Thursday, May 30, 2013

Mermaids: The Body Found


Mermaids: Real or Fake? 

What do you think?

 

I saw the documentary on Discovery Channel on Sunday May 26, 2013.  I have to admit that after viewing the evidence, I am seriously considering the fact that these humanoid creatures actually exist!

 


 

 

Saturday, May 18, 2013

Currency Wars are on the horizon by Peter Jones

Independent or not, Scotland will still be vulnerable to monetary manipulation by other nations, writes Peter Jones

While we in Scotland have been engaged in our own little currency fisticuffs over post-independence sterling unions and the like, the rest of the world has been worrying about the next round of what some fear is a global currency war. Regardless of how our domestic currency debate pans out (I’ll give my view on that at the end of this column), the real world currency battle could radically re-shape the global economy in which the Scottish Government wants to be a new player in 2016.

What is a currency war? The term was coined by Guido Mantega, Brazil’s finance minister, in 2010. He was concerned that other countries – mainly the United States – were manipulating their currencies to reduce their value, which would make Brazil’s exports to them more expensive, damaging Brazil’s growth and employment prospects.

On the other hand, American exports would get cheaper, boosting world demand for them, increasing US output and jobs. So Brazil, Mantega fretted, would be the loser and America the gainer, just through a bit of currency manipulation.

Cynics note that American policy-makers call what they are doing “monetary policy” (intended to achieve good things for the US economy), but when others do it, Americans call it “currency manipulation”, ie, other people doing bad things.

In Britain and Europe, the Bank of England and the European Central Bank (ECB) have been doing it too, except that in our snooty old world way, we call it “quantitative easing” (QE) or “unconventional monetary policy”. The intended effects, however, add up to the same thing.

How is it done? The conventional way is for a central bank to reduce short-term interest rates, making the currency less attractive to overseas investors, which reduces demand for it, so causing it to fall in value. But these days interest rates are already close to zero.

The next stage is unconventional: increasing the amount of money available. This, in domestic terms, is intended to have virtuous effects. The process gives commercial banks more money to lend, which should make more mortgages and more business loans available, so stimulating activity.

But two secondary, or spillover effects, may not be so virtuous. If the supply of money increases faster than real wealth in the economy does, then inflation should occur. This means that the real interest rate paid to investors becomes lower than the nominal interest rate and can even be negative – ie that money put in a supposedly safe place loses value even when the interest paid is taken into account.

Currency investors, being smart people, know this, so they stop buying a currency until it reaches a lower value where expected future increases in its worth (caused by its economy improving) are better than the predicted loss in value caused by inflation.

These two, potentially negative, spillovers may be counterbalanced by a third, potentially positive, spillover effect. This is that the economic stimulus caused by monetary expansion may be so big as to stimulate other economies. Consumers may become so buoyant that they increase their spending on not just domestically produced goods (which may have a lot of imported components) but also in imported goods.

Complicated, I know, but if you are still with me, we have now reached the point where there is a big debate – is quantitative easing having overall good or bad effects? And are policy-makers – in concentrating on short-term benefits – ignoring the long-term problem of inflation?

The short answer is that nobody really knows; debate on the topic is fierce. And despite there being lots of analysis done on the QE that has occurred over the last five years, and on when it happened in the 1930s (when countries devalued by abandoning the gold standard) the evidence is pretty mixed.

Tomorrow, we will learn whether the US Federal Reserve will carry on with its QE programme of expanding the money supply by about $85 billion a month (the expectations are that it will), and on Thursday whether the ECB will cut its interest rate (market folk reckon it will, but not until June). The Bank of England is thought likely to indulge in more QE sometime this year, but probably not at next week’s meeting of the monetary policy committee.

Meanwhile, Japan’s central bank is aggressively using QE, having announced this month it will try to end two decades of economic stagnation by pumping a massive $1.4 trillion into the economy.

Amongst QE practitioners, the Bank of Japan is unusual in that it has quite explicitly said its aim is to cause inflation. The reason is that the cause of the stagnant economy has been deflation, causing consumers and companies to hoard money rather than spend it. The prospect of inflation, it is hoped, will cause people to go out and spend.

The immediate effect of QE has been to cause the Japanese yen to fall in value, prompting Japanese investors to bring back money held overseas, yielding a profit, and to invest it in the Japanese stock market, where there ought to be still more profits to come from a stimulated economy.

To me, what this adds up to is that the proof of the QE pudding will only come in a few years, when we will know whether the desired outcome – more economic growth – has happened. I side with the doubters. Growth is not happening in Britain or Europe, and while it is occurring weakly in the US, that is arguably because of cheap energy prices rather than QE.

It is too soon to know the outcome in Japan, and meantime there are ominous signs of slowing growth in China. And if global economic growth does not match monetary growth, we will be stuck with inflation, meaning declining real incomes and savings, plus asset price bubbles.

This is not a pretty prospect, whatever your position on independence. In the union with sterling, or independent and still with sterling, there is no escaping it. There is a case for a separate Scottish currency, but that also has other costs and, as any QE-caused inflation will be global, a Scottish poond doesn’t escape that either.

On this debate, my view is that it would be in the UK’s interest to accept a sterling union with an independent Scotland, though the inhibitions on Scottish fiscal freedom would be pretty severe. I suspect, however, that by September 2014, what to do about inflation caused by currency wars will be a more pressing question.
 

Michigan school district goes broke, lays off all teachers

Cash-strapped Buena Vista School District in rural Michigan cannot guarantee parents that students will be able to return to school to finish the rest of the school year.
A school district in Buena Vista Township in rural Michigan has laid off its teachers and is not sure whether students will be able to finish the current school year.
Buena Vista School District in Saginaw, Mich., has run out of money and won't be able to pay its teachers anymore, prompting anger and concern from parents whose children are currently enrolled at the school – especially those who will be graduating this year.

At this point I don't know – I don't know what's going to happen to them," board member Randy Jackson told Michigan's WNEM.com.


The school continued to be closed Thursday and there is no guarantee as to when students will be able to return, either for the current school year or the 2013-2014 school year.

"Front doors are still locked … the superintendent couldn't even get into the high school ... Is the school year ever, ever, ever going to resume?" asked a WNEM reporter standing outside Buena Vista High School.

Michigan Senate Democratic Leader Gretchen Whitmer called on Gov. Rick Snyder to provide emergency funding to the district, saying that "Michigan's Constitution guarantees each and every child in Michigan the right to a free education."

The school currently owes about $1 million to the state and the federal government, The Detroit News reported.

PARENTS FRUSTRATED

More than 300 parents and teachers showed up at a special meeting Tuesday night, but left with more questions than answers, WNEM reported. The district is holding a school board meeting tonight to ask the state for emergency funding and talk about consolidation plans, a move that has been witnessed in other school districts – most recently in Chicago – struggling to cope with budget cuts and declining enrollment.

Chicago Public Schools announced in April that they plan to close 54 schools next year and shut down 61 school buildings.

Besides budget woes, Buena Vista School District's enrollment has also been shrinking and is currently down to 400 students.

The state cut off funding to the district after it was discovered that the district was mismanaging funds. According to the state, the school district, which serves a poor, mostly African-American community, continued to receive money for an alternate education program from the state even after severing ties with it in 2012.

Buena Vista School District Superintendent Deborah Hunter-Harvill – who is reportedly looking for another job herself – did not immediately return calls for comment. Her office told MSN News that she was busy preparing for tonight's meeting.

Angry parents are lashing out on Facebook about why the 27 teachers, who agreed to work for free until May 10, were let go.

"The people of BV... need to go wake these people up … bang on their doors, show up at the schools, their homes, park in their driveways, whatever it takes, to make these people accountable for this. Sitting on the sidelines would not work for me," wrote Michigan resident Peggy Mikac on WNEM's Facebook page.

The district said on its website that they couldn't allow the teachers to work without paying them: "We thank the teaching staff for their dedication, and understand their frustration. However, we must follow the law."

The district's statement says that it will continue to work with state officials to try and come up with a plan to continue educating its students, but does not go into any specifics.