Hong Kong May Be Dropping Dollar Peg, Trouble in Yemen, and George Will on Obama Breaking War Powers

Simon Black of Sovereign Man had an interesting post the other day on the possibility of Honk Kong dropping its dollar peg and possibly pegging their dollar to the Chinese yuan:

To guard against this constant loss of purchasing power, many Hong Kong’s residents are converting their savings to Chinese Yuan. While the Chinese Yuan closely shadows the US dollar, it has steadily appreciated and is perceived to have significant future upside should the Chinese ever allow it to appreciate more quickly.
US monetary inflation makes it inevitable that the Hong Kong Monetary Authority will come up with some sort of a scheme to either peg the Hong Kong dollar to the Yuan (rather than the US dollar), or perhaps even replace the Hong Kong dollar with the Yuan altogether.
This would be a HUGELY popular move. Hong Kong is one of the few places on Earth with a net savings rate; the loan to deposit ratio its banking system, for example, stood at 81.7% at the end of March, meaning there are only 81.7 cents on the dollar lent out in Hong Kong for every $1 on deposit in the banks.

This reasoning, though sound to some degree, is along the lines of some who are predicting the world may go to a yuan-type standard.  This is kind of hard to believe though because of the looming property bubble in China that is being financed by money printing.  Sooner or later, the bubble will burst and China will most likely go into a large slowdown.  This is already evident by the number of reserve requirements China's central bank has been imposing on banks in an effort to control inflation.

So the big rumor around the blogosphere is that the U.S. will probably be going into Yemen next.  First the State Department tweeted (I can't believe it actually uses twitter) that U.S. citizens need to get out of Yemen and now the New York Times is reporting that Islamist militants have taken control of a town:

SANA, Yemen — Islamist militants battled Yemeni security forces in the southern province of Abyan on Sunday even as the government struck a deal for a cease-fire in the capital, Sana, with its tribal rivals, bringing relative calm here after days of fierce fighting.

In Sana, Yemeni officials said President Ali Abdullah had agreed to a truce with his historic tribal rivals the Ahmar family. Violence broke out between the two sides last Monday after Mr. Saleh refused to follow through on his promise to sign an agreement leading to his resignation.

We are already launching drone strikes there in order to take out Anwar al-Awlaki, we might as well have troops there already.  If you need any more evidence see this:

WARSAW, Poland — Holding out Poland's transformation to democracy as a model for the world, President Barack Obama on Saturday exhorted Western allies and the American public alike to extend their support, energy and vision to those now reaching for democracy in the Middle East and North Africa.
Obama wound up his six-day trip to Europe with a message aimed squarely at the people of the United States, saying that in a time of tight budgets, "I want the American people to understand we've got to leave room for us to continue our tradition of providing leadership when it comes to freedom, democracy, human rights."
Obama, in a brief news conference with Polish Prime Minister Donald Tusk, assured Americans that he spends the bulk of each day worrying about the U.S. economy and how to strengthen it and create jobs. But he coupled that with the message that it is a U.S. obligation to support democracy around the globe, one that pays dividends in the form of a safer and more prosperous world.

Translation: We need to support dictators that support our interests.  We supported the Yemen regime for decades and now it is coming back to bite us in the ass.  Rather than give it up, look for the defense and intelligence departments, along with a few gung-ho Congressmen, rally for us to intervene again.

George Will's column today highlighted something I have vaguely heard about but should be getting a lot more attention:

The U.S. intervention in Libya’s civil war, intervention that began with a surplus of confusion about capabilities and a shortage of candor about objectives, is now taking a toll on the rule of law. In a bipartisan cascade of hypocrisies, a liberal president, with the collaborative silence of most congressional conservatives, is traducing the War Powers Resolution.
Enacted in 1973 over President Nixon’s veto, the WPR may or may not be wise. It is, however, unquestionably a law, and Barack Obama certainly is violating it. It stipulates that a president must terminate military action 60 days after initiating it (or 90, if the president “certifies” in writing an “unavoidable military necessity” respecting the safety of U.S. forces), unless Congress approves it. Congress has been supine and silent about this war, which began more than 70 days ago.

He even eviscerates Sen. McCain:

“No president,” says Sen. John McCain, “has ever recognized the constitutionality of the War Powers Act, and neither do I. So I don’t feel bound by any deadline.” Oh? No law is actually a law if presidents and senators do not “recognize” it? Now, there is an interesting alternative to judicial review, and an indicator of how executive aggrandizement and legislative dereliction of duty degrade the rule of law.

I love Will but he should know by now that laws are easily overlooked in the name of war by presidents and Congress alike.  Case in point:

LASHKAR GAH, Afghanistan (Reuters) – An air strike called in by NATO-led troops in southern Afghanistan killed 12 children and two women, Afghan officials said on Sunday, one of the worst civilian death tolls by foreign forces in months.

The mistaken killing of civilians by foreign troops, usually during air strikes or night raids, is a major source of friction between Afghan President Hamid Karzai and his Western backers, and complicates efforts to win support from ordinary Afghans for an increasingly unpopular war.

And you wonder why there is so much animosity toward us in the Middle East.

I will end with what should be a lesson for any Congressmen that supports raising taxes on oil companies:

North Sea oil production has slowed to its lowest level since records began 15 years ago following the Chancellor's recent tax raid on the industry.

An update from the Department of Energy yesterday showed the biggest fall in oil production since quarterly records started in 1995.

The slowdown follows the Chancellor's controversial Budget decision to increase the supplementary tax on North Sea Oil production to 32 per cent from 20 per cent to pay for a cut in petrol duty.

The Chancellor's decision drew an industry-wide outcry and claims that mature fields would be closed.

You can only raise taxes so long before people get tired of it.  Looks like the U.K. is learning the hard way.

Update- via Tom Woods, which of these is non-egotistical?