Wednesday, May 27, 2009

Stubborn minded people are dangerous

I notice something common between LHL and this woman. They like to start their message using straw man logic.

May 27, 2009
Religion still has its place
By Jeremy Au Yong, Political Correspondent

(Left, daughter of self-claimed Feminist Mentor) Nominated MP Thio Li-ann. -- ST FILE PHOTO

RELIGION and politics should not mix, but that does not mean religion has no place in public life.

Nominated MP Thio Li-ann argued at length in Parliament on Tuesday that secularism, as practised in Singapore, did not exclude religion.

Referring to Deputy Prime Minister Wong Kan Seng's recent reiteration that religion and politics must not be mixed, she said that while this was sound, 'there are difficulties of definition as no bright line demarcates 'religion' from 'politics'.

She added: ' 'Secularism' is a protean, chameleon-like term. What it means depends on the context and who is using it; it can be a virtue or a vice. It is timely to eschew glibness and examine the Singapore model of secularism with precision.'

In the first place no one is excluding religion, or saying religion has no place in public life.

2ndly, she is trying hard to link or blur
public life with politics. Bcos if religion has a place in public life, then it should in politics too, since both are legitimate going by her argument.

But she is mistaken. For e.g. it may be my belief that eating sharks fin is a terrible thing and sharks fin eaters are stupid and irresponsible fuckers. This is private and this belief remains within me. My actions in public is also personal, i do not eat sharks fin. I do not vocalise my belief in public or go around getting other people to share this belief. Maybe there are some other people who also believe in the same thing. And the public calls us Sharkists or other stupid names. But that is about it. We don't start to go around invading Chinese restaurants and take over their menu decision.

So that is the difference between public life and politics. Politics affect everyone, not just yourself.

By way of elaboration, she pointed out that during the parliamentary debate a few years ago on whether or not to have casinos in Singapore, many MPs prefaced their speeches by stating their faiths.

'Everyone has values, whether shaped by religious or secular ideologies; all may participate in public discourse to forge an ethical social consensus. This is democratic and cherishes viewpoint diversity,' she said. 'While religion is personal, it is not exclusively private and has a social dimension which is not to be trivialised.'

Prefacing speeches by stating one's faith is perfectly ok to me. But to base their political decisions on faith or values grounded in faith is another thing. The latter will no longer be secular liao. Besides, the casino debate, if i recall correctly, ended up being one of weighing economic benefits against social ills.

Also, this is more of a case where we have PAP MPs who are simply going along with their political boss, appease their constituents or members of certain faiths. It is a no-brainer.

Rather naive for an NMP like Thio not to understand this but instead tries to subtlely reinterpret the facts.


Friday, May 15, 2009

Andy Xie makes sense

Who is Andy Xie? hehehe

If China loses faith the dollar will collapse

By Andy Xie

Published: May 4 2009 19:28

Emerging economies such as China and Russia are calling for alternatives to the dollar as a reserve currency. The trigger is the Federal Reserve’s liberal policy of expanding the money supply to prop up America’s banking system and its over-indebted households. Because the magnitude of the bad assets within the banking system and the excess leverage of its households are potentially huge, the Fed may be forced into printing dollars massively, which would eventually trigger high inflation or even hyper-inflation and cause great damage to countries that hold dollar assets in their foreign exchange reserves.

The chatter over alternatives to the dollar mainly reflects the unhappiness with US monetary policy among the emerging economies that have amassed nearly $10,000bn (€7,552bn, £6,721bn) in foreign exchange reserves, mostly in dollar assets. Any other country with America’s problems would need the Paris Club of creditor nations to negotiate with its lenders on its monetary and fiscal policies to protect their interests. But the US situation is unique: it borrows in its own currency, and the dollar is the world’s dominant reserve currency. The US can disregard its creditors’ concerns for the time being without worrying about a dollar collapse.

The faith of the Chinese in America’s power and responsibility, and the petrodollar holdings of the gulf countries that depend on US military protection, are the twin props for the dollar’s global status. Ethnic Chinese, including those in the mainland, Hong Kong, Taiwan and overseas, may account for half of the foreign holdings of dollar assets. You have to check the asset allocations of wealthy ethnic Chinese to understand the dollar’s unique status.

The Chinese love affair with the dollar began in the 1940s when it held its value while the Chinese currency depreciated massively. Memory is long when it comes to currency credibility. The Chinese renminbi remains a closed currency and is not yet a credible vehicle for wealth storage. Also, wealthy ethnic Chinese tend to send their children to the US for education. They treat the dollar as their primary currency.

The US could repair its balance sheet through asset sales and fiscal transfers instead of just printing money. The $2,000bn fiscal deficit, for example, could have gone to over-indebted households for paying down debts rather than on dubious spending to prop up the economy. When property and stock prices decline sufficiently, foreign demand, especially from ethnic Chinese, will come in volume. The country’s vast and unexplored natural resource holdings could be auctioned off. Americans may view these ideas as unthinkable. It is hard to imagine that a superpower needs to sell the family silver to stay solvent. Hence, printing money seems a less painful way out.

The global environment is extremely negative for savers. The prices of property and shares, though having declined substantially, are not good value yet and may decline further. Interest rates are near zero. The Fed is printing money, which will eventually inflate away the value of dollar holdings. Other currencies are not safe havens either. As the Fed expands the money supply, it puts pressure on other currencies to appreciate. This will force other central banks to expand their own money supplies to depress their currencies. Hence, major currencies may take turns devaluing. The end result is inflation and negative real interest rates everywhere. Central banks are punishing savers to redeem the sins of debtors and speculators. Unfortunately, ethnic Chinese are the biggest savers.

Diluting Chinese savings to bail out America’s failing banks and bankrupt households, though highly beneficial to the US national interest in the short term, will destroy the dollar’s global status. Ethnic Chinese demand for the dollar has been waning already. China’s bulging foreign exchange reserves reflect the lack of private demand for dollars, which was driven by the renminbi’s appreciation. Though this was speculative in nature, it shows the renminbi’s rising credibility and its potential to replace the dollar as the main vehicle of wealth storage for ethnic Chinese.

America’s policy is pushing China towards developing an alternative financial system. For the past two decades China’s entry into the global economy rested on making cheap labour available to multi-nationals and pegging the renminbi to the dollar. The dollar peg allowed China to leverage the US financial system for its international needs, while domestic finance remained state-controlled to redistribute prosperity from the coast to interior provinces. This dual approach has worked remarkably well. China could have its cake and eat it too. Of course, the global credit bubble was what allowed China’s dual approach to be effective; its inefficiency was masked by bubble-generated global demand.

China is aware that it must become independent from the dollar at some point. Its recent decision to turn Shanghai into a financial centre by 2020 reflects China’s anxiety over relying on the dollar system. The year 2020 seems remote, and the US will not pay attention to something so distant. However, if global stagflation takes hold, as I expect it to, it will force China to accelerate its reforms to float its currency and create a single, independent and market-based financial system. When that happens, the dollar will collapse.

The writer is an independent economist based in Shanghai and former chief economist for Asia Pacific at Morgan Stanley