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Who's Fairing Well, Going Down Toilet

Trade Deficits/Surpluses Around The World
by Eric deCarbonnel

How will other currencies be affected should the dollar collapse due to its horrible fundamentals? The answer to this question depends on a nation's reliance on the dollar to finance a balance of trade deficit.

Macro factors for 2009

Due to global slowdown, many nations who might otherwise have been running surpluses will instead be running trade deficits this year:

1) Global demand for raw materials will remain depressed until 2010 or later. This means that oil producers and other commodity exporters will be running trade deficits for the foreseeable future.

2) Global demand for luxury, durable, and capital goods will remain depressed until 2010 or later. This means that "new economy" nations like US, UK, and Japan will be running trade deficits this year.

How a Dollar Collapse will drag other currencies down

Among these many nations running trade deficits, there are four groups whose currencies are vulnerable to a US dollar collapse:

1) Nations who are financing trade deficits by selling off dollar reserves. Nations in this category include: India, Japan, Saudi Arabia, Russia, and most middle-east oil producers.

2) Nation who are financing trade deficits with large amounts of US foreign aid. Nations in this category include Israel and Egypt.

3) Nation who are offsetting trade deficits with remittances from citizens working abroad. Nations in this category include Mexico and India.

4) Nation who are trade heavily with US while running trade deficits with rest of the world. Nations in this category include Japan and Mexico.

Trade Balance will be key to a currency's survival

What all this means is that the trend in a nation's trade balance in the last three month will most probably determine the fate of its currency. With that in mind, here is a listing of trade balances from nations around the world.

Asia

South Korea
Currency: won—Survivor
Trade Balance: Growing Surplus
Story: South Korea posted current-account surplus for a second straight month in November.

China
Currency: yuan—Survivor
Trade Balance: Growing Surplus
Story: China's trade surplus widened to a record $40 billion, from $35.2 billion in October

India
Currency: rupee—Outlook Negative (Huge dollar reserves)
Trade Balance: Growing Deficit
Story: India's Trade Deficit Grows Worse

Japan
Currency: yen—Outlook Negative (Huge dollar reserves)
Trade Balance: Growing Deficit
Story: Japan trade deficit explodes

Vietnam
Currency: dong—Doomed
Trade Balance: Growing Deficit
Story: Vietnam's Trade Deficit Widens to Record $17 Billion

North America

United States
Currency: dollar—Doomed
Trade Balance: Growing Deficit
Story: Why US trade deficit is worsening

Canada
Currency: dollar—Unclear
Trade Balance: Shrinking Surplus
Story: Canadian Trade Surplus Narrows for a Second Month

Mexico
Currency: peso—Doomed
Trade Balance: Growing Deficit
Story: Mexico monthly trade deficit hits record $2.8B

South America

Chile
Currency: peso—Survivor
Trade Balance: Growing Surplus
Story: Chile November Trade Surplus Grew as Imports Shrank

Brazil
Currency: real—Unclear
Trade Balance: Shrinking Surplus
Story: Brazil’s Currency Falls as Trade Surplus Narrows

Europe (non-Euro)

Switzerland
Currency: Frank—Survivor
Trade Balance: Growing Surplus
Story: Swiss Trade Surplus, Retail Sales Rise; Fears Remain

Norway
Currency: krone—Unclear
Trade Balance: Shrinking Surplus
Story: Norway's global trade surplus slipped 0.3% on the year in October

Britain
Currency: pound—Doomed
Trade Balance: Growing Deficit
Story: UK trade deficit widens in October

Iceland
Currency: krona—Collapsed
Trade Balance: Collapsed
Story: How Iceland Collapsed, Events Turning Violent In Iceland

Ukraine
Currency: hryvnia—Collapsed
Trade Balance: Growing Deficit
Story: Panic as Ukraine's currency plummets, Ukrainian trade gap widens

Russia
Currency: ruble—Unclear (Huge dollar reserves)
Trade Balance: Shrinking Surplus
Story: Russia's trade surplus shrank to $7.1 billion in November

Turkey
Currency: lira—Unclear
Trade Balance: Shrinking Deficit
Story: Turkey's foreign trade deficit down 48.8 percent in November

Europe (Euro)

Euro Zone
Currency: Euro—Unclear
Trade Balance: Shrinking Surplus
Story: Euro area external trade surplus 0.9 bn euro

Germany (refuses to print money like US)
Currency: Euro—Unclear
Trade Balance: Growing Surplus
Story: German trade surplus unexpectedly expands In October

France (wants to print money like US)
Currency: Euro—Unclear
Trade Balance: Growing Deficit
Story: French trade deficit hits new record in October

Ireland
Currency: Euro—Unclear
Trade Balance: Growing Surplus
Story: Imports fell 14% in three months to October 2008; Exports rose 2%

Spain
Currency: Euro—Unclear
Trade Balance: Shrinking Deficit
Story: Spanish current account deficit narrows in october

Italy
Currency: Euro—Unclear
Trade Balance: Growing Deficit
Story: Italy non-EU trade deficit widens y/y in November
Side note: Ability to repay debt in question
Story: Italy's debt levels are greater than value of economy

Greece
Currency: Euro—Unclear
Trade Balance: Shrinking Deficit
Story: Greece's trade deficit dropped 13.9 pct in October
Side note: Ability to repay debt in question
Story: Greek debt spirals after Olympics

Middle East

Israel
Currency: shekel—Doomed
Trade Balance: Growing Deficit
Story: Israeli exports are plummeting

Saudi Arabia
Currency: riyal—Outlook Negative (Huge dollar reserves)
Trade Balance: Growing Deficit
Story: Saudi Arabia's 2009 Budget Deficit

Egypt
Currency: yuan—Doomed
Trade Balance: Growing Deficit
Story: Egypt govt deficit above target in July-Sept

Africa

Zimbabwe
Currency: Dollar—Collapsed
Trade Balance: Collapsed
Story: Zimbabwe: Living with hyperinflation

South Africa
Currency: rand—Doomed
Trade Balance: Growing Deficit
Story: South Africa’s rand falls against euro as trade deficit widens

South Pacific

New Zealand
Currency: dollar—Doomed
Trade Balance: Growing Deficit
Story: New Zealand’s annual current account deficit increased to 8.6 percent of GDP

Australian
Currency: dollar—Doomed
Trade Balance: Growing Deficit
Story: Australian Trade Deficit Grows for 75th Consecutive Month

Brits Worry 2 Hours a Day Over Economy

LONDON (Reuters) - Britain is becoming a nation of worriers, according to a new survey, with the financial crisis giving people ever more reason to fret about their lives.

The average person now spends 2-1/4 hours of every day worrying -- six and half years of the average life span -- a figure up 30 minutes a day from last year, according to the worry index compiled by reallyworried.com, a support group.

Young adults -- those aged between 16 and 24 -- worry the most, and women worry substantially more than men, according to the survey of 1,400 people nationwide.

The top five concerns in 2008 were: the cost of living, energy prices, personal health, outgoings and income, and personal debt.

Job security, which last year didn't figure in the top 25 worries, shot up to number 7 in the rankings, one notch below recession and a bigger concern than crime.

So much fretting can take a terrible toll on people's health and their sex lives, according to the survey's compilers.

One in five questioned said they drowned their concerns in drink, up 50 percent on last year. One in six said they now shy away from sex because of their constant fretting.

"It is alarming to learn from this research just how many people in Britain are chronic worriers," said Phillip Hodson, a member of the British Association for Counselling and Psychotherapy.

"Worry is the central component of all anxiety disorders and most depression. It is a sign of a double difficulty -- that we cannot get our problems into perspective nor take effective action to solve them."

Reflecting a national characteristic for not unburdening on others, nearly 40 percent of Britons say they keep their worries to themselves, with less than a third discussing them with a partner.

"The research shows that most people in Britain are really worried," said Richard Rubin, the founder of reallyworried.com

"Whether it's about something monumental like facing home repossession, or something relatively simple to sort out such as changing energy suppliers."

Is Yellowstone Volcano Getting Ready?

http://www.seis.utah.edu/req2webdir/recenteqs/Maps/Yellowstone.html

War College, Civil Unrest -ARMY

Unrest caused by bad economy may require military action, report says
By Diana Washington Valdez / El Paso Times
Posted: 12/29/2008 12:00:00 AM MST


EL PASO -- A U.S. Army War College report warns an economic crisis in the United States could lead to massive civil unrest and the need to call on the military to restore order.
Retired Army Lt. Col. Nathan Freir wrote the report "Known Unknowns: Unconventional Strategic Shocks in Defense Strategy Development," which the Army think tank in Carlisle, Pa., recently released.

"Widespread civil violence inside the United States would force the defense establishment to reorient priorities ... to defend basic domestic order and human security," the report said, in case of "unforeseen economic collapse," "pervasive public health emergencies," and "catastrophic natural and human disasters," among other possible crises.

The report also suggests the new (Barack Obama) administration could face a "strategic shock" within the first eight months in office.

Fort Bliss spokeswoman Jean Offutt said the Army post is not involved in any recent talks about a potential military response to civil unrest.

The report become a hot Internet item after Phoenix police told the Phoenix Business Journal they're prepared to deal with such an event, and the International Monetary Fund's managing director, Dominique Strauss-Khan, said social unrest could spread to advanced countries if the global economic crisis worsens.

Javier Sambrano, spokesman for the El Paso Police Department, said city police have trained for years so they can address any contingency, but not with the military.

"The


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police (department) trains on an ongoing basis as part of its Mobile Field Force Training," Sambrano said. "As a result, the police will be able to respond to emergency situations, such as looting or a big civil unrest. The police (department) does not train with soldiers."
Earlier this year, Pentagon officials said as many as 20,000 soldiers under the U.S. Northern Command (NORTHCOM) will be trained within the next three years to work with civilian law enforcement in homeland security.

Joint Task Force-North, a joint command at Biggs Army Airfield, which conducts surveillance and intelligence along the border, comes under NORTHCOM. No one was available at JTF-North to comment on the Army War College's report. NORTHCOM was created after the 9-11 attacks to coordinate homeland security efforts.

Soldiers under the former Joint Task Force-6 (now JTF-North) supported the Border Patrol in El Paso with its drug-interdiction operations.

In case civilian authorities request help or become overwhelmed, El Paso has several National Guard and military reserve units that can be called on. In 1992, National Guard and active Marine and Army units were deployed to help police control riots and looting in Los Angeles.

Charles Boehmer, political science professor at the University of Texas at El Paso, was skeptical about the Army War College report.

"The military was not called out during the Great Depression, and I don't think our economic problems are as bad as they were then," he said. "The military always has contingency plans. It's a think tank's job to come up with scenarios, but that doesn't mean it represents an active interest on the part of the (Pentagon)."

Jim Rogers, Prepare for 2009

You Can Take Some of It with You

Architects create American-style suburbs overseas


By DAISY NGUYEN
Associated Press Writer

LOS ANGELES (AP) - Architect Andy Feola keeps running into Southern California colleagues in some of the world's most exotic locations—from the Egyptian desert to China to Azerbaijan.
"We'll scratch our heads and ask 'Why are you here?'" said Feola, president of F+A Architects in Pasadena. "Well, I'm here for the same reasons you're here."

A growing number of architects and urban planners are finding work overseas as the domestic real estate slump persists. An emerging affluent class abroad is drawn to suburbs with U.S. names that mimic the American ideal—down to the master bathroom and tree-lined sidewalk.

A 2006 survey of American Institute of Architects members shows that large architecture firms with more than 100 employees reported billings from international work doubled in four years. Meanwhile, billings in the U.S. this year dropped to the lowest point in the 12 years the survey has been conducted.

While there's no hard data, more American-made windows, roofing systems, furnaces and other specialized materials are being shipped overseas because projects designed by Americans are built to U.S. construction standards, said Jim Haughey, an economist with Reed Construction Data, which tracks the construction industry.

"The English concept of a man's home is his castle is true in most parts of Asia, the Mideast and Eastern Europe," said Jeff Rossely, a Bahrain-based developer of shopping malls, resorts and residential communities in the Middle East. "If you look at how countries are moving up the socio-economic ladder, some of the things they all want is a car, a house, a nice view and air conditioning."

The trend started during the early 1990s U.S. housing downturn and has intensified in recent years. Firms that ventured abroad since that time say doing so has helped them weather economic slowdowns in certain markets.

It has also created opportunities to design on a grander and more creative scale. At times, architects are creating huge master-planned communities encompassing a mix of single-family homes with high rises, parks and shopping centers. Feola's firm is designing a shopping and entertainment complex for New Cairo, a metropolis built from scratch for roughly 200,000 residents in Egypt. The idea is to avoid some of the mistakes of the past and create a mixed-use environment where people rely less on their car to get to shops and services.

American firms are behind an eco-friendly island connected to Shanghai by rail, and a new township in northern Indian loaded with luxury villas, apartments, shops, parks and schools.

Curiously, some of the developments overseas look and sound a lot like California suburbs marketed to affluent customers who have spent time living in the U.S. or attracted to an American suburban lifestyle.

Feola's firm, which does 90 percent of its projects outside the U.S. and is best known for designing a shopping mall in Dubai with an indoor ski slope, was responsible for a development outside of Beijing called Napa Valley that has little resemblance to the winemaking region.

Grassy front lawns and driveways lead to pastel-colored homes that mimic French, Italian or Spanish architectural styles. Customized kitchens, screening rooms and basement wine cellars are very different from Chairman Mao's vision of communal living.

"It's hard to tell you're not in Southern California," Feola said.

Another Beijing suburb is aptly named Orange County, which sold out within days of opening in 2002. Chinese developers hired Newport Beach firm Bassenian Lagoni to make a replica of homes they saw south of Los Angeles. With the eerie resemblance to the American suburb, critics derided the homes as "McMansions."

"It's too bad that we as Americans are turning away from suburban sprawl as Asia adopts it," said Robert Fishman, a professor of architecture and urban planning at the University of Michigan.

Architect Aram Bassenian, whose Mediterranean-style homes have come to define California's ritzy suburbs, contends that architects shouldn't shoulder all the blame. California borrows ideas from elsewhere, and for centuries cities have been designed or influenced by outsiders.

Many advances in green home design that were developed in the U.S. are being introduced overseas, including better insulation or ventilation to rely less on fossil fuels for heating and air conditioning.

To make the homes fit with the local culture, outdoor kitchens are added in Asia for frying food, and trellises are installed to protect Mediterranean homes from intense sunlight.

"We don't create the demand, we respond to people's needs for shelter, for housing," Bassenian said.

Despite criticism, suburban communities are sprouting in Latin America, North Africa, South Asia and Eastern Europe. To promote developments that won't deplete natural resources, land use experts at the Urban Land Institute has been taking foreign groups on "study tours" of U.S. communities and recently opened an education center in the United Arab Emirates.

Developers say they look to American architects because they have a track record of designing successful shopping malls, resorts and other high-end projects.

Bassenian said he doesn't take lightly the task of creating a built-in environment for people millions of miles away.

"It is both a daunting responsibility as well as an incredible privilege to think that what we do here will shape how somebody lives around the world," Bassenian said.