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China and the declining dollar

by Princella D. Smith, Israel Hayom Newspaper     Israel Hayom Princella Cartoon

According to several long-time economists’ recent analyses, the future of the U.S. dollar as the world’s reserve currency is in big trouble.

The Wall Street Daily recently reported that the U.S. Treasury Department has agreed to give China direct access to its auctions. This deal would allow China to purchase Treasury bills without having to place bidsthrough primary dealers, bypassing Wall Street.

In the whole of its 237-year history, the U.S. has never allowed a foreign government such unmediated access to its markets.

Though the deal isn’t illegal, it poses a major problem to U.S. economic sovereignty: China holds over $1.2 trillion in U.S. Treasury bills. At this rate, China will soon own 50 cents on every dollar of the U.S. debt. Couple this issue with the overall decline of the U.S. dollar, and it calls into question whether the U.S. will long remain a sovereign nation.

International Monetary Fund records show that the share of U.S. dollar holdings in global foreign exchange reserves has dropped to 61.9 percent and that its percentage of the total world money supply has plunged from nearly 90% in 1952 to about 15% today.

Floyd Brown, chief political analyst of Capitol Hill Daily, feels that the dollar faces impending, if not immediate, doom.

“Today America is like the fourth-generation heirs of a fabulous fortune,” he said. “We may be making all the wrong moves, but our fortune is large, so it takes time for our spendthrift ways and boneheaded policies to erode the legacy bequeathed to us by our forebears.”

The deal with China coincided with reports this week that American billionaires Warren Buffett, John Paulson and George Soros have all dumped U.S. stocks. offered a rationale for the billionaires’ actions in an interview with Robert Wiedemer, an economist and author of the New York Times best-selling book “Aftershock”: “Wiedemer’s explanation starts with the reckless strategy of the Federal Reserve to print a massive amount of money out of thin air in an attempt to stimulate the economy.”

“These funds haven’t made it into the markets and the economy yet. But it is a mathematical certainty that once the dam breaks, and this money passes through the reserves and hits the markets, inflation will surge,” Wiedemer said.

“Once you hit 10% inflation, 10-year Treasury bonds lose about half their value. And by 20%, any value is all but gone. Interest rates will increase dramatically at this point, and that will cause real estate values to collapse. And the stock market will collapse as a consequence of these other problems.”

Phillip Coggan, author of the bestselling book “Paper Promises: Debt, Money and the New World Order,” and a columnist for The Economist, is less alarmist on the issue, stating that he doubts “the dollar is going to disappear as a reserve currency anytime soon.” He made it clear that he doesn’t see it reigning supreme either, though.

Asked if he felt that with China being such a creditor to the U.S., it gives the Chinese more leverage in replacing the dollar as the world currency, Coggan answered: “I think if that happens, it will only happen very, very slowly. If you think about [the British] sterling, which was the dominant trading power in the early 20th century, the U.S. took over from it after the First World War. But sterling was still being used as reserve currency all the way into the 1950s. So I don’t think the dollar is going to disappear as a reserve currency anytime soon.

“So I suggest two possible ways it could go. One is that you could have more than one reserve currency, so the [Chinese] renminbi and the dollar could be virtually equal. … The other one would be that the Chinese are slow to adapt to that world; they don’t like free markets very much. And so they might do a deal with the U.S. akin to the one that existed after the Second World War, where countries fixed their exchange rates against each other.

“So we might have a kind of managed exchange rate system where the Chinese agree to let the currency rise by a certain amount per year and the U.S. agrees to limit the size of its deficits. And that’s not going to happen tomorrow. But if you ever had a crisis in the Treasury bond market then you might end up with that kind of deal in the future.”

One thing is certain: China is definitely telegraphing an interest in handicapping the U.S. economy as evidenced by cyber attacks on Wall Street. We have lost millions of manufacturing jobs to China since it joined the World Trade Organization in 2001, and China’s actions become bolder yearly as its own pending economic collapse has come into question. The average American should be prepared. The world should be prepared.

Princella D. Smith was a communications staffer to former House Speaker Newt Gingrich and a communications director on Capitol Hill. She is a graduate student at the Lauder School of Government, Diplomacy and Strategy at the Interdisciplinary Center in Herzliya.


Aqua Zai attempts to solve global hunger from A to Z

by Princella D. Smith, Washington Times    Princella_white blazer

Despite Israel’s semiarid climate, Israel’s agricultural industry has advanced enough to prevent its desertification, which is defined as the process by which fertile land becomes desert, typically as a result of drought, deforestation, or inappropriate agriculture.

The impressive agricultural industry is so developed, in fact, that Israel has been placed as a world leader in agricultural technologies because of its use as the country’s main tool against desertification.

Four students at the Israeli-based Interdisciplinary Center (IDC) Herzliya have applied these technological advancements toward a solution for global hunger. Our names are Julian Jubran of Nazareth, Israel; Paul Amos of Milan, Italy; Bezawit Getaneh of Ethiopia and Israel; and myself, Princella Smith of Arkansas, United States.

Schools around the world are forming teams of four or five people to participate in the Hult Prize competition.

The Hult Prize brings together the brightest college and university students from around the globe to focus on solving one of the world’s key social challenges and awards $1 million in start-up capital to the winner. The idea must be capitalist and free-market-based for sustainability. This year, the challenge of focus is global hunger.

IDC Herzliya team’s idea is an agricultural technology business called Aqua Zai, whose purpose is to develop an easier method for farmers in developing nations to preserve and utilize water. This will enable them to produce more crops, store more food, and have enough throughout the year instead of living off of day-to-day farming. The newly grown healthy food will be sold at an affordable price in the urban slum areas where the rate of global hunger is rapidly increasing.

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We will start in Ethiopia.

Aqua Zai discovered, in some parts of Africa, a unique method of planting seeds, using zai holes. A zai hole is a planting pit with a 20-40 centimeter (8-16 inch) diameter and a 10-20 cm (4-8 inch) depth. Zai holes fulfill three functions: soil and water conservation and erosion control for encrusted soils — with the most important element being water conservation.

Plants that are produced with zai holes have an increased productivity of 200-500 percent. However, the reason many farmers have not utilized zai holes is because they believe that it is too difficult and time-consuming to dig the holes.

Since Africa’s primary challenge with agriculture is affiliated with the struggles of an unpredictable rain pattern, Aqua Zai created a method by which digging multiple zai holes at once could become a reality while keeping the holes more regularly watered through drip irrigation, which Israeli farmers have mastered.

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In addition to developing a drilling machine, called the “Zai Bug,” Aqua Zai will model watering techniques after the drip irrigation system Israeli farmers use on their lands.

This will all be performed on Aqua Zai’s zai farms, where we will work with Israeli agricultural experts to teach the methods to the Ethiopian farmers, and then eventually allow local farmers to run the operation so that they can work independently and produce enough food for themselves.

Additionally, Aqua Zai has designed the mobile “Zai Hopper” to transport the freshly grown food from the zai farm to distribution points in the slums, so that residents will be able to purchase clean and affordable food. The Zai Hopper is a simple machine based on fundamental farming technology and railroad grain cars.

Data from the International Monetary Fund confirms a positive trend for Africa. Whereas in the West, dialogue on investment in developing countries is mainly concentrated in Brazil, Russia, India and China, in the last decade six of the 10 fastest growing economies in the world were sub-Saharan African countries.

Between 2001 and 2010, for example, Angola’s economy grew the fastest in the world, with an annual average of 11.1%. Nigeria showed an average annual growth of 8.9%, Ethiopia followed with 8.4%, while Chad and Mozambique both grew by 7.9% annually. Even Rwanda has boasted 7.6% annual growth in that time period. The IMF’s forecast for 2015 reinforces this trend.

The creation of Aqua Zai enhances the already friendly relationship between Israel and many countries in Africa — but especially in Ethiopia, where the company has chosen to launch.

Israeli Ambassador to Ethiopia Belaynesh Zevadia, along with the first Israeli Ethiopian woman to be elected to Knesset, Pnina Tamano-Shata, have endorsed the project.



Helping the African deserts bloom

Helping the African deserts bloom

Israeli agricultural technology and know-how is being put to innovative use to combat desertification • Four students at the Interdisciplinary Center (IDC) in Herzliya have applied these technological advancements toward a solution for global hunger.

Princella D. Smith – Israel Hayom Newsletter

Despite Israel’s semiarid climate, Israel’s agricultural industry has advanced enough to prevent its desertification, which is defined as the process by which fertile land becomes desert, typically as a result of drought, deforestation, or inappropriate agriculture.

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Republican politico Princella Smith gains policy chops in Israel

Republican politico Princella Smith gains policy chops in Israel

by David Ramsey, AR Times

March 28, 2013

SMITH ABROAD: But still thinks of Arkansas politics.

What follows is your typical story of a 6-foot-tall black female Republican who starts off in Wynne, Arkansas, and ends up in Israel, writing for a Zionist newspaper and studying counter-terrorism.

Princella Smith has always been a wild card. A high school and college basketball star who interned for then-Lt. Gov. Win Rockefeller and in John Boozman’s congressional office, she first drew major attention on the political scene in 2004. As a 20-year-old Ouachita Baptist University student, she won MTV’s “Stand up and Holla” essay contest, earning her a prime-time speech at the Republican National Convention. Her speech was fiery and fun, and led many to proclaim her as a rising political star.

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Yair’s ‘Yesh Youth’

by Princella Smith, Israel Hayom    Israel Hayom Princella Cartoon

A little while ago, I was at the Interdisciplinary Center in Herzliya when a handsome and charismatic man in an elegant black suit, black shirt and no necktie made his way across the campus, flanked by an entourage.

“Who is he?” I asked someone in his entourage.

“Yair Lapid. He is the head of the Yesh Atid Party.”

“And are you with him?”


“What’s your name and position?”

“I am Yaakov Peri. I am a member of Yesh Atid.”

Peri, a former head of Israel’s Shin Bet domestic intelligence agency and the senior security figure on Lapid’s list, granted me an interview for Israel Hayom. He spoke very plainly, as if it was the first time that anyone reading Israel Hayom would have even heard of him or of Yesh Atid. Peri is No. 5 on the Yesh Atid list, and with the party having won 19 seats, this means he will be a member of the new, 19th Knesset.

The stir over Yesh Atid’s surprising gains in this week’s election made me think back to my interview with Peri and connect the dots. Should Israelis really be so shocked by Yesh Atid’s rise? Political ideology aside, these people seem to “get it” when it comes to relating to young people and people concerned with moving Israel forward. Few people make waves in elections by claiming to keep things exactly the same.

When I asked Peri about the importance of the youth vote, he said, “We want to convince them [young people] that there is a lot of change that can occur in our country and in daily life. We want to change the government system by minimizing the number of ministers and vice ministers. We are such a small country. We only need 18. We currently have 35. We want to lower the cost of living and build 150,000 units as business projects to create jobs.”

As an American citizen, I want to be careful not to express a bias for any particular Israeli party over another. I support Israel, and I strongly favor the U.S. having a positive and effective working relationship with Israel and its leaders as the haven of democracy in the Middle East.

While objectively observing Israel’s election results, it is clear that Yair Lapid articulated a simple and optimistic vision for Israel. That observation is justified by his Yesh Atid party’s surprise ending to an otherwise uneventful Israeli election cycle.

Prime Minister Benjamin Netanyahu is popular with many Israelis — and for good reason — but should Israelis really have been surprised at Yesh Atid’s surge?

Lapid portrayed himself as an average Israeli citizen and a champion advocate of Israel’s young people and the struggling middle class. Political figures who can speak to the next generation generally create a stir in politics. They come across as the everyman ready to take on the challenges of the electorate’s future, and this gets people excited.

In the lead-up to the election, one of Lapid’s party members, Rabbi Dov Lipman, was active on social media with the aim of reaching English-speaking voters and young, technologically savvy voters. He uploaded a video from his YouTube account of Lapid speaking to a group of young people in English.

The seemingly unpretentious, 49-year-old Lapid again donned the black suit with no necktie and captured the young audience by speaking directly to who they were as a people and the pride they should take in moving Israel forward.

“This country was built and established by people your age, 21, 22, from all over the world, who came here and said, ‘If I’m not happy with the reality of my life, I’m going to create a different reality. If I’m not happy with the direction my country’s taking I’m going to make sure and take a different direction.’ Those people said to themselves, this is what I do. I’m a part of a whole. We are all a part of something. That’s the strength of this place. That’s the strength of being Jewish,” Lapid said.

“People spend a lifetime trying to be part of something. They always go to the same bar. They join cults … they join street gangs … all because they want to be part of something. We have this as a birthright, but we have to work on it every day of our life, and this is what you do, and you do it also outside politics. You do it outside politics because this is where things are happening, this is where you change stuff.”

Agree with his political views or not, Lapid seems to “get it.” He spoke to audiences in both English and Hebrew. He spoke of a stronger future for Israel, but he tapped a vein that few others seemed to address when he spoke of the actual essence of being Jewish and bringing a love for Israel to a higher level.

Princella D. Smith is a freelance contributor to Israel Hayom. She was a communications staffer to former House Speaker Newt Gingrich and has also served as a communications director on Capitol Hill in Washington, D.C. She is currently a graduate student at the Lauder School of Government, Diplomacy and Strategy of the Interdisciplinary Center in Herzliya, Israel.


Around The World In Color: Arkansan takes hearts of Benton County women to Israel

Around The World In Color

Arkansan takes hearts of Benton County women to Israel


Posted: January 17, 2013 at 1:43 a.m.

 A project that touched the heart of an Arkansan in Israel stretched around the world to Bentonville and back at Christmastime.

Benton County Republican Women donated $1,000 and “a phenomenal” number of crayons, coloring books, markers and more to Save A Child’s Heart, according to Leigh Nogy, president of the local organization. The charity, based in Israel, treats children with heart ailments from all over the world.

The charity came to the attention of the local group because Princella Smith, a Republican activist from Wynne, is studying in Israel. Invited to speak to the women’s group during a visit home, she shared her passion for Save A Child’s Heart.

Smith was teaching English in China when she discovered the humanitarian organization, she explained.

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University students make case for Israel

by Princella Smith, Israel Hayom Newspaper   Israel Hayom Princella Cartoon

Americans and the rest of the Western world are surrounded by negative news concerning the Gaza conflict.

The situation is undeniably grave, but what continues to fascinate me about Israel is the unyielding resolve of its residents to live without fear and to remain on and fight for the land that is theirs.

As an American having only been on Israeli soil for a few months, my observation of the Israeli spirit is as much of an education for me as the time I spend in classrooms at the Interdisciplinary Center (IDC) in Herzliya as a graduate student in the Lauder School of Government, Diplomacy & Strategy.

One such example of this spirit is the work of IDC students over the past few days.

Since the start of the recent conflict, IDC students have created a “hasbara” operation on campus headquartered in an information “war room” — a term that is more familiar to Americans.

“Hasbara” is a Hebrew term for the positive alternative to negative propaganda — particularly in reference to media and press coverage of Israel. Another term for this is public diplomacy.

It is no secret that Hamas and other radical Islamist organizations have become very effective in reaching mass audiences via social networking sites such as Twitter, Facebook, and YouTube. Who better to combat these efforts than a group of young people whose generation has been largely defined by the Internet and social networking?

“Israel Under Fire” is a Facebook group created by the Israeli government’s Public Diplomacy Ministry with the help of volunteers on Nov. 15, 2012. IDC students have largely taken over the group and garnered more the 18,000 members, with an online conversation rate of more than 27,800 people talking about it daily, as tracked by Facebook.

The group has engaged students of the Raphael Recanati International School (RRIS) on IDC campus and asked them to create letters in their individual languages and to share updates on what is happening in Israel with their friends, contacts, and their countries’ media and online blogospheres. They have devoted their Twitter and personal email accounts to the dissemination of constant “rapid-fire” updates minute by minute.

Jonathan Davis, vice president of external relations at the Interdisciplinary Center and head of the RRIS, said, “The added value of the RRIS at the IDC is that we have students from over 80 countries who speak 22 languages. Hundreds of them are on Twitter and Facebook redistributing good information through social media. They are making a huge impact in their home countries when they make the case for Israel mainly because they are speaking in their own language and touting their own views.”

Certainly, the students have made quite an impact around the world — so much so that their efforts grabbed the attention of Prime Minister Benjamin Netanyahu who joined them and other university groups via video conference this week, commending their efforts.

Prior to Netanyahu’s video conference, Public Diplomacy and Diaspora Affairs Minister Yuli Edelstein personally visited IDC’s hasbara war room accompanied by IDC President Uriel Reichman.

Reichman, who had recently returned from a meeting with President Shimon Peres, expressed praise from Peres. Beaming with pride, Reichman addressed the students with a patriarchal tenor: “Nobody could do this other than IDC. No one could reach out to entire world, speaking in multiple languages on behalf of Israel. We are happy to help the country at this time. The knowledge of what you are doing has reached the president of the country. I would like to express to you the personal thanks of President Peres. He conveys his greetings and gratitude for the work that you are doing and wishes to come and see you soon. … You have to understand [that] you are doing something of great significance. Altogether, what you are doing is enormous.”

Edelstein appeared visibly impressed by the wall charts, graphics, rows of computers, and the operation led by the IDC Student Union.

The students have established advocacy centers in 62 countries so far. They have produced and translated fact-checked information available via an online public dropbox in more than 20 languages, including Arabic, Armenian, Chinese, Croatian, Danish, Dutch, English, French, Georgian, German, Hebrew, Hindi, Hungarian, Italian, Korean, Norwegian, Portuguese, Romanian, Russian, Serbian, Spanish, Swedish, Tagalog and Turkish.

Edelstein told the students of a different emotional feeling in Israel and around the world than in previous conflicts. “I want you to understand that this time is really different. For the first time in Israel, you hear satisfied people talking about the war. I call what you are doing public diplomacy — not communication. I know that you could be somewhere else eating pizza and drinking cola, but instead you are here making a difference in the world. If all ambassadors, generals, and other officials would take your information and use it, it would work.”

I asked the minister to elaborate on his statement for Israel Hayom. In the 75 seconds that I had with him he had a lot to say, but this sentence brought it all home for me: “The concept of Israel’s actions has changed in several countries. Volunteers, students, and young people like the ones here at IDC give us hope that the conflict will be over.”

The IDC Student Union is also directly assisting operations to host families and individuals from southern Israel, providing them with safe havens in Herzliya. It hosted a “fun day” with over 400 children from the south, enabling them to play games and enjoy food from McDonald’s and Kyoto restaurants, which sponsored the event.

Indeed the word “hope” has taken on a new meaning for the young people of IDC as they have epitomized the spirit of hope that then-Senator John F. Kennedy spoke of 52 years ago at the Zionists of America convention in New York: “Israel was not created in order to disappear — Israel will endure and flourish. It is the child of hope and the home of the brave. It can neither be broken by adversity nor demoralized by success. It carries the shield of democracy, and it honors the sword of freedom.”

Princella D. Smith is an American freelance contributor for Israel Hayom. She was a communications staffer to former House Speaker Newt Gingrich and has also served as a communications director on Capitol Hill in Washington, D.C. She is currently a graduate student at the Lauder School of Government, Diplomacy & Strategy of the Interdisciplinary Center (IDC) in Herzliya, Israel.


Americans Heart Israel

Americans heart Israel

Roy Ashton might be considered a “typical southern male” in the United States. He is a Mississippi resident, a father, and a husband who attends church regularly and considers himself to be patriotic. Although active in his church, he was not particularly interested in traveling to the Middle East. In fact, the only countries that his church mentioned when speaking of missions work were Asian countries in the Far East. But, like many church-going American southerners, Roy eventually became informed of the importance of Israel’s security to the pro-democratic free world and to America’s national security, as well as the biblical significance of protecting Israel, and he had a change of heart. He decided to travel to Israel and to learn about how he could help Israelis to handle emergency situations.

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