Beggar thy currency or thy self – says the good doctor El-Erian?

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Not many countries nowadays seek a strong exchange rate; a few, including systemically important ones, are already actively weakening their currencies. Yet, because an exchange rate is a relative price, all currencies cannot weaken simultaneously. How the world resolves this basic inconsistency over the next few years will have a major impact on prospects for growth, employment, income distribution, and the functioning of the global economy.

Japan is the latest country to say enough is enough. Having seen its currency appreciate dramatically in recent years, Prime Minister Shinzo Abe’s new government is taking steps to alter the country’s exchange-rate dynamic – and is succeeding. In just over two months, the yen has weakened by more than 10% against the dollar and close to 20% against the euro.

European leaders have already expressed reservations about Japan’s moves. The US auto industry is up in arms. And, a few days ago, Jens Weidmann, the president of the Bundesbank, publicly warned that the world risks a harmful and ultimately futile round of competitive exchange-rate depreciations – or, more bluntly, a “currency war”…

Of course, Japan is not the first country to go down this path. Several advanced and emerging economies preceded it, and I suspect that quite a few will follow it…

One need not be an economist to figure out that, while all currencies can (and do) depreciate against something else (like gold, land, and other real assets), by definition they cannot all weaken against each other. In order for some currencies to depreciate, others must appreciate. Here is where things get interesting, complex, and potentially dangerous…

None of this is unprecedented, and there is a lot of scholarship demonstrating why such beggar-thy-neighbor approaches result in bad collective outcomes. Indeed, multilateral agreements are in place to minimize this risk, including at the International Monetary Fund and the World Trade Organization…

Unlike the old days, the threat of currency wars is not directly related to trade imbalances and balance-of-payments crises. Rather, an important driver is major central banks’ pursuit of experimental measures in order to compensate for policy inadequacies and political dysfunction elsewhere…

The risk is that the phenomenon leads to widespread disruptions, as increasingly difficult national policy challenges stoke regional tensions and the multilateral system proves unable to reconcile imbalances safely. If policymakers are not careful – and lucky – the magnitude of this risk will increase significantly in the years ahead.

Meanwhile, the hypocrisy of nations like the United States and Japan – manipulating their own currencies counter to each other’s national interests becomes a symphony of xenophobia orchestrated by politicians and mass media, each less interested in truth than enhancing power and profit for the interests they serve. And that ain’t you and me.

Internally, they make legitimate points about liquidity, attempting to nudge the economy into something more than desultory bumps.

For even a broader examination of opinion and analysis on the topic, return to Project Syndicate and wander through their “Currency War Drums” Focal Point.

A Golden Rice opportunity

Finally, after 12 years of delay caused by opponents of genetically modified (GM) foods, so-called “golden rice” with vitamin A will be grown in the Philippines. Over those 12 years, about eight million children worldwide died from vitamin A deficiency. Are anti-GM advocates not partly responsible?

Golden rice is the most prominent example in the global controversy over GM foods, which pits a technology with some risks but incredible potential against the resistance of feel-good campaigning. Three billion people depend on rice as their staple food, with 10% at risk for vitamin A deficiency, which, according to the World Health Organization, causes 250,000-500,000 children to go blind each year. Of these, half die within a year. A study from the British medical journal The Lancet estimates that, in total, vitamin A deficiency kills 668,000 children under the age of five each year.

Yet, despite the cost in human lives, anti-GM campaigners – from Greenpeace to Naomi Klein – have derided efforts to use golden rice to avoid vitamin A deficiency…

The New York Times Magazinereported in 2001 that one would need to “eat 15 pounds of cooked golden rice a day” to get enough vitamin A. What was an exaggeration then is demonstrably wrong now. Two recent studies in the American Journal of Clinical Nutrition show that just 50 grams (roughly two ounces) of golden rice can provide 60% of the recommended daily intake of vitamin A. They show that golden rice is even better than spinach in providing vitamin A to children…

To be sure, handing out vitamin pills or adding vitamin A to staple products can make a difference. But it is not a sustainable solution to vitamin A deficiency. And, while it is cost-effective, recent published estimates indicate that golden rice is much more so.

Supplementation programs costs $4,300 for every life they save in India, whereas fortification programs cost about $2,700 for each life saved. Both are great deals. But golden rice would cost just $100 for every life saved from vitamin A deficiency…

Finally, it is often claimed that GM crops simply mean costlier seeds and less money for farmers. But farmers have a choice. More than five million cotton farmers in India have flocked to GM cotton, because it yields higher net incomes. Yes, the seeds are more expensive, but the rise in production offsets the additional cost.

Of course, no technology is without flaws, so regulatory oversight is useful [necessary]. But it is worth maintaining some perspective. In 2010, the European Commission, after considering 25 years of GM-organisms (GMOs) research, concluded that “there is, as of today, no scientific evidence associating GMOs with higher risks for the environment or for food and feed safety than conventional plants and organisms.”

Opposition to GM foods as one of many basic scientific solutions to food as scarce goods is no more rational than opposition to vaccination as one of many solutions to disease. The sad part of the equation is the number of well-meaning individuals who are willing to oppose the products of science based upon their fear of science and unfounded, unscientific so-called studies. Studies, I must say, which function like “creation science”, e.g., here’s the result we’re looking for – what can we do to get that result?

Well-meaning folks who gladly count themselves among progressives and other classes of human-oriented politics confound my sensibilities when they wander off into the realm of noble savage science. All them happy villagers are supposed to be better off with a lifespan of 38 years instead of 68 – or 78.

Spokesman for Heart Attack Grill – dies of heart attack

52-year-old John Alleman suffered a heart attack on the street outside the restaurant. The unofficial spokesman of the Heart Attack Grill in Las Vegas has died from a heart attack he suffered last week Monday.

According to the Las Vegas Sun, John Alleman, 52, suffered a heart attack on the street outside of the restaurant last week and was taken off of life support on Monday.

The owner of the restaurant, “Doctor” Jon Basso said in an interview with the Sun that Alleman “lived ate and breathed the Heart Attack Grill” and “lived a very full life.”

Alleman, a local security guard, was a famous regular at the restaurant who ate there almost every day. He was nicknamed “Patient John” and was featured in a picture on the menu…

According to Yahoo! News, this is the second time one of the restaurant’s unofficial spokesmen has died in two years.

The restaurant is known for it’s overly-fattening menu, one that features a “quadruple bypass burger” that pushes 10,000 calories. Last year, a man suffered an apparent heart attack in the restaurant while eating the restaurant’s “triple bypass burger.”

The saying goes, “you are what you eat”. That apparently includes dumb – on the way to being dead.

Should the Republican Party be saved from obsolescence?

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Red Edge, is a digital-advocacy group for conservative causes, and their days are typically spent designing software applications for groups like the Heritage Foundation, the Republican Governors Association and the U.S. Chamber of Commerce. Lately, however, Bret Jacobson and Ian Spencer have taken up evangelizing — and the sermon, delivered day after day to fellow conservatives in the form of a 61-point presentation, is a pitiless we-told-you-so elucidation of the ways in which Democrats have overwhelmed Republicans with their technological superiority…

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