Newmont says emissions from Indonesian mine were not harmful


By William Pesek Jr.
Bloomberg News Service
International Herald Tribune, Paris
Tuesday, December 21, 2004

Being an American overseas these days can be a disorienting
experience. Virtually everyone you meet, it seems, wants to explain
why he or she is upset with the United States.

Recent stops in Bangkok, Hanoi, Kuala Lumpur, Singapore, and Mumbai
featured many such moments, leaving little doubt that anti-Bush
sentiment is intensifying in Asia.

Is this negativity manifesting itself economically? Yes, says Joseph
Quinlan, chief market strategist of Banc of America Capital
Management in New York. Quinlan thinks the U.S. image as a "rogue
nation" is a key force behind the dollar's decline.

"The message from the foreign exchange markets" of late "seems to be
simply this: The free ride for the rogue nation is over," Quinlan
says. "No more guns and butter, or wads of foreign cash for a nation
deeply enmeshed in the Middle East, heavily indebted at home and
seemingly disengaged -- some might say -- from the rest of the world."

The sinking dollar, Quinlan says, "could be a sign that the world is
no longer willing to underwrite the designs of U.S. foreign policy.
To a large extent, we believe a rebound in the U.S. dollar could
hinge on a revamped foreign policy."

There's ample economic justification for the dollar's 7 percent drop
versus the euro and 5 percent slide against the yen this quarter.
Record budget and current account deficits are spooking investors, as
are signs from President George W. Bush's administration that further
tax cuts are on the way. If so, the U.S. economy isn't about to fix
its imbalances.

That's why some dismiss the idea that geopolitics is driving down the
dollar. "It's an economic phenomenon," says Mike Englund, chief
economist at Action Economics in Boulder, Colorado. "I see little
evidence on a blow-by-blow basis that swings in the dollar line up
with political events."

Still, a recent chat with black-market currency traders in Bangkok
bolsters Quinlan's argument. The U.S. dollar is always a good thing
to have in Asia, a region plagued by currency instability during the
past decade. And so traders tend to seek out people who may be
holding them.

In front of an ATM the other evening, a Thai exchanger approached me
looking for euros or British pounds. Seeing that I had only dollars,
he winced. "No, I'm not buying dollars these days," said the man, who
would only tell me his first name, Ampon.

As Ampon explained, most people in his line of work in Asia figure
the dollar will plunge this year. Asked why, he answered
simply: "Bush will be around a few more years."

While all this is impossible to quantify, some long-time Asia
watchers like Marc Faber have been warning investors that U.S.
foreign policy will hurt the dollar. Faber, Hong Kong-based head of
the company that bears his name, has focused on the possibility that
the United States will attack Iran.

Moreover, Faber says that what he views as "continuous human rights
abuses" by the Bush administration in Iraq and elsewhere have made
China's human rights record "look like Cinderella." That perception,
he says, increasingly worries investors who wonder about Bush's plans
for the world during his second term.

The dollar's declines, Quinlan says, "mirror America's plunging
approval rating with the rest of the world." The nation's image has
been hurt not only by the Iraq war, he says, but also by its
rejection of the Kyoto environmental treaty, its strained relations
with international institutions like the United Nations and its
mounting visa restrictions.

"It seems as if America's popularity with the rest of the world has
never been lower," Quinlan says. "Little wonder, then, that the U.S.
dollar is as unloved as it is today."

That's music to the ears of some well-known U.S. detractors like
Mahathir bin Mohamad, who until October 2003 was prime minister of
Malaysia. In a recent interview with Gulf News in Dubai, he said the
United States "owes huge sums of money to the rest of the world"
and "if people do not keep giving money to the U.S., it will go

Mahathir also suggested that Muslim countries should refuse to trade
in dollars and use their economic clout to force a change in U.S.

Ironically, the United States is following what is known as
the "Mahathir doctrine." During the 1997-98 Asian crisis, Mahathir
rebuffed the International Monetary Fund's economic advice. This
year, U.S. Treasury officials dismissed the IMF's concerns about
soaring current account and budget deficits as "breathless hyperbole."

Why should Treasury officials care that the United States has a
growing credibility gap in Asia? Because central banks in the region
have a huge say in whether the United States continues to live beyond
its means or plunges into crisis. Asian monetary authorities hold
more than $1 trillion in U.S. Treasury securities. If they pull that
plug, the United States is in trouble.

The sooner America's image is restored, the better the prospects for
the U.S. dollar," Quinlan notes. "Our hunch is that this may take
time, leaving the dollar vulnerable to more downside pressure."


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