UN Declaration of Human Rights: Article 5

No one shall be subjected to torture or to cruel, inhuman or degrading treatment or punishment.

This has been one of the most debated and patrolled articles. The use of torture has been so widespread in times of war and terrorism that it has become government policy in many countries, just another extension of police and military processsing.

It probably falls under “does the means justify the ends” debate. Does torturing information out of a prisoner, which turns out to save lives, justify the action.

Abu Ghraib is an example of how it can all go horribly wrong. The US is not alone in taking whatever measures are needed to break or humiliate a prisoner.

There is no mention in the UNDHR of the responsibilities that come with the granting of rights. Clearly breaking the law is one of them and that would include waging terrorism or state sponsored war.

The Geneva Convention set the standard for treatment or prisoners in a more conventional theatre of war. But many political prisoners are routinely tortured and they may include prisoners arrested for any number of reason which may include terrorism, which these days cuts a wide swathe.

But when dealing with people who wish to kill and maim civilians (such as the 7/7 bombings in London) how far would you go in trying to extract information?

Is it justifiable under pragmatic grounds or should it just be ruled out? Does one take an absolutist perspective such as no death penalty or does one take a more relavatist or utilitarianist approach?

There are many differing views on this.

My personal view is that we should oppose torture. It just lowers us and keeps the fire of anger and hatred burning and quite frankly rarely achieves anything except to deliver more bad karma into the universe.

What do you think?

Currency Watch: Global Currency Crisis developing

The recent rush for the $ has exposed a global currency crisis that seems to be gathering momentum.

So far we have seen Iceland bankrupted, South Korea facing a huge run on the Won, Argentina seizing private pensions, Hungary and Denmark raising rates and general deleveraging in emerging markets.

At the same time even the majors have taken a pounding. In the last 3 months against the $ the Euro has fallen 22%, the Pound 22%, the Aussie 38%, the Kiwi 29% and the Canadian 28%. The latter 3 suffering more because of their links to commodity markets which have also collapsed.Against the Yen just add another 10%.

Those falls are enormous.

The major factors here are:

- Credit issues.

- Current Account position.

- Commodities.

- Interest Rates.

If you have a large current account deficit and huge overseas borrowing (like Australia and New Zealand) then you will struggle given the problems with credit availability. At the same time lower currencies provide an opportunity to reduce those deficits. No more cheap imports for the Antipodeans.

This poses real problems for the US. Although the Yen is taking some of the slack with a major appreciation, a strong $ is hardly what the US are looking for at the moment given their huge current account problems. However we are entering into a situation where there are bigger issues at play.

A full scale unwind of the global currency net position would see surplus countries holding the upper hand. China with its vast $ reserves has plenty of options on the table. There is an interesting analysis on Naked Capitalism with some good links.

The most interesting proposal from Brad Setser at the CFR is for China (and other large $ holders) to diversify their $ holdings and buy assets from other deficit countries. Although its hard to see China doing this it makes sense as part of the eventual rebalancing of currencies and capital that must happen if we are not to see a huge race to the bottom in currency land.

This would help out the US in taking the heat over a resurgent $ and it would take the heat out of the impending meltdown of cross border capital flows. It may even help avert a potential meltdown in the Euro which grows closer by the day.

The era of running big deficits thanks to leveraged debt finance and derivative products is over. The November 15th War Council will certainly push to reform and regulate markets though that bolted years ago and the stable has burnt down.

Other suggestions proposed are:

- A return to a gold backed global currency. This is just fiat in a different form. It has some merit as a stable, hard store of value in which supply is reasonably easy to manage but it has already failed several times in recent memory.

- A commodity/energy back currency. The EBCU proposal by Richard Douthwaite still is a favourite of mine because it links natural resources, climate change and money together. It’s real unlike gold as it connects energy to money and energy is what we are concerned with, in terms of transforming it and using it in our daily lives.

Hopefully all of these approaches will be on the table when our financial “wizards” meet shortly.

In the meantime it will be a case of holding one’s breath and hoping for the best with possible intervention ahead.

At worst expect markets to close and capital controls to be applied.

UN Declaration of Human Rights: Article 4

No one shall be held in slavery or servitude; slavery and the slave trade shall be prohibited in all their forms.

This seems pretty obvious and to many the days of slavery would seem to be long past. Unfortunately that isn’t the case. The trafficking of people (modern day slavery) continues to happen on a global scale.

Not many countries are unaffected in some way by this hideous activity. It’s long past our historic notion of black slaves taken from Africa to the Empire and beyond. Today slavery consists of bonded labour, early or forced marriage, forced labour, slavery by descent, forced sex work and extreme forms of child labour.

None of it is pleasant.

It’s true that our economic system prizes cheap labour and so in a way encourages that drive. Certainly it makes one think about why and how this still happens? Certainly people look to escape poor circumstances and that can often lead them into the hands of traffickers of hope but deliverers of hell.

But wherever you are reading this from don’t think your country is immune to this. It isn’t.

Abandon ship: Investors Bailout in rush for $

Forget about government bailouts, now its investors that are bailing out. It’s a case of salvaging whatever is left of portfolios now. Hedge funds are unloading anything with liquidity and currencies are taking the strain,

The horrendous spike in LIBOR rates has seen a reverse run on the $. From global pariah to this week’s must have the $ has risen at a rate of knots in the last month against all currencies except the yen, which has been used to fund most of the speculative investment activity. The Aus$/Yen cross rate is down over 40% in 3 months. The Eur/$ rates has fallen 20%. Eur/yen around 25%. These are not emerging markets, these are the main conduits for global trade and when added to stock market moves of between 25-50% one is faced with the realisation that the whole global financial system is at risk.

I wrote recently that at some point global markets will need to be frozen. That may well happen as not just stocks but currencies go into complete meltdown making any form of economic activity almost pointless.

The recent wholesale and blanket guarantees of bank deposits and lending in many countries have just added to the general lack of confidence in the global financial system.

Added to this commodities have collapsed in price also as that speculative bubble is popped. Even gold, something one would consider in the current situation, has fallen, over 20% in the last few weeks.

Nothing makes much sense at the moment except that the unwinding of years of excess is both savage and yet unpredictable.

One can only hope that somehow the markets can stabilise but the lower it goes the worse it gets as the spiral of margin calls increases and investors seek to recoup whatever they can. It’s probably not the time to sell but at the moment cash is king.

And surprisingly the king of cash is the $…….for now.

UN Declaration of Human Rights: Article 3

Everyone has the right to life, liberty and security of person.

This is as basic a right as there can be. It’s one of the foundations of Amnesty International, founded on the belief that people should not be carted off to jail because of their beliefs.

Founded in 1961 Amnesty International has campaigned since then for those people whose basic rights have been taken away from them like the two Portuguese students imprisoned for raising a toast to freedom.

Today the practice of imprisoning people without charge continues along with extra-judicial murder, disappearances and state approved torture.

Whoever you are and wherever you live, you should be able to go about your business free of fear that for some reason you will be taken away.

In some countries we have much to be grateful for. We should also be mindful that others do not share in our good fortune.

UN Declaration of Human Rights: Article 2

Everyone is entitled to all the rights and freedoms set forth in this Declaration, without distinction of any kind, such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status. Furthermore, no distinction shall be made on the basis of the political, jurisdictional or international status of the country or territory to which a person belongs, whether it be independent, trust, non-self-governing or under any other limitation of sovereignty.

This is a big statement.

It should be noted now that the Declaration is not a convention which means that member states cannot sign up to it. It’s merely, as it says, a declaration. Declarations are important however as they are statements of intention. This Declaration was intended to establish these rights and freedoms without distinction. In other words to override any concept of sovereignty. Which is probably why most countries have ignored it, in part or whole. Which is why it is important for us to revisit this not just to celebrate it every 10 years but to actual scrutinise it.

Is it workable? Would member states all be happy to stand up and make this Declaration out loud in front of the General Assembly? If the answer is no then it needs to be looked at again to establish its relevance.