Bad Idea

A few weeks ago, a young woman, we’ll call her ‘Jane’, was traveling from Vancouver, British Columbia to meet with us at the DR HQ in Baltimore to discuss our upcoming documentary.

Thing is, flying from Vancouver to Baltimore is pretty pricey and Jane had been traveling a good bit in recent weeks. So, to save some money, she opted to cross the U.S. border via a shuttle bus to take a flight from Seattle to Baltimore, a much cheaper option.

While this seemed like a no-brainer at the time, Jane soon came to regret this decision. Being the only Canadian on a bus packed with American tourists, the U.S. border patrol asked to look through her bag. Jane complied. Then they informed her that they needed to go through her day-planner and her laptop. Confused, but knowing she had nothing to hide, Jane agreed.

The U.S. border patrol then held her in their custody and interrogated her for hours. Apparently they had found some suspicious items in her carry-on. No, not a gun…or scissors…or even a lighter. What they found was – gasp! – three hotel keys in the pockets of her bag.

To make a long story short, the geniuses working the border patrol decided, based on their “evidence”, (the hotel keys, various names of hotels that she could stay at in Baltimore, and names and phone numbers of male contacts in her day planner) they could only come to one conclusion: she was obviously a prostitute.

They eventually googled her and found that Jane had been telling the truth – that she’s a film producer that travels a lot and doesn’t always remember to return hotel keys. Two hours later, Jane was free, armed with a tale of American bureaucracy at its finest.

While it’s a sadly amusing story, it is one that touches on a bigger problem that we are facing in America right now: we are slowly losing our civil liberties to things like the Patriot Act and more recently, the “Real ID Act of 2005.”

This past Thursday, the House approved this set of rules that will force states to issue every adult American citizen an electronic ID card. The bill was approved by a 261-161 vote.

“Passed without congressional debate as a rider tucked into the 2005 Emergency Supplemental Appropriations for Defense, the Global War on Terror and Tsunami Relief,” reports Detroit’s Metro Times, “the act seeks to have states drastically overhaul procedures for issuing drivers’ licenses by increasing the amount of documentation required to prove citizenship or legal residency and boosting the personal information contained on each card, including the addition of biometric identifiers such as fingerprints or retinal scans.”

As if that wasn’t creepy enough, University of Washington School of Law professor Anita Ramasastry reported in a column for CNN.com, such tags emit radio frequency signals that would “allow the government to track the movement of our cards and us.”

“Private businesses,” Ramasastry adds, “may be able to use remote scanners to read RFID tags too, and add to the digital dossiers they may already be compiling. If different merchants combine their data – you can imagine the sorts of profiles that will develop. And unlike with a grocery store checkout, we may have no idea the scan is even occurring; no telltale beep will alert us.”

What’s next? Microchips implanted in our brains so that Big Brother read our minds along with the ability to listen to our phone calls, read our emails, and know where we are at all times.

More to come…

The Daily Reckoning – Weekend Edition
June 3-4, 2006
Baltimore, Maryland
by Kate “Short Fuse” Incontrera

P.S. Another thing worth considering as far as the national ID card goes is the cost. The Congressional Budget Office says that by 2010 the country’s collective DMVs will pay about $100 million to implement Real ID systems…and many experts say this estimate is ridiculously low. Ah, something else to add to our ever growing list of expenses.

Consider this – every hour of every single day, the United States racks up another $80 million of debt. A year ago, the annual deficits already hit $7 trillion, according to the U.S. comptroller. That’s roughly $24,000 the government owes for every American man, woman and child.

Getting Poorer – Without Even Knowing It

— Daily Reckoning Book Of The Week —

Demise of the Dollar…and why it’s great for your investments
by Addison Wiggin

This acclaimed book spent over a week in the #1 slot on Amazon’s bestseller list – knocking Harry Potter to number two. It then showed up on Barnes and Noble’s bestseller list and debuted on The Wall Street Journal’s Business bestseller list last week at #8!

The only logical next step was for the book to get on the New York Times bestseller list…which it and sat strongly at #5!

The Demise of the Dollar examines the reasons for the dollar’s slide – including the nation’s historic trade deficit, the euro, government spending habits, globalization, and other international factors – and offers an up-close look at the Federal Reserve’s attempts to “manage” the dollar’s value.

To purchase your copy at a 40% discount, see here:

The Demise of the Dollar

THIS WEEK in THE DAILY RECKONING: Miss an issue of The Daily Reckoning this week? Never fear, we have them all catalogued for you, below…

The Way of All Cash, Part II   06/02/06
by Bill Bonner

“In 2003, the economy grew at a rate even India would be proud of: 8.4%. The cafes are filling up. Prices are rising. The country would probably prosper, if the Perónistas would just leave it alone.”

The U.S. Consumption Bias   06/01/06
by Dr. Kurt Richebächer

“The present U.S. economic recovery has never gained the traction that it needs for self-sustaining economic growth with commensurate employment and income growth.”

Shifting Demand and Wealth   05/31/06
by Dr. Marc Faber

“The opening of China and of other countries has permanently shifted the demand curve for consumer goods and services (for example, transportation) to the right and along with it the demand for industrial commodities and energy.”

Dealing With the Dollar   05/30/06
by Dan Denning

“Foreign governments will pay lower rates as the relative risks between their bonds and American bonds narrow. In other words, American bonds will be recognized as risky. The dollar will fall.”

As American As Housing and Health Care 05/29/06
by The Mogambo Guru

“Wonders never cease…the ever-cryptic former Fed chief recently said something easily understood by the average person. Find out what Greenspan said that has the Mogambo in such a tizzy, below…”

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FLOTSAM AND JETSAM:

Another Nail in the Dollar’s Coffin
by Kevin Kerr

It’s the end of a short trading week, but certainly not a dull one, that’s for sure. Looks like the “demise of the dollar” and gold’s continued rise are fairly secure after today’s disappointing jobs report. My good friend and currency trading expert Kathy Lien explains:

“For yet another month, analysts overforecasted the number of jobs created by the U.S. economy. This time, however, by 95,000 jobs! In the month of May, the number of jobs created was a mere 75,000, compared with the market’s forecast for 170,000. This is an abysmal number and really puts into question whether the Federal Reserve will pause in June.

“In addition, given the fact that we are now entering the U.S. midterm elections, the pressure on the Fed to pause will not only be economic, but political as well, with many players fearing that the Fed has overshot its tightening policy. Rate hike expectations were already hovering near 50%, and today’s horrendous number will likely drive it even lower. To make things even worse, average hourly wages came in a paltry 0.1 %, weekly hours dipped from the previous month and the already disappointing number for the month of April was revised even lower.

“Furthermore, it means that consumer confidence going forward could begin to slide even further, impacting already slowing retail sales, which was the primary driver of economic growth. No matter which way you cut it, this is a bad number and negative for the dollar. It also paves the way for an easy move to 1.30.

“Kindest regards, Kathy Lien, FXCM”

Thanks, Kathy. She is one sharp cookie, indeed. Let me tell you, when I have a currency question, I turn to the experts. It’s important as a trader to always know your limitations, much like a doctor or lawyer. You don’t hire a tax attorney to handle your murder indictment, and you don’t go to the podiatrist for brain surgery. Hopefully, you don’t ever need either one.

These professionals go to each other for advice, and often that’s what traders do too — at least the smart ones.