Economic rationales for community-centrism

Some fun moments to have from these wikileaks. By far, my all time favorite until now is this statement coming from Elias el Murr, former minister of Defense:

According to Murr, “when you want to fight terrorists,you are fighting Sunni and Shia; you need Christians in special forces to do this mission. If you maximize Christians, you will have the best results.”

I mean Murr’s statements have some rationale: creating employment opportunities for Christians (Something most sectarian leaders do in Lebanon). In order to do so, one can make this ‘cultural’ point that Christian forces would hate better. Economics, has its weird laws sometimes…

Advertisements

Unsustainable …

Global imbalances were projected to stabilize in 2007 and 2008, but were still very large, he said. The United States deficit had increased to $860 billion at the end of 2006, and was expected to fall to $800 billion in 2007. That deficit was basically being financed by surpluses in the developing and oil exporting countries, as well as some major developed countries, in particular Japan and Germany. The European Union,at large, was projected to continue to have a slight deficit on its current account. United States debt, which had now deepened to well over $3 trillion, might turn out to be unsustainable in the rest of 2007 or next, putting further downward pressure on the United States dollar, he said. Since its peak in 2002, the dollar had depreciated vis-à-vis the major currencies by some 35 per cent and by 25 per cent against a broader range of other currencies.
With that increased debt the risk of a sharp depreciation of the dollar continued, he said. If countries willing to invest in United States dollar assets expected further depreciation, they might be less willing to hold dollar assets, triggering a much sharper fall in the United States dollar. The risk of disorderly adjustment and the steep fall of the dollar existed. The policy challenge was how to prevent a hard landing of the United States dollar and forge a benign adjustment of the global imbalance.