Sunday, March 10, 2013

How will Washington deal with end of the world?

Recently, a large asteroid had a close encounter with earth while a meteor actually exploded over Russia damaging property and causing some injuries. 

These closely occurring natural events served to bring public attention to the big what-if question. Namely, what if a large heavenly body were hurtling on a collision course with earth? How can we earthlings forestall such an inevitable threat to extinction?

The scientific experts on talk shows assured the public that by being watchful of the heavens, we could calculate the trajectories and anticipate possible collisions as much as 20 years away. 

With the technology already available on earth, this would be plenty of time to design suitable propelling force that would meet the celestial body with just the right glancing blow to nudge the object off the original course resulting in eventual fly by without a collision.

I am not so sanguine and can easily imagine a scenario with a less happy outcome. For example, let us imagine that …

Dr. Alphonse Keen, a PhD psychologist and amateur astronomer was the first to spot an asteroid heading for earth. He reasoned that the public might not take the threat to heart if they were told that the collision was 20 years away. To make sure of the sense of urgency, he said the collision was 10 years away.

Other scientists working to confirm the findings quickly exposed the wrong projection to the immense relief of governments and people around the world. Suddenly they were given an extra decade to solve this problem and the feeling of urgency were perceptibly lessened.

The fundamentalists declared that they would pray to God to avert the end of the world. They expressed faith in God’s will be done.

The Libertarians insisted that it’s not up to the government to solve the world’s problem. 

Leaders on both sides of the aisle after failing to reach consensus decided that the issue could be safely deferred until the next session of Congress, and then the next….

The White House decided to take the matter to the UN. The response from the General Assembly was that this was a matter for the Security Council. Other members of the Security Council pointed out that the US, as the sole super power and technological leader, must take the leading role and assemble the task force to repel the asteroid.

The American representative to the UN expressed the dismay that the US does not have a budget for such an undertaking. The EU representative indicated that they too are broke. China and India rejected any suggestion that contribution to the save the world project be levied according to population.

In the meantime a rising chorus of naysayers began to make their views known. They questioned the accuracy of the orbital calculations. They pointed out that asteroids have never collided with earth within human knowledge and why should it now? 

Some expressed confidence the earth will weather any collision. Others concluded that it was all a grand conspiracy formulated by the same folks that created the myth of global warming.

In the meantime, a handful of super rich convened a secret meeting to discuss the construction of a space platform large enough to host a significant sampling of the human race and thus preserve the species. The platform would have to sustain life for possibly decades until the aftermath of the collision subsided and earth became habitable again.

The trillion dollar financing was no challenge and all the technical details were fully examined and quickly addressed except one. Namely, the elite gathering could not agree on which of the human DNAs to be selected and ferried to the space platform.

The proceedings of the meeting was never publicly disclosed and thus the human race was spared of the sordid details of the clash of selfish and bigoted minds on the project that ultimately never got off the ground.

What happened in the interim 20 years before collision day, I leave for Hollywood's fertile imagination.

Friday, March 8, 2013

India gets into the currency swap game

India and Bhutan recently announced a currency swap agreement amounting to $0.1 billion to "further economic cooperation." 

This swap agreement allows the Royal Monetary Authority of Bhutan to withdraw tranches in dollars and euros as well as rupees. 

The same piece goes on to say that in May 2012, the Royal Bank of India had announced intention to enter currency swap agreements to the aggregate total of $2 billion with SAARC member countries -- Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka. 

The piece did not say whether Bhutan is the first or only member country to have accepted the invitation. The Bhutan central bank gave a clear and comprehensive explanation of the advantage of the swap agreement from Bhutan's point of view.

China has been entering into bilateral swap agreements with a large number of countries involving significantly larger amounts. These agreements involve their respective local currency and is a way of avoiding exposure to and cost of having to convert to dollars before settling their trade accounts.

Singapore just doubled their swap agreement with Bank of China to a total of 400 billion yuan or $48.2 billion. Singapore will be the third offshore centers (along with Hong Kong and Taiwan) to include the Renminbi in their foreign currency exchange market. London is expected soon to become the fourth offshore center to include the Chinese currency.

I have been tracking China's swap agreements as shown on my blog.