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Americans may be spending their dollars with merry abandon as the Christmas shopping season begins this Black Friday, and that might be a good short-term strategy: the greenback slid on the foreign exchange markets after a Chinese central banker expressed fears about depreciation of the U.S. currency.
“The exchange rate of the U.S. dollar, which is the major reserve currency, is going lower, increasing the depreciation risk for East Asian reserve assets," wrote Wu Xiaoling, deputy governor of the People’s Bank of China, in an academic paper. Wu is ranked by Forbes as the 35th-most-powerful woman in the worldWu’s comments marked the second time this month that a Chinese central banker had made dollar-wary comments. On Nov. 9, the central bank governor, Zhou Xiaochuan, was quoted as saying that China has plans to diversify its assets into “many instruments,” presumably moving away from the dollar.
China has never revealed the exact composition of its foreign currency reserves, but market speculation suggests at least 70% is in dollars. With Chinese reserves having recently topped $1 trillion, a move away from the dollar could have significant implications.
For months China has been soaking up U.S. Treasury bonds, using dollars from its huge trade surplus with the United States. Wu noted that East Asian investors not only face a currency depreciation risk from holding dollar-denominated assets but also falling interest rates on long-term bonds. There is some perhaps unintentional irony in that comment because China’s seemingly insatiable appetite for Treasuries seems to be a major cause of the falling interest rates.
See:State auditors find 7.1 billion yuan misappropriated in social security funds
The National Audit Office has found that 7.1 billion yuan of China's 2 trillion yuan in social security funds had been misappropriated.
The money was siphoned off for "overseas investment, commercial loans to companies, construction of government buildings and other purposes", according to a report released by the state agency. Of the total, 2.347 billion yuan was stolen before 1999 and 4.788 billion yuan after that.
The agency started the investigation in September on pension, unemployment and health insurance funds across the country and it discovered corruption and inconsistent management.
The agency's report insisted that the social security funds, except for sums paid to beneficiaries, "must be deposited in banks or used to purchase state treasury bonds". It said the funds were a "high-voltage power line", which meant that no one was allowed to illegally tamper with them.
China's social security funds have been recently hit with scandals - in particular the Shanghai scandal wich involved 3.2 billion yuan of city funds - prompting the Ministry of Labour and Social Security to say that it would keep a closer watch on the funds. The Shanghai scandal which broke out in September brought down Chen Liangyu, secretary of the Shanghai Municipal Party Committee, and other senior officials and business leaders.
Xinhua reported that China has carried out five nationwide audits of social security funds since 1998. Embezzlement of the funds was found in 16 of the 31 provinces, autonomous regions and municipalities in 2004, while 1.7 billion yuan was misappropriated in 2005 alone.
The National Audit Office's report also revealed that the director and financial chief of a health insurance fund management centre in Ningxia Hui Autonomous Region, in northwestern China, transferred 31.9 million yuan (about four million U.S. dollars) of medical insurance premiums to the personal bank accounts of their friends and relatives. In Xinmi, Henan province, in central China, 6.4 million yuan of pension insurance funds were deposited in a credit cooperative, a kind of informal bank. The credit cooperative stopped operation in 2002 and the money could not be recovered.
China provided pensions to 43.67 million retired people last year and granted living subsidies to 3.62 million laid-off people. The value of the social security funds in China has more than doubled since 2000.
As well, a blog alleges money from these contracts may have been funnelled through tobacco control lobbyists to Tory leadership contenders. Two others say Carr wanted to move up the government food chain to bigger and better positions.
Dunn asks Carr and checks the man's records. Dunn questions Alberta Lung and Kilburn. He can't find anything.
Except, Dunn does point out "unlike some jurisdictions, contribution records for leadership campaigns in Alberta are not required to be publicly available." And Dunn can't look at the books of the men who would be premier. In fact, Alberta law specifically excludes delving into dough from leadership bids.
The best the financial watchdog can do is lay out all the names and hope the Tory candidates do the right thing.
Anything more, says Dunn's findings, "is a matter for the Legislative Assembly to consider." That is, the politicians.
Dunn maintains if the contributions were open to the public "it would be very easy to trace."
Nothing in Alberta is ever easy to trace, whether it's government pork, insider influence or ballot-box stuffing. All this yarn gets is quick expressions of regret from the Tories and outrage from the opposition.
It will all blow over, as usual.
Yesterday morning, Dunn's department also talks to the province about the possible running up of expenses on a government credit card in 2004 by the executive assistant to former economic development minister Mark Norris, who is now running for Tory leader.
Dunn's department is "quite surprised" they hadn't heard of the allegations and asks government officials why auditors were not told. The answer? They didn't think there was anything to be concerned about. Situation normal.
AADAC funds the Anti-Tobbacco lobby who have been lobbying PC candidates with money from the government.
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A second ballot is almost certain in Alberta's Tory leadership race, a new poll of party members suggests, with Jim Dinning and Ted Morton in a statistical dead heat and four hopefuls battling for third spot.
The poll by Leger Marketing of 801 card-carrying Alberta Progressive Conservative members found Dinning, the province's former treasurer, garnered the support of 21 per cent of those surveyed. Calgary-area MLA Morton appears to have emerged as his most serious challenger -- snaring 18 per cent support.
Fellow candidates Lyle Oberg, Ed Stelmach, Mark Norris and Dave Hancock all have a legitimate shot at finishing third in Saturday's vote, according to the poll conducted for the Herald, with support ranging between 11 per cent for Oberg and six per cent for Hancock.
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