China, Olympics, and Visas

UPDATE: More information about the Olympics is available at http://www.2008chinaolympics.com


I wanted to send you this article since the Chinese Summer Olympics are coming up soon. For background click here http://brianleesblog.blogspot.com/2008/04/activist-olympics.html. The article talks about China's reactions to being the Olympic host and why they are doing the things they are doing. I hope you find this interesting.


China, the Olympics and the Visa Mystery
July 29, 2008

By Rodger Baker
Related Links
Managing Change in ChinaFREE PODCAST
Related Special Topic Pages
2008 Olympics: Beijing’s Hopes and Hurdles
China’s Economic ImbalanceSomething extraordinary is happening in China, and we are not talking about the Olympics. Rather, Chinese officials have been clamping down on visa applications and implementing bureaucratic impediments to new and renewed visa applications under the guise of pre-Olympic security. In some ways, Beijing’s plan for a safe and secure Olympics appears based on the premise that if no one shows up, there can be no trouble. But placing restrictions on the movement of managers and employees of foreign businesses operating in China, even if for a limited time as Chinese officials have been at pains to reassure, makes little sense from the standpoint of gaining political and economic benefits from hosting the Olympics. Something just isn’t right.
The Post-’70s Economic FrameworkSince China’s economic reform and opening in the late 1970s, China’s economic policy — and thus the basis for the overall development of the nation — has been based on a simple two-part framework. First, draw in as much foreign investment as possible and use the money and technology to strengthen China while using the subsequent economic leverage to secure China. And second, encourage growth for growth’s sake to ensure an ever-increasing flow of money through the system to provide employment and social services to a massive and urbanizing population. Key to this policy has been creating a very open environment for foreign businesses, which bring money, technology and expertise and use their influence with their own governments to keep stable international relations with China — hence reducing international and economic frictions and increasing the efficiency of the supply chain. For more than two decades, Chinese national strategy has thus revolved around the principle of encouraging investment, joint ventures and wholly-owned foreign enterprises in China. There have been two foundations for this strategy: the evolution of financial facilities for transferring and controlling foreign money with a level of transparency nearing international standards, and the ease of movement of personnel in and out of China.It is this latter point that recently has been hit the hardest. Over the past several months as the Beijing Olympics drew nearer, the Chinese government has effectively frozen up most financial reform plans. It also has issued a raft of new security measures not entirely unlike other host cities in the post 9/11 security environment. But China has gone several steps further than its predecessor hosts, placing official and bureaucratic impediments on visa applications. This not only has targeted potential “troublemaking” rights advocates, it has also impacted foreign businesses ranging from invited guests to the Olympic games to managers and employees of foreign companies in China.
Business and the New Visa HasslesThe visa restrictions in particular have been a source of angst for foreign businesses and business associations. Many smaller operations may circumvent Chinese regulations and travel on tourist visas (provided they can still obtain them). And there are ways around the tighter regulations or bureaucratic hurdles if one has the right connections or the willingness to apply several times or from different locations. But multinational corporations are less willing to jeopardize their operations by skirting the laws. Instead, they are making their concerns known to Beijing and hoping that restrictions are eased in September, as Beijing has rumored and hinted will occur. In general, these visa restrictions have been brushed aside by foreign observers as simply paranoia on China’s part regarding protests or terrorist attacks during the Olympics. In many ways, however, this makes little sense. First and most obvious, the Olympics were supposed to highlight the opening of China — not restrict the very people who have made China a key part of the global economy. Second, imposing tight restrictions in Shanghai, the center of the Chinese foreign-domestic economic nexus, makes little sense on grounds of Olympic security since Shanghai is playing only a minor role in the games compared to Beijing and Qingdao. (Think shutting down visas to New York during the Atlanta games in the name of security, though Shanghai admittedly is hosting some soccer matches.) Shutting down business visas to keep terrorists out makes little sense anyway — it is hard to imagine Uighur militants traveling on business visas as representatives of foreign multinationals. Furthermore, by restricting business visas — even if not across the board in a coherent fashion — China is putting a massive strain not only on the ability of businesses to trust Chinese regulations and business relations with the government, but also on the fluidity of the global supply chain. Shutting down or impeding visas affects much more than delaying the movement of a single individual into China; it impacts the ability of multinational corporations to move, replace or supplement managers and dealmakers in China. A delayed visa applications of just three months still represents an entire quarter that multinational corporations cannot reliably manage their businesses operations i n China, and that doesn’t take into account the visa backlog when restrictions are loosened or lifted. Disrupting an integral part of the global economy for a full quarter because of an international exposition makes little sense. The Germans in 1936 didn’t do it, the Russians in 1980 didn’t — no one has. One doesn’t simply shut down international business transactions for three months or more to stop a terrorist — and particularly not China, which depends on foreign direct investment. This is not simply an inconvenience for some people: It is the imposition of friction on a part of the system that is supposed to be frictionless. And it is not merely individuals who are affected, but the relations between mammoth companies.
A Period of Erratic PoliciesChina’s behavior has been erratic for several months now, if not for the past few years, with the implementation of new and often contradictory security and economic policies. These have all been brushed aside as somehow related to preparation for the Olympics. But they are in fact anomalous. China’s behavior is not that of a country trying to show its best side for the international community, nor that of a nation simply concerned about potential terrorist or public relations threats to the Olympic games. In another two months, after the Olympics and Paralympics have ended, it will become clearer whether this was a spate of excessive paranoia or a reflection of a much more significant crisis facing the Chinese leadership — and the evidence increasingly points toward the latter. As mentioned, China’s economic policies in the reform and opening era have been based on the idea of growth. This in many ways simply reflects the Asian economic model of maintaining cheap lending policies at home, subsidizing exports, flowing money through the system and focusing on revenue rather than profits. In essence, it is growth for the sake of growth. This was the policy of Japan, South Korea, Indonesia, Malaysia and Thailand. And it led each of those countries to a final crisis point, striking Japan first in the early 1990s and the rest of the Asian tigers a few years later. But China managed to avoid each of the previous Asian economic crises points, as it was on the lagging end of growth and investment curves. Following the Asian economic crisis, China fully recovered from the international stigma of Tiananmen Square and became the global economic darling. By the time the 21st century rolled around, China was already taking on the mantle of the Japanese and other Asians. It began to be labeled both an economic miracle and a rising power; a future challenge to U.S. economic dominance with all the political ramifications that brought. Were it not for 9/11, Washington would have squared off with Beijing to prevent the so-called China rise. The reprieve of international pressure that came when U.S. attention turned squarely toward Afghanistan and then Iraq freed China’s leaders from an external stress that could have brought about a very different set of economic and political decisions. With the United States preoccupied, and no other major power really challenging China, Beijing shifted its attention to domestic issues, and its review quickly revealed the stresses to the system. These did not primarily come from “splittist” forces like the Tibetans or the Falun Gong, but rather from the economic policies that had brought China from the Third World to the center of the global economic system. Beijing is well-aware that should it continue with its current economic policies, it will face the same risk of crisis as Japan, South Korea and the rest of Asia. It is also aware that growing internal challenges — from the spread and invasiveness of corruption to geographic economic imbalances, from rising social unrest to massive dislocation of populations ̵ 2; are causing immediate problems.
Economics from Mao to HuMao Zedong built a China designed to be self-sufficient and massively redundant. Every province, every city, every factory was supposed to be a self-contained unit, making the country capable of weathering nearly any military attack. Deng Xiaoping didn’t get rid of these redundancies when he opened the economy to foreign investment. Instead, he and his successors encouraged local officials to work to attract foreign investment and technology so as to raise China’s economic standard more rapidly. By the time Jiang Zemin was in power it had become clear that the regionally and locally driven economic policies threatened to throw China back into its old cycle of decentralization — and, ultimately, competing centers of power. Attempts by Jiang to correct this through the Go West program, for example, came to naught after meeting massive resistance in the wealthy c oastal provinces. The central government accordingly backed off, shifting its attention to reclaiming centralized authority over the military. Hu Jintao has sought once again to try to address the problem of the concentration of economic power in China’s coastal provinces and cities through his Harmonious Society initiative. The idea is to redistribute wealth and economic power, regain central authority over the economy, and at the same time reduce redundancies and inefficiencies in the Chinese economy. With minimal external interference, Hu was able to test policies that by their very nature were going to sacrifice short-term social stability in the name of long-term economic stability. Growth was replaced by sustainability as the target; longer-term redistribution of economic growth engines would replace short-term employment and social stability. This was a risky proposition, and one that met strong resistance in China. But the alternative was to sit back and wait for the inevitable economic crisis and the social repercussions thereto. In some ways, Hu was suggesting that China risk stability in the short term to preserve stability in the long run. But Hu didn’t anticipate the massive surge in global commodity prices, particularly of food and oil. This was compounded by increased international scrutiny over China’s human rights record ahead of the Olympics, natural disasters hitting at the availability and distribution of goods, a rise in domestic social unrest triggered by local government policies and economic corruption, several attempted and successful attacks against China’s transportation infrastructure, and the uprising in Tibet. Thus, the already-risky policies the central government was pursuing suddenly looked more destructive than constructive from the point of view of continued rule by the Communist Party of China (CPC). The global economic slowdown was the external impetus China feared — something that could undermine the flow of capital and leave Beijing unable to control the outcome of a reduction in the inflow of capital. At the same time, the internal social tensions triggered both by Hu’s attempts to reshape the Chinese economy and by the slow pace of those changes created a crisis for the Chinese leadership. It was hard enough internally to control a measured economic slowdown to reshape the economic structure of China, but quite another thing altogether to have such a slowdown imposed on China from outside at the very moment social stability was in a critical state at home.
A Government in CrisisChina’s rapid and contradictory economic and security policies, rising social tensions, and seemingly counterproductive visa regulations appear to be signs of a government in crisis. They are the reactionary policies of a central leadership trying to preserve its authority, stabilize social stability and postpone an economic crisis. At the same time, we see signs that the local governments, and even organs of the central government, are putting up steady resistance to the announcements coming from Beijing. Slapping restrictions on foreign businessmen may make little sense from a broader business continuity sense, but if the point is to begin breaking the backs of the local governments — whose strength lies in their relations with foreign businesses — then the moves may make more sense. If the central government has reached the point that it is willing to risk its international business role to rein in wayward local officials, however, then the Chinese leadership sees a major crisis looming or already under way. It is one thing to toss out a few local leaders and replace them, quite another to undermine the structure of the Chinese economy for the sake of regaining control over local officials. But if Chinese history since 1949 (and really quite a ways before) is any guide, the core of the CPC leadership is willing to sacrifice social and economic stability to preserve power. One need only look at the Great Leap Forward, the Cultural Revolution or the crackdown at Tiananmen Square for evidence of this. Revolution is not, after all, a dinner party, and maintaining CPC control is paramount to the government. After each major revolution or crisis, China eventually has recovered. The Cultural Revolution was followed by diplomatic relations with the United States, Tiananmen Square was put aside as China joined the World Trade Organization and surged ahead in gross domestic product (GDP). Certainly, there was change among the leadership and in the way the party dealt with policies at home and abroad. But if there is the likelihood of loss of control due to an impending economic crisis, better to have some role in shaping the crisis to preserve the chance of maintaining a role in the future political structure than to sit by and try to clean up as things fall apart. The Party in fact has a long history of taking a self-generated crisis/revolution over an externally or domestically initiated one.It may be that the contradictory policies Beijing is tossing around these days will simply fade away after September and things will get back to “normal.” But already, Chinese officials are downplaying the previously hyped political and economic benefits of the Olympic games. They are now warning that economic conditions may not be so strong in the future, and at least internally discussing the distinct possibility that at least certain regions of China are facing the same economic crises faced by their mentors Japan, South Korea and the Asian tigers.
Internal Crises vs. the EconomyA recent article in the Global Times, a paper that addresses myriad topics of domestic and international significance and is read among China’s leaders, discussed how economics is not the best measure of strength. It referred to the overall comparative GDP and the size of China’s military in the late 1800s. Then, China was considered at its weakest, but from an economic or military perspective it could have been considered comparable to the global powers of the day. This hints at the deeper internal debate in Beijing, where true national strength and the role of the economy is under discussion. Assumptions that China is only focused on continued good economic ties with the world shouldn’t be taken as gospel — China has a track record of shutting down external connections when internal crises brew. Numerous polices are being thrown around in firefighting fashion, including blocking or at least hindering foreign business movement in and out of the country and tightening the flow of foreign capital in both directions. They are coming in reaction to flare-ups in economic, environmental, public relations and social arenas. Energy policies are making less sense, imbalances in supply and demand are growing and seemingly contradictory policies are being issued. Social unrest, or at least local media coverage of such unrest, seems to be increasing; either is a sign of weakening control. Local officials are still failing to fall in line with central government edicts. Strategic state enterprises like China National Petroleum Corp., China Petroleum & Chemical Corp. and the China Development Bank are all defyi ng state-council orders — and the State Council itself is apparently going head-to-head with major policy bodies long given control over economic policies. Something extraordinary is happening in China. And while not everyone may want that to be the case, and so have sought to use the Olympics to explain things away, the easy explanation simply doesn’t make enough sense.Tell Stratfor What You Think

Border Patrol Agents

I wanted to let you know what this town has done lately. The link is here http://www.elpasotimes.com/news/ci_10027171 if you want to read further.

Appeals court upholds prison for ex-agents
By Daniel Borunda / El Paso Times
Article Launched: 07/29/2008 12:00:00 AM MDT
Forum discussion: Comment on this story EL PASO -- The Fifth Circuit Court of Appeals on Monday upheld mandatory 10-year prison sentences for former El Paso Border Patrol agents Ignacio Ramos and Jose Alonso Compean, convicted of civil-rights violations in 2006 after shooting an admitted drug smuggler and then covering it up.
The decision by a three-judge panel renewed calls by some members of Congress for President Bush to commute the sentences of the imprisoned agents. -
"It was a shock to us. It's a complete shock," said Ra mos's wife, Monica Ramos, her voice cracking with emotion hours after the
Imprisoned border agents
Do you agree with the decision to uphold the convictions of border patrol agents Ignacio Ramos and Jose Alonso Compean?
Yes
No
decision was announced. After a hearing in December in New Orleans, supporters of the ex-agents had felt that an appeals decision would go their way.
But the court upheld all convictions, except for charges of tampering with an official proceeding because the Border Patrol investigation did not meet statutes.
"Our fight continues. My concern right now is keeping my husband safe where he is at (in prison). He is in segregation and it is tough," Monica Ramos said. She said she was not sure about their next legal move.
Ramos was sentenced to 11 years and Compean 12 years, mainly due to a mandatory minimum 10-year sentence on the federal charge of discharge of a firearm in commission of crime. The law does not exclude law enforcement officers. "The court has validated what this office has said all along -- this prosecution was about the rule of law, plain and simple," U.S. Attorney Johnny Sutton said in a statement.
In February 2005, Osvaldo Aldrete Davila was shot in the buttocks as he ran back to Mexico after abandoning a van filled with marijuana near Fabens. Prosecutors said Aldrete Davila was unarmed. The agents claimed the shooting was in self-defense and it was a mistake to not report it to supervisors.
"The jury was the fact-finder. The jury heard all the evidence. The jury returned the verdict. The jury did not believe the Border Patrol agents. It convicted them," the 45-page appeals court opinion stated.
Aldrete Davila is scheduled to be sentenced Aug. 6 after pleading guilty to smuggling more than 100 kilos of marijuan a in the fall of 2005.
Aldrete faces a minimum mandatory sentence of five years and up to 40 years in prison.

Jupiter's Red Spots

I don't know if you're interested in astronomy, but if you are. I'm sending this for you to view if you are interested. I hope you enjoy it.



Great Red Spot eats 'Baby'A recently discovered hurricane-like storm on Jupiter's surface, called Baby Red Spot, was sucked up by the Great Red Spot.

Economics Reading - Applied Economics

I wanted to let you know about this book if you are interested in reading about economics. Of course in the Kingdom of God http://www.gnmagazine.org/booklets/GK/, some of these laws are different, not only because of a lack of sin, but also a lack of scarcity, as it says in Genesis that mankind would have to "toil for their productivity" as a punishment for Adam's sin. Anyway, this book does talk about some of the hot button issues of our time - labor, medical care, and housing - as the Contents Listing below describes, in an easy to understand way. If you are watching the news and some of the issues are somewhat confusing, then this is a great book to read to help with your understanding. I do hope that you find this interesting.

Applied Economics by Thomas Sowell
http://www.worldcat.org/oclc/52251413&referer=brief_results

Contents:
Politics versus economics -- Free and unfree labor -- The economics of medical care -- The economics of housing -- Risky business -- The economics of discrimination -- The economic development of nations.

Columns by Thomas Sowell
Get Thomas Sowell’s columns & more emailed to you
Thomas Sowell was born in North Carolina and grew up in Harlem. As with many others in his neighborhood, he left home early and did not finish high school. The next few years were difficult ones, but eventually he joined the Marine Corps and became a photographer in the Korean War. After leaving the service, Sowell entered Harvard University, worked a part-time job as a photographer and studied the science that would become his passion and profession: economics.
After graduating magna cum laude from Harvard University (1958), he went on to receive his master's in economics from Columbia University (1959) and a doctorate in economics from the University of Chicago (1968).
In the early '60s, Sowell held jobs as an economist with the Department of Labor and AT&T. But his real interest was in teaching and scholarship. In 1965, at Cornell University, he began the first of many professorships. His other teaching assignments include Rutgers University, Amherst University, Brandeis University and the University of California at Los Angeles, where he taught in the early '70s and also from 1984 to 1989.
Sowell has published a large volume of writing. His dozen books, as well as numerous articles and essays, cover a wide range of topics, from classic economic theory to judicial activism, from civil rights to choosing the right college. Moreover, much of his writing is considered ground-breaking -- work that will outlive the great majority of scholarship done today.
Though Sowell had been a regular contributor to newspapers in the late '70s and early '80s, he did not begin his career as a newspaper columnist until 1984. George F. Will's writing, says Sowell, proved to him that someone could say something of substance in so short a space (750 words). And besides, writing for the general public enables him to address the heart of issues without the smoke and mirrors that so often accompany academic writing.
In 1990, he won the prestigious Francis Boyer Award, presented by The American Enterprise Institute.
Currently Sowell is a senior fellow at the Hoover Institute in Stanford, Calif.

Kings of the East? Russia and China

I wanted to send this article which applies to two countries that might be part of the "kings of the east" mentioned in Revelation. The article talks about how they get along, which usually hasn't been all that well. Anyway, I thought you might enjoy reading this.

China and Russia’s Geographic Divide
July 22, 2008

By Peter Zeihan
Related Theme Page
Central Asian Energy: Circumventing RussiaSince the Soviet fall, Russian generals, intelligence chiefs and foreign policy personnel have often waxed philosophic about the inevitability of a global alliance to hem in U.S. power — often using the rhetoric of a “multipolar world.” Central in all of these plans has been not only the implied leadership of Russia, but the implied presence of China. At first glance, the two seem natural partners. China has a booming manufacturing economy, while Russia boasts growing exports of raw materials. But a closer look at the geography of the two paints a very different picture, while the history of the two tells an extraordinarily different story. If anything, it is no small miracle that the two have never found themselves facing each other in a brutal war.
A Hostile GeographyRussia east of the Urals and the Chinese interior are empty, forbidding places. Nearly all of Russia’s population is hard up on its western border, while China’s is in snug against its eastern and southern coasts. There is an ocean’s worth of nothing between them. But while ships can ply the actual ocean cheaply, potentially boosting economic activity, trade between Russia and China does not come easy. Moscow and Beijing are farther apart than Washington and London, and the cost of building meaningful infrastructure between the two would run in the hundreds of billions. With the exception of some resource development and sales in the border region, integration between the two simply does not make economic sense.Yet, distance aside, there are no real barriers between the two. Southwestern Siberia is a long stretch of flatness that flows seamlessly into the steppes of Central Asia and the highlands of western China. This open expanse is the eastern end of the old Silk Road — proof that luxury trade is often feasible where more conventional trade simply cannot pay the transport bill. But where caravans bearing spice and silk can pass, so can armies bearing less desirable “goods and services.”
Ominously for Russia, there is little to separate the Russian Far East — where most of the Russian population east of the Urals resides — from Manchuria. And not only is there a 15:1 population imbalance here in favor of the Chinese (and not only has Beijing quietly encouraged Chinese immigration across its border with Russia since the Soviet breakup), but the Russian Far East is blocked from easy access to the rest of Russia by the towering mountains surrounding Lake Baikal. So while the two parts of Russia have minimal barriers separating them from China, they do have barriers separating them from each other. Russia can thus only hold its Far East so long as China lacks the desire to take it.Geography also drives the two in different directions for economic reasons. For the same reason that trade between the two is unlikely, developing Russia would be an intimidating task. Unlike China or the United States, Russia’s rivers for the most part do not interconnect, and none of the major rivers go anywhere useful. Russia has loads of coastline, but nowhere does coast meld with population centers and ice-free ocean access. The best the country has is remote Murmansk.So Russia’s development — doubly so east of the Urals — largely mirrors Africa’s: limited infrastructure primarily concerned with exploiting mineral deposits. Anything more holistic is simply too expensive to justify.In contrast, China boasts substantial populations along its warm coasts. This access to transport allows China to industrialize more readily than Russia, but China shares easily crossed land borders with no natural trading partner. Its only serious option for international trade lies in maritime shipping. Yet, because land transport is “merely” difficult and not impossible, China must dedicate resources to a land-based military. This makes China militarily both vulnerable to — yet economically dependent upon — sea powers, both for access to raw materials and to ship its goods to market. The dominant naval power of today is not land-centric Russia, but the United States. To be economically successful China must at least have a civil and neutral relationship with the $14-trillion-economy-wielding and 11-aircraft-carrier-strike-group-toting United States. Russia barely even enters into China’s economic equation.And the way Russia does figure into that equation — Central Asia — is not a positive, because there is an additional complication. Natural gas produced in the Central Asian states until recently was part and parcel of overall Soviet production. Since those states’ infrastructure ran exclusively north into Russia, Moscow could count on this captive output to sign European supply contracts at a pittance. The Kremlin then uses those contracts as an anvil over Europe to extract political concessions. “China” has been around a long time, but the borders of today represent the largest that the Chinese state has ever been. To prevent its outer provinces from breaking away (as they have many times in China’s past), one of Beijing’s geopolitical imperatives is to lash those provinces to the center as firmly as possible. Beijing has done this in two ways. First, it has stocked these outlying regions with Han Chinese to dilute the identity of the indigenous populations and culturally lash the regions to the center. Second, it has physically and economically lashed them to the center via building loads of infrastructure. So, in the past 15 years, China has engaged in a flurry of road, pipeline and rail construction to places such as Tibet and Xinjiang. Merge these two seemingly minor details and it suddenly becomes clear that much of the mineral and energy riches of formerly Soviet Central Asia — resources that Russia must have to maintain its energy leverage over Europe — are now just as close to China’s infrastructure network as they are to Russia’s. And obtaining those resources is one of the few possible means China has of mitigating its vulnerability to U.S. naval power.All that is needed are some pieces of connecting infrastructure to allow those resources to flow east to China instead of north to Russia. Those connections — road, pipe and rail — are already under construction. The Russians suddenly have some very active competition in a region they have thought of as their exclusive playground, not to mention a potential highway to Russia proper, for the past quarter millennia. Control of Central Asia is now a strategic imperative for both.
A Cold HistoryThe history of the two powers — rarely warm, oftentimes bitter — meshes well with the characteristics of the region’s geography. From the Chinese point of view, Russia is a relative newcomer to Asia, having started claiming territory east of the Urals only in the late 1500s, and having spent most of its blood, sweat and tears in the region in Central Asia rather than the Far East. Russian efforts in the Far East amounted to little more than a string of small outposts even when Moscow began claiming Pacific territory in the late 1700s. Still, by 1700, Russian strength was climbing while Chinese power was waning under the onslaught of European colonialism, enabling a still-militarily weak Russian force to begin occupying chunks of northeastern China. With a bit of bluff and guile, Russia formally annexed what is now Amur province from Qing China in the 1858 Treaty of Aigun, and shortly thereafter the Chinese-Russian border of today was established. China attempted to resist even after Aigun — lumping the document with the other “unequal treaties” that weakened Chinese sovereignty and territorial integrity — and indeed the Russians had more or less swindled China out of a million square miles of territory. But Beijing simply had too many other issues going on to mount a serious resistance (the Opium Wars come to mind). Once the Trans-Siberian Railway was completed early in the 20th century, Russia was able to back up its claims with troops, and the issue definitively moved to the back burner — especially as the rising colonial aspirations of Japan occupied more attention than China had to spare. The bilateral relationship warmed somewhat after the end of World War II, with Russian energy and weapons critical to Mao’s consolidation of power (although notably, Stalin originally backed Mao’s rival, Chiang Kai-shek). But this camaraderie was not to last. Stalin did everything he could first to egg on the North Korean government to invade South Korea, and then to nudge the Chinese into backing the North Koreans against the U.S.-led U.N. counterattack. But while the USSR provided weapons to China in the Korean War, Moscow never sent troops — and when the war ended, Stalin had the temerity to submit a bill to Bejing for services rendered. Sino-Soviet relations never really improved after that. As part of Cold War maneuvers, Russia allied with India and North Vietnam, both longtime Chinese rivals. Therein lay the groundwork of a U.S.-Chinese rapprochement, and rapid-fire events quickly drove the Chinese and Soviets apart. The United States and China both backed Pakistan in the Indo-Pakistani wars. Some 60,000 Uighurs — a Muslim minority that the Chinese still fear hold separatist aspirations — fled across the Soviet border in 1962. In 1965, the Chinese energy industry matured to the point that Soviet oil was no longer required to keep the Chinese economy afloat. Later, Washington turned a blind eye to the horrors of the Chinese-bankrolled Khmer Rouge in Cambodia to destabilize Soviet-backed Vietnam. When all was said and done, the Soviet Union faced a foe to its south every bit as implacable as those on its w estern and eastern flanks. But the seminal event that made the Sino-Soviet split inevitable was a series of military clashes in the summer of 1969 over some riverine islands in the Amur.
TodayChina and Russia are anything but natural partners. While their economic interests may seem complementary, geography dictates that their actual connections will be sharply limited. Moreover, in their roles of resource provider versus producer, they actually have a commercial relationship analogous to that of Organization of the Petroleum Exporting Countries versus the United States — with all the angst and distrust that suggests.Strategically, the two tend to swim in different pools, but they still share a borderland. Borderlands — where one great state flows into another — are dangerous places, as their precise locations ebb and flow with the geopolitical tides. And the only thing more likely to generate borderland friction than when one side is strong and the other weak is when both sides are strong. Currently, both China and Russia are becoming more powerful simultaneously, creating ample likelihood that the two will slide toward confrontation in regions of overlapping interest.So why Stratfor’s interest in the topic? The primary reason the United States is the most powerful state in the international system is that it faces no challengers on its continent. (Canada is de facto integrated into the United States, and Mexico — even were it stable and rich — would still be separated from the United States by a sizable desert.) This allows the United States to develop in peace and focus its efforts on projecting its power outward rather than defending itself. For the United States to be threatened, a continental-sized power or coalition of similar or greater size would need to arise. So long as China and Russia remain at odds, the United States does not have to work very hard to maintain its position. Which brings us back to the island battles that cemented the Sino-Soviet split: Russia is giving them back. On July 21, Russian Foreign Minister Sergei Lavrov put Russia’s final signature — in a deal already signed and ratified by both sides — to a deal that commits Russia to the imminent removal of its forces from 67 square miles of territory on a series of Amur riverine islands. The Russians call them Tarabarov and Bolshoi Ussuriysky, the Chinese call them Yinlong Dao and Heixiazi Dao. These are two of the islands over which the Chinese and Soviets battled in 1969, formalizing the Sino-Soviet split. The final pullout of Russian forces is expected within a month.When two states enter into alliance, the first thing they must do is stop treating each other as foes. There is a bit of wiggle room if the two states do not border each other as the United States and Soviet Union did not during World War II. But in cases of a shared land border, it is devilishly difficult to believe that those on the other side of the line have your back if they are still gunning for a piece of your backyard. If China and Russia are going to stand together against the United States — or really, anyone — in any way, shape or form, the first thing they have to do is stop standing against each other. And that is just about to happen. There are still plenty of reasons to doubt the durability of this development. In terms of modern warfare, the islands are strategic irrelevancies, so their surrender is not exactly a huge gesture of trust. Achieving any semblance of economic integration between the two powers still would be more trouble and expensive than it would be worth, making any deepening of the bilateral relationship difficult. Russia’s demographic slide instills a perfectly logical paranoia in the Kremlin; Russians are outnumbered 7 to 1 by their “partner” in terms of population and 3 to 1 in terms of economic size — something that Russian pride will find far harder to accept than merely handing over some islands. There is no substitute to the American market for China. Period. Sharing Central Asia is simply impossible because both sides need the same resources to achieve and maintain their strategic aims. And neither power has a particularly sterling reputation when it comes to confidence building.Yet while Moscow is known for many, many things, sacrificing territory — especially territory over which blood has been shed — is not on that list. Swallowing some pride to raise the prospect of a Chinese-Russian alliance is something that should not pass unnoticed. Burying the hatchet in the islands of the Amur is the first step on the improbable road to a warmer bilateral relationship, and raises the possibility of a coalition of forces with the geographic foundation necessary to challenge the United States at its very core.Such a Chinese-Russian alliance remains neither natural nor likely. But, with the territory handover, it has just become something that it was not a week ago: possible.Tell Stratfor What You Think

Melchizedek

I wanted to send you a list of links to our web page as well as an article that Herbert Armstrong wrote about this. Melchizedek is an admittadly difficult topic since he was mentioned in such an enigmatic way in the bible. I wanted to bring that topic up because some people have made comments that they would like to study him and we can revisit this topic again in a future bible study. Anyway, I wanted to give you the links to all of what the United Church of God has written about him. The link is here http://www.ucg.org/search/?q=melchezidek&cx=016889497640205832510:wdwph-r0a3u&cof=FORID:11&sa.x=15&sa.y=4#986 and this references a lot of articles on this topic that our church has published. I do hope that you find this series of articles to be interesting reading. Also, if you would like to add more comments, go ahead and share them!

The Mystery of MELCHIZEDEK Solved!

by Herbert W. Armstrong
Copyright © 1956, 1972 Ambassador CollegeAll Rights Reserved Printed U.S.A.
FEW MYSTERIES of the Bible have attracted more interest than the mystery of the identity of Melchizedek. Who is he?
You will read in Hebrews 6:19-20 that Jesus Christ, after His resurrection, is High Priest "after the order of Melchizedek." The plainer English of the Moffatt translation words it: ". . with the rank of" that is, equal status with "Melchizedek."
Melchizedek Was God's Priest
First, notice from both Old and New Testaments that the man of mystery, Melchizedek, was a priest of the Most High God. Turn now to the account in Genesis 14. During the war between a number of ancient city-states in Canaan and Mesopotamia, Abraham's nephew Lot had been captured. He and his family and goods were carted off.
One of their number escaped and brought the news to Abraham, who armed 318 of his own servants and pursued the invaders to what was later named Dan and beyond. Abraham rescued Lot and his family and returned them safely to the Canaanite cities.
On Abraham's return a man of mystery bursts upon the scene. Abraham was ministered to by Melchizedek.
Here is the account: "And Melchizedek king of Salem brought out bread and wine; he was priest of God Most High. And he [Melchizedek] blessed him [Abraham] and said, 'Blessed be Abram by God Most High, maker of heaven and earth; and blessed be God Most High, who has delivered your enemies into your hand!' And Abram gave him [Melchizedek] a tenth of everything" that is, a tithe of all, for a tithe means a tenth (Genesis 14:18-20, RSV).
Notice that Melchizedek was king of Salem. That is the city of Jerusalem. "Salem" comes from the Hebrew word meaning "peace." That would make Melchizedek the "King of Peace" (Heb. 7:2). The Hebrew name Melchizedek itself means "King of Righteousness" (Heb. 7:2). The same individual is mentioned in Psalm 110:4. Speaking prophetically of Christ, David stated: "The Eternal hath sworn, and will not repent, Thou art a priest forever after the order of Melchizedek." This verse is quoted again in Hebrews 5:6, 10.
Before we turn to Hebrews for the identification of Melchizedek, re-member that this mystery figure is a mystery only to us. Abraham and the King of wicked Sodom knew exactly who he was. They must have seen him before. He could not have been a Canaanite, for they were steeped in pagan customs. And furthermore Canaan was a descendant of Ham, whereas God basically chose the descendants of Shem to accomplish His work.
Then who is the mystery man Melchizedek? One other hint before we proceed. The land of Canaan from ancient time, before the days of Moses, was known among the Gentiles as "the divine land" the Holy land" the land of the place of worship!" Why? Was there someone in the Holy Land who was divine, holy, worthy of worship?
The Mystery Clears
Coming to Hebrews 7, we find Melchizedek identified: "For this Melchizedek, king of Salem, priest of the most high God, who met Abraham returning from the slaughter of the kings, and blessed him; to whom also Abraham gave a tenth part of all; first being by interpretation King of righteousness, and after that also King of Salem, which is, King of peace" (Heb. 7:1-2).
Since God names individuals what they are, that, then is what this man is.. "King of Righteousness." Think of it! King of Righteousness.
Jesus Himself said: "There is none good but one, that is, God" (Matt. 19:17). Human self-righteousness is, before God, as filthy rags. None can be righteous but God or one made righteous by God's power or Christ in a person! And certainly none but One of the Godhead the divine Kingdom of God could be King of Righteousness. Such an expression, applied to any but God, would be blasphemous. Why? Righteousness is obedience to God's Law. Since God made all laws (James 4:12), He is Supreme Ruler or King. He determines what righteousness is. "All thy commandments are righteousness" (Psalm 119:172). When speaking of one of the points of that Law, Jesus placed Himself superior to it. He is Lord of the Sabbath (Mark 2:28). No man is Lord or King over God's Law. Only God could be! All human beings have sinned and broken that Law of righteousness (Romans 3:23).
To continue with Hebrews 7. Note, too, that this man was King of peace. "Salem" from which Jerusalem was named means "peace." And remember, Jesus is called the Prince of peace! No human being could be King of Peace. Men know not the way of peace. Read Romans 3:10 and 17: "There is none righteous, no, not one.... And the way of peace have they not known."
Observe further: Melchizedek was "without mother, without father, without descent," or as the Phillips translation renders it: "He had no father or mother and no family tree." He was not born as human beings are. He was without father and mother. This does not mean that Melchizedek's records of birth were lost. Without such records human priests could not serve (Ezra 2:62). But here Melchizedek had no genealogy. He must not have been an ordinary mortal. He had no descent or pedigree from another, but was self-existent. Notice Paul's own inspired interpretation of this fact: "Having neither beginning of days, nor end of life" (Heb. 7:3). Therefore He has always existed from eternity! He was not even created, like angels. But He is now eternally self-existing. And that is true only of GOD deity, not humanity!
Not the Father Nor the Holy Spirit
Yet Melchizedek cannot be God the Father. He was the "priest of that Most High God." Scripture says no man has ever seen the Father (John 1:18, 5:37), but Abraham saw Melchizedek. He cannot be God the Father, but rather, "made like unto the Son of God; abideth a priest continually" (Heb. 7:3).
And there it is! In the days of Abraham, He was not the Son of God, for He had not yet been born of the virgin Mary but He was made like unto the Son of God in His manifestation to the ancients.
Notice again: Melchizedek, this scripture reveals, abides that is, remains permanently, continually, a priest. God the Father is not the Priest of God, but Christ the Son is! Yet, in the days when the Apostle Paul lived and wrote, shortly after Jesus ascended to heaven as High Priest, the scripture states that even then Melchizedek "abideth "which means does now abide-"a priest continually." The Moffatt translation states it: "continues to be priest permanently" even while Jesus Christ is High Priest!
And notice that the order of Christ's Priesthood is named after Melchizedek. It is the High Priest's name that is placed upon an order just as Aaron's name was upon the Aaronic priesthood. Thus Melchizedek was then High Priest, in Paul's day, and even now, and He will rule forever! And at the same time Christ was, is today, and shall be forever High Priest!
Are there two High Priests'? No! Impossible! The conclusion is inescapable. Contrary to many cherished man-thought-out ideas, Melchizedek and Christ are one and the same! Some people have stumbled on the statement that Melchizedek has no "end of life." They contend that since Christ died, He had an end of life! If that be true then Christ is still dead! But Christ is not dead. He is alive. It was not possible for Christ to be held by death (Acts 2:24). Melchizedek would never have fulfilled His office of High Priest if He had not died for the sins of the people and risen again. It is the function of the High Priest to lead the way to salvation.
Indeed, Jesus Christ is the author and finisher of our salvation (Heb. 5:9; 12:2). He is "called of God an high priest after the order of Melchizedec" (Heb. 5:10). And no wonder. Melchizedek and Christ are one and the same Per-son!

Dark Horse

I wanted to let you know about this book that came out this year. It does show the problems that getting involved in politics can lead to, in a somewhat entertaining way. One of the main problems is that people do seem to have to compromise their principles to win elections, especially in a party politics system. Of course, our own church does publish some booklets that talk about the coming King of Kings who won't have to be dependant upon anyone for electoral favors such as this booklet
http://www.gnmagazine.org/booklets/JC/ which is well worth rereading again if you haven't in a while. Anyway, the book I wanted to let you know about is reviewed below if you are interested in it.

http://www.worldcat.org/oclc/191865776&referer=brief_results
11 of 12 people found the following review helpful:
A Look Behind the Curtain,
By
Bill Wood "Perimeter reader" (Atlanta, GA) - See all my reviews
Dark Horse is a fast paced story that could have been easily lifted from newspapers or right off of the network news programs. Although it was a little challenging at the very beginning, probably due to the reader being dropped into the middle of a political process with a large cast of characters, Once you sort out the players the payoff is worthwhile. Ralph Reed has been involved in bare knuckled politics for many years. It is obvious from the tags for this book, that he continues to be a lightening rod of vitriol from his political adversaries. I suppose success brings both adoration and vilification. Notwithstanding all of that, Dark Horse is a fun read, in the way that Bill Buckley's Blackford Oakes series are fun to read. One gets the sense that as this story unfolds the reader is treated to a behind the scenes look at the intrigue of a national campaign. Who better to let us in on that than one who has been in the center of many political storms over the years. Though Reed portrays politicians and religious leaders reasonably realistically, every one appears to be brawlers when the gloves come off in the heat of the battle. it is easy to imagine that much of the story was drawn from Reed's experience as a consultant in the political process and a former candidate for office himself. That little touch of realism makes the story that much more interesting. If you are looking for a fun read with a little constitutional education and political drama, Dark Horse fits the bill. For the aspiring young politico, Dark Horse captures the heat and emotion and does so in a manner that one would not mind their kids picking up the book and reading it. Hopefully Ralph will give us another book in the no so distant future that extends the story line of some of the interesting characters we have met in this book. And another review is here http://www.townhall.com/columnists/RebeccaHagelin/2008/06/19/bet_on_this_dark_horse

News Test 7/21/2008

I'm sending this article below which has a link that is a news test. I would think most members of our church would get 100%, or close to that, since we are told in the bible to watch world events. Anyway, if you have any comments about the test or how you did on it, I'd like to hear them! Otherwise, you can use this as a tool to see how well you actually are watching world events, and increase doing so if you need to.

Test Your Current Events Knowledge w/the Pew News IQ Test
http://pewresearch.org/newsiq/
Here's some fun for your week. Take the Pew News IQ Quiz (h/t NBer DaBird):
To test your knowledge of prominent people and major events in the news, we invite you to take our short quiz. Then see how you did in comparison with 1,003 randomly sampled adults asked the same questions in a recent national survey conducted by the Pew Research Center. [...]You'll also be able to compare your News IQ with the average scores of men and women; with college graduates as well as those who didn't attend college; with people who are your age as well as with younger and older Americans. Are you more news-savvy than the average American? Link to the quiz below the fold (photo courtesy Pew):Have fun NewsBusters. Be sure to tell us how you did.
http://pewresearch.org/newsiq/

Kenya - UCG Good Works

I wanted to send this article about our brethren in Kenya. This is an area that was torn by war earlier this year, as the article points out, and is now a victim of drought. The link www.ucg.org/goodworks is a site that explains how you can help if you want to. Anyway, I thought you might find this interesting.

Peace Returns to Kenya; Members Face DroughtThe violence that troubled Kenya at the beginning of this year (leaving 1,500 dead and 600,000 homeless and/or displaced) has long since faded away. However, the rift among tribes continues below the surface. Only by allowing both rival parties to win (through a power-sharing agreement) was the bloodbath halted. Meanwhile, many of our members there have been impacted by a seasonal drought. Their crops failed and they have been unable to grow food or purchase it without assistance. World prices of food, seed, fertilizer and petrol have all skyrocketed, and Kenya's 20 percent inflation rate further compounds the situation. A Good Works project to assist the members there with supplemental food is listed on the UCG Web site at www.ucg.org/goodworks. During July Tim Waddle and his wife, Valerie, will visit the region. Some of the items on his agenda include leadership training, Festival logistics assessment and congregational visits. A meeting with leaders of a group that left WCG years ago and attended with another affiliation is also scheduled. They have formally requested to be part of United. Their additional numbers could potentially swell Feast attendance this year and may dictate a change of venue. Thankfully, a suitable site has become available at a price that would be considerably less per person than in previous years. —John Elliott

Replacing Housing Risk with Dollar Risk

I previously sent an article about supply and demand in regards to oil prices which you can link to here http://brianleesblog.blogspot.com/2008/07/oil-prices-ship-turns.html. That article also had a link that you could click on called "Breaking the Back of High Oil" which had some articles that suggested how oil prices could be lowered. The article that I'm now sending talks about a misfortune in the Housing Market, and how mismanagement of this could have severe consequences for a very long time. The article is a little long and it does have some technicalities, but it is worth the read. Also, our own church does have a great article in this month's Good News about debt management here http://www.gnmagazine.org/issues/gn77/slave-to-debt.htm

Replacing Housing Risk With Dollar Risk, Updated
Understanding the Dimensions of the Fannie Mae/Freddie Mac Problem

Thursday, July 17, 2008

As of Sunday night, the US government, speaking through Treasury Secretary Henry Paulson, has committed to guarantee the value of securities issued by the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac.That means that you, dear Taxpayer, are about to get into the housing business in a way you’ve probably never imagined and certainly didn’t choose.So it’s worth asking a few questions about the business we’re all about to get into.What does it mean to say that Freddie Mac is insolvent on a mark-to-market valuation basis? Exactly how much risk are the taxpayers going to be exposed to? Who owns the securities (or “agency debt”) issued by Fannie and Freddie, and how do they benefit from the bailout?And most of all, what does it mean for people who want to buy houses in the future?This update of a story that was originally written three days ago includes sections on market and Congressional reactions to the GSE bailout plan.
Keep reading…
Preventing Revolutions
Fannie and Freddie (the GSEs) are chartered by Congress to borrow money from the public, and then lend it to homebuyers in the form of mortgages, at a higher rate of interest. They’re supposed to make a nice profit from the interest-rate spread.But Congress long ago gave the GSEs a line of credit from the Treasury (currently $2.25 billion, although Paulson just proposed to raise it). So there has always been a tacit assumption that agency liabilities would be guaranteed by the US government.This makes for a very interesting business model. Because of the implicit Federal guarantee, agency debt is perceived as nearly free of credit risk. This makes it exceptionally attractive to investors, and interest rates on the paper are correspondingly low.So the agencies have an artificially low cost of capital, compared to other lending institutions. Fannie and Freddie don’t make money because they’re particularly good at what they do. They make money only because people believe that the government has assumed the credit risk on their liabilities.This significantly reduces the interest rates that people have to pay on their mortgages, which without the agencies would be quite a bit higher than they are today.And that’s why Congress chartered these entities in the first place. Politicians have long understood that asset ownership keeps people from demanding radical social change. People who own houses and make mortgage payments tend not to participate in revolutions.
On Balance Sheet And Off
In addition to the direct mortgage lending that they engage in, Fannie Mae and Freddie Mac also guarantee the payments on a much larger amount of mortgage debt. What kind of numbers are we talking about here?There are maybe $12 trillion worth of home mortgages in force in the US today. Fannie and Freddie together own about $1.6 trillion of those mortgages, either directly or in the form or mortgage-backed securities.To support those assets, they’ve issued liabilities in the form of coupon bonds and other debt sold directly to investors. And underneath those liabilities, the agencies have shareholder equity amounting to maybe $70 billion in all.The agencies have also been major issuers of mortgage-backed securities, which are not carried on their balance sheets. These securities amount to a total of nearly $4 trillion. They’re based on mortgages that were underwritten by Fannie and Freddie, and conform to their strict standards. So the agencies guarantee the payments made by these securities, even if the underlying mortgages default, and they earn a fee for making the guarantee.So all in, you’re looking at about $5 trillion in mortgages that are owned or guaranteed by Fannie and Freddie: nearly half of all US mortgages.Ok, now let’s get out the back of an envelope and do some arithmetic.
Potential Losses
What if the sky falls and 10% of the agency-guaranteed mortgages go into foreclosure? (Remember, we’re talking about conforming, prime mortgages: the good stuff, not the subprime toxic waste.) Figure the recovered value from a foreclosure averages half the value of the original loan. That adds up to a potential loss of half of 10% of $5 trillion. Maybe $250 billion.Does that number sound familiar? It should, because the contemplated maximum size of the mortgage bailout bill now working its way through Congress is $300 billion. So at least we’re all working off the back of the same envelope.But Fannie and Freddie only have about $70 billion in equity capital between them. When mortgages default and they lose money, the first losses are taken by the equity. When the equity is wiped out, the agencies’ debt takes the hit. So if you want to not worry about them defaulting on their liabilities, you have to make up the gap between $70 billion and whatever you think their loan losses will be.And that’s why Hank Paulson is talking about buying equity in Fannie and Freddie. It would be a matter of desperation for them to sell additional common stock in the open market now, with their stock prices at smelling distance from zero.But who’s being protected by all this? Well, who owns the debt that’s been issued or guaranteed by the agencies to fund your mortgage?
The International Dimension
To a perhaps surprising extent, part of the answer is the central banks of China, Russia and Japan. “Official” holdings of US agency debt are said to total just under $1 trillion, but they are likely somewhat higher.What the heck happened here?What happened is that investors, including central banks, chose to treat the cash flows generated by American homeowners as reserve assets, a role typically played by securities issued directly by governments (that is, US Treasury debt).These investors eagerly chose to invest in securities that paid a relatively high yield, because it was understood that the US government would assume their credit risk.Turn this over in your mind a few more times. It’s quite remarkable.Fannie and Freddie have been giving investors a free ride for years now. Investors benefit from the high yields paid by mortgages, without being exposed to the risk of default. You’d take this deal too, if you could.This totally explains the rapid growth of Fannie and Freddie, who especially in the Nineties, went out and actively marketed themselves as a substitute for US Treasuries, which were in short supply because of the Federal budget surpluses.And now these investors are demanding that the US make good on its implicit guarantee. In effect, they want to exit from their exposure to the US housing market, and replace it with exposure to the US dollar. They want their agency paper to behave like Treasury paper.Does that sound like a windfall profit for the governments of China and Russia? Yes, it most certainly is. Their agency securities will now appreciate sharply in value until they nearly converge with the value of US Treasuries.But they will still face the problem of holding securities that are denominated in dollars. They’ve replaced housing risk with dollar risk. And the dollar risk is real, because the taxpayer-funded bailout of any losses on agency-guaranteed mortgages will take the form of inflation.Foreign central banks, particularly China, will prove entirely willing to take this risk. The Chinese appear to have recently decided to slow down this year’s sharp appreciation of renminbi, partly to slow down a flood of hot-money inflows. So they’ll continue to pile up dollar reserves as fast as ever. They’ll need a place to put those dollars.And in addition, the fact that there is so much official ownership of agency debt makes it a matter of international diplomacy to propose anything which might impair their value. (For example, the otherwise perfectly reasonable idea of asking agency debtholders to take up to a 5% “haircut,” or reduction in principal value, to reflect roughly that much damage in the housing market.)I suspect that this reality is part of why Secretary Paulson insists that the pain be borne exclusively by shareholders, not bondholders.
Congressional and Market Reactions
Financial markets originally had a positive reaction to the Paulson announcements, but they turned sour almost immediately. The interest-rate spread between agency and Treasury debt, which had tightened sharply on Friday with the rumors of a GSE bailout, started widening again on Monday and subsequent days this week.Secretary Paulson himself came in for a tongue-lashing in Senate Finance Committee testimony on Tuesday. Fed Chairman Bernanke's testimony was received with more politeness. But I can't have been the only one who was struck by a sense that Bernanke is acting like a man with limited options.Bernanke is walking on a knife edge. He's trying to mitigate an ongoing credit crisis, with tools that are better suited for dealing with macroeconomic problems. He can't cut interest rates any further because inflation is already roaring now. (Although this is more complicated than it looks, as the Fed has actually kept total money-supply growth muted through sterilization operations.) And he dares not raise rates because that would slam the brakes on the financial sector (which is in dire distress) and the economy as a whole.Freddie Mac successfully executed a discount-bill raise on Monday and has another one scheduled for Friday. This wasn't surprising. Fannie and Freddie are not in immediate danger. A rather remarkable steepening of the Treasury yield curve this week, however, suggests that people are starting to realize that high inflation is here to stay. We've also seen fresh signs this week that foreign central banks and sovereign investors are accelerating their diversification away from dollar assets.
Where do we go from here?
The net effect of Congress’ 40-year experiment in fostering home ownership has been a significant misallocation of economic resources. Think about it: whenever you make something (like mortgage risk) cheaper than it should be, people will buy more of it than they should.And that crowds out investments that make more economic sense. I have a hunch that some smart economists will figure out that this is exactly why the US economy has been growing more slowly than it could have for so many years.So what happens to homeownership now? We’ve been subsidizing it with an implicit government guarantee. Should we continue to do so, but with an explicit taxpayer-funded guarantee?Or should we let the free market figure out the true value of US housing? (Undoubtedly a lot lower than it is now.) And should we end the deductibility of home mortgage interest?Free-market orthodoxy suggests that we should, because otherwise we’ll continue to overallocate resources to housing, even now that events have proven this to be a bad idea. Efficient resource allocation is what free markets do best. But it’s also what scares politicians the most, because they can’t predict (or control) what free markets will do.The mantra of many successive Administrations has been that America needs high rates of home ownership. For better or worse, we’re already hearing a very different point of view, expressed not only by some who say that “we need to put more money in people’s pockets, and ensure that housing is affordable and available.”That’s actually very different from saying that “home ownership is the American Dream.”The former implies a continued reliance on distorted incentives created by government. The latter activates the idea that if people work hard and smart, the economy will create affordable houses for them to buy.We will all need to decide together which one of these competing visions is the way forward.-Francis Cianfrocca
www.redstate.com

Oil Prices - The Ship Turns

I wanted to send this article which shows how the rising price of oil is causing people to adjust their behavior and possibly make the prices come down with a market adjustment. It's an article about economics which is a topic that some people find interesting and others not so much, but it is worth a read. I hope you find it interesting and if you know anyone with budget problems, do remember that our church publishes a great book which I referenced after the article.

The Ship Turns
By INVESTOR'S BUSINESS DAILY
Energy: Call it the paranoid theory of petroleum. Somehow, dark forces behind the scenes keep us from doing anything about soaring oil prices. In fact, something is being done to bring down oil prices. And you're doing it.
IBD Series: Breaking The Back Of High Oil
For some, rising oil prices prove that oil companies and petrotyrants around the world must be in cahoots to create energy shortages. By that theory, we can do nothing about it. Eventually, government will have to step in.But in fact, even as our own dithering Congress refuses to help ease the energy crunch, things are already changing — thanks to you, the consumer, and you, the producer. That's right: It's the private sector that's doing it.One of the glories of a capitalist system is that price signals are allowed to work. When the price for a good rises, that means it's in scarce supply. When the price falls, it's relatively abundant. This signals to users and producers they must change their behavior.For users, higher prices mean finding ways to do with less. For producers, they mean finding ways to produce more. The confluence of these two forces usually results in lower prices. This is what's happening now with oil.It's true that the booming economies of China and India are sucking up ever more energy. But guess what? As the price of crude has soared from $30 a barrel to $50, then to $70 and past $100, we've all changed our behavior.For oil companies, it has meant drilling for more oil. According to data from a variety of sources, world oil output has jumped by 11%, or 8.5 million barrels a day, since 2002, to 83 million barrels a day.Contrary to the predictions of petro-paranoids, private oil companies are producing flat out — even though government entities such as the Organization of Petroleum Exporting Countries and the U.S. Congress work to keep prices high.Fueled by the high prices, new sources of oil are being discovered. They include the 33-billion-barrel bonanza recently found off Brazil's coast and other huge finds in the Caribbean and Asia. The U.S. itself has 656 trillion cubic feet of natural gas and 112 billion barrels of oil on federal lands alone — there for the taking if only Congress would allow it.But even without it, we're going gangbusters. As the American Petroleum Institute recently noted, "an estimated 4,577 (U.S.) oil wells were completed in the first quarter of 2008, up 12%" from last year and the highest rate since 1986. U.S. oil companies are going back to tapped-out wells and pumping oil that wasn't economically recoverable at $25 a barrel but is at $100.That's the supply side. What about demand? U.S. fuel demand in the first three months of 2008 was down 1.4% from a year earlier — the third straight quarterly year-over-year decline in a row.Gasoline consumption has risen about 1.5% a year since 2000. But Energy Department data showed demand in the first quarter edging down for the first time in more than two decades.In short, the tide has turned.The New York Times notes that U.S. car buyers have suddenly gone ga-ga over small cars. One in five purchases is now a compact or subcompact, while SUV sales are off 28%. "It's easily the most dramatic segment shift I have witnessed in the market in my 31 years here," said George Pipas, Ford Motor's chief sales analyst.So, even as Congress twiddles its thumbs, the private sector is doing its thing — adjusting to the market to make things better. The bad news is, there's no guarantee that oil prices won't go up more. The good news, as recent trends show, is that it won't last.
http://www.gnmagazine.org/booklets/MF/

U.S. Hospital used for Mexico's infighting!

I just thought you might want to know how this city's hospital is being used.

Thomason CEO seeks help after 3rd lockdown
By Aileen B. Flores / El Paso Times
Article Launched: 07/13/2008 12:00:00 AM MDT

Jim Valenti, CEO of Thomason Hospital, held up a copy of the Emergency Medical Treatment and Labor Act, which is the federal law that states no trauma patient seeking medical treatment can be turned away, and a copy of the National Security Advisory Security System, which the hospital will use to determine its level of security when appropriate. (Vanessa Monsisvais / El Paso Times)Related: Find more on the violence in Juárez. With his hospital forced to take heightened security measures for the third time this year, Thomason Hospital CEO Jim Valenti on Saturday called on elected officials to stop the trend of people shot in Juárez seeking medical treatment at the county hospital.
Valenti acted after a Mexican police officer with multiple gunshot wounds, apparently another victim of the ongoing drug war in Juárez, was taken Friday night by ambulance from one of the ports of entry to Thomason Hospital's Level 1 Trauma Center.
Once again, sheriff's deputies stood guard outside the hospital with assault rifles, doors were locked, and all visitors to the hospital had to be screened by through a metal detector.
Thomason officials said the officer was the third wounded Mexican police official to be taken to Thomason. Since January, 11 victims of the drug-war violence have been treated at the hospital, seven of them U.S. citizens.
This should be a signal that elected officials and law enforcement agencies need to take some action, Valenti said.
"This trend is disturbing our doctors and nurses, medical students and patients," Valenti said. "We need the assistance of federal, local and state agencies. A month ago we had a similar situation, and our prediction is that this is going to continue."
Mayor John Cook said Saturday he understood that the situation was putting a burden on the ability of the hospital to operate and take care of its patients. Cook said federal, state and local officials would have to meet and find a solution to "a very disturbing trend."
In response to Valenti's request for assistance, U.S. Rep. Silvestre Reyes, D-Texas, said the Merida Initiative was "a major step in addressing the escalating violence in Juárez."
Reyes said the Merida Initiative, recently signed into law by President Bush, would provide Mexico with training, equipment and intelligence to reduce drug-related crime.
Reyes said it would also give Mexico's judicial system support and resources that could lead to more drug-related prosecutions.
County Commissioner Veronica Escobar said the Thomason Hospital board members and the Commissioners Court would meet July 24 to discuss the "pattern" of bringing drug-related shooting victims to El Paso.
"It appears there may be a significant effort to provide safety for certain individuals who are victims of the drug war," Escobar said.
She said El Paso is the only border city where wounded Mexican officials are taken to receive medical care, even though other Mexican cities along the U.S. border are having similar violence.
According to Thomason officials, the hospital did not accept those patients in transfer. The decisions to take the patients to the hospital were made when emergency medical technicians assessed the patients and determined they required Level 1 trauma care.
Thomason is the only Level 1 Trauma Center in the region. Under federal law, medical personnel are required to provide immediate treatment to such patients, Valenti said.
Thomason officials said the Emergency Medical Treatment and Labor Act requires a U.S. hospitals to stabilize any patient brought to its emergency room needing trauma care, regardless of the patient's ability to pay or national origin.
"Mexican citizens aren't different than the United States citizens," said Valenti, who added that cost isn't the issue. "Thomason is receiving reimbursements from the majority of these cases."
Friday night, three El Paso police units escorted the ambulance to Thomason, where El Paso County sheriff's deputies implemented heightened security.
"We aren't providing protection to the individual. We provide extra security for the patients, staff and visitors," said Deputy Eduardo Placencia, Sheriff's Office public information officer. The added security will continue until further notice, he said.

UK or Pakistan?

I wanted to send this article which shows the persecution that someone who converts from Islam can go through. The story is about someone in Britain, not thought of as a Muslim country, but you can click a link in the story to see what can happen to someone who converts in the Middle East. If you would like another link that shows how some fellow Sabbatarians had to move to flee persecution, click the link here http://www.lifenets.org/ukraine/crisis.htm. I hope you find this interesting.

"He endured similar threats in his homeland Pakistan, but never expected the same thing to happen in the UK"

If this is what Muslim converts to Christianity experience living in the UK, imagine what converts living deep in the heart of Islam must go through.

"Persecution threat to British Muslims who change their faith," from Inspire Magazine, July 9:
A growing number of Christians in Britain from a Muslim background are facing harassment and persecution, warns Release International. They include ‘Yasmin’, whose ex-husband planned to kill her. She’s been attacked in the street, driven from her home and was taken under police protection. Yasmin became a Christian after receiving a vision of Jesus during the difficult birth of her son. She tried to keep her faith a secret from her family, but eventually told her mother. “When my mother found out I had become a Christian she went to the local mosque and told them that I had gone crazy,” Yasmin told Release International, which serves the persecuted Church in 30 nations. “She went to get some holy water to heal me of my madness. A campaign was set up against me; people would come and bang on the door every ten minutes during the night.”Apostates, after all, are mercifully granted sometimes up to three days to return to the fold of Islam before being killed. And they say Islam is merciless!
The police set up a panic alarm, but finally told Yasmin they could no longer protect her and moved her into a women’s refuge.Yasmin relocated to another part of the country, but her ex-husband tracked her down and demanded custody of their children as he objected to them being brought up by a Christian.She says: “He continually intimidated and harassed me and hired someone to beat me in the street. Wherever we went there would always be a car following us and watching us.”Her son yielded to pressure and went to live with his dad. “He only stayed one night,” says Yasmin, “as his dad told him that he had arranged for someone to kill me and was pressing my son for details of the layout of our home - where the alarm was and where I slept.”
Yasmin went into hiding with her son and took out an injunction against her husband. The harassment stopped, but that was not the end of the trouble.“Everyone in the local Muslim community knew I was a Christian and didn’t want to know me. People would cross the street rather than greet me and often spat in my face. They tried to pressure me to leave town. But I had already been chased out of one town so I was determined not to let them intimidate me.”Yasmin is now working to support other Muslim background believers who are experiencing the same pressures and persecution. She tells her story in the latest edition of Release International’s Witness magazine, available from
www.releaseinternational.org
She adds: “One of the most difficult things about becoming a Christian from a Muslim background is losing your family. There are such tight family networks in our communities. If someone becomes a Christian then they are considered to bring shame on the whole family and the only response is to cut them out of the family.”Some Muslim background believers in the UK lose their homes, possessions and even custody of their children – a picture replicated in many nations around the world, where former Muslims may even lose their lives for changing their faith.Release International’s patron, Bishop Michael Nazir Ali has also been under police protection after receiving death-threats for expressing his concerns about some aspects of Islam in Britain. He endured similar threats in his homeland Pakistan, but never expected the same thing to happen in the UK.Bishop Michael Nazir-Ali says: “The story of the Church is a story of persecution. The blood of the martyrs has been, and is, and will be the seed of the Church.”Note: "martyrs" in a Christian sense. You know, those men and women who, rather than recant their faith, gladly suffered torture and execution, as opposed to the Muslim sense: being killed while trying to kill others in the name of your faith.
http://www.jihadwatch.org/dhimmiwatch/
For further reading
http://www.worldcat.org/oclc/64595883&referer=brief_results

Hitler's Jihadist

I wanted to send this article which shows a link between Hitler and the Grand Mufti of Jerusalem in the 1940's. The concept of Jihad did exist before Nazi Germany, however, this article points out that it became re-energized by a common anti-Jewish worldview that both ideologies fed upon from each other and how this carried over to some of the Jihad movements today. The topic does come up of how Aryan Nazi Germany could ally itself with an influential Arab, but do remember that they also allied with Imperial Japan. I hope you find this interesting.

Hitler’s Favorite Jihadist
David R. StokesSunday, July 06, 2008
As members of the Allied Expeditionary Force entered the landing crafts that would transport them to their rendezvous with history in the early morning hours of June 6, 1944, they received individual copies of the Order of the Day drafted by their Supreme Commander, Dwight D. Eisenhower. He had given the go ahead for the massive invasion, code named Overlord, in spite of weather that was less than inviting. He wanted the men to understand what they were fighting for – and against.
He told them:
“You are about to embark upon the Great Crusade, toward which we have striven these many months. The eyes of the world are upon you. The hopes and prayers of liberty-loving people everywhere march with you. In company with our brave Allies and brothers-in-arms on other fronts, you will bring about the destruction of the German war machine, the elimination of Nazi tyranny over the oppressed peoples of Europe, and security for ourselves in a free world.”In those days leaders weren’t as concerned about the politically correct parsing of phrases and words as some seem to be today. It was clear to them that they were not fighting mere “flesh and blood” but abhorrent ideological wickedness (“Nazi tyranny”). And they passed that clarity onto those who were engaged in the perilous fight.
So, why is it so hard for some today to call things as they are?
We are not fighting a war on terror. We are fighting against a pernicious way of thinking. Terrorism is a methodology – a way to fight a battle. The technique itself is not the enemy. Our foes are people and regimes who, in the name of foul opinion, perpetrate destruction. Just like back in the 1940s.
Can you imagine what it would have sounded like if Ike, FDR, or Churchill had been bound by the sensitivities of our day? We would have been “battling the blitzkriegers,” or maybe “bringing to justice those who dared to attack too early on a Sunday morning,” - hardly clarion calls.
Wars make more sense, and they tend to be conducted with greater vigilance and effectiveness, when we understand things in terms of good vs. evil. But these days it’s hard to even bring up the idea that militant Islam is to blame, much less to frame the current conflict as a war against it. History, however, leaves clues that remind us that there is really not much new under the sun.
David G. Dalin and John F. Rothman have written a new book, one that should be read by all Americans seeking to understand current geopolitical reality, called: Icon of Evil: Hitler’s Mufti and the Rise of Radical Islam. They make a compelling and well-documented case that we are actually fighting the quasi-spiritual offspring of Nazism and Fascism.
Haj Amin al-Husseini (1895-1974) is by no means a household name today, but his story is a key historical plot-point helping to create the mess we now find ourselves in. From his appearance on the stage of turbulent Middle Eastern politics in 1921, until his death fifty-three years later, he was a consistent and vociferous voice preaching a blend of anti-Semitic, anti-Western, and pan-Islamic rhetoric to anyone who would lend an ear. And there were plenty of listeners. There still are. He was the grand mufti (maximum leader) of all muslims in Palestine – the big kahuna.
Mr. al-Husseini’s political journey was driven by a radical interpretation and application of Islam. He was an effective and charismatic leader of a vast movement - forerunner of the various manifestations of Islamic fanaticism extant. This virulent form of his religion took hold during the period between the two world wars and grew to become the plague it now is on all houses of freedom.
And it turns out that al-Husseini was a big fan of a man by the name of Adolf Hitler. The number one Nazi liked him, too.
In November of 1941, a little more than a week before the attack on Pearl Harbor, there was a meeting in Berlin, one that is often relegated to a footnote in the history of that great global conflict. Haj Amin al-Husseini made his way from the mansion he’d been provided by the Nazis toward the Reich Chancellery, where he was to meet Hitler in the dictator’s private office. Dalin and Rothman describe this ominous meeting in great detail.
The mufti sought to ingratiate himself with Hitler and the strategy was reciprocal. They pledged allegiance to each other. And why not? They had common goals and enemies. The German leader bestowed honorary Aryan citizenship on his guest (Hitler interpreted al-Husseini’s blond hair and blue eyes as evidence that the Islamic leader must have possessed some “pure” blood) and it was clear that his visitor was keenly interested in being set up as the Nazi leader in Palestine and its surrounding region.
Al-Husseini eventually recruited 100,000 European Muslims to partner with the Waffen-SS, and the authors of Icon of Evil hint at the idea that the cleric-politician was influential in the decision to implement the notorious Final Solution. He was good buddies with Heinrich Himmler and Adolf Eichman.
Nazis and radical Islamists – together. Nothing good could come of that, and in fact, a lot of today’s bad stuff was incubated in that Berlin laboratory.
One of the most captivating portions of Icon of Evil is devoted to the question: What if Hitler had been victorious and the war had turned out differently? Drawing on similar previous musings by writers such as William L. Shirer, John Keegan, and David Fromkin, the duo shares a chilling narrative about how radically different life would be today had Hitler won. This is important not just because of the horrifying idea of a Hitler-dominant Europe – but also due to what the Middle East would look like in such a case. Al Husseini wanted to extend the Holocaust beyond the borders of European living space to the Middle East. His goal was something near and dear to the heart of the depraved men running the Third Reich – a Palestine that would be virtually Judenrein (a reprehensible Nazi term literally meaning: “clean of Jews”).
Then there’s the story of how this wicked preacher was able to avoid the Nuremberg trial dragnet, in spite of clearly being guilty of egregious war-crimes. He would not be brought to justice, but rather would live out his days back in the Middle East. His post-war work included becoming something of a mentor to men who would become famous in his cause. What do Gamel Abdel Nassar, Anwar Al Sadat, Yassir Arafat, and Saddam Hussein have in common? They were all connected with, and deeply influenced by, Haj Amin al-Husseini. Hamas and Hezbollah are very much part of his legacy, as well. He worked closely with the theoretician of radical Islam, Sayyid Qutb, as well as Saddam’s infamous uncle, General Khairallah Talfah. The guy was connected. And the usual suspects he ran with paved the way for everything from the attacks on September 11, 2001, to the maniacal rantings of Mahmoud Ahmadinejad.
In fact, some of Haj Amin al-Husseini’s spirit is in the intellectual and emotional DNA of every current radical Islamist.
Now, here’s what really bugs me – why could we fight a war nearly seventy years ago, all the while referring to our enemies as Nazi thugs, and yet today be so concerned about sensibilities that we’re reduced to, at best, rhetorical beating-around-the-bush?
The war we are in is not against a weapon, no matter how dreadful that weapon is. We are fighting a virulent ideology. To be brutally honest about it - to call our enemies today terrorists, or even Islamo-Fascists, is not strong enough.
They are Islamo-Nazis and they’re really bad people - like the German-Nazis were.
http://www.worldcat.org/oclc/180205003&referer=brief_results
Other books on this topic:
http://www.worldcat.org/oclc/162502036&referer=brief_results
http://www.worldcat.org/search?q=nazi+connection+to+islamic+terrorism&qt=owc_search

Saudis and Muhammad, their Prophet

Sex OK at 9, says Saudi cleric'Muhammad is model we follow. He took 'Aisha to be his wife when she was 6'

Posted: June 27, 200812:15 am Eastern© 2008 WorldNetDaily

Age, or lack thereof, is no hindrance to marriage under Islam, according to Ahmad Al-Mu'bi, an officiant for marriages from Saudi Arabia who says sex at 9 is fine.According to a video of the Saudi official recorded and translated by MEMRI, the Middle East Media Research Institute, Al-Mu'bi has confirmed that marriage contracts are appropriate for girls as young as age 1.And he said the model for marriage continues to be Muhammad, who married one of his wives when she was but 6.
The video comes from a broadcast on LBC Television on June 19, according to the MEMRI report.Al-Mu'bi said, "Marriage is actually two things: First we are talking about the marriage contract itself. This is one thing, while consummating the marriage – having sex with the wife for the first time – is another thing."There is no minimal age for entering marriage. You can have a marriage contract even with a 1-year-old girl, not to mention a girl of 9, 7, or 8. This is merely a contract [indicating] consent. The guardian in such a case must be the father, because the father's opinion is obligatory. Thus, the girl becomes a wife," he said. "But is the girl ready for sex or not? What is the appropriate age for having sex for the first time? This varies according to environment and traditions. In Yemen, girls are married off at 9, 10, 11, 8, or 13, while in other countries, they are married off at 16. Some countries have legislated laws forbidding having sex before the girl is 18," he said.
He confirmed, "The Prophet Muhammad is the model we follow. He took 'Aisha to be his wife when she was 6, but he had sex with her only when she was 9."An interviewer asked: "My question to you is whether the marriage of a 12-year-old boy to an 11-year-old girl is a logical marriage permitted by Islamic law.""If the guardian is the father... There are two different types of guardianship. If the guardian is the father, and he marries his daughter off to a man of appropriate standing, the marriage is obviously valid," said Al-Mu'bi."People find themselves in all kinds of circumstances. Take, for example, a man who has two, three, or four daughters. He does not have any wives, but he needs to go on a trip. Isn't it better to marry his daughter to a man who will protect and sustain her, and when she reaches the proper age, he will have sex with her? Who says all men are ferocious wolves?" Al-Mu'bi said.