"It was not billed as a fund-raiser. It was billed as a community outreach event."--Vice-President Al Gore, explaining his presence at a controversial gathering in a Buddhist temple that raised $140,000 for the DemocratsEDITED BY LARRY LIGHTReturn to top
UNCLE SAM'S BIG CREDITOR: CHINA
WITH BILLIONS OF DOLLARS IN trade surpluses to recycle, China's secretive monetary agencies are becoming big buyers in U.S. Treasury markets. This raises fears on Wall Street and among some U.S. trade experts about how Beijing will use its newfound heft.
In 1996's first half, China boosted its Treasury note and bond holdings by $11.8 billion--way up from 1995, when it netted only $700 million in medium-to long-term Treasuries. The heavy 1996 purchases made Beijing this year's third-largest buyer of such Treasuries, behind only Britain and Japan.
What's the downside? Given tense U.S.-China trade relations, some Washington trade experts fear China wants to gain clout in the tough talks over Beijing's joining the World Trade Organization. "Just as Japan gained significant leverage over the U.S. [as a lender], China feels it can, too," argues Greg Mastel of the Economic Strategy Institute, a Washington think tank.
The U.S. Treasury, though, welcomes Beijing's buying, figuring more buyers means Washington pays lower interest rates. And China's surge in notes and bills purchases this year is matched by a dip in its shorter-term Treasury holdings. For China, owning more U.S. paper has such pluses as keeping its currency cheap and its exports more competitive.EDITED BY LARRY LIGHT By Mike McNameeReturn to top
THE SPEAKER LOOKS OVER HIS SHOULDER
SPEAKER Newt Gingrich has had to cut short his extensive forays around the country, stumping for GOP candidates. His free-spending Democratic challenger ($2 million thus far) has apparently pinned Gingrich down to his suburban Atlanta district in the election season's last crucial weeks.
Gingrich is still heavily favored to win, but political novice Michael Coles has gained on him. In a poll completed on Oct. 21 by the Atlanta Journal & Constitution and WSB-TV, Coles, owner of Great American Cookie Co., had cut Gingrich's lead to 14 points--55% favored Gingrich, 41% Coles. That's down from a 29-point gap a month ago.
Gingrich handlers, claiming their polls show him much further ahead (60% to 31%), say the Speaker always expected to spend the campaign's last days in the district. But he seems to be taking Coles more seriously than his last foe. In 1994, he ignored Ben Jones, the actor who played Cooter on TV's The Dukes of Hazard, and defeated the Democrat 64% to 35%. Now, Gingrich has been forced to spend $600,000 for ads: on TV, lauding himself as this century's most effective Speaker; on the radio, seeking to allay fears he'll cut welfare or education funding. He even has a debate slated with Coles.EDITED BY LARRY LIGHT By David GreisingReturn to top
SO WHAT'D ABE HAVE AGAINST E-BUCKS?
DID ABRAHAM LINCOLN SET up an obstacle for cybermoney, making companies using it outlaws? With electronic money, you send cash to vendors over the Internet or pay at a store for purchases with currency literally embedded in a smart card.
Lincoln's 1862 Stamp Payments Act banned notes that merchants issued for small amounts for customers. During the Civil War, rampant inflation led to a scarcity of U.S. coins, the result of stockpiling--the metal's actual value often was higher than the coin's face value. But the quasicurrencies threatenedto worsen inflation. Under the 1862 law, anyone circulating notes for less than $1 intended to be used as U.S. money risks fines or six months in prison. (Until 1913, both banks and the feds issued currency; then, Washington monopolized it.)
Attorney Thomas Vartanian of Fried, Frank, Harris, Shriver & Jacobson worries that some cybermoney ventures could run afoul of the old law. Although Washington has given no opinion on the issue yet, he advises E-money pioneers to clear new products with the Justice Dept. This business, now doing an estimated $50 million yearly, could grow to $1 billion by 2000, says research outfit Jupiter Communications.EDITED BY LARRY LIGHT By Amy BarrettReturn to top