Dollar Demise

LONDON – The dollar could collapse if Opec officially admits considering changing the pricing of oil into alternative currencies such as the euro, the Saudi Arabian foreign minister has warned. Prince Saud Al-Faisal was overheard ruling out a proposal from Iran and Venezuela to discuss pricing crude in a private meeting at the oil cartel's conference. In an embarrassing blunder at the meeting in Riyadh, ministers' microphones were not cut off during a key closed meeting, and Prince Al-Faisal was heard saying: "My feeling is that the mere mention that the Opec countries are studying the issue of the dollar is itself going to have an impact that endangers the interests of the countries. "There will be journalists who will seize on this point and we don't want the dollar to collapse instead of doing something good for Opec."

Iran and Venezuela have argued that the meeting's final communique should voice concern about the level of the dollar, which has recently fallen to new record lows against the euro. They are pushing for oil to be denominated against a basket of currencies.

• JJ Commentary: So what does this mean for the good ‘ol USA? More of our sovereignty erodes and we lose our “last remaining superpower” status just as the New World (Dis)Order folks desire.

Morality Decline Accelerates

PORTLAND, Maine (AP) — Pupils at a city middle school will be able to get birth control pills and patches at their student health center after the local school board approved the proposal Wednesday evening. The plan, offered by city health officials, makes King Middle School the first middle school in Maine to make a full range of contraception available to students in grades 6 through 8, according to the state Department of Health and Human Services. There are no national figures on how many middle schools, where most students range in age from 11 to 13, provide such services. About one-fourth of student health centers that serve at least one grade of adolescents 11 and older dispense some form of contraception.

Opponents cited religious and health objections. Diane Miller said she felt the plan was against religion and against God. A supporter, Richard Verrier, said it's not enough to depend on parents to protect their children because there may be students who can't discuss things with their parents.

• JJ Commentary: In a misguided attempt to prevent unwanted pregnancies in children, schools now provide encouragement for sexual experimentation in children as young as 11 years of age. Satan is quite pleased. The moral slide in America quickens with every passing day.

Looming Fiscal Crisis

Federal Reserve Chairman Ben Bernanke has found some strong support for his fears of a looming fiscal crisis from an unlikely source: Bill Clinton’s Treasury Secretary Robert Rubin. Bernanke is a Republican and Bush administration appointee. Rubin said that the U.S. faces "excruciating decisions" regarding what he sees as an increasingly unsound economy.In his wide-ranging Jan. 22 interview with PBS’s Rose, Rubin asserted that this country is on the "wrong track on almost every front." "I think we’ve got to re-establish sound fiscal conditions . . . so we have an environment conducive to growth, and also to avoid the dangers that, as [Federal Reserve Chairman] Ben Bernanke said very recently in his congressional testimony, [underlie] unsound fiscal conditions. I think that’s a tremendous threat to the global economy. To our economy and the global economy,” Rubin added.

"I don’t really think there’s too many question about this — a strong dollar grounded in strong policy is very much in our country’s interest, because [of] the exchange rate. Remember — the exchange rate between the dollar and other currencies is basically a way of expressing the rate at which we take our goods and services and exchange them for the goods and services of other people of other countries. And the more . . . goods and services we can get for the ones that we give, the better off our standard of living will be. Therefore, a strong dollar is very much in our interest…. If the current account deficit doesn’t change, then at some point something is going to have to give. It seems to me that it’s very likely there’s going to have to be an adjustment of the dollar.” Rubin stated.

• JJ Commentary: The dollar is being purposely undermined by many of the nations who are opposed to American, including Russian, China, India and the Arab nations. Osama Bin Laden has stated his real goal is to bankrupt the U.S. When (not if) these nations decide to cash in their wealth of dollars, the value of the dollar (already extremely low) will crash and so will our economy. The somewhat vague statements of these leading economists are intended to serve as a warning without panicking world markets.

Worrisome Debt

Globalization long has been regarded as a made-in-America phenomenon, driven by Silicon Valley's technology, Hollywood's movies and Wall Street's cash. But suddenly, countries formerly on the periphery of world events seem poised to challenge American dominance of this age of global integration. It's not only that developing countries are proving to be white-hot investment opportunities, though they are: the Morgan Stanley Emerging Markets index gained 242% the past four years. It's also that emerging markets, once known dismissively as the Third World, are now central to Americans' lives. Not long ago, these countries were of interest only to the Peace Corps. Now, everything from the financial lifeline that makes possible the modern American lifestyle to the identity of your next boss, customer, competitor or cultural trendsetter likely can be found in the developing world.

"We're in the middle of the biggest shift in 200 years — since the Industrial Revolution. It's really that big," said Antoine van Agtmael, the investment manager credited with coining the term "emerging markets" in 1981. The new prominence of emerging markets represents a sharp departure from the flurry of financial crises that tore through Mexico, Asia and Russia in the 1990s. Since then, scores of developing countries have cleaned up their balance sheets, slashed inflation rates and accumulated enormous stockpiles of hard-currency reserves. China alone sits atop a $1 trillion mountain of cash. Russia, Mexico, India and South Korea also are swiftly building their cash hoards, according to Treasury Department data.

Developing nations have gone from beggar to banker. The U.S. must borrow enormous sums each day to finance the gap between its anemic national savings rate and its consumption. Increasingly, those funds — largely raised by selling Treasury securities — come from poorer nations. Through November, the most recent data available, more than 29% of the $806 billion in net securities purchases came from developing countries compared with just 5% in 1998, according to Bank of America. The river of capital flowing into the U.S. economy enables Americans to continue consuming beyond their means. But some analysts find it worrisome that the world's wealthiest nation now depends on loans from some of the globe's poorest countries.

• JJ Commentary: Worrisome? Our debt-ridden ways are coming home to roost. Our financial future is in the hands of those countries who despise us. Worrisome? Nay, disastrous.