China’s Holding of US Treasuries.

By: Michael Guess

Every so often you read or hear something like this: China is holding of billions of dollars in US Treasury bonds, and that puts us at risk as it could give them leverage over us via our currency.

Rubbish. China has the problem, not us. Let me explain.

This is how foreign exchange is supposed to work:
– A foreign company sells a product to a US company.
– The foreign company is paid in dollars.
– The foreign company takes the dollars to their Central Bank and exchanges them for their own currency.
– The Central Bank then goes on the open market, sells the dollars and buys their own currency.

But the Chinese Central Bank has decided not to sell the dollars. Instead they are just sitting on them. Why?

The answer has nothing to do with Chinese foreign policy and everything to do with Chinese domestic policy.

Selling a lot of something lowers the price, and buying a lot of something raises the price. The action of selling US dollars and buying Chinese yuan will affect the exchange rate between the two currencies. The Chinese currency would become more expensive compared to the US currency. In the case of the dollars and yuan the change in the exchange rate could be significant.

China is a dictatorship. The number one fear of the Chinese government is domestic unrest. A recent issue of the Economist magazine reported that the Chinese government now allocates more money to domestic security than to the military. A large increase in the value of the yuan will negatively affect the Chinese export industry. Millions of people would lose work. The very survival of the Party could be at risk.

Given that risk, what should the Chinese government do with all the dollars they are accumulating? Sell them and risk massive discontent, or just keep them? Clearly they have decided to hold the dollars, out of fear of the consequences.

Like I said, they have the problem, not us.

So…if in the future President Obama does something to offend China (like scheduling a lunch meeting with the Dalai Lama or something), and China responds by contacting Hillary Clinton and huffs and puffs that if that happens they will “use the dollar weapon”, she should smile sweetly at them and say: “Go ahead, make my day”.

Now, if you’re talking to somebody and they start going on about the Chinese owning us or something like that, explain the above to them. They will be impressed.

EPD Activity Report July 2 2011

Living Outside the Box is what makes Thinking Outside the Box Worth the Effort

IS IT TRUE that John Kish the Arena project manager and reluctant but game on manager of the downtown Convention Hotel Project is on camera stating that the hotel project is an 18 month construction project?…that the site on which the hotel is to be built is about as “shovel ready” as the country was when President Obama embarked upon the now infamous “Stimulus Plan”?…that a 10 foot pile of concrete, rebar, and guano is not quite ready to start building an hotel on yet?…that there are no detail drawings of any proposal for any hotel for downtown Evansville?…that Mr. Kish says that the hotel projects is on schedule to open in late 2012?…that is physically impossible given the 18 month construction project duration?…that we must start at the beginning and that the first step will be to issue a new RFP on July 6, 2011.

IS IT TRUE that the bids will be opened and/or presented by a new group of suitors during the 3rd week of July?…that there will then be a selection process that hopefully includes a VETTING PROCESS and involves ELECTED MEMBERS OF THE EVANSVILLE CITY COUNCIL?…that under the best of circumstances that this will be completed by mid August 2011?…that then there will be a formal announcement and a presentation of approved renderings?…that then there will be about another month to get a new CONTRACT SIGNED?…that by then it will be the middle of September of 2011?…that then and only then will any good business (and we trust that the next winning bidder will have been vetted and will be capable of proceeding) start a formal detail design process?…that the design may be completed and approved with permits issued by the END OF 2011?…that by the end of 2011 the Arena will be complete and that Mr. John Kish will be happy to be the heck out of Evansville and recuperating back home in Indianapolis?…that Mr. Kish’s 18 month construction timeline will end in a best case scenario of a Grand Opening in the Summer of 2013?

IS IT TRUE that in the case of a fully funded and vetted developer and a highly cooperative building commissioner may be able to pull this off in 12 months instead of the 18 months that conventional wisdom would estimate?…that a commitment to run two shifts may really make Mr. Kish’s end of 2012 completion date possible?…that other locations have actually offered performance bonuses in the millions of dollars to developers for early completions of all sorts of projects?…that a 7 figure bonus may be both necessary and appropriate to provide the carrot incentive needed to get this downtown Convention Hotel opened in time for the new head of the CVB to start booking conventions into the place?…that being a player in the 2013 convention season is worth offering a 7 figure bonus to the developer?…that if Evansville does not find a way to make this happen that 2013 will be the 4th year that the City of Evansville sat on the banks and watched the rest of the country compete for conventions?…that this is a NO-BRAINER?

IS IT TRUE that in other timing issues that the City Council and County Commissioners have kicked the consolidation plan approval down the road for another month in to August?…that when and if an approval takes place that there is a 30 day window for final approval?…that right now we are looking at mid September as the earliest that there will be something for the people of Vanderburgh County to examine?…that we bet the can will get kicked down the road for at least two more months?…that if these politicians can do that, and believe me they can, that no one running for office this year will have to offer a position on the consolidation plan before this year’s City of Evansville elections?…that none of the candidates are particularly enthused about having to issue an opinion on a consolidation plan this year?…that this should have been ready to be an election issue in this year’s City of Evansville elections?

IS IT TRUE that the Convention Hotel is the can that kicks itself down the road, but that the Consolidation Plan is the can that gets kicked down the road?

Overall Competitiveness of Division 1 Athletic Programs Compared

CLEVELAND – For the 17th straight year, Stanford takes home the top spot in the Division I Learfield
Sports Directors’ Cup standings with 1550.25 total points. The Cardinal most recently finished ninth in baseball. Ohio State took home second place with 1277.05 total points. With its fifth place showing in baseball, California moved into third with 1219.50 points. The Gators of Florida jumped into fourth after a second place finish in the College World Series. Rounding out the top five is Duke with 1171.50 points.

All 13 spring NCAA championships have been completed with the following institutions capturing titles:
baseball – South Carolina; women’s golf – UCLA; men’s golf – Augusta State (Ga.); women’s lacrosse –
Northwestern; men’s lacrosse – Virginia; women’s rowing – Brown (R.I.); softball – Arizona State;
women’s tennis – Florida; men’s tennis – Southern California; women’s outdoor track & field – Texas
A&M; men’s outdoor track & field – Texas A&M; men’s volleyball – Ohio State; and women’s water polo –
Stanford.

The Learfield Sports Directors’ Cup was developed as a joint effort between the National Association of
Collegiate Directors of Athletics (NACDA) and USA Today. Points are awarded based on each
institution’s finish in up to 20 sports — 10 women’s and 10 men’s.

The Missouri Valley Programs that the University of Evansville Purple Aces compete in Finished as follows in the Director’s Cup along with their overall scores.

#114 Creighton 150 points
#123 Illinois State 135 points
#129 Southern Illinois 129.5 points
#144 Wichita State 104.5 points
#148 Northern Iowa 102.5 points
#167 Indiana State 80 points
#205 Missouri State 50 points
#238 Bradley 25 points
#238 Drake 25 points
#280 Evansville 0 points

Link to full standings:

finald1standings10-11-2

IS IT TRUE that John Kish the Arena project manager and reluctant but game on manager of the downtown Convention Hotel Project is on camera stating that the hotel project is an 18 month construction project?…that in the very same interview done yesterday he also stated that the hotel project is on schedule for completion in late 2012?…that we know that adding a big number like 18 may only be taught in the second half of the 1st grade but earth to John, 18 months from today is January 2, 2013?…that there is one other nagging little detail that needs to be realized?…that RIGHT NOW THERE IS NO HOTEL PROJECT?…that just because the technicality of formally declaring default has not yet happen does not mean that this project and the contract that goes with it have more than a 1% chance of being resurrected?…that Mole #109 tells us that the discourse within Woodruff Hospitality LLC is so intense that “all the King’s horses and all the King’s men will not put this together again”?….that for any entity or any person to heal from internal discourse requires a desire to heal?…that Mole #109 tells us that Woodruff does not have unanimous consent to even consider a healing process?

IS IT TRUE that on Wednesday July 6, 2011 that unless Mary Poppins and Glenda the Good Witch converge on Evansville and inspire a healing of mythical proportion that the Evansville Redevelopment Commission will be formally defaulting the Downtown Hotel Development Agreement dated March 22, 2011 and formally announcing their new RFP?…that Mole #109 has learned that there really is a possibility that a HERO may be showing up with a response to the RFP?…that there will be allot of surprised faces if that really materializes?…that the City County Observer crosses our fingers that this time after a full four years of spinning around the bowl that the old ways finally do down the hole and that a new day dawns for how to vet and manage capital projects in the City of Evansville?

IS IT TRUE that it would be entirely appropriate and valuable for some member of the Evansville City Council and/or a candidate for the City Council or Mayor to come forward in a very public way with a proposal for a financial VETTING PROCESS?…a formal and appropriate VETTING PROCESS that is proposed to the City Council and adopted by the City Council would be a tremendous contribution to the evolution of governance and oversight in Evansville?…that it is just stupefying that no Vetting process has ever existed here?…that whomever does this and DOES IT IN TIME TO VET THE NEXT ROUND OF HOTEL BIDDERS will impress many voters?…that this is the kind of policy that makes “GOOD OLD BOY” deals more difficult to pull off and stabilizes the city?…that GOOD OLD BOYS almost never make it through a professional and appropriate VETTING PROCESS?

IS IT TRUE that the time for a VETTING PROCESS is right now and we should not even start to read developer proposals for the Downtown Convention Hotel until the government of the City of Evansville has the ability to read them and VET them established with a resolution adopted?…that if the City of Evansville had a VETTING PROCESS in place that the following two paragraphs would have never been NEEDED?

IS IT TRUE that it has now been 1,523 days since the announcement was made on May 14, 2007 that the McCurdy Hotel was to be refurbished into luxury apartments?…that it has now been 1,376 days since the Evansville Redevelopment Commission at the request of Mayor Weinzapfel approved the spending of $603,000 to purchase the parking lot?…that City Centre Properties and Scott Kosene the developers of the McCurdy project are both listed as contributors to the Weinzapfel for Mayor committee for 2010?

IS IT TRUE that there are now 486 days remaining in the two years that the EPA had given the City of Evansville to present an acceptable solution to the Combined Sewer Overflow problem?…..that this plan is an expensive and complex endeavor that needs immediate attention to avoid the embarrassment and expense of another round of fines?

A lifetime of experience in blending art with architecture enables Jim Lang to work with owners in a practical yet elegant combination that yields optimal designs in the transformation of real estate. Mr. Lang lends his expertise for both living and working spaces with a flare that enables his clients to enjoy the panache’ of Park Avenue with a favorable Main Street budget? Your perfect space dreams can begin with a single conversation.

Jim Lang has lead the design efforts and directed the construction on projects that range from classic façades for new and interesting eateries through multiple unit downtown residential loft living spaces.
Some examples where Lang’s artistry has made dramatic design contributions that have translated into unique transformations to commercial entities include the Mayfair of London style façade of downtown Evansville’s Eclipse tapas restaurant to the full resurrection of a European Gothic church in Indianapolis into 7 luxury townhomes that sold for from $500,000 to $900,000.

Jim has particular interests and talent in identifying what beauty is obscured in historically significant properties and bringing it back to life in a way that honors the history while integrating modern amenities into the functionality of each opportunity as it is touched by his vision.

Residential Real Estate and the opportunities for increasing the enjoyment of the owners through strategic elegance has been a passion of Jim’s since he was a child. Through his entire career that spans three decades in Indiana Mr. Lang has pushed new limits with design that has enabled both individual and builder clients to make higher than market profits by offering classic elegance that can be achieved on a reasonable budget.

Mr. Lang serves as a design and implementation from small jobs like indoor and outdoor kitchens all the way through full blown residential complexes for sale to upwardly mobile professionals. Time after time his magic touch is just what a project needs to fill those empty gaps that always seem to cause the most last minute problems.

Many volunteer projects in Indianapolis and Evansville have benefitted greatly from Jim’s generosity and humble brilliance.

Jim Lang Design Strategies, (317) 809-3434

On a College Scale the City of Evansville Gets a 1.4 on a 4.0 Scale for this Semester: CVB, KEB, and the people of Evansville bail out the Government who would have scored a 0.57 on its own merit

The City County Observer kicked off 2011 with a reader’s choice of what the most important things that the City of Evansville and Vanderburgh County need to get right in 2011. Well we are now halfway through the year and some progress is being made, some things are done, and others are terribly lacking. Here is our assessment of the Mid-Term Grades for the most important issues.

THE TOP TEN and THE GRADES

B: The 2011 City Elections: There were some spirited primaries and some unopposed seats. What we opined would constitute getting it right is for no more partisan voting block control of the City Council and a split party make-up of independent thinkers. After the primaries we actually have the potential for exactly what we hoped for. This grade would be an A if all of the City Council seats were contested. The contest for Mayor likewise appears to be between two capable good people both of which want what is right for Evansville.

F: An Evansville for the next Decade Plan: Nothing has been done and not one our elected officials or candidates for office has mentioned such a plan.

B+ : Civic Beautification: We can thank Ann Ennis of Keep Evansville Beautiful for a great new fountain at Garvin Park and a northern Gateway beautification plan. There have also been several quite visible efforts by candidates for office and particularly Lloyd Winnecke for mobilizing private litter removal programs. NOTE: The City of Evansville’s Parks Department gets a big fat F for the year thus far for utter incompetence for 5 of the six months including not even keeping a log of complaints. There is hope for a D for the year as there have actually been some efforts started to do cleanups.

A+: The Hiring of a new Executive Director for the Evansville Convention and Visitors Bureau: Mission accomplished CVB Board and the plus is for doing the right thing with respect to the rotten circumstances surrounding the departure of Marilee Fowler.

D: CSO Plan for EPA: The total of the disclosed accomplishment is the recent announcement that a judge had approved the consent decree. It is time for some real design work to be budgeted and done so we are not hit with fines again at the end of 2012.

D: The MLK Entertainment Complex: John Kish gets an A for his work in keeping the Arena on budget and on schedule. The City of Evansville and the Evansville Redevelopment Commission get a big fat F for the hotel fiasco. If there were anything lower than an F they would deserve that. Actually 2010 should have resulted in academic probation for that project and this year’s efforts deserve expulsion. There is nothing that could have possibly have been done worse.

D: Mental Health Services Improved: Coroner Annie Groves gets good marks for initiating an awareness campaign. The end result is still a D because the suicide rate is still among the highest if not the highest in the country. This grade would have been an F but Mrs. Grove’s hard work raised it.

D-: Pay Scales: Not a darn thing has been done to make the pay scales of the City of Evansville competitive. The generous D- is because at least Tom Barnett is now paid honestly by the place he works for.

F: Consolidated Government: Every opportunity to craft a plan that demonstrates real efficiency from consolidation has been punted to later. The current plan does not save a dime, offers no tangible benefit to anyone, and relies on trust the government to do things right after passing it. This is no way to run a County.

F: Smoking Ordinance Revisited: The Evansville City Council has not had the courage to bring this up in an election year even though it is now assured to pass if it is comprehensive. Next year it will pass which is why the first metric got a B.

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