banks as their reserve currency. Over the last three months, banks put 63 percent of their new cash into euros and yen -- not the greenbacks -- a nearly complete reversal of the dollar's onetime dominance for reserves, according to Barclays Capital. The dollar's share of new cash in the central banks was down to 37 percent -- compared with two-thirds a decade ago. Currently, dollars account for about 62 percent of the currency reserve at central banks -- the lowest on record, said the International Monetary Fund. Bernanke could go down in economic history as the man who killed the greenback on the operating table. After printing up trillions of new dollars and new bonds to stimulate the US economy, the Federal Reserve chief is now boxed into a corner battling two separate monsters that could devour the economy -- ravenous inflation on one hand, and a perilous recession on the other. "He's in a crisis worse than the meltdown ever was," said Peter Schiff, president of Euro Pacific Capital. "I fear that he could be the Fed chairman who brought down the whole thing." Investors and central banks are snubbing dollars because the greenback is kept too weak by zero interest rates and a flood of greenbacks in the global economy. They grumble that they've loaned the US record amounts to cover its mounting debt, but are getting paid back by a currency that's worth 10 percent less in the past three months alone. In a decade, it's down nearly one-third. Yesterday, the dollar had a mixed performance, falling slightly against the British pound to $1.5801 from $1.5846 Friday, but rising against the euro to $1.4779 from $1.4709 and against the yen to 89.85 yen from 89.78. Economists believe the market rebellion against the dollar will spread until Bernanke starts raising interest rates from around zero to the high single digits, and pulls back the flood of currency spewed from US printing presses. "That's a cure, but it's also going to stifle any US economic growth," said Schiff. "The economy is addicted to the cheap interest and liquidity." Economists warn that a jump in rates will clobber stocks and cripple the already stalled housing market. "Bernanke's other choice is to keep rates at zero, print even more money and sell more debt, but we'll see triple-digit inflation that could collapse the economy as we know it. "The stimulus is what's toxic -- we're poisoning ourselves and the global economy with it." Ben Bernanke's dollar crisis went into a wider mode yesterday as the greenback was shockingly upstaged by the euro and yen, both of which can lay claim to the world title as the currency favored by central banks as their reserve currency. Over the last three months, banks put 63 percent of their new cash into euros and yen -- not the greenbacks -- a nearly complete reversal of the dollar's onetime dominance for reserves, according to Barclays Capital. The dollar's share of new cash in the central banks was down to 37 percent -- compared with two-thirds a decade ago. Currently, dollars account for about 62 percent of the currency reserve at central banks -- the lowest on record, said the International Monetary Fund. Bernanke could go down in economic history as the man who killed the greenback on the operating table. After printing up trillions of new dollars and new bonds to stimulate the US economy, the Federal Reserve chief is now boxed into a corner battling two separate monsters that could devour the economy -- ravenous inflation on one hand, and a perilous recession on the other. "He's in a crisis worse than the meltdown ever was," said Peter Schiff, president of Euro Pacific Capital. "I fear that he could be the Fed chairman who brought down the whole thing." Investors and central banks are snubbing dollars because the greenback is kept too weak by zero interest rates and a flood of greenbacks in the global economy. They grumble that they've loaned the US record amounts to cover its mounting debt, but are getting paid back by a currency that's worth 10 percent less in the past three months alone. In a decade, it's down nearly one-third. Yesterday, the dollar had a mixed performance, falling slightly against the British pound to $1.5801 from $1.5846 Friday, but rising against the euro to $1.4779 from $1.4709 and against the yen to 89.85 yen from 89.78. Economists believe the market rebellion against the dollar will spread until Bernanke starts raising interest rates from around zero to the high single digits, and pulls back the flood of currency spewed from US printing presses. "That's a cure, but it's also going to stifle any US economic growth," said Schiff. "The economy is addicted to the cheap interest and liquidity." Economists warn that a jump in rates will clobber stocks and cripple the already stalled housing market. "Bernanke's other choice is to keep rates at zero, print even more money and sell more debt, but we'll see triple-digit inflation that could collapse the economy as we know it. "The stimulus is what's toxic -- we're poisoning ourselves and the global economy with it." http://www.nypost.com/p/news/business/dollar_loses_reserve_status_to_yen...

From The UK - The demise of the dollar

Grandpa — Tue, 06 Oct 2009 08:35:18 -0700

The demise of the dollar

In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading

By Robert Fisk

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.
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The Americans, who are aware the meetings have taken place – although they have not discovered the details – are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China's former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. "Bilateral quarrels and clashes are unavoidable," he told the Asia and Africa Review. "We cannot lower vigilance against hostility in the Middle East over energy interests and security."

This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil – yet again turning the region's conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.

The decline of American economic power linked to the current global recession was implicitly acknowledged by the World Bank president Robert Zoellick. "One of the legacies of this crisis may be a recognition of changed economic power relations," he said in Istanbul ahead of meetings this week of the IMF and World Bank. But it is China's extraordinary new financial power – along with past anger among oil-producing and oil-consuming nations at America's power to interfere in the international financial system – which has prompted the latest discussions involving the Gulf states.

Brazil has shown interest in collaborating in non-dollar oil payments, along with India. Indeed, China appears to be the most enthusiastic of all the financial powers involved, not least because of its enormous trade with the Middle East.

China imports 60 per cent of its oil, much of it from the Middle East and Russia. The Chinese have oil production concessions in Iraq – blocked by the US until this year – and since 2008 have held an $8bn agreement with Iran to develop refining capacity and gas resources. China has oil deals in Sudan (where it has substituted for US interests) and has been negotiating for oil concessions with Libya, where all such contracts are joint ventures.

Furthermore, Chinese exports to the region now account for no fewer than 10 per cent of the imports of every country in the Middle East, including a huge range of products from cars to weapon systems, food, clothes, even dolls. In a clear sign of China's growing financial muscle, the president of the European Central Bank, Jean-Claude Trichet, yesterday pleaded with Beijing to let the yuan appreciate against a sliding dollar and, by extension, loosen China's reliance on US monetary policy, to help rebalance the world economy and ease upward pressure on the euro.

Ever since the Bretton Woods agreements – the accords after the Second World War which bequeathed the architecture for the modern international financial system – America's trading partners have been left to cope with the impact of Washington's control and, in more recent years, the hegemony of the dollar as the dominant global reserve currency.

The Chinese believe, for example, that the Americans persuaded Britain to stay out of the euro in order to prevent an earlier move away from the dollar. But Chinese banking sources say their discussions have gone too far to be blocked now. "The Russians will eventually bring in the rouble to the basket of currencies," a prominent Hong Kong broker told The Independent. "The Brits are stuck in the middle and will come into the euro. They have no choice because they won't be able to use the US dollar."

Chinese financial sources believe President Barack Obama is too busy fixing the US economy to concentrate on the extraordinary implications of the transition from the dollar in nine years' time. The current deadline for the currency transition is 2018.

The US discussed the trend briefly at the G20 summit in Pittsburgh; the Chinese Central Bank governor and other officials have been worrying aloud about the dollar for years. Their problem is that much of their national wealth is tied up in dollar assets.

"These plans will change the face of international financial transactions," one Chinese banker said. "America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate."

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.

http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar...

Factcheck on Climategate

stephley — Thu, 10 Dec 2009 16:09:58 -0800

It's a long article, this is just the analysis section.

Skeptics claim this trove of e-mails shows the scientists at the U.K. research center were engaging in evidence-tampering, and they are portraying the affair as a major scandal: "Climategate." Saudi Arabian climate negotiator Mohammad Al-Sabban went so far as to tell the BBC: "It appears from the details of the scandal that there is no relationship whatsoever between human activities and climate change." He said that he expected news of the e-mails to disrupt the U.N. climate summit in Copenhagen this month. An article from the conservative-leaning Canada Free Press claims that the stolen files are proof of a "deliberate fraud" and "the greatest deception in history."

Missing the Mark

We find such claims to be far wide of the mark. The e-mails (which have been made available by an unidentified individual here) do show a few scientists talking frankly among themselves - sometimes being rude, dismissive, insular, or even behaving like jerks. Whether they show anything beyond that is still in doubt. There are two investigations underway, by the U.K.’s Met Office and East Anglia University, and the head of CRU, Phil Jones, has "stepped aside" until they are completed. However, many of the e-mails that are being held up as "smoking guns" have been misrepresented by global-warming skeptics eager to find evidence of a conspiracy. And even if they showed what the critics claim, there remains ample evidence that the earth in getting warmer.

Even as the affair was unfolding, the World Meteorological Organization announced on Dec. 8 that the 2000-2009 decade would likely be the warmest on record, and that 2009 might be the fifth warmest year ever recorded. (The hottest year on record was 1998.) This conclusion is based not only on the CRU data that critics are now questioning, but also incorporates data from the U.S. National Aeronautics and Space Administration (NASA) and the National Oceanic and Atmospheric Administration (NOAA). All three organizations synthesized data from many sources.

Some critics claim that the e-mails invalidate the conclusions of the Intergovernmental Panel on Climate Change, the world scientific body that reaffirmed in a 2007 report that the earth is warming, sea levels are rising and that human activity is "very likely" the cause of "most of the observed increase in global average temperatures since the mid-20th century." But the IPCC’s 2007 report, its most recent synthesis of scientific findings from around the globe, incorporates data from three working groups, each of which made use of data from a huge number of sources - of which CRU was only one. The synthesis report notes key disagreements and uncertainties but makes the "robust" conclusion that "warming of the climate system is unequivocal." (A robust finding is defined as "one that holds under a variety of approaches, methods, models and assumptions, and is expected to be relatively unaffected by uncertainties.")

The IPCC has released a statement playing down the notion that CRU scientists skewed the world body’s report or kept it from considering the views of skeptical scientists:

Intergovernmental Panel on Climate Change: "The entire report writing process of the IPCC is subjected to extensive and repeated review by experts as well as governments. Consequently, there is at every stage full opportunity for experts in the field to draw attention to any piece of literature and its basic findings that would ensure inclusion of a wide range of views. There is, therefore, no possibility of exclusion of any contrarian views, if they have been published in established journals or other publications which are peer reviewed."

The facts support this assertion. In one 2004 e-mail that’s come under much scrutiny, Jones wrote of two controversial papers that "Kevin and I will keep them out [of the IPCC report] somehow - even if we have to redefine what the peer-review literature is!" But both papers under discussion, Kalnay and Cai (2003) and McKitrick and Michaels (2004), were cited in one of the three working group reports from which the 2007 IPCC report is synthesized.

Mixed Messages

The 1,000-plus e-mails sometimes illustrate the hairier side of scientific research. Criticisms of climate change are sometimes dismissed as "fraud" or "pure crap," as in this 2005 e-mail from CRU Director Phil Jones. Other messages, like a 2007 e-mail from Michael Mann of Penn State University, show indignation at being the target of skeptics’ ire. Some of the e-mails are in bad form; for instance, climate scientist Benjamin Santer of Lawrence Livermore National Laboratory makes a crack about "beat[ing] the crap out of" opponent Pat Michaels.

Claims that the e-mails are evidence of fraud or deceit, however, misrepresent what they actually say. A prime example is a 1999 e-mail from Jones, who wrote: "I’ve just completed Mike’s Nature trick of adding in the real temps to each series for the last 20 years (i.e., from 1981 onwards) and from 1961 for Keith’s to hide the decline." Skeptics claim the words "trick" and "decline" show Jones is using sneaky manipulations to mask a decline in global temperatures. But that’s not the case. Actual temperatures, as measured by scientific instruments such as thermometers, were rising at the time of the writing of this decade-old e-mail, and (as we’ve noted) have continued to rise since then. Jones was referring to the decline in temperatures implied by measurements of the width and density of tree rings. In recent decades, these measures indicate a dip, while more accurate instrument-measured temperatures continue to rise.

Scientists at CRU use tree-ring data and other "proxy" measurements to estimate temperatures from times before instrumental temperature data began to be collected. However, since about 1960, tree-ring data have diverged from actual measured temperatures. Far from covering it up, CRU scientists and others have published reports of this divergence many times. The "trick" that Jones was writing about in his 1999 e-mail was simply adding the actual, measured instrumental data into a graph of historic temperatures. Jones says it’s a “trick” in the colloquial sense of an adroit feat - "a clever thing to do," as he put it - not a deception. What’s hidden is the fact that tree-ring data in recent decades doesn’t track with thermometer measurements. East Anglia Research Professor Andrew Watson explained in an article in The Times of London:

Watson: "Jones is talking about a line on a graph for the cover of a World Meteorological Organisation report, published in 2000, which shows the results of different attempts to reconstruct temperature over the past 1,000 years. The line represents one particular attempt, using tree-ring data for temperature. The method agrees with actual measurements before about 1960, but diverges from them after that - for reasons only partly understood, discussed in the literature."

Other quotes that skeptics say are evidence of "data manipulation" actually refer to how numbers are presented, not to falsifying those numbers. For instance, in one e-mail climate scientist Tom Crowley writes: "I have been fiddling with the best way to illustrate the stable nature of the medieval warm period." Crowley is referring to the best way to translate the data into a graphic format. We’re the first to admit that charts and graphs can give a false or misleading impression of what data actually show. In the past, for instance, we’ve criticized a pie chart used by some liberals to make military spending look like a much larger slice of the federal budget than it really is. In fact, it’s been a major contention of climate change skeptics that a so-called "hockey stick" chart, so named because it shows a steep climb in temperatures in the last few decades, exaggerates the true extent of warming. That claim is contradicted by climate scientists, including the creator of one of the most contended "hockey stick" charts, and we make no judgment about that dispute here. We simply note that "fiddling" with the way data are displayed - even in a way that some may see as misleading - is not the same thing as falsifying the numbers.

Much has also been made of the scientists’ discussion of Freedom of Information Act requests for their raw data. In fact, the vast majority of CRU’s data is already freely available. According to the University of East Anglia, a small amount of the data is restricted by non-publication agreements. Discussion of British FOIA requests in the stolen e-mails show scientists bristling at demands that they supply records of their own correspondence, computer code and data to people whose motives they question. In one e-mail about a request for data and correspondence, Santer writes critically of Steven McIntyre, a Canadian science blogger who runs the Climateaudit.org Web site:

Ben Santer e-mail, Nov. 12, 2009: "My personal opinion is that both FOI requests [for data related to a 2008 paper and for correspondence dating back to 2006] are intrusive and unreasonable. Steven McIntyre provides absolutely no scientific justification or explanation for such requests. … McIntyre has no interest in improving our scientific understanding of the nature and causes of climate change. He has no interest in rational scientific discourse. He deals in the currency of threats and intimidation. We should be able to conduct our scientific research without constant fear of an "audit" by Steven McIntyre; without having to weigh every word we write in every email we send to our scientific colleagues."

It’s clear from the e-mails that there are people with whom the scientists would rather not share. What’s less clear is whether any deliberate obstruction actually occurred - that’s one of the subjects of the East Anglia investigation. Some e-mails refer to long discussions with lawyers and university officials about what the scientists may, or must, make available and to whom. In others, scientists let their critics know directly that data are freely accessible, or mention that they’ve already sent the information along, though they may not fulfill their opponents’ every informational wish.

Climate change skeptics also say that the e-mails prove they’ve been excluded from peer review. In one e-mail, for example, climate scientist Tom Wigley of the University Corporation for Academic Research writes: "If you think that [Yale professor James] Saiers is in the greenhouse skeptics camp, then, if we can find documentary evidence of this, we could go through official AGU channels to get him ousted." Saiers later departed from the journal in question (Geophysical Research Letters, or GRL). However, Saiers says he isn’t a warming skeptic and that Wigley had nothing to do with his departure. When another professor (and blogger) asked Saiers about the Wigley e-mail, Saiers responded: "I stepped down as GRL editor at the end of my three-year term. … My departure had nothing to do with attempts by Wigley or anyone else to have me sacked."

Investigators are still sifting through 13 years’ worth of CRU e-mails looking for evidence of impropriety. But what’s been revealed so far hasn’t shaken the broad scientific consensus about global warming. In an open letter to Congress posted on Climate Science Watch and other sites, 25 leading climate scientists (including eight members of the National Academy of Science) wrote:

Letter to Congress from U.S. scientists, Dec. 4: "The body of evidence that human activity is the dominant cause of global warming is overwhelming. The content of the stolen emails has no impact whatsoever on our overall understanding that human activity is driving dangerous levels of global warming. … Even without including analyses from the UK research center from which the emails were stolen, the body of evidence underlying our understanding of human-caused global warming remains robust."

http://factcheck.org/2009/12/climategate/?utm_source=twitterfeed&utm_med...

Glenn Beck's gold-gate problem

Roarman — Tue, 08 Dec 2009 13:56:30 -0800

Yet another controversy appears to be brewing around Fox News host Glenn Beck. Some are accusing him of a blatant conflict of interest concerning his frequent on-air promotion of an investment sold by one of his main advertisers: Gold.

For some time Beck critics have cried foul over his relationship with Goldline International, a precious metals vendor that features the TV and radio host's endorsement prominently on their website. Critics charge that Beck is guilty of misleading his audience by often advising them to purchase gold in advance of the potential collapse of the value of the dollar on the world currency market, without disclosing that he is in fact a "paid spokesman" for Goldline. Beck's on-air promotion of gold, which includes advising viewers to construct "fruit cellars" and to rely on a "three G system" of "God, Gold, and Guns" in the event of America's collapse, dates back to his time as a host for CNN Headline News.

Glenn Beck also regularly talks up gold on his nationally syndicated radio show, where he often endorses Goldline during live commercial segments. Additionally, Beck has had the company's CEO on as a guest. Advertisements for Goldline are also featured prominently on Beck's own website, where he recently promoted gold in an audio clip warning of an apocalyptic future:

When the system eventually collapses, and the government comes with guns and confiscates, you know, everything in your home and all your possessions, and then you fight off the raving mad cannibalistic crowds that Ted Turner talked about, don't come crying to me. I told you: get gold.

Back in October, the liberal media company Air America made this video mocking the conflict of interest:

Beck's promotion of gold presents a potential problem for Fox News, which strictly prohibits on-air personalities from making paid product endorsements. When contacted by Daily Finance for a comment on the matter, Fox News senior vice-president for development Joel Cheatwood said the network "makes an exception for its commentators who are also radio hosts," adding that they knew upfront that hiring Beck came with the understanding that he was also a radio host and that they "had to be accepting of certain elements of that." Nevertheless, a Fox spokeswoman said that the company is addressing the matter with Beck's agent, George Hiltzik.

However, Beck, who responded to the conflict of interest allegations on his show last Thursday by saying "So I shouldn't make money?", isn't devoid of defenders on the matter. Business Insider called the controversy "nonsense," adding "there's nothing wrong with a commentator advising viewers, listeners, or readers to take positions that he is taking himself. In fact, you might wonder about the motivations of someone giving financial advice he wouldn't take himself."

In Beck's defense, some have also noted that the price of gold has spiked since he started at Fox News. Nevertheless, you can probably bet that any and all future Jon Stewart impressions of Beck will include numerous references to the virtues of gold.

Source: http://news.yahoo.com/s/ynews/ynews_ts1022