Health tips for better life

A topic that has been the source of friction between the US and China is the intentional undervaluation of the Chinese Yuan (also known as the Renminbi) by the Chinese government. This issue has gained traction after the global financial crisis in economic and political forums such as the G-20 as fundamental structural imbalances of global trade have been brought to light. In Washington the rhetoric against China has grown as the US faces an unprecedented fiscal deficit and a stubbornly high unemployment rate.

The Chinese government for the better part of the last three decades has pegged the Yuan to the Dollar, and utilizes a system of “Fixed Exchange Rate”. From 1994 to 2005, one Dollar was equivalent to approximately 8.30 Yuan. During this period, the Chinese government blatantly disregarded market forces which were calling for an appreciation of the Yuan relative to the Dollar. Under pressure from Washington, the Chinese revalued their currency to 8.11 in 2005 and allowed it to slowly appreciate in a Managed Floating system. The Yuan was however re-pegged to the Dollar in 2008 in the aftermath of the global financial crisis. Currently, the Yuan traded at 6.5 to one Dollar. Even at this level, most economists argue the Yuan is undervalued by as much as 40%. At a 40% undervaluation, the Yuan should be trading in a “Flexible Exchange Rate” system close to 4 Yuan to a Dollar.

Why does the Chinese government intentionally devalue their currency?

China’s economic growth story has been remarkable. It has grown at an average of 10% for the last thirty years and overtook Japan last year to become the second largest economy in the world. In terms of GDP, China is projected to overtake the US to become the world’s largest economy by the end of this decade. This growth has primarily been driven by China’s exports and specifically its exports to the US. In 1994, the US trade deficit with China was $29.5 billion. At the end of 2010, the trade deficit was a colossal $273 billion, reflecting a skewed trading relationship. This massive trade deficit is primarily due to the artificial undervaluation of the Yuan.

For instance, an US importer can exchange one hundred Dollars for 650 Yuan ($100 * 6.50) worth of goods at today’s fixed exchange rate. If a t-shirt costs 50 Yuan, the US importer can buy 13 t-shirts. Now let’s assume the Chinese government allows the exchange rate to appreciate to its market equilibrium of 4 Yuan to a Dollar (assuming a 40% undervaluation). In this scenario, the US importer will only receive 400 Yuan ($100 * 4.00) worth of goods for one hundred Dollars. With 400 Yuan the US importer can now only buy 8 t-shirts. US importers will buy fewer goods from China, weakening demand and look to other countries to import the same goods at lower cost. The Chinese exporter will also receive 250 (650 – 400) Yuan less in this case than with the fixed exchange rate.

China’s export oriented growth model has lifted millions of people from poverty to a middle class standard of living. Despite this, a significant portion of the population still lives in rural areas where their sustenance is primarily based on farming. The Chinese are wary of moving to a floating exchange rate as this will mean the shuttering of thousands of export oriented businesses across China and result in large unemployment exacerbated by lack of social safety nets.

How does China “fix” the exchange rate?

In a nutshell, China sells its currency (Yuan) and buys US Dollars. At the end of 2010, China had a trade surplus of $273 billion with the US. This creates an excess supply of dollars, which in a flexible exchange rate system would have reduced the value of the Dollar relative to Yuan or in other words increase the value of the Yuan relative to the Dollar. Chinese exporters are mandated to clear their Dollar cash holdings through the Chinese Central Bank. The Central Bank exchanges the Dollars and provides Yuan, which it prints, to the exporters. It holds the Dollars as reserves and invests in Dollar denominated assets such as Treasury Bonds and US government backed mortgage bonds. Reducing the supply of the Dollars by mopping up the excess surplus of Dollars allows China to undervalue the Yuan relative to its true market equilibrium. China then issues bonds to reduce the supply of Yuan to decrease the potential for inflation and holds this as bank reserves.

What are the consequences of the Fixed Exchange Rate for China and USA?

China

1. Inflation – a phenomenon where more money chases the same number of domestic goods, leading to price appreciation. The inflation rate last month was 5.3% which is leading to severe monetary tightening and lower projected growth. This can be partially attributed to China printing Yuan to buy Dollars in order to keep the currency pegged along with other variables.

2. GDP growth solely reliant on exports of goods

3. Asset bubbles – value of real estate has sky rocketed. The total value of land of the cities of Beijing and Shanghai as calculated by China Economic Weekly based on the prevalent land price in 2010 is 30 trillion dollars. This is double the annual GDP of the USA. Again, this is partly due to the printing of Yuan to peg the currency.

4. FX reserve risk – as the value of the dollar depreciates, China’s Dollar denominated reserves is worth less. China holds close to one trillion Dollars in US government debt and is often referred to cheekily as “America’s Banker”. China has lost 271 billion Dollars due to Dollar depreciation from 2003 – 2010.

USA

1. Leveraging of the consumer balance sheet – US consumers bought copious amount of Chinese goods from toys, furniture, and apparel fueled by credit card and home equity lines. This led to low US household savings and significant leveraging within the balance sheet of the consumer. Average credit card debt per household was $14,000.00 in 2010.

2. Leveraging of the public balance sheet – Like the American consumer, the US government leveraged its balance sheet – spending more money than it took in via tax receipts. Total US public debt outstanding is over 14 trillion dollars and approximately 96% of annual GDP as of the first week of May. China’s demand for US debt has led to extremely low borrowing costs for the US government. The US Treasury can issue a 10 year note for a coupon at little over 3% today. The low interest rates undoubtedly played a role in both the Bush and Obama administration spending money liberally for their domestic priorities.

3. Huge trade deficit

4. Lower demand for US exports – US exports have lower demand in China due to weaker Yuan. A stronger Yuan would allow the Chinese consumer to buy more US goods. This has adversely affected the US manufacturing industry and plays a role in the high unemployment rate.

How can these complex, structural, fiscal and trade imbalances be resolved? There is no magic pill and the solutions outlined below will require time, patience and commitment from both sides.

1. A gradual appreciation of the Yuan / Dollar exchange rate to the market determined equilibrium. This will result in Chinese exports becoming more expensive to US consumers (lower demand) and US exports becoming cheaper for Chinese consumers (higher demand). This will eventually reduce the wide trade gap between both countries.

2. Due to a lack of social safety nets, the Chinese typically tend to save 50% of their disposable income. US household savings rate is 5.5% which is very low in comparison. The Chinese need to decrease their savings rate and increase domestic consumption to boost GDP instead of relying solely on the export driven model. In contrast, the US needs to increase its savings rate, de-leverage its private (consumer) and public balance sheets and consume fewer goods while producing more goods for export.

3. China needs to encourage domestic consumption of goods and reduce dependence on the US consumer for its exports and the US needs to aggressively grow its exports and reduce its domestic consumption which will help reduce the unemployment rate.

The Chinese and the US economies, the two largest in the world, are intertwined at the hip and will be the source of global economic growth for the foreseeable future. There is real danger that lack of structural re-balancing of the issues outlined above can lead the global economy back to a negative growth environment.

Glucose monitors play very important roles in controlling diabetes. Health professionals are one in underscoring the benefits of blood glucose monitoring for managing diabetes and good health in general. Continuous monitoring helps diabetics avoid serious complications. Before, urine testing was done to check for glucose levels. Today, it is no longer recommended and is no longer reliable. Blood glucose monitors or meters are better at the job. Yet still, urine testing remains a primary tool today in diabetes care as it used in the detection of ketones.

Glucose monitors checks the concentration of glucose in the blood, called glycemia. Blood is tested for glycemia content by these monitors. The skin is pierced by a lancet, normally at the finger tips, to take a small amount of blood as sample. This is then placed on a disposable strip which would later change in color or electrical property depending on the type and result of the test.

The visual strip type changes in color as blood reacts with chemicals on the test strip. The resulting change in color varies according to glucose concentration. The electrical device type is measured with an electronic meter. Within a few seconds, the digital meter displays the glucose level. It takes from 5 to 60 seconds to read results, varying from model to model. Alternative sites have been suggested for drawing blood samples but they normally do not compare with the finger tips in reflecting rapidly changing levels of glucose.

Glucose monitors are essential in home blood glucose monitoring (HBGM). Several models have come out in the last thirty years. The first units appeared in the 1970s. They were huge and bulky by today’s standards. The first devices used the same visual colorimetric system that is still in use in urine test strips. These would require 30 micro liters (µl) of blood samples, referred to as hanging drop, which are quite large compared to only 0.3 to 10 micro liters for today’s units. The sizes of the newer monitors are about the size of the palm of an adult’s hand. Some models are even smaller while a few are a little larger. Instead of disposable strips, some models have discs that can be reused.

More and newer monitors now have the capability for data transfer. Readings may be downloaded onto a computer that has corresponding diabetes monitoring software through cables or infrared. Some can even be linked to insulin injection devices and PDAs. All monitors feature clocks and memory to store past results. These functions help a person with diabetes to better manage, keep a record, and watch for patterns and developments.

The accuracy of glucose monitors are at about ±10 to 15%. But more factors should be considered regarding these numbers. Elements that may influence accurate readings include the temperature in the immediate surrounding area, humidity, the person’s intake of drugs that will be present in the blood, dirt on the meter, calibration of the monitor or meter, percentage of red blood cells in the blood sample, the strips to be used are either new or already old, and the quality and amount of the blood sample. These factors may compromise an accurate measurement. A good way to check and test for accurateness of the monitors is for the user to check for himself the glucose levels at about the same time that a blood sample has been drawn when visiting a doctor and then make comparisons.

Continuous glucose monitoring (CGM) systems make use of a small sensor that is inserted under the skin. They measure levels of glucose in tissue fluid. The individual must wear the sensor in the same place for up to a week. Then it should be replaced. The sensor, after measuring glucose levels, transmits this information to a wireless monitor that may be carried around or worn. However, CGM models are not as accurate and reliable as standard units. They are also much more expensive. In exchange for the higher cost is the ability of the individual for a closer and better glucose monitoring and control. CGM devices can take real-time readings at every 5- or even 1-minute intervals. These come with alarm functions that can warn the diabetic of a too low or too high glucose levels. They also have data transfer capabilities for closer tracking and analysis similar to conventional monitors.

Well, let’s begin our talk with the gossip and then get serious. It seems Gabourey Sidibe who was recently nominated for an Oscar for her role in Precious, has been approached by a weight loss company. It wants to help her lose weight and, of course, by doing so enhance its own reputation. What makes the story so interesting is the aggressiveness of the approach. Here is a young woman who is obviously not unhappy with the way she looks and is successful as she is. Yet a weight loss company thinks she should want to lose weight. Now we could assume this company is altruistic. It knows being obese significantly increases the risk of diabetes, arthritis, some cancers, a stoke or heart disease. If anyone overweight can lose between 5 and 10% of their body weight, these risks are reduced or completely disappear. So why look for celebrity endorsement? The answer lies in the national statistics.

In 2009, the National Institutes of Health reported obese people in the US represented 34% of the population while the number who were merely overweight represented only 32.7%. For the record, this classifies 72 million people as obese, i.e. their BMI is 30 or higher. In fact, the rate of obesity has doubled over the last thirty years and, being dispassionate about it, this represents a major market for weight loss products and services. Billions of dollars are at stake. Against this background, the San Diego Medical Center has been running a clinical trial on POSE. This is a new approach to bariatric surgery. The increasingly common lap band procedure requires the surgeon to enter the body through the abdomen and this inevitably leaves a scar. POSE is surgery performed using an endoscope. This is a device pushed down the throat and into the stomach without any need for an incision. Once inside the stomach, there are tools operated remotely by the surgeon. This allows the stomach walls to be sutured, reducing available space by about one-third. Thus, the effect is the same as in conventional surgery. Patients begin to feel full minutes after starting to eat. Thus, for those who have vanity issues and want to achieve a “body beautiful”, this form of surgery promotes weight loss without scars.

For the purposes of the trial, only people who have a long history of weight problems are being considered. But, if the trial proves a long-term success, you will probably see this type of procedure heavily advertized for people of all weights. It’s not our policy to argue people should not have surgery. There may come a time when people prove themselves so lacking in will power to diet and exercise that physically preventing them from overeating is the only way of saving their lives. But what does concern us is the notion that surgery should become the normal response to weight problems. As a nation, do we really want to spend millions of dollars every year on surgery when the solution to the problem is a diet, physical exercise and phentermine? Just think for a moment. If you buy Phentermine, you get an effective appetite suppressant. Why do people using it not lose weight in the long term? Because they continue to eat massive portions of unhealthy food. People are unable to prevent themselves from overeating. What does that say about the character of Americans? We have become a nation of food junkies, so addicted to eating, we cannot stop even when we know it’s killing us.