China lets its currency float; Patriot Act getting extended to take yr. privacy, lunch money

So China's a big deal. More stuff about it on this Agonist post. Morgan Stanley has a lot to say about it:

This is also a plus for the rest of the world -- but with a potentially painful twist. By moving to a currency basket, China will need to diversify its enormous portfolio of foreign exchange reserves, which totalled some $660 billion at the end of 1Q05. Other Asian central banks -- also massively overweight dollars -- should follow China’s lead. The near-simultaneous announcement by Malaysia to abandon the Ringgit peg in favor of a managed basket float confirms such a possibility. Other central banks, such as the Bank of Korea, have been itching to diversify out of dollars.

Consequently, a more flexible RMB mechanism raises the odds of an Asian shift out of dollars, in effect removing the artificial bid for dollar-denominated assets that has provided a subsidy for US interest rates. This will undoubtedly put pressure on the interest rate support to US asset markets -- especially property. Asset-dependent American consumers will certainly be challenged by such a development. This could result in a reduced impetus from US consumption support -- in the end, the only real hope for a US current account adjustment. This is a plus for a long overdue global rebalancing but will be admittedly painful. Unfortunately, that’s probably the only way for the US and the rest of the world to come to grips with its most glaring excesses.

The financial market implications of this shift in Chinese currency policy cannot be minimized. At the most basic level, the FX reserve diversification play is likely to be negative for the dollar and bearish for US interest rates -- mirroring the classic trappings of a current-account adjustment. That, however, is not the only consideration bearing on the US interest rate outlook. The combination of persistently low inflation and a still-likely China slowdown remain important prospective developments on the bullish side of the interest rate equation. Over the near term, I suspect that the balance will now tip more toward the bearish outcome than I had previously thought. Over the medium term, however, I still believe that pressures on longer-term US interest rates will be contained by subdued inflationary expectations and the likelihood of a China-led shortfall in pan-Asian economic growth.

Wasn't that easy to comprehend? :-P

So along comes Billmon to depress us about the fact that the Patriot Act and all its unchecked expansions of the executive branch are getting expanded and un-sunsetted. Sucks.

Congress will vote to renew and possibly expand PATRIOT today, tomorrow or early next week. This will all be over long before Roberts has a hearing, before Fitzgerald finishes his investigation.

If Congress renews or expands Section 215, as they seem intent on doing, you can kiss the 4th Amendment good-bye . . . What two World Wars and a Civil War could not accomplish, al-Qaeda and the cowardly leadership of George Bush will. (emphasis added)

This is probably a good time to remind people what Section 215 gives the government the power to do:

•Order any person or entity to turn over "any tangible things," so long as the FBI specifies that the order is part of an authorized terrorism or intelligence investigation.
•Obtain personal data, including medical records, without any specific facts connecting those records to a foreign terrorist.
•Prohibit doctors and insurance companies from disclosing to their patients that their medical records have been seized by the government.
•Obtain library and book store records, including lists of books checked out, without any specific facts connecting the records to a foreign agent or terrorist.
•Obtain private financial records without a court order, and without notification to the person involved.

•Conduct intelligence investigations of both United States citizens and permanent residents without probable cause, or even reasonable grounds to believe that they are engaged in criminal activity or are agents of a foreign power.

•Investigate U.S. citizens based in part on their exercise of their First Amendment rights, and non-citizens based solely on their exercise of those rights. (Naturally, decisions about what constitutes "in part" are left to a secret court, meeting secretly.)
•Those served with Section 215 orders are prohibited from disclosing that fact to anyone -- even their attorney. (This provision was struck down by a U.S. district court last year.)

Section 213 of PATRIOT, meanwhile, allows federal agents to:

•Conduct secret “sneak and peek” searches of your home.

•Enter your home or office and seize items for an indefinite period of time, without informing you that a warrant has been issued.

And Section 216 lets the feds:

•Seize records that could show the subject lines of your e-mails and the details pf your Web surfing habits.

Just to highlight what an Orwellian witch's brew the Patriot Act has turned into, consider that while the Cheney administration claims Section 215 has never been used to search or seize library records, a 2002 survey of librarians found that almost half of them reported being visited by federal or local law enforcement agents demanding access to patron records.
Confronted with these results, the Justice Department insisted the vast majority of those visits were related to criminal investigations, but refused to disclose how many were terror-related, saying that information was (you guessed it) classified.
Naturally, as if all this wasn't bad enough, many of the "reforms" now being rammed through our Chamber of People's Deputies would make the law worse. For example, the House Judiciary Committee (led by chairman James "turn off their fucking microphones" Sensenbrenner) has voted to extend the sunset on Section 215 from four years to ten.
(The Senate Judiciary Committee's version would retain the four-year sunset on Section 215. But both bills would permanently extend all but one other section of the law.)
The biggest threat, however comes (surprise!) from the Senate Intelligence Commitee, which has taken a break from its continuing efforts to whitewash the Iraq WMD scandal in order to vomit up a bill allowing the FBI to exercise many of the powers outlined above without even bothering to ask a judge or grand jury for permission -- not even the Star Chamber magistrates on the Foreign Intelligence Surveillance Court.
The House Rules Committee is also doing its part to keep the police state steamroller moving forward. Last night it refused to permit straight up-or-down floor votes on more than half of the amendments sought by reform advocates but rejected by Sensenbrenner and his stooges.
This includes the Bernie Sanders's bid to at least protect library and bookstore records from the Section 215 vacuum cleaner. This was endorsed by a big bipartisan majority in a kind of test vote last month -- but of course none of that matters when the securitycrats and their legislative water carriers get together behind closed doors.
And I do mean closed. In some cases, deliberations on Patriot Act renewal themselves have been classified, and closed to both the public and the press. More grist for the Orwellian mill.

Apologies to Billmon for tossing basically the whole post up, but it tackled the gory details so damn well...