PANAMA-ENERGY-DROUGHT-CRISIS

The Panama Canal took a decade to complete, cost the lives of thousands of workers and proved one of the largest and most difficult engineering projects ever undertaken.

So why not a repeat performance?

Earlier this month, the Nicaraguan legislature approved construction of a canal to compete with the Panama Canal, an endeavor that would double the number of shortcuts between the Atlantic and Pacific oceans.

The project would apparently be built by a Chinese telecommunications equipment firm, with financing largely coming from China, according to the magazine The American.

The project envisions building a canal as long as 178 miles (the Panama Canal is 48 miles, by comparison), as well as two deep-water ports, two free-trade zones, an oil pipeline, a railroad and an international airport, according to the Wall Street Journal.

The cost is estimated at a staggering $40 billion, about four times the country’s annual gross domestic product.

Supporters of the latest iteration of the project, approved last week, hope that it will propel Nicaragua out of its economic doldrums by bolstering employment and economic growth, added the Journal.

Read the rest of this entry »

north korean medals

North Korea has been making headlines a great deal lately, and not for good reasons.

So-called Supreme Leader Kim Jong-un has spent the past few months engaged in sabre rattling to a degree that would have made his grandfather, Kim Il-sung, proud.

In a move that must have warmed the hearts of millions of impoverished North Koreans scraping to find enough food to keep their families from starving, the nation’s leadership announced intentions to launch a preemptive nuclear strike against the United States, calling the US the “sworn enemy of the Korean people.”

A few days later, North Korea confirmed it was ending the 60-year armistice connected to the 1950-53 Korean War.

On March 30, Pyongyang declared it was in “a state of war” with South Korea, and Kim Jong-un stated that rockets were ready to be fired at American bases in the Pacific in response to the US flying two nuclear-capable B2 stealth bombers over the Korean peninsula.

While US intelligence officials speculate that Kim Jong-un is using the bluster to assert control over his country, and his ultimate goal is recognition rather than getting involved in a devastating conflict, the general consensus seems to be that the baby-faced dictator is decidedly unpredictable, if not eight kinds of crazy.

Which is just what the people of North Korea don’t need at this point.

Read the rest of this entry »

scotland money

British finance minister George Osborne wielded the cudgel of fiscal insecurity to warn Scots against voting for independence.

Scotland runs the risk of ceding control of much of its economy if it chooses sovereignty during a referendum next year and remains in a “currency zone” using the British pound – the preferred option of the pro-independence Scottish government.

Osborne also warned there was no guarantee that the rest of the United Kingdom would accept such an arrangement.

Speaking in Glasgow, Osborne said choosing such a path could result in Scotland ending up like Panama and Montenegro, which use the US dollar and the euro, respectively, but neither has control over policy, according to Agence France-Presse.

In case anyone in attendance was unclear where Osborne, Britain’s Chancellor of the Exchequer, stood regarding Scotland’s 300-year-old union with England, the British Conservative politician made it crystal clear.

“If it ain’t broke, don’t break it,” he said.

Read the rest of this entry »

Global cotton production for the coming year is expected to drop 4 percent, according to estimates by the US Department of Agriculture.

The projected decline is attributed to a significant reduction in Brazil, where the crop for the 2012-13 year is expected to fall by fully one-third.

Record soybean and corn prices, disease outbreak and erratic precipitation are expected to lower the crop in the central Brazilian states of Bahia and Mato Grosso, which together account for more than 80 percent of Brazil’s total annual cotton production, according to Southeast Farm Press.

In the US, production is expected to be slightly more than 17 million bales, which represents a 2 percent increase from the previous month’s USDA estimate and is 11 percent higher than the previous year’s crop, the publication added.

Worldwide, 2012-13 cotton production is estimated at nearly 120 million bales.

Global cotton stocks are expected to be significantly higher this year than last, the USDA also reported.

Read the rest of this entry »

canadian pennies

The Canadian penny is showing it’s not going down without a fight.

Nearly two months after the Royal Canadian Mint stopped distributing the one-cent piece, the coin continues to circulate, causing some confusion north of the border.

That’s because when government officials announced the mint would end the penny’s run after more than 150 years, many people thought the cent would no longer be used.

But that’s not quite the case, according to the Canadian Broadcasting Corp.

“Businesses don’t have to turn over the pennies they collect to the bank and they can decide if they want to keep using Canada’s smallest currency, even though it’s not being produced,” the CBC reported.

Pennies still remain legal tender in Canada, it added.

Read the rest of this entry »

shakespeare taxes

The Los Angeles Times’ take on the recent report that William Shakespeare didn’t like to pay taxes and sought to profit from an archaic form of commodities trading says as much about the Times’ view of the world as it does about life in Elizabethan-era England.

The Times picked up on a report from researchers at Aberystwyth University in Wales that claims the Bard of Avon was a grain hoarder and was pursued by authorities for tax evasion.

Profits from his actions were channeled into real estate deals, enabling Shakespeare to become a large landowner.

The Times calls Shakespeare a conniving character, a tax dodger and a profiteer. What it fails to do is add some economic context to its story.

While focusing on claims that Shakespeare “a tax dodger who profiteered during times of famine,” the Times makes just a brief mention of the fact that there was no copyright laws in Shakespeare’s time, meaning he could expect no future royalties from his works.

Instead, the publication manages to whip up a little class envy while portraying the playwright as little more than a thug:

“By combining both illegal and legal activities, Shakespeare was able to retire in 1613 as the largest property owner in his hometown, Stratford-upon-Avon,” according to the Times. “His profits – minus a few fines for illegal hoarding and tax evasion – meant he had a working life of just 24 years.”

Read the rest of this entry »

Cyprus bank Nicosia cashpoint

Bank runs are generally discouraged by governments. The idea of long lines of people lining up outside financial institutions to suddenly withdraw money tends to destabilize banks, economies and sometimes even entire nations.

So the decision by the Republic of Cyprus this past weekend to take a sizeable portion of bank depositors’ money to help recapitalize the nation’s banks seems shortsighted at best.

Cypriots will have to hand over up to 9.9 percent of their deposits, part of a deal worked out with the EU and International Monetary Fund that would see the latter two organizations pump more than 4 billion euros into the nation.

Fearing bank runs, the Greek Cypriot cabinet is seeking to extend Monday’s state-mandated bank holiday through Tuesday, even though the European Central Bank has said it will offer unlimited liquidity to banks that experience deposit flight, according to the Wall Street Journal.

Under terms of the plan, the Cyprus government would impose 9.9 percent “stability levy” on deposits larger than 100,000 Euros and a 6.75 percent levy on deposits smaller than that, the publication added.

The rather stunning move comes as a result of the exposure of Cypriot banks to the Greek government debt crisis, the downgrading of the Greek Cypriot economy to junk status by international rating agencies and the inability of the government to cut state expenses.

Read the rest of this entry »

erlanger cotton bond

The depth and breadth of the New York Times’ Disunion series never ceases to amaze. The articles focus on the War Between the States, but go far beyond examinations of battles and leaders, delving into an amazing array of topics, including the medical, legal and financial aspects of the 1861-65 period.

Recently, Disunion, which is written by a variety of historians, academics and other individuals knowledgeable on specific aspects of the war, focused on the ingenious concept of cotton bonds, financial instruments issued by the Confederacy in 1863.

In January of that year, the Confederate Congress secretly authorized bankers at the noted Paris-based financial house of Erlanger et Cie. to underwrite $15 million of Confederate bonds, to be denominated in British pounds or French francs.

“But unlike ordinary bonds backed only by the faith and credit of the issuing country, at the option of the holder an Erlanger certificate could be converted into a receipt for a pre-specified quantity of cotton,” Phil Leigh writes for Disunion.

This was important because Confederate currency was all but worthless in Europe at that point of the war.

The conversion rate for the cotton bonds was fixed at 12 cents a pound, regardless of the commodity’s market price, at the time about 48 cents. In addition, the bonds paid a 7 percent annual interest rate.

Read the rest of this entry »

old photo of Isle of Man

Manx, a language declared extinct in the 1990s, is staging an extraordinary renaissance.

Nearly 40 years after last native speaker of Manx died and half a generation after UNESCO declared it extinct, the Gaelic language is anything but dead.

“Road signs, radio shows, mobile phone apps, novels – take a drive around the Isle of Man today and the local language is prominent,” according to the BBC News Magazine.

Manx is a sister language of Irish and Scottish Gaelic, and like those two languages is descended from an old version of Irish. In the Manx tongue, the language is called “Gaelg” or “Gailck,” similar to the English word “Gaelic.”

Like many of the languages which once flourished within the British Isles, including Irish, Scottish Gaelic and Cornish, Manx was supplanted by English and later looked down upon by many, particularly those in power.

“In the 1860s there were thousands of Manx people who couldn’t speak English,” said Brian Stowell, 76, a native of the Isle of Man, located in the Irish Sea between Great Britain and Ireland. “But barely a century later it was considered to be so backwards to speak the language that there were stories of Manx speakers getting stones thrown at them in the towns.”

Read the rest of this entry »

calvin coolidge

Book reviews, when done well, can provide useful history lessons in and of themselves.

Take The Economist’s review of Coolidge, Amity Shlaes’ new biography of the underappreciated 30th US president.

“Mr. Coolidge’s hallmark was distrust of government. He saw it as an entity that uses ‘despotic exactions’ (taxes) that sap individual initiative and prosperity across the board …” according to publication.

“Coolidge learned at first towards the surging progressive movement, which supported state intervention and union involvement in the economy,” the review adds. “But his views shifted when he saw what those ideas meant in practice.”

The Economist is not noted for being a publication of a particularly libertarian bent by any means, but it recognizes Coolidge’s achievements during his five-and-a-half years as president, during which American debt fell by one-third, the tax rate by half and unemployment dropped precipitously. It’s unfortunate that more Americans haven’t taken note of Coolidge’s accomplishments.

While no means perfect, Coolidge offers an interesting counterbalance to FDR and his New Deal approach.

Read the rest of this entry »