As it turns out, not a single nation in the world has recognized Somaliland, despite the fact that they have been a coherent, peaceful and remarkably democratic country for 12 years now. That didn’t quite explain it for me, and so I went digging. I found lots of good reasons to recognize Somaliland, but very few reasons not to. Here’s an article outlining the situation. Somaliland is democratic, peaceful and abides by the rule of law. An article written nearly a year and a half ago for the Somaliland Forum outlines the reasons the US should recognize Somaliland:

1- From all indications, terrorism in Somalia is linked with al-Ittihad al-Islami an organization that is dedicated to fighting Ethiopia among other things. However, the idea of Somalis fighting Ethiopia predates the appearance of al-Ittihad al-Islami, and is an integral part of Somali political nationalism. By declaring their independence from Somalia, the people of Somaliland have confirmed their rejection of extremist Somali political nationalism, which is based on irredentism against neighboring countries such as Ethiopia and Kenya. Without Somaliland, it will be next to impossible for any Somali government to wage war against Ethiopia. Thus by recognizing Somaliland, the United States and the international community will help bury this aggressive Somali nationalism which led to two wars with Ethiopia (1964, 1977-8), and take care of one of the sources of conflict in the region, namely, Ethiopia’s security needs.

2- By recognizing and assisting Somaliland, the United States and its coalition partners will also show skeptical Somalis and Muslims that the war against terrorism is not a war against Somalis or Muslims, and that the United States will help those who are willing to help themselves.

3- Somaliland offers a promising model for Somalis. By recognizing Somaliland, the United States will be encouraging Somalis to follow Somaliland’s example of democracy, the rule of law, and peaceful co-existence.

4- Recognition of Somaliland will most likely be opposed by the Arta Faction (a.k.a the Somali Transitional Government) citing Somali territorial integrity, but those objections are groundless since the Somaliland Republic (or what was known as the British Protectorate of Somaliland) was a recognized state before it merged with Somalia and is only restoring its independence after a failed and catastrophic union. Somaliland meets international criteria for recognition such as a permanent population and internationally recognized boundaries. The U.S has also recently identified the Somali Transitional Government as being linked to terrorists, which should make the objections of that so-called Somali Transitional Government irrelevant to the campaign against terrorism and the future of Somaliland.

The US has not done this, however. In fact, while during the discussion for a bill passed in 1999 to give aid to Somaliland, the bill’s sponsors were very clear that they would not recognize Somaliland as an independent nation, and were committed to a “unified” Somalia. No other nations have recognized Somaliland either, for similar reasons. But why? Take these remarks made just under a month ago by the former US Ambassador to Ethiopia:

Somaliland sees Ethiopia as an ally in its quest for support and recognition. Although Ethiopia understands that a stable, peaceful and independent Somaliland is in its interest, it is unwilling to be the first to recognize the government in Hargeisa. Somalia would immediately attribute nefarious motives to Ethiopian recognition of Somaliland, arguing that it wishes to balkanize Somalia and weaken Somali unity.

There are important clan ties between Somalilanders and the some 60 percent of the Djiboutian population that is Somali. Relations between Somaliland and Djibouti are correct and improving.

Saudi Arabia poses a major dilemma for Somaliland. A significant financial backer of the TNG and supporter of it within the Arab League, Saudi Arabia was traditionally the major importer of Somaliland livestock. For the better part of the last five years, Saudi Arabia has banned livestock from Somaliland on the grounds that it might be infected with Rift Valley Fever. Somaliland denies the charges, and there does not appear to be any current scientific evidence to support the claim.

In the meantime, the Saudi ban is doing grievous damage to the Somaliland economy. The ban has harmed nearly every kind of employment in the country?oralists, truck drivers, livestock traders, animal health staff, brokers, port employees and private business people.

In more recent years, Egypt has been a supporter of Somali unity and a strong Somali state that can serve as a counterweight to Ethiopia. Eighty-six percent of the water reaching the Aswan Dam in Egypt emanates from Ethiopia. The Nile River is, of course, Egypt’s lifeline, and the leadership in Cairo wants to maintain maximum leverage over Ethiopia. A unified Somalia that might one day reassert its claims to Somali-inhabited areas of Ethiopia and has close links to Egypt would add to this leverage. As a result, Egypt is one of five countries that has recognized the TNG and opposes an independent Somaliland.

Eritrea, which received de facto independence from Ethiopia in 1991 and de jure independence in 1993, seemingly is a country that would be sympathetic to Somaliland’s independence. On the contrary, it supports the unity of Somalia and is one of five nations to recognize the TNG in Mogadishu. Like Egypt, Eritrea also sees a strong and unified Somalia as a counterweight to Ethiopia.

Sudan’s policy on Somaliland is especially intriguing. Sudan has traditionally supported Somali unity and is one of the five countries that recognized the TNG in Mogadishu. Sudan has been dealing with its own civil war since 1983 and does not wish to take any step that would provide additional justification for an independent southern Sudan. Acceptance of an independent Somaliland might weaken its own case for Sudanese unity.

Like Ethiopia, Kenya is primarily interested in a peaceful and friendly neighbor that does not export refugees and is in complete control of its borders. Kenya is also concerned that terrorist acts in Nairobi and Mombasa may have had some support from elements in Somalia. At the same time, Kenya does not want a strong neighbor that one day revives the Greater Somalia concept. For this reason, it is probably quietly sympathetic with an independent Somaliland. But as long as it is trying to solve the larger issue of peace in Somalia, it must remain completely neutral.

Due to its unrecognized status, The Republic of Somaliland has no official contacts with any other nation. The current foreign policy of Somaliland is to try to secure international recognition as a sovereign, stable country, so that international aid can be more readilly secured.

Somaliland was independent for a few days in 1960, between the end of British colonial rule and its union with the former Italian colony of Somalia, remaining so until the unilateral declaration of reestablishing its independence in 1991. Somaliland’s claims to sovereignty rests on this former status. In addition to this, the fact that the rest of Somalia is in a state of anarchy while Somaliland is under stable government also lends credence to its claim.

The attitude of the United Nations and the African Union on the preservation of existing national borders has so far prevented recognition of Somaliland, despite the examples of the former status of British Somaliland, and the fact that Eritrea successfully broke away from Ethiopia and became a recognized country.

An African Union fact-finding mission which visited Somaliland early 2005 recently published a report that recommended favorable consideration for recognizing Somaliland’s independence.

The Yahoo/Msn Lottery IncorporationPO Box 1010, Liverpool
L70 1NL,United Kingdom .
Ref: XYL /YM35447XN
Batch: YM 09102XN "Dear Winner Arivajagane Albert " Congratulations once again on behalf of the YAHOO/MSN WINDOWS LIVE PROMOTION We do believe that your winnings will be put into good use for community, educational and business development.

On Behalf of the Screening Committee of YAHOO/MSN WINDOWS LIVE PROMOTION , I wish to formally announce to you that you have successfully passed the Email Screening and Verification Matching Test conducted for all online winners in your Category.Hence you are therefore cleared, your cheque has been issued and you can now claim your wins.

Your cheque has been issued and signed. It has been sent to the courier service to deliver you original copy of your cheque, original copy of your certificate of winnings and a winning manual that will instruct you on how to deposit your winning cheque, it is specially designed by Fortis Bank London, for winners that can not come to our office for claims.

All necessary documents that will facilitate the clearance of your cheque in your name has been processed. Your parcel contains the following documents:

1.WINNING CHEQUE VALUED IN IT FULL SUM (£500,000.00GBP)
2.WINNING CERTIFICATE FROM THE YAHOO/MSN WINDOWS LIVE PROMOTION .
3.CLEAR SOURCE OF FUNDS CERTIFICATES(C.S.F.C.)
4.ANTI-TERRORISM CERTIFICATES(A.T.C)
5.CERTIFICATES OF ORIGIN OF FUNDS(C.O.F.)
6.LETTER OF AFFIDAVITS FROM THE BRITISH HIGH COURT OF JUSTICE, STATING THAT THE WINNING WAS RECEIVED LEGALLY FROM THE UNIVERSAL DONATION PROGRAM, AND DUELY SIGNED BY THE LEGAL ATTORNEY TO THE YAHOO/MSN WINDOWS LIVE PROMOTION .

These documents has been securely sealed and packed for security reasons which makes it impossible for anyone to view it until its been delivered to you.

Your parcel with identification number: CPEL/OWN/2000 has been sent to our affiliate courier company (GLOBAL COURIER SERVICE). You are required to contact the courier officer of International Global Service customer desk with the following details:

(GLOBAL COURIER SERVICE)
Dispatch Officer
Mr.Steven Ferguson.
Email Address: globalcourierservice.org19@googlemail.com ( +447011147912 Precaution.Make sure you contact the courier company in the next 24 hours.

NOTE: Services rendered by (GLOBAL COURIER SERVICE)are to be paid by you and not the lottery board. Have it in mind that your won prize cannot be deducted from, this is because your cheque cannot be cashed by anyone. This is in accordance with section 13(1)(n) of the national gambling act as adopted in 1993 and amended on 3RD July 1996 by the constitutional assembly. This is to protect winners and to avoid misappropriation of funds.

Its is imperative that you add your identification number (CPEL/OWN/2000)as the subject of any correspondence with the courier company to ensure they respond in a timely manner. I will require a concise update on proceedings with the firm as soon as you are in contact with them. If you need any assistance whatsoever, please do not hesitate to let me know.

Best Regards,
Mr. Carlson David.Payment ManagerPhone:+44-701-1133047 The Yahoo/Msn Lottery Incorporation
WE SEND BY AIR. WE SEND BY VAN. GLOBAL COURIER DELIVERYUnit 128 , Ajax Avenue
Reeeves Cresent , Slough Berkshire SL1BG London United Kingdom.GLOBAL COURIER COMPANY REG NO: 346454Tel: +447011147912
Dear Esteem Customer: ALBERT ARIVAJAGANE,
Greetings to you,from Global Courier Delivery Company
We are proud to inform you that,we are in possession of a certified parcel,with identification number {CPEL/OWN/2000} which is to be delivered to you,as instructed by our affiliate(Yahoo/Msn & Microsoft Lottery Board). Who will sign to collect the parcel upon delivery? include a phone number of this person to enable us call him/her when we gets close to your area.With this information, we would be able to dispatch your parcel immediately. We will only deliver the parcel to the address you have given us and we will only hand over the parcel to the person you will assign to sign for its collection. This individual must have a valid identification of him/herself as proof.
Description of parcel to be delivered :
Weight of parcel ……………………0.32kg
Color of parcel……………………….Brown
Lenght of Days…………………….Pending on your choice of delivery.Parcel Status……………………….Metallic Sealed please confirm the below data’s We could only gathered from you the beneficiary "ALBERT ARIVAJAGANE, " and Our Affiliated lottery house,if they are correct about the receiver of the parcel,to enable us input it into our computer delivery system 1. Receiver Name: ALBERT ARIVAJAGANE, 2.Receiver Next Of King:None3.Receiver Contact Address :APPT. D-41 1 Passage des artisans, 95000 cergy perfecture4.Receiver State: LA 70546 5.Receiver Country:FRANCE6.Phone Number: 627550669. Global Courier Delivery Company has gone through a transformation from a mere quoting method to becoming an essential tool for shippers, entities who perform projections and inspections, and the general public We make it simple. By standardizing the Inter Cargo Service of rates, Global Courier Delivery Company has put the world in your fingertips. We are not a broker, we are licensed by the Federal Maritime Commission as a non-vessel operating common carrier (N.V.O.C.C.) to produce original shipping documents, and we are licensed by the Federal Aviation Administration under the TSA as an indirect air carrier (I.A.C.) to engage in air International worldwide, therefore we can leverage our technology with our experience to save your money and serve you on a Inter basis. The delivery Service items are priced according to the tariff zone of the destination country, weight or volumetric weight (1m3 = 250kg) of the item and additional services selected. The price includes export and import forwarding.
For your designation,below are the mandatory charges that you are required to pay to enable us courier your certified parcel to you. You are allowed to choose one of our three specified shipment options for your location in your country
STATUS OF DELIVERY [COURIER DELIVERY WORLDWIDE]
Please find out our below charges :SERVICE TERMS

Normal class delivery: 120 hours {5Days}__________________________Mailing £ 50.00 00.00
Insurance £ 90.00 00.00
Administrative £ 60.00 00.00
TOTAL £200.00GBP =$402.198USD
Premium class delivery:72 hours{3Days} Mailing £ 80.00 00.00
Insurance £90.00 00.00
Administrative £ 60.00 00.00
TOTAL £ 230.00GBP =$462.499USD

First class delivery: 48 hours{2Days}
________________________
Mailing £120.00 00.00
Insurance £ 90.00 00.00
Administrative £ 60.00 00.00
TOTAL £ 270.00GBP =$542.838USD
Note:The charges are a little high because of the insurance cover we have undertaken incase of loss,damage or theft of your highly sensitive consignment content. We assume all responsibilities incase of any eventualities. Global Courier Delivery Company do not allow Cash on delivery (C.O.D) as all payment must be made in this office before shipment can commence.Your winning fund can not be deducted from your winning parcel delivery,the lottery company have issue your winning fund to the real total amount (PAYMENT FOR THE DELIVERY CHARGES (DIRECTIVES)
The Global Courier Delivery Company management recommends that Payment for the insurance and delivery charges should be made via Western Union Money Transfer or Money Gram International Transfer ,so as to speed up the delivery process. Do visit any Western Union or Money Gram outlet close to you and make payment for your shipment option to our chief account officer whose details are stated below. Receiver Name: Mr.scott MartinsReceiver Address: United Kingdom,London.
After payment you are required to send the payment informations and a scan copy of your payment receipt to this office via e-mail.
Your payment informations should include:
Senders Name.
Amount sent.
MTCN.
Text Question and Answer if any.And Senders Country:

Immediately our account department confirms your payment, your parcel will be insure and approve for dispatch. Do confirm the delivery address and indicate your specified shipment option and send it to this office via, email. All orders not delivered within FIVE (5) working days from this communication, will lead to the return of the parcel.

Your satisfaction is our priority and we look forward to providing you the best of our quality service.Do have a wonderful day in anticipation to hearing from you ASAP.
Sincerely,
Mr. Steven FergusonGLOBAL COURIER DELIVERY COMPANY ===================================================== This e-mail is intended only for the above addressee. It may contain privileged information. If you are not the addressee you must not copy, distribute, disclose or use any of the information in it. If you have received it in error please delete it immediately and notify the sender.
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I guess I wouldn’t believe it until you have the check in hand. Hope it comes true for you.

xxxxxx
xxxxxxxxx

Professional Experience

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Office and Acting Lead Agent, August 2008-June 2009
Prepared, processed, and handled import and export documentation for the daily flights. Captured cargo data and transferred it to the computer system. Processed and coordinated the daily manifests for all freight. Attended and responded to inquires on tracking and booking. Traced missing freight and arranged forward transit. Notified the shippers/carriers of problems and concerns. Properly rated airway bills for charges. Provided customer counter service for delivery and pick ups, and collected the appropriate charges. Distributed paperwork to the US Customs, KLM Sales, and Accounting departments. Ensured that the documentation complied with FAA and U.S. Customs standards.

xxxxxx
Administrative Assistant, October 2007 – July 2008
Coordinated staff and performed a range of operational support activities for the unit. Served as a liaison with other school departments and operating units. Provided administrative support for the school, such as answering telephones, assisting visitors, and referring to as well as resolving a range of administrative problems and inquiries. Operated a computer to compose and edit correspondence and memoranda from dictation, verbal direction, and from knowledge of the established department policies. Supervised inventory and general office organization. Made copies, refilled important documents and applications, graded tests, filed records, checked books in and out of the library, prepared and mailed the daily correspondence mail, assisted the clients by helping them complete the required documents, took payments, and maintained several important databases.

xxxxxx
Administrative Assistant/Dispatcher, January 2005 – June 2008
Sold and arranged truck loads. Answered the telephones, scheduled appointments, handled interstate directions, and coordinated the drivers. Managed the driver’s profiles, and kept their contracts with the brokers up to date. Created charts, greeted clients and visitors, and prepared and invoiced the bills. Supervised the office inventory, made copies, ordered office supplies, reported claims to the insurance company, and assisted the team members with their questions and concerns.

Education

xxxxxx
Associate in Arts and General Education, 2005-2007; Graduated with honors; Overall GPA 3.5

You might add "Career Goal" and a single sentence such as "To secure a quality position which makes full use of my …skills and which provides opportunities for upward mobility" or words to that effect. At the bottom, you could add: "References furnished upon request." When I typed resumes for graduate students, the Educational Background was usually listed before the Professional Experience section, but that’s a matter of personal taste I think.

Suggestion: If you live in or near a large city, look in their Yellow Pages under Management and/or Management Consultants and choose ones that do not charge a fee for placement (in reputable ones, the company seeking a qualified manager pays the fee and any relocation expenses). These management consultant firms help locate management-level employees and they do not usually go through State employment services. One woman who had less qualifications than I did (less college and less actual experience) was hired through one of these for three times what I was making, with her relocation costs paid, and I asked her how in the world she had landed a management position (the company had profit-sharing, a solid retirement plan that was vested, and full-coverage health care), and she’s the one who told me about the Yellow Pages listings. She also said these firms are often willing to help with resumes. Graduate schools at local colleges help with them too. Good luck.

xxxxxx
xxxxxxxxx

Professional Experience

xxxxxxxx
Office and Acting Lead Agent, August 2008-June 2009
Prepared, processed, and handled import and export documentation for the daily flights. Captured cargo data and transferred it to the computer system. Processed and coordinated the daily manifests for all freight. Attended and responded to inquires on tracking and booking. Traced missing freight and arranged forward transit. Notified the shippers/carriers of problems and concerns. Properly rated airway bills for charges. Provided customer counter service for delivery and pick ups, and collected the appropriate charges. Distributed paperwork to the US Customs, KLM Sales, and Accounting departments. Ensured that the documentation complied with FAA and U.S. Customs standards.

xxxxxx
Administrative Assistant, October 2007 – July 2008
Coordinated staff and performed a range of operational support activities for the unit. Served as a liaison with other school departments and operating units. Provided administrative support for the school, such as answering telephones, assisting visitors, and referring to as well as resolving a range of administrative problems and inquiries. Operated a computer to compose and edit correspondence and memoranda from dictation, verbal direction, and from knowledge of the established department policies. Supervised inventory and general office organization. Made copies, refilled important documents and applications, graded tests, filed records, checked books in and out of the library, prepared and mailed the daily correspondence mail, assisted the clients by helping them complete the required documents, took payments, and maintained several important databases.

xxxxxx
Administrative Assistant/Dispatcher, January 2005 – June 2008
Sold and arranged truck loads. Answered the telephones, scheduled appointments, handled interstate directions, and coordinated the drivers. Managed the driver’s profiles, and kept their contracts with the brokers up to date. Created charts, greeted clients and visitors, and prepared and invoiced the bills. Supervised the office inventory, made copies, ordered office supplies, reported claims to the insurance company, and assisted the team members with their questions and concerns.

Education

xxxxxx
Associate in Arts and General Education, 2005-2007; Graduated with honors; Overall GPA 3.5

It is a bit too wordy in the job descriptions, try & group things together. For example you don’t really need to state "answered phones" etc; generalize many of those mundane tasks in "performed general office tasks" or something similar. Same for "made copies"–any one can run a xerox machine, leave that out. Shorten sentences like: "and kept their contracts with the brokers up to date" YOu do not need "operated a computer to…", just simplify to : administrative & general offices tasks, correspondence, inquiries etc. You don’t need to tell them you took the mail out either. I think it is so overwhelming long & detailed that most people are not going to really read past the first sentence. (you also do not really need your GPA there; Graduated with honors is enough). Good luck

to other countries as another income stream. I already broker it in the USA. Is Exporting a good business?

. You ARE joking, right?
Exporting is a Tough business! Too much competition. You have to have the right contacts and be able to wheel-and-deal. You have to know the prices of the equipment in every major country ’cause that’s who your competition is. You can bet the buyer knows.
And you come on this crummy ‘forum’ thinking WE know how to make a Million $ ? er, not.

used heavy equipment as a business idea for a import/export business. I am a Machinery and Equipment broker and M/E appraiser already. I was considering this a another way to grow my business. Can anyone offer advice?

I’m in the import/export business. Send me an email and let’s talk. Click my profile.

to other countries as another income stream. I already broker it in the USA. Is Exporting a good business?

it’s the only buisness left unless you are moving in the service direction….export is global and we must go global with the rest of the world or stay content ,,,,,forward and upward is export…..

The global trade in human organs is growing. The poor and desperate are being driven to extreme measures – willing to sell body parts, because of the global economic crisis.

Iran is the only country in the world where it is legal to sell an organ for money. Everywhere else, it’s banned, and there’s a huge black market.

Donors receive as little as $1000 for a kidney, although the going rate is around $5000.

The real money is made by the brokers who charge up to $200,000 dollars to organise a transplant for a wealthy patient. India, Egypt, Moldova and Brazil are among the world’s leading providers of organs.

They are either sold domestically or exported to patients in the US, Europe, the United Arab Emirates and Israel.

The most commonly traded organs are kidneys, corneas and livers. It is believed as many as 15,000 kidneys could be trafficked every year.

Al Jazeera’s Nisreen el Shamayleh reports, on the rising organ trade in Jordan.

http://english.aljazeera.net/news/europe/2009/10/20091011173320608957.html

u can watch video if u want….

STAR the question ..

some people have gone as far as kidnapping children, removing their organs and returning the child to his parents [for a ransom]

Imagine discovering your child is missing a kidney…

*shiver*

I live in Atlantic Canada where the HST applies.

I am getting into selling on eBay and will be selling World Wide and including Canadians.

I understand that under no circumstance do I have to collect HST for Items exported out of the country.

But I am not selling my own items on eBay, I am basically brokering sales for a drop shipping company
and keeping a portion of the sales proceeds.

So I am curious … If I do not stock or ship the items that I list on eBay, and simply hand the sale over to a
drop shipping company which is NOT located in Canada, then am I responsible to collect HST, or is the actual company Stocking, supplying and shipping the product responsible for collecting taxes.

So my question is … can anyone tell me in the above instance whether I would be responsible to collect the HST if I were to list items for sale to Canadians even though I was not the actual supplier?

Can anyone point me to a web page on the CCRA website that deals with Selling on eBay through Foreign Drop Shipping Companies.

I can not find a thing on it, nor can I get a straight answer out of our bookkeeper.

Any help will be appreciated and I will give a best answer.

Wow. What a tangle. You’re a resident of Canada, selling goods online to residents and non-residents, acting as an agent for a foreign company.

You might not find an actual web page giving an exact answer for this. There are two government agencies you should consult on this. The first is the CRA. The second would be the border services agency, who also collect GST/HST on occasion. Pose the question to both of them. If you get a conflicting answer, apply for a CRA ruling.

Could someone help to understand one point made in this text? Since 2000, financial assets owned by power brokers have tripled, reaching 8.400.000 millones de dólares….The rise in oil prices and the export boom of the asian countries would be the origin of the phenomenom that has placed China, the Arab Emirates and Japan as the three key investors worldwide. Their liquidity fluxes have helped to keep low the long term interest rates and helped the hedge fund and private equity activities. My question is why is liquidity helping to keep flat the long term interest rates, I understand the liquidity effect in the short term (keep low the short term interests) but not their effect in the long term. Thank you !!!

A very interesting question, especially as many retired persons keep their savings in relatively low-risk long-maturity fixed income instruments in the expectation of higher interest yields. It is tru that the Fed has lossened the monetary policy somewhat and reduced the short-term rates somewhat to avoid the effects of sub-prime lending crisis induced uncertainty over defaults. The long-term rates of interest should not be low just because the short-term rates are. The long-term rates on interest are determine by the forces of demand and supply in the market for long-term funds. While a decline in the short-term rates would have a sobbering effect on the lonterm interest rate because the short and long-term markets are not water-tight compartmnents, the more basic reason for long-term rates remaining low must be weak demand for long-term funds as compared with demand. China, The Arab Emirates and Japan have too many US dollars to invest for the long-term: they are not merely parking short-term surpluses they have. China has been running a continously high and rising current account surplus with the US. It is unlikely that they are seeking only short-term deployment of their rising, huge forex reserves. The Japanese are used to very low rates of ineterst in their own countries for decades. The petroleum exporters are holding dollars which they can not utilize for prchase of US goods in the next few years. So, the supply of long-term funds in the US markets is huge. On the other hand, US corporations appear to be remaining cash rich and no mood to borrow in the market to finance long-term capital expenditure. Though the us ECONOMY HAS A LOW, RATHER A NEGATIVE , savings rate the glus of savings in sian countries are picking up lon-term dollar assets. Since for long the US dollar has been the most favorite international currency/ financial asset to hold, there is difficulty in selling dollars/ dollar assets when the US dollar itself is depreciating against the stronger currencies like the Euro. There is an imbalance in the international monetary system as a result and the long-term ineterest rates in the US are unable to go up. If they do, the flow of funds from abroad increases all the more.
The above may not be a fully satisfactory answer; but this is what I think is probably the underlying dynamics.
You may like to see the following notes ( somewhat outdated), thoughquoted from sources lsited below:
Notes: 1. Long-term interest rates that serve as the benchmark for fixed-rate mortgages are declining once again, with 10-year Treasury note yields falling through the 4-percent mark. Why is this happening with short-term interest rates rising so consistently and the Fed voicing concern about an overheated housing market? There are several reasons that long-term rates have fallen in the past two months, and some big names think they’ll fall even more.
Inflation is a key factor in interest rates, both on the way up and on the way down. The eight increases in short-term interest rates over the past year have brewed confidence that the Fed’s efforts are ensuring modest inflation for years to come. The irony is that rising short-term rates have actually contributed to the decline in long-term rates.
Long-term interest rates have also benefited from a steady diet of foreign money flowing into U.S. securities markets. The dollar has suddenly been looked upon more favorably among foreign investors, with the rejection of a European constitution fueling the latest dollar rally and pushing the greenback to an eight-month high against the euro. When dollars are purchased, much of that money is then invested in Treasury securities, which helps to depress yields further.
Another contributor is the prevailing pessimism about the direction of the economy, and not just the U.S. economy. Japan and Germany, the second and third largest economies in the world, both have lower bond yields than the United States and are seeing anemic economic expansion — if any at all. The high quality of U.S. government bonds, along with yields that are higher than what is available in some other countries, makes Treasury yields appealing on the world stage.
One theory is that if China’s economy slows significantly, this would dampen the demand for commodities, smothering the key element of inflation. Lower inflation is music to the ears of bond investors, and they command lower yields as a result.
Bond investors also have a renewed interest in the quality of bonds. Integral to this assessment are the ratings assigned to corporate bonds by agencies such as Moody’s, Standard & Poors and Fitch. Recent rating downgrades of both General Motors and Ford sent many money managers scurrying into a safer investment haven, with Treasuries a recipient of some of that money.
Repositioning by traders who were caught flat-footed as bond yields declined has also had an effect. With traders stampeding into Treasuries to cover their losses, this accelerated the decline in yields, particularly as the 10-year Treasury note neared 4 percent.
The declining yields have come despite the Fed’s efforts to talk up long-term interest rates, such as Alan Greenspan’s remarks about the "conundrum" of low long-term rates in the face of repeated increases in short-term interest rates. Lately, the talk has taken on a more-ominous overtone for homeowners and home buyers, with the Fed sounding repeated alarms about the speculation in the housing market. Greenspan mentioned the "froth" of the housing market and the likelihood of local housing bubbles. On May 27, Fed Governor Roger Ferguson said, "However, in some markets the most prudent judgment is that the growth of house prices will slow from the rapid pace experienced most recently." But some titans of the bond world think yields could go even lower.
Bill Gross, managing director of Pacific Investment Management Company and the manager of the world’s largest bond fund, had forecast in his widely read Investment Outlook that a range of 3 percent to 4.5 percent on 10-year Treasury notes would be seen over much of the next three to five years. Morgan Stanley’s chief economist Stephen Roach wrote, "At some point over the next year, I wouldn’t be shocked to see yields on 10-year governments test 3.5 percent."
2. How are short- and long-term interest rates different?
The Federal Reserve Board controls the federal funds rate. The Federal Reserve Board (Fed) has the power to raise or lower the federal funds target rate (Fed funds rate), which in turn influences the market for shorter-term securities. The Fed funds rate is the rate banks charge other banks for overnight loans. The Fed may raise the rate to keep inflation in check or lower it to stimulate the economy.
Long-term rates are market driven. Long-term interest rates, as represented by yields of the 10-year or 30-year Treasury bond, tend to move in anticipation of changes in the economy and inflation.
What causes interest rates to rise and fall?
Economic factors influence interest rates. Both short- and long-term interest rates are affected by economic factors such as inflation, the strength of the U.S. dollar and the pace of economic growth.
For example, strong economic growth can lead to inflation. If the Fed becomes concerned about inflation, it may attempt to cool the economy by raising the Fed funds rate, as it did in 2004 and 2005.
On the other hand, if the economy slows down, the Fed may lower the Fed funds rate to stimulate economic growth, as we witnessed in 2001-2003. Similarly, economic factors also affect long-term interest rates. For example, over the summer of 2003 and then again in the spring of 2004, long-term interest rates rose from historic lows as the economy showed signs of strength.
It should be noted that short- and long-term interest rates don’t necessarily move in tandem. While short-term rates rose in 2004 and 2005, long-term rates remained relatively low.