Wednesday, March 31, 2010
Saturday, March 27, 2010
Friday, March 19, 2010
The Road to Hyperinflation
Inflationism is a slippery road – the road to hyperinflation. The inflationist Bernanke Fed behaves as if they would not be “dialling back” from Quantitative Easing any time soon. They talk the talk, but can’t walk the walk. The inflationary genie is out of the bottle. Taming it back will result in a crushing deflationary collapse. The Fed will never let this happen again. They did it once during the Great Depression, they won’t do it again.
The government’s reaction is typical of a crisis associated with economic collapse and social unrest. Hemingway put it so aptly: “The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin."
Three years ago Äripäev, Estonia’s leading daily business newspaper, published Alar Tamming’s article “Great Economic Crisis on the Way”. The article came out during the economic euphoria and the author himself is probably the only one who still remembers the final sentence: “... this time, do not complain that you were not forewarned.”
The economic crisis is well under way. However, there are major differences in predicting how the crisis will end. Yes, “under way”, because most people still think that we will be soon coming out of the crisis, may be even within a couple of months. Economic philosophizers still prognosticate that the economic boom is about re-emerge. Many in the Establishment even declare that the crisis is over. They forecast business as usual – the resurrection of the consumption-based economy, only if the banks were to start loaning again. Unfortunately, this will be impossible.
They are mostly wrong, as suggested by history and chaos theory. Even a superficial introduction to chaos theory leads us to observe that when a self-regulating system has reached the critical point, there is no returning to the previous level. Just like a capitalistic society cannot return back to slavery, or just like slavery cannot return back to the primeval society of hunters and gatherers, so we can no longer return to the capitalistic economic model that is based on consumption.
Development of all complex systems, whether we are dealing with a society, a business, or a human being, always take place in cycles. There is a time of balance (equilibrium), then a period of confusion (disequilibrium), and afterwards the system will be re-organised at a new, higher level, so that the problems that were a source of conflicts at the previous level will be resolved. This is the essence of Hegelian dialectics.
For example, everyone can see these processes happening to their children – how teenagers are full of conflicts during their puberty and how they will grow out of them stronger and smarter than before. Similarly, one can think of the end of the Soviet Era, when the system could no longer react to the external environment, which drove it to chaos; and then a new social order emerged, a qualitatively new system, based on private capital. Every entrepreneur probably remembers the same when thinking about development of his company, and can recall how crises have helped his company improve, if he ever managed to survive. Without proper resolution of internal and external conflicts through development, every system is doomed to fail. This is a basic application of Hegelian dialectics and a basic result associated with complex systems.
However, the current situation is rather complicated. The economic system has gone critical – it has reached point from where there is no turning back. The worst part is that the system cannot self-organise. “Normal” business organisation typically means that if you are doing business and make wrong decisions in a particular economic environment, then you should also suffer the consequences. In other words – if a bank has made bad loans, then we should let it fail. Failure is part of capitalism. Individuals and businesses that have deposited their money in this bank and, therefore, made a wrong decision, should also lose their money. Simple and logical, this is what capitalism is all about.
Unfortunately, governments and central banks do not want to accept that. They think that trying to feed a dead horse will bring it back to life. And if it won’t revive, then it has to be fed even more. They can vividly remember that when the horse was running strong, it had a good appetite. So the endless bailout packages are not going to revive the economy. Unfortunately, the system can no longer recover through normal pain – the Schumpeterian “creative destruction”. Instead, the result there will be a long period of excruciating suffering – a systemic implosion.
Even worse, thanks to the human factor, an even bigger problem awaits. The economy, which is just about to tailspin on one side of the road, will probably tailspin on the other side. This represents the current inflation-deflation debate. Everyone with a racing experience who has felt the car skid off the road knows that trying to countersteer too hard will get you in the ditch on the other side of the road. While the deflationary forces exert strong deflationary pressure, the inflationist Bernanke Fed is trying hard to countersteer with inflation. Some prices are indeed dropping now, but this is just the prelude to the real opus – hyperinflation.
Financial history teaches us that every time a financial crisis has been alleviated by printing more money instead of cutting costs and prices, it has ended up with hyperinflation. Zimbabwe is the most recent example, but the list is almost endless: Bulgaria, Russia, Ukraine, Turkey, Argentina, Mexico – the list goes on and on. We don’t need to add the years behind the crises – everyone can easily find these from the Internet. We refer the reader to our good friend Mike Hewitt, who has created an impressive compilation of such historical follies in his article “Hyperinflation Around the World”.
Hyperinflation goes with economy and finance just like attachments go with e-mails. Here is how the great economist Ludwig von Mises describes it:
„But then finally the masses wake up. They become suddenly aware of the fact that inflation is a deliberate policy and will go on endlessly. A breakdown occurs. The crack-up boom appears. Everybody is anxious to swap his money against "real" goods, no matter whether he needs them or not, no matter how much money he has to pay for them. Within a very short time, within a few weeks or even days, the things which were used as money are no longer used as media of exchange. They become scrap paper. Nobody wants to give away anything against them.”
Currency depreciation is actually quite common. A survey including 120 countries provides evidence that over the past 7 years, the currencies of 90 countries have lost at least half of their value. The thirty countries with relatively more “stable” currencies included mostly developed countries like the USA, Western European countries, Australia, and a few others that represent the “core” of the global monetary system.
However, this time the instability of the system has reached the core. The current economic policies can only lead us to one result – the destruction of the current global monetary system through hyperinflation. The flawed mainstream remedy, based on the failed doctrine of Keynesianism, is that in difficult times the state should intervene aggressively into the economy by spending more (and bailing out everybody) in order to protect jobs. To use one of Peter Schiff’s analogies, this is like poring gasoline on a fire; it only serves to speed up the hyperinflation. If the money for the stimulus actually exists in the government coffers as a result of previous savings, as is currently the case with Saudi Arabia, then this would be all right; unfortunately for the developed world (the “core” – U.S & Europe), this is not the case. And calling the spending without actual savings with fancy terms like “Keynesian stimulus” (or whatever) can’t possibly change the essence of things. The state provides for the stimulus with freshly-printed money that modern central bankers call euphemistically “Quantitative Easing”. It is a textbook example of “monetization” that is rapidly depreciating the currency and later on rendering it practically worthless. If printing more money and providing all sorts of stimuli and bailout packages could solve economic problems, then we would have been living in endless prosperity for hundreds of years, and Zimbabwe and Argentina would have been the economic powerhouses of the world.
Hyperinflation is not yet to be seen at the core, but the internal dynamics of process has its own inner logic and necessarily requires time. When a car backs out of a garage, it first backs up in one direction, before it drives off in the other. It appears for now that the U.S. auto manufacturers are saved, but this is actually a step towards hyperinflation. Eventually, costs will have to go up, then prices, and eventually salaries. In a positive feedback loop, higher wags lead to higher costs and higher prices – the dreaded wage-price spiral begins to speed up. Typically, a shortage of money develops and the social pressure to inflate becomes insurmountable – when inflation is speeding up, the government and business would go through tough times, because the revenues for goods and services sold will never be enough to pay for rising wages and prices of raw materials.
In a normal economic cycle, a profitable business will have more money (profits) after producing goods out of raw materials, so it can buy even more raw materials and grow; however, during hyperinflation business revenues are not enough to cover the rising cost of materials. So every production cycle generates a loss and the company becomes poorer and poorer. This simple concept may be hard to grasp at the moment for those who have never lived through hyperinflation, but when the time comes, it will be perfectly understood by almost everyone in the economy.
As grim as it may sound, there is a glimmer of hope – the beginning of the hyperinflation is also the beginning of the end for the Crisis. Financial assets accumulated by individuals and businesses during the boom years have to be destroyed – the price for our financial folly today will be paid tomorrow. There is no way around it, as the scarce economic resources backing these financial assets have been consumed through the sophisticated redistribution mechanisms of innovative financial instruments and deficit spending. Unfortunately, there is no such thing as a free lunch – the Baby Boomer generation has had an extra lunch today, but will have to skip the lunch tomorrow. The economic crisis is here and hyperinflation is on the way.
In conclusion, let us reiterate: “Don’t say you haven’t been forewarned.” But of course, this warning is just as good as giving a moralizing speech about drinking in a packed bar – no one would listen anyway. However, you have been warned – protect yourself, buy gold!
By Alar Tamming, Tavex and Dr. Krassimir Petrov,
Prince Sultan University
Alar Tamming has a Master's in Psychology. He is the founder and Chairman of the Supervisory Board of the TAVEX Group, the largest gold bullion dealer in Northern Europe. Visit www.tavex.eu to purchase your gold bullion coins and bars. Tavex can also help foreigners find storage in the safe jurisdictions of Sweden or Finland.
Krassimir Petrov ( Krassimir_Petrov@hotmail.com ) has received his Ph. D. in economics from the Ohio State University and currently teaches Macroeconomics, International Finance, and Econometrics at the American University in Bulgaria. He is looking for a career in Dubai or the U. A. E.
By: Dr_Krassimir_Petrov
Source: www.marketoracle.co.uk
The government’s reaction is typical of a crisis associated with economic collapse and social unrest. Hemingway put it so aptly: “The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin."
Three years ago Äripäev, Estonia’s leading daily business newspaper, published Alar Tamming’s article “Great Economic Crisis on the Way”. The article came out during the economic euphoria and the author himself is probably the only one who still remembers the final sentence: “... this time, do not complain that you were not forewarned.”
The economic crisis is well under way. However, there are major differences in predicting how the crisis will end. Yes, “under way”, because most people still think that we will be soon coming out of the crisis, may be even within a couple of months. Economic philosophizers still prognosticate that the economic boom is about re-emerge. Many in the Establishment even declare that the crisis is over. They forecast business as usual – the resurrection of the consumption-based economy, only if the banks were to start loaning again. Unfortunately, this will be impossible.
They are mostly wrong, as suggested by history and chaos theory. Even a superficial introduction to chaos theory leads us to observe that when a self-regulating system has reached the critical point, there is no returning to the previous level. Just like a capitalistic society cannot return back to slavery, or just like slavery cannot return back to the primeval society of hunters and gatherers, so we can no longer return to the capitalistic economic model that is based on consumption.
Development of all complex systems, whether we are dealing with a society, a business, or a human being, always take place in cycles. There is a time of balance (equilibrium), then a period of confusion (disequilibrium), and afterwards the system will be re-organised at a new, higher level, so that the problems that were a source of conflicts at the previous level will be resolved. This is the essence of Hegelian dialectics.
For example, everyone can see these processes happening to their children – how teenagers are full of conflicts during their puberty and how they will grow out of them stronger and smarter than before. Similarly, one can think of the end of the Soviet Era, when the system could no longer react to the external environment, which drove it to chaos; and then a new social order emerged, a qualitatively new system, based on private capital. Every entrepreneur probably remembers the same when thinking about development of his company, and can recall how crises have helped his company improve, if he ever managed to survive. Without proper resolution of internal and external conflicts through development, every system is doomed to fail. This is a basic application of Hegelian dialectics and a basic result associated with complex systems.
However, the current situation is rather complicated. The economic system has gone critical – it has reached point from where there is no turning back. The worst part is that the system cannot self-organise. “Normal” business organisation typically means that if you are doing business and make wrong decisions in a particular economic environment, then you should also suffer the consequences. In other words – if a bank has made bad loans, then we should let it fail. Failure is part of capitalism. Individuals and businesses that have deposited their money in this bank and, therefore, made a wrong decision, should also lose their money. Simple and logical, this is what capitalism is all about.
Unfortunately, governments and central banks do not want to accept that. They think that trying to feed a dead horse will bring it back to life. And if it won’t revive, then it has to be fed even more. They can vividly remember that when the horse was running strong, it had a good appetite. So the endless bailout packages are not going to revive the economy. Unfortunately, the system can no longer recover through normal pain – the Schumpeterian “creative destruction”. Instead, the result there will be a long period of excruciating suffering – a systemic implosion.
Even worse, thanks to the human factor, an even bigger problem awaits. The economy, which is just about to tailspin on one side of the road, will probably tailspin on the other side. This represents the current inflation-deflation debate. Everyone with a racing experience who has felt the car skid off the road knows that trying to countersteer too hard will get you in the ditch on the other side of the road. While the deflationary forces exert strong deflationary pressure, the inflationist Bernanke Fed is trying hard to countersteer with inflation. Some prices are indeed dropping now, but this is just the prelude to the real opus – hyperinflation.
Financial history teaches us that every time a financial crisis has been alleviated by printing more money instead of cutting costs and prices, it has ended up with hyperinflation. Zimbabwe is the most recent example, but the list is almost endless: Bulgaria, Russia, Ukraine, Turkey, Argentina, Mexico – the list goes on and on. We don’t need to add the years behind the crises – everyone can easily find these from the Internet. We refer the reader to our good friend Mike Hewitt, who has created an impressive compilation of such historical follies in his article “Hyperinflation Around the World”.
Hyperinflation goes with economy and finance just like attachments go with e-mails. Here is how the great economist Ludwig von Mises describes it:
„But then finally the masses wake up. They become suddenly aware of the fact that inflation is a deliberate policy and will go on endlessly. A breakdown occurs. The crack-up boom appears. Everybody is anxious to swap his money against "real" goods, no matter whether he needs them or not, no matter how much money he has to pay for them. Within a very short time, within a few weeks or even days, the things which were used as money are no longer used as media of exchange. They become scrap paper. Nobody wants to give away anything against them.”
Currency depreciation is actually quite common. A survey including 120 countries provides evidence that over the past 7 years, the currencies of 90 countries have lost at least half of their value. The thirty countries with relatively more “stable” currencies included mostly developed countries like the USA, Western European countries, Australia, and a few others that represent the “core” of the global monetary system.
However, this time the instability of the system has reached the core. The current economic policies can only lead us to one result – the destruction of the current global monetary system through hyperinflation. The flawed mainstream remedy, based on the failed doctrine of Keynesianism, is that in difficult times the state should intervene aggressively into the economy by spending more (and bailing out everybody) in order to protect jobs. To use one of Peter Schiff’s analogies, this is like poring gasoline on a fire; it only serves to speed up the hyperinflation. If the money for the stimulus actually exists in the government coffers as a result of previous savings, as is currently the case with Saudi Arabia, then this would be all right; unfortunately for the developed world (the “core” – U.S & Europe), this is not the case. And calling the spending without actual savings with fancy terms like “Keynesian stimulus” (or whatever) can’t possibly change the essence of things. The state provides for the stimulus with freshly-printed money that modern central bankers call euphemistically “Quantitative Easing”. It is a textbook example of “monetization” that is rapidly depreciating the currency and later on rendering it practically worthless. If printing more money and providing all sorts of stimuli and bailout packages could solve economic problems, then we would have been living in endless prosperity for hundreds of years, and Zimbabwe and Argentina would have been the economic powerhouses of the world.
Hyperinflation is not yet to be seen at the core, but the internal dynamics of process has its own inner logic and necessarily requires time. When a car backs out of a garage, it first backs up in one direction, before it drives off in the other. It appears for now that the U.S. auto manufacturers are saved, but this is actually a step towards hyperinflation. Eventually, costs will have to go up, then prices, and eventually salaries. In a positive feedback loop, higher wags lead to higher costs and higher prices – the dreaded wage-price spiral begins to speed up. Typically, a shortage of money develops and the social pressure to inflate becomes insurmountable – when inflation is speeding up, the government and business would go through tough times, because the revenues for goods and services sold will never be enough to pay for rising wages and prices of raw materials.
In a normal economic cycle, a profitable business will have more money (profits) after producing goods out of raw materials, so it can buy even more raw materials and grow; however, during hyperinflation business revenues are not enough to cover the rising cost of materials. So every production cycle generates a loss and the company becomes poorer and poorer. This simple concept may be hard to grasp at the moment for those who have never lived through hyperinflation, but when the time comes, it will be perfectly understood by almost everyone in the economy.
As grim as it may sound, there is a glimmer of hope – the beginning of the hyperinflation is also the beginning of the end for the Crisis. Financial assets accumulated by individuals and businesses during the boom years have to be destroyed – the price for our financial folly today will be paid tomorrow. There is no way around it, as the scarce economic resources backing these financial assets have been consumed through the sophisticated redistribution mechanisms of innovative financial instruments and deficit spending. Unfortunately, there is no such thing as a free lunch – the Baby Boomer generation has had an extra lunch today, but will have to skip the lunch tomorrow. The economic crisis is here and hyperinflation is on the way.
In conclusion, let us reiterate: “Don’t say you haven’t been forewarned.” But of course, this warning is just as good as giving a moralizing speech about drinking in a packed bar – no one would listen anyway. However, you have been warned – protect yourself, buy gold!
By Alar Tamming, Tavex and Dr. Krassimir Petrov,
Prince Sultan University
Alar Tamming has a Master's in Psychology. He is the founder and Chairman of the Supervisory Board of the TAVEX Group, the largest gold bullion dealer in Northern Europe. Visit www.tavex.eu to purchase your gold bullion coins and bars. Tavex can also help foreigners find storage in the safe jurisdictions of Sweden or Finland.
Krassimir Petrov ( Krassimir_Petrov@hotmail.com ) has received his Ph. D. in economics from the Ohio State University and currently teaches Macroeconomics, International Finance, and Econometrics at the American University in Bulgaria. He is looking for a career in Dubai or the U. A. E.
By: Dr_Krassimir_Petrov
Source: www.marketoracle.co.uk
Sunday, March 14, 2010
Birth tourism in US on the rise for Turkish parents
With more Turkish parents wanting their child to be born in the US, tourism companies are starting to offer ‘birth tourism’ packages to US cities. Many women say giving birth in the US has benefits including cheaper education and fewer visa worries. Some Americans, however, want to restrict the practice, citing fears of illegal migration.
If Bruce Springsteen’s 1982 hit “Born in the USA” were to become popular again, the title might now refer to thousands of Turkish children whose parents are increasingly traveling to the United States to give birth.
According to tourism expert Gürkan Boztepe and media sources, 12,000 Turkish children have been born in the U.S. since 2003.The numbers are significant enough to draw the attention of tourism companies and inspire them to pursue “birth tourism.”
“We found a company on the Internet and decided to go to Austin for our child’s birth,” said Selin Burcuoğlu who gave birth to a daughter last year. “It was incredibly professional. They organized everything for me. I had no problem adjusting and I had an excellent birth,” she told the Hürriyet Daily News & Economic Review.
Burcuoğlu said she and her partner chose to have the birth in the U.S. to make their child’s life more comfortable. “I don’t want her to deal with visa issues – American citizenship has so many advantages.”
Birth tourism
Burcuoğlu is not the only Turkish parent who wants her child to have U.S. citizenship. Many Turkish parents-to-be are now seeking tourism companies to “guarantee” their child’s life.
“We have been involved in medical tourism since 2002,” said Levent Baş, general manager of Gurib Tourism. “But we were also receiving so many demands about this issue that we decided to sell birth packages,” he told the Daily News.
“We first started our research in New York City, Los Angeles, Chicago and Orlando and we only contacted Turkish doctors,” Baş said. “But we are preparing a package that covers everything from the flight and city tours to accommodation for several months and hospital expenses.”
In terms of cost, Baş said the minimum expense is $25,000, which rises to $40,000 if the destination is New York.
Birth tourism organizations are located throughout Turkey, including one run by Gürkan Boztepe in the Aegean province of İzmir. “Before, only celebrities gave birth in the U.S. We are now aiming, however, to make this service accessible to everyone. And surprisingly, our customers are not just from İzmir and Istanbul, there are also many people from smaller provinces, such as [southeastern] Gaziantep.”
Many families, however, do not want to talk openly about the process, according to the birth tourism operators. “Many people say they are doing it because they want their kids to get a cheaper education and not deal with visa issues when they grow up,” said Baş.
“But they don’t want to make it public. Even celebrities who have done this are trying to ignore the issue by saying they had to give birth in the U.S. because their doctors were there,” he said.
Arzu Geiger is an entrepreneur who lives in Gilbert, Arizona, and offers customers the option to stay in her home.
“We got the idea when a friend of ours wished to give birth in the U.S.,” she told the Daily News. “We realized that many women abroad may also wish to give birth in the U.S., but may have many concerns regarding arrangements or safety. Some women may choose to stay alone with us for the first few months, then move to separate living arrangements when family members arrive for the birth.”
While the small-scale companies have started investing in the birth market, bigger firms are also entering the market with alternative packages. The Turkish-owned Marmara Hotel group recently announced a birth tourism package that includes accommodation at their Manhattan branch.
“We hosted 15 families last year,” said Nur Ercan Mağden, head manager of The Marmara Manhattan, adding that the cost was $45,000 each.
Law Amendment
According to the U.S.’s 14th Amendment, the country grants citizenship to anyone born on its soil. At the same time, however, many have demanded the elimination of the “ius soli” law.
"They come to this country and have babies. The children are citizens. The children are eligible to go to school. They receive food stamps and social programs. The American taxpayers are paying for it," said Republican Congressman Gary Miller last month, who is co-sponsoring a bill that seeks to abolish birthright citizenship for children born in the country to illegal immigrant parents.
According to Emre Özgü, a partner at law firm Barst Mukamal & Kleiner LLP in New York, people in favor of tightening immigration laws have been attempting to end “ius soli” citizenship for years.
“Those trying to restrict immigration argue these babies, who are occasionally called ‘anchor babies,’ serve as a key link in the ‘chain immigration’ process that they would like to see eliminated. However, there is no current pending legislation before Congress that would limit the claim to U.S. citizenship of a child born in the U.S.,” Özgü told the Daily News.
When asked whether birthright citizenship could be considered a loophole in the law, Özgü said he would not classify the “ius soli” citizenship as such because it is explicitly included within the U.S. Constitution.
“While it can be controversial, birth tourism is legal in the U.S.,” said Geiger. “Some of the major concerns expressed with birth tourism are that the mother and baby can access free health and social benefits at the expense of U.S. taxpayers. We do not accept customers in this manner – they are responsible for the payment of their own medical expenses.”
Baş, however, thinks U.S. authorities are ultimately unconcerned by the practice. “I think the United States is aware of such a law, otherwise they would prevent it. I think it is part of an integration policy. They want people to become American citizens.”
Other examples
Birth tourism to the U.S. is not just popular in Turkey but also in Asian countries such as South Korea, Hong Kong and Taiwan. According to a Los Angeles Times report, many South Korean parents-to-be have chosen to give birth in the U.S. for many reasons, ranging from a desire to enroll their children in American schools to enabling them to avoid South Korean military service.
The birthright citizenship formerly applied to other countries such as the United Kingdom and Australia but both countries modified their law in the mid-1980s.
India maintained such birthright law until 2004, but ended the right to prevent continued illegal immigration from neighbors Pakistan and Bangladesh.
Source: Hurriyet Daily News and Economic Review
If Bruce Springsteen’s 1982 hit “Born in the USA” were to become popular again, the title might now refer to thousands of Turkish children whose parents are increasingly traveling to the United States to give birth.
According to tourism expert Gürkan Boztepe and media sources, 12,000 Turkish children have been born in the U.S. since 2003.The numbers are significant enough to draw the attention of tourism companies and inspire them to pursue “birth tourism.”
“We found a company on the Internet and decided to go to Austin for our child’s birth,” said Selin Burcuoğlu who gave birth to a daughter last year. “It was incredibly professional. They organized everything for me. I had no problem adjusting and I had an excellent birth,” she told the Hürriyet Daily News & Economic Review.
Burcuoğlu said she and her partner chose to have the birth in the U.S. to make their child’s life more comfortable. “I don’t want her to deal with visa issues – American citizenship has so many advantages.”
Birth tourism
Burcuoğlu is not the only Turkish parent who wants her child to have U.S. citizenship. Many Turkish parents-to-be are now seeking tourism companies to “guarantee” their child’s life.
“We have been involved in medical tourism since 2002,” said Levent Baş, general manager of Gurib Tourism. “But we were also receiving so many demands about this issue that we decided to sell birth packages,” he told the Daily News.
“We first started our research in New York City, Los Angeles, Chicago and Orlando and we only contacted Turkish doctors,” Baş said. “But we are preparing a package that covers everything from the flight and city tours to accommodation for several months and hospital expenses.”
In terms of cost, Baş said the minimum expense is $25,000, which rises to $40,000 if the destination is New York.
Birth tourism organizations are located throughout Turkey, including one run by Gürkan Boztepe in the Aegean province of İzmir. “Before, only celebrities gave birth in the U.S. We are now aiming, however, to make this service accessible to everyone. And surprisingly, our customers are not just from İzmir and Istanbul, there are also many people from smaller provinces, such as [southeastern] Gaziantep.”
Many families, however, do not want to talk openly about the process, according to the birth tourism operators. “Many people say they are doing it because they want their kids to get a cheaper education and not deal with visa issues when they grow up,” said Baş.
“But they don’t want to make it public. Even celebrities who have done this are trying to ignore the issue by saying they had to give birth in the U.S. because their doctors were there,” he said.
Arzu Geiger is an entrepreneur who lives in Gilbert, Arizona, and offers customers the option to stay in her home.
“We got the idea when a friend of ours wished to give birth in the U.S.,” she told the Daily News. “We realized that many women abroad may also wish to give birth in the U.S., but may have many concerns regarding arrangements or safety. Some women may choose to stay alone with us for the first few months, then move to separate living arrangements when family members arrive for the birth.”
While the small-scale companies have started investing in the birth market, bigger firms are also entering the market with alternative packages. The Turkish-owned Marmara Hotel group recently announced a birth tourism package that includes accommodation at their Manhattan branch.
“We hosted 15 families last year,” said Nur Ercan Mağden, head manager of The Marmara Manhattan, adding that the cost was $45,000 each.
Law Amendment
According to the U.S.’s 14th Amendment, the country grants citizenship to anyone born on its soil. At the same time, however, many have demanded the elimination of the “ius soli” law.
"They come to this country and have babies. The children are citizens. The children are eligible to go to school. They receive food stamps and social programs. The American taxpayers are paying for it," said Republican Congressman Gary Miller last month, who is co-sponsoring a bill that seeks to abolish birthright citizenship for children born in the country to illegal immigrant parents.
According to Emre Özgü, a partner at law firm Barst Mukamal & Kleiner LLP in New York, people in favor of tightening immigration laws have been attempting to end “ius soli” citizenship for years.
“Those trying to restrict immigration argue these babies, who are occasionally called ‘anchor babies,’ serve as a key link in the ‘chain immigration’ process that they would like to see eliminated. However, there is no current pending legislation before Congress that would limit the claim to U.S. citizenship of a child born in the U.S.,” Özgü told the Daily News.
When asked whether birthright citizenship could be considered a loophole in the law, Özgü said he would not classify the “ius soli” citizenship as such because it is explicitly included within the U.S. Constitution.
“While it can be controversial, birth tourism is legal in the U.S.,” said Geiger. “Some of the major concerns expressed with birth tourism are that the mother and baby can access free health and social benefits at the expense of U.S. taxpayers. We do not accept customers in this manner – they are responsible for the payment of their own medical expenses.”
Baş, however, thinks U.S. authorities are ultimately unconcerned by the practice. “I think the United States is aware of such a law, otherwise they would prevent it. I think it is part of an integration policy. They want people to become American citizens.”
Other examples
Birth tourism to the U.S. is not just popular in Turkey but also in Asian countries such as South Korea, Hong Kong and Taiwan. According to a Los Angeles Times report, many South Korean parents-to-be have chosen to give birth in the U.S. for many reasons, ranging from a desire to enroll their children in American schools to enabling them to avoid South Korean military service.
The birthright citizenship formerly applied to other countries such as the United Kingdom and Australia but both countries modified their law in the mid-1980s.
India maintained such birthright law until 2004, but ended the right to prevent continued illegal immigration from neighbors Pakistan and Bangladesh.
Source: Hurriyet Daily News and Economic Review
Saturday, March 13, 2010
China lets its cash speak in the Balkans
As Brussels painstakingly deliberates the merits of aspiring European Union members in the Balkans, Beijing has begun an investment offensive in the region. But is China’s money talking economics or politics?
Last year, Presidents Hu Jintao of China and Boris Tadic of Serbia cemented their bilateral relations and traditional friendship with a strategic partnership. Besides reaffirming their mutual respect for one another's sovereignty and territorial integrity, pledging broader, stronger and deeper ties, the two republics firmly stated their aim to promote economic cooperation and trade.
A document resulting from their partnership agreement said the two sides had expressed a readiness to “ensure continuous and steady growth of bilateral trade and gradually improve the balance of bilateral trade through development in accordance with the principle of equality, mutual benefit, reciprocity and win-win result.”
A few months down the line the Export Import Bank of China (China Eximbank) has granted Belgrade a billion euro ($1.3 billion) loan to upgrade two power plants and build a much-needed bridge over the beautiful blue Danube.
Bildunterschrift: Großansicht des Bildes mit der Bildunterschrift: A new bridge would help unclog Belgrade's traffic
The bridge project, which is due to get underway in the spring, is critical both as a means of easing the traffic situation in Belgrade, and as a test of how well China can work with its south-eastern European partner.
An official from the cabinet of Serbia's National Investment Plan (NIP), who preferred not to be named, told Deutsche Welle that continued Chinese presence in the region hinges on the success of the bridge scheme.
"There are a lot of projects we would like the Chinese to do," he said. "But they want to see how it turns out first."
What's good for one…
And Serbia is not the only country in the Balkans which embraces the idea of a free-flowing yuan. Dusan Reljic from the EU External Relations division of the German Institute for International and Security Affairs, told Deutsche Welle that Chinese presence is gathering momentum right across the region.
"The Chinese are in Slovenia, in Macedonia, they're exporting buses to Skopje, they're talking to Croatia about transport facilities, harbors, airports, railway connections," he said "and they've been talking to the Greeks about leasing possibilities in Athens harbor."
Analysts have described China's arrival in the Balkans as an effort to get into Europe through the back door. But Kerry Brown of the Asia Program at London's Chatham House, disputes the need for sneaking in through the rear when the "front door is wide open." Citing telecommunications and automotive high-tech retail industries as examples, he told Deutsche Welle that Chinese investors are already in Europe.
Win-win result?
Bildunterschrift: Großansicht des Bildes mit der Bildunterschrift: Pireus harbor in Athens
Dusan Reljic agrees, but says taking the direct route to greater EU presence would be more costly for China than investing in territories poised to join within the next 10 to 15 years. "It's cheaper to buy assets there [southern-eastern Europe] than within the present European Union," the expert said.
A cheap ride for China, but what's in it for the conduit countries like Serbia? "A good deal," says Reljic. With very little direct foreign investment coming into the region, tight government budgets and unemployment rates on the rise again, he says Balkan states need and welcome China's money, which comes with grace periods, generously low interest rates and very few strings attached.
"The Chinese do not attach economic or political conditions to their loans," Reljic said. "In a way, cheap Chinese money is an alternative to commercially expensive Western money or politically expensive money from the International Monetary Fund or the World Bank."
The politics of economics
But money is not the only factor at play. Reljic says Beijing's activities in the Balkans are as much about political positioning as they are about financial returns.
"This increased presence is also a signal to the US and the West that China is no longer a peripheral world power, but it is the world power and it is engaging in all political developments throughout the world with its own agenda."
Bildunterschrift: Großansicht des Bildes mit der Bildunterschrift: "Kosovo is Serbia" graffiti is testimony to Kosovo's disputed independence
An example of that agenda is Beijing's vehement opposition to Kosovo's independence. China recently spoke out against Kosovo's split from Serbia at the International Court of Justice in the Hague.
Yet many analysts would say such public displays of support have less to do with China's concern over stability in the Balkans region than with a concern that its own minority groups might follow Kosovo's lead towards independence. And that, says Kerry Brown is "absolutely not what they want."
Weighing it up
So what do they want? "China wants to remake the world and is disappointed that the world won't comply." Brown said. "It is guided by self-interest and is happy to abuse friendships."
He says China, which has itself stated its national aim of becoming a strong and wealthy country, is often hard for foreign partners to understand, which is why smaller countries like those in the Balkans should be aware of what they want from a partnership with Beijing.
"If countries say yes to everything, they have the complication of becoming a tributary state of China."
But the NIP official told Deutsche Welle such problems would not arise between Belgrade and Beijing. "According to domestic law, we are obliged to hire third-party supervision," he said. "The Chinese will not be given free reign to do whatever they want, no matter who they are dealing with."
Source: Deutsche Welle
Author: Tamsin Walker
Last year, Presidents Hu Jintao of China and Boris Tadic of Serbia cemented their bilateral relations and traditional friendship with a strategic partnership. Besides reaffirming their mutual respect for one another's sovereignty and territorial integrity, pledging broader, stronger and deeper ties, the two republics firmly stated their aim to promote economic cooperation and trade.
A document resulting from their partnership agreement said the two sides had expressed a readiness to “ensure continuous and steady growth of bilateral trade and gradually improve the balance of bilateral trade through development in accordance with the principle of equality, mutual benefit, reciprocity and win-win result.”
A few months down the line the Export Import Bank of China (China Eximbank) has granted Belgrade a billion euro ($1.3 billion) loan to upgrade two power plants and build a much-needed bridge over the beautiful blue Danube.
Bildunterschrift: Großansicht des Bildes mit der Bildunterschrift: A new bridge would help unclog Belgrade's traffic
The bridge project, which is due to get underway in the spring, is critical both as a means of easing the traffic situation in Belgrade, and as a test of how well China can work with its south-eastern European partner.
An official from the cabinet of Serbia's National Investment Plan (NIP), who preferred not to be named, told Deutsche Welle that continued Chinese presence in the region hinges on the success of the bridge scheme.
"There are a lot of projects we would like the Chinese to do," he said. "But they want to see how it turns out first."
What's good for one…
And Serbia is not the only country in the Balkans which embraces the idea of a free-flowing yuan. Dusan Reljic from the EU External Relations division of the German Institute for International and Security Affairs, told Deutsche Welle that Chinese presence is gathering momentum right across the region.
"The Chinese are in Slovenia, in Macedonia, they're exporting buses to Skopje, they're talking to Croatia about transport facilities, harbors, airports, railway connections," he said "and they've been talking to the Greeks about leasing possibilities in Athens harbor."
Analysts have described China's arrival in the Balkans as an effort to get into Europe through the back door. But Kerry Brown of the Asia Program at London's Chatham House, disputes the need for sneaking in through the rear when the "front door is wide open." Citing telecommunications and automotive high-tech retail industries as examples, he told Deutsche Welle that Chinese investors are already in Europe.
Win-win result?
Bildunterschrift: Großansicht des Bildes mit der Bildunterschrift: Pireus harbor in Athens
Dusan Reljic agrees, but says taking the direct route to greater EU presence would be more costly for China than investing in territories poised to join within the next 10 to 15 years. "It's cheaper to buy assets there [southern-eastern Europe] than within the present European Union," the expert said.
A cheap ride for China, but what's in it for the conduit countries like Serbia? "A good deal," says Reljic. With very little direct foreign investment coming into the region, tight government budgets and unemployment rates on the rise again, he says Balkan states need and welcome China's money, which comes with grace periods, generously low interest rates and very few strings attached.
"The Chinese do not attach economic or political conditions to their loans," Reljic said. "In a way, cheap Chinese money is an alternative to commercially expensive Western money or politically expensive money from the International Monetary Fund or the World Bank."
The politics of economics
But money is not the only factor at play. Reljic says Beijing's activities in the Balkans are as much about political positioning as they are about financial returns.
"This increased presence is also a signal to the US and the West that China is no longer a peripheral world power, but it is the world power and it is engaging in all political developments throughout the world with its own agenda."
Bildunterschrift: Großansicht des Bildes mit der Bildunterschrift: "Kosovo is Serbia" graffiti is testimony to Kosovo's disputed independence
An example of that agenda is Beijing's vehement opposition to Kosovo's independence. China recently spoke out against Kosovo's split from Serbia at the International Court of Justice in the Hague.
Yet many analysts would say such public displays of support have less to do with China's concern over stability in the Balkans region than with a concern that its own minority groups might follow Kosovo's lead towards independence. And that, says Kerry Brown is "absolutely not what they want."
Weighing it up
So what do they want? "China wants to remake the world and is disappointed that the world won't comply." Brown said. "It is guided by self-interest and is happy to abuse friendships."
He says China, which has itself stated its national aim of becoming a strong and wealthy country, is often hard for foreign partners to understand, which is why smaller countries like those in the Balkans should be aware of what they want from a partnership with Beijing.
"If countries say yes to everything, they have the complication of becoming a tributary state of China."
But the NIP official told Deutsche Welle such problems would not arise between Belgrade and Beijing. "According to domestic law, we are obliged to hire third-party supervision," he said. "The Chinese will not be given free reign to do whatever they want, no matter who they are dealing with."
Source: Deutsche Welle
Author: Tamsin Walker
Friday, March 12, 2010
Thursday, March 11, 2010
U.K. House Prices Rise the Most Since 2002, Acadametrics Says
March 12 (Bloomberg) -- U.K. house prices increased in February at the fastest pace in more than seven years, research group Acadametrics Ltd. said.
The average cost of a home in England and Wales was 222,008 pounds ($334,033), up 1.9 percent from January in the biggest advance since September 2002, Acadametrics founder David Thorpe said in a telephone interview. Values are still 4 percent below their February 2008 peak, the group said in an estimate released by e-mail today.
The measurement is at odds with other housing data that show values fell last month and is likely to be revised down, Thorpe said. Some property market indicators show Britain’s housing recovery lost momentum this year after the looming general election, an increase in transaction tax and colder- than-average winter weather deterred buyers.
“The numbers at the moment are very volatile because of low transactions,” Thorpe said. “When more transactions come through we would expect this 1.9 percent to drop.”
Transactions in January plunged 52 percent from December to 36,000, an 11-month low, the research group said.
Acadametrics uses methodology employed by the U.S. S&P/Case-Shiller price index, combining initial housing transaction data from the U.K. Land Registry and results from other price measures to produce an estimate for the most recent month. That number is then revised in following months. The gauge was formerly called the Financial Times House Price Index.
By Scott Hamilton, Source: Bloomberg
The average cost of a home in England and Wales was 222,008 pounds ($334,033), up 1.9 percent from January in the biggest advance since September 2002, Acadametrics founder David Thorpe said in a telephone interview. Values are still 4 percent below their February 2008 peak, the group said in an estimate released by e-mail today.
The measurement is at odds with other housing data that show values fell last month and is likely to be revised down, Thorpe said. Some property market indicators show Britain’s housing recovery lost momentum this year after the looming general election, an increase in transaction tax and colder- than-average winter weather deterred buyers.
“The numbers at the moment are very volatile because of low transactions,” Thorpe said. “When more transactions come through we would expect this 1.9 percent to drop.”
Transactions in January plunged 52 percent from December to 36,000, an 11-month low, the research group said.
Acadametrics uses methodology employed by the U.S. S&P/Case-Shiller price index, combining initial housing transaction data from the U.K. Land Registry and results from other price measures to produce an estimate for the most recent month. That number is then revised in following months. The gauge was formerly called the Financial Times House Price Index.
By Scott Hamilton, Source: Bloomberg
China's auto sales top 2.9m units in first two months
China's auto sales maintained steady growth in the first two months of 2010, buoyed by the nation's car purchase incentives and strong demand brought by the week-long Spring Festival holidays.
The combined auto sales in January and February surged 84 percent from a year earlier to 2.9 million units, with February's figures alone reaching 1.2 million units, up 46 percent year-on-year, according to the China Association of Auto Manufactures (CAAM) Tuesday.
China, the world's largest auto market, adjusted the auto tax-cut policy and old-for-new program in January this year, to boost domestic consumption.
Ministry of Commerce said in February that the favorable policies for car purchasing had paid off, with a significant rise in the number of subsidy applications.
Dong Yang, the first deputy director of the CAAM, urged the nation's automobile industry to properly handle the relationship between improving product quality and maintaining fast development.
Source: China Dayli
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