Interest Rates Outlook Causes Weekly Slump of Dollar, Forex

The US dollar was performing terribly this week against both commodity and safe currencies among signs of economic growth and on speculation that the Federal Reserve will lag with an increase of the interest rates.

The bad performance of the US currency against its safe-haven counterparts was expected, but the drop versus currencies linked to growth wasn’t anticipated. The persisting Europe’s problems with sovereign debt should’ve spurred the greenback against commodity currencies, but that hasn’t happened. It’s surprising to see how easily markets shook off fears of the European crisis and restored their risk appetite.

The strength of commodity currencies against the dollar has the same explanation as before: the global recovery. The US economy itself provided very the confusing signs: while its weak housing market turned out to be better than it was considered, the growth of manufacturing, the one of the strongest US sectors, slowed significantly and unexpectedly. As for performance versus other currencies, analysts remind us about the same old story: the quantitative easing. The US policy makers started talking about an end to the accommodative stance, but talks aren’t enough when other banks, most notably the European Central Bank and Sweden’s Riksbank, already began raising their borrowing costs.

EUR/USD has broken its resistance and jumped from 1.4411 to 1.4647, the highest level since December 2009, over the week, closing at 1.4559. USD/JPY fell from 83.21 to 81.85. USD/SEK closed at 6.1034 after opening at 6.1930 and reaching 6.0717, the lowest level since August 2008.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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Icelandic Kronur: Lessons from a Failed Carry Trade

A little more than two years ago, the Icelandic Kronur was one of the hottest currencies in the world. Thanks to a benchmark interest rate of 18%, the Kronur had particular appeal for carry traders, who worried not about the inherent risks of such a strategy. Shortly thereafter, the Kronur (as well as Iceland’s economy and banking sector) came crashing down, and many traders were wiped out. Now that a couple of years have passed, it’s probably worth reflecting on this turn of events.


At its peak, nominal GDP was a relatively modest $20 Billion, sandwiched between Nepal and Turkmenistan in the global GDP rankings. Its population is only 300,000, its current account has been mired in persistent deficit, and its Central Bank boasts a mere $8 Billion in foreign exchange reserves. That being the case, why did investors flock to Iceland and not Turkmenistan?
The short answer to that question is interest rates. As I said, Iceland’s benchmark interest rate exceeded 18% at its peak. There are plenty of countries that offered similarly high interest rates, but Iceland was somehow perceived as being more stable. While it didn’t join the European Union until last year, Iceland has always benefited from its association with Europe in general, and Scandinavia in particular. Thanks to per capita GDP of $38,000 per person, its reputation as a stable, advanced economy was not unwarranted.
On the other hand, Iceland has always struggled with high inflation, which means its interest rates were never very high in real terms. In addition, the deregulation of its financial sector opened the door for its banks to take huge risks with deposits. Basically, depositors – many from outside the country – parked their savings in Icelandic banks, which turned around and invested the money in high-yield / high-risk ventures. When the credit crisis struck, its banks were quickly wiped out, and the government chose not to follow in the footsteps of other governments and bail them out.

Moreover, it doesn’t look like Iceland will regain its luster any time soon. Its economy has shrunk by 40% over the last two years, and one prominent economist has estimated that it will take 7-10 years for it to fully recover. Unemployment and inflation remain high even though interest rates have been cut to 4.25% – a record low. The Kronur has lost 50% of its value against the Dollar and the Euro, the stock market has been decimated, and the recent decision to not remunerate Dutch and British insurance companies that lost money in Iceland’s crash will only serve to further spook foreign investors. In short, while the Kronur will probably recover some of its value over the next few years (aided by the possibility of joining the Euro), it probably won’t find itself on the radar screens of carry traders anytime soon.

In hindsight, Iceland’s economy was an accident waiting to happen, and the global financial crisis only magnified the problem. With Iceland – as well as a dozen other currencies and securities – investors believed they had found the proverbial free lunch. After all, where else could you earn an 18% by putting money in a savings account? Never mind that inflation was just as high; with the Kronur rising, carry traders felt assured that they would make a tidy profit on any funds deposited in Iceland.

The collapse of the Kronur, however, has shown us that the carry trade is anything but risk-free. In fact, 18% is more than what lenders to Greece and Ireland can expect to earn, which means that it is ultimately a very risky investment. In this case, the 18% that was being paid to depositors were generated by making very risky investments. As the negotiations with the insurance companies have revealed, depositors had nothing protecting them from bank failure, which is ultimately what happened.
Now that the carry trade is making a comeback, it’s probably a good time to take a step back and re-assess the risks of such a strategy. Even if Iceland proves to be an extreme case – since most countries won’t let their banks fail – traders must still acknowledge the possibility of massive currency depreciation. In other words, even if the deposits themselves are guaranteed, there is an ever-present risk that converting that deposit back into one’s home currency will result in losses. That’s especially true for a currency that is as illiquid as the Kronur (so illiquid that it took me a while to even find a reliable quote!), and is susceptible to liquidity crunches and short squeezes.

When you enter into a carry trade, understand that a spike in volatility could wipe out all of your profits in one session. The only way to minimize your risk is to hedge your exposure.

Forex Win to Loss Ratios

It has been observed that majority of the individual traders in the Forex market function with no trading technique; hence over the longer period of time, they incur high losses. A Forex trading system or tactic is gear to present you an upper hand in the Forex market.

Better to Work with a Systematic Approach

A Forex trading system verifies whether you are earning profit or not in a Forex market. If you make your trading in a methodical manner then your win to loss ratios will be better than the other traders or investors.

Good Trading System

An excellent trading system is that which has already been evaluated by the investors; hence it has an upper hand in the market and also deliver reasonable amount of earning on continuous basis. A gainful and money making Forex system may have win to loss ratio (the percentage of trades with winning to the trades with losing) of 80 percent.

On the other hand the profit/loss ratio on the volume of the standard win to the volume of standard loss may be 2-3 to 1. You can promptly discover that the mishmash of win/loss and profit/loss proportions (renowned as profitability ratio) enlightens you that the system is money making or not.

How Profitability of System can be Determined?

If you proliferate, the sum of profitability ratio must be more than one. Till the time you get this figure more than one, the system is gainful. Preferably the bigger figure is better

Forex System with High Win/Loss Ratio

You can work with more personal involvement with the system that exhibit high win/loss ratio. Besides that the big profit loss proportion presents worthwhile outcome of trading activities, even though you are not making ample sum to enhance the market liquidity.

Finally, it is the amalgamation of both the profit/loss and the win/loss proportions that are truly important. You must therefore, make an endeavor to look for the system in which mutually these factors are high.

What is PIP?

PIPs are actually the profits earned in the Forex system which can also be recognized as dollar amounts depending upon a float. The profits that are spoken in terms of pips are conceivably the most frequently utilized indicator to evaluate the accomplishment of a system. The alternating method is to estimate the dollar profits established by a theoretical float.

If you have two systems to evaluate, and both the systems have the identical float, in that case you can compare the win/loss ratio of these systems. It means to calculate the percentage of winner trades in comparison to that of losers.

Risk Multiple Principal

R multiple principal is one of the major information that you have to comprehend on Forex day trading. Here R stands for the Risk. It means the amount of risk you are willing to assume on any of the trade when you go in the market. In this regard, the R compound of a trade is the proportion of profit or loss as against the sum of cash put in a risk to earn revenue or incur loss.

For instance, if you put US$150 amount at risk in your preliminary buying, and you earn US$600. It signifies that you have made four times the sum of cash that you put on risk in this trade. Hence, the R multiple is 4 in this example. This data helps you in calculating the comparative volume of your profits to your losses.

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Forex Markets Focus on Central Banks

Over the last year and increasingly over the last few months, Central Banks around the world have taken center stage in currency markets. First, came the ignition of the currency war and the consequent volley of forex interventions. Then came the prospect of monetary tightening and the unwinding of quantitative easing measures. As if that wasn’t enough to keep them busy, Central Banks have been forced to assume more prominent roles in regulating financial markets and drafting economic policy. With so much to do, perhaps it’s no wonder that Jean-Claude Trichet, head of the ECB, will leave his post at the end of this year!

The currency wars may have subsided, but they haven’t ended. On both a paired and trade-weighted basis, the Dollar is declining rapidly. As a result, emerging market Central Banks are still doing everything they can to protect their respective currencies from rapid appreciation. As I’ve written in earlier posts, most Latin American and Asian Central Banks have already announced targeted strategies, and many intervene in forex markets on a daily basis. If the Japanese Yen continues to appreciate, you can bet the Bank of Japan (perhaps aided by the G7) will quickly jump back in.

You can expect the currency wars to continue until the quantitative easing programs instituted by the G4 are withdrawn. The Fed’s $600 Billion Treasury bond buying program officially ends in June, at which point its balance sheet will near $3 Trillion. The European Central Bank has injected an equally large hunk of cash into the Eurozone economy. Despite inflation that may soon exceed 5%, the Bank of England voted not to sell its cache of QE assets, while the Bank of Japan is actually ratcheting up its program as a result of the earthquake-induced catastrophe. Whether or not this manifests itself in higher inflation, investors have signaled their distaste by bidding up the price of gold to a new record high.

Then there are the prospective rate hikes, cascading across the world. Last week, the European Central Bank became the first in the G4 to hike rates (though market rates have hardly budged). The Reserve Bank of Australia, however, was the first of the majors to hike rates. Since October 2009, it has raised its benchmark by 175 basis points; its 4.75% cash rate is easily the highest in the industrialized world. The Bank of Canada started hiking in June 2010, but has kept its benchmark on hold at 1% since September. The Reserve Bank of New Zealand lowered its benchmark to a record low 2.5% as a result of serious earthquakes and economic weakness.
Going forward, expectations are for all Central Banks to continue (or begin) hiking rates at a gradual pace over the next couple years. If forecasts prove to be accurate, the US Federal Funds Rate will stand around .5% at the beginning of 2012, tied with Switzerland, and ahead of only Japan. The UK Rate will stand slightly above 1%, while the Eurozone and Canadian benchmarks will be closer to 2%. The RBA cash rate should exceed 5%. Rates in emerging markets will probably be even higher, as all four BRIC countries (Russia, Brazil, China, India) should be well into the tightening cycles.

On the one hand, there is reason to believe that the pace of rate hikes will be slower than expected. Economic growth remains tepid across the industrialized world, and Central Banks are wary about spooking their economies with premature rate hikes. Besides, Fed watchers may have learned a lesson as a result of a brief bout of over-excitement in 2010 that ultimately led to nothing. The Economist has reported that, “Markets habitually assign too much weight to the hawks, however. The real power at the Fed rests with its leaders…At present they are sanguine about inflation and worried about unemployment, which means a rate rise this year is unlikely.”  Even the ECB disappointed traders by (deliberately) adopting a soft stance in the press release that accompanied its recent rate hike.
On the other hand, a recent paper published by the Bank for International Settlements (BIS) showed that the markets’ track record of forecasting inflation is weak. As you can see from the chart below, they tend to reflect the general trend in inflation, but underestimate when the direction changes suddenly. (This is perhaps similar to the “fat-tail” problem, whereby extreme aberrations in asset price returns are poorly accounted for in financial models). If you apply this to the current economic environment, it suggests that inflation will probably be much higher-than-expected, and Central Banks will be forced to compensate by hiking rates a faster pace.
Finally, in their newfound roles as economic policymakers, Central Banks are increasingly engaged in macroprudential policy. The Economist reports that, “Central banks and regulators in emerging economies have already imposed a host of measures to cool property prices and capital inflows.” These measures are worth watching because their chief aim is to indirectly reduce inflation. If they are successful, it will limit the need for interest rate hikes and reduce upward pressure on their currencies.
In short, given the enhanced ability of Central Banks to dictate exchange rates, traders with long-term outlooks may need to adjust their strategies accordingly. That means not only knowing who is expected to raise interest rates – as well as when and by how much – but also monitoring the use of their other tools, such as balance sheet expansion, efforts to cool asset price bubbles, and deliberate manipulation of exchange rates.

Time to Short the Euro

Over the last three months, the Euro has appreciated 10% against the Dollar and by smaller margins against a handful of other currencies. Over the last twelve months, that figure is closer to 20%. That’s in spite of anemic Eurozone GDP growth, serious fiscal issues, the increasing likelihood of one or more sovereign debt defaults, and a current account deficit to boot. In short, I think it might be time to short the Euro.

There’s very little mystery as to why the Euro is appreciating. In two words: interest rates. Last week, the European Central Bank (ECB) became the first G4 Central Bank to hike its benchmark interest rate. Moreover, it’s expected to raise rates by an additional 100 basis points over the next twelve months. Given that the Bank of England, Bank of Japan, and US Federal Reserve Bank have yet to unwind their respective quantitative easing programs, it’s no wonder that futures markets have priced in a healthy interest rate advantage into the Euro well into 2012.

From where I’m sitting, the ECB rate hike was fundamentally illogical, and perhaps even counterproductive. Granted, the ECB was created to ensure price stability, and its mandate is less nuanced than its counterparts, which are charged also with facilitating employment and GDP growth. Even from this perspective, however, it looks like the ECB jumped the gun. Inflation in the EU is a moderate 2.7%, which is among the lowest in the world. Other Central Banks have taken note of rising inflation, but only the ECB feels compelled enough to preemptively address it. In addition, GDP growth is a paltry .3% across the EU, and is in fact negative in Greece, Ireland, and Portugal. As if the rate hike wasn’t bad enough, all three countries must contend with a hike in their already stratospheric borrowing costs, ironically making default more likely. Talk about not seeing the forest for the trees!

If the rumors are true, Portugal will soon become the third country to receive a bailout from the EU. (It should be noted that as recently as November, Portugal insisted that it was just fine and that a bailout wasn’t necessary). Its sovereign credit rating is now three notches above junk status. Today, Greece became the first Eurozone country to be awarded this dubious distinction, and Ireland is now only one downgrade away from suffering the same fate. Of course, Spain insists that it is just fine and denies the possibility of a bailout. At this point, though, does it have any credibility? Based on rising credit default swap rates (which serve as a gauge of the probability of default), I think that investors have become a little more cynical about taking governments at face value.

I have discussed the fiscal woes of the Eurozone in previous posts, and don’t want to dwell on them here. For now, I’d only like to add a footnote on the extent to which their problems are intertwined.  Banks in Germany and France (as well as the rest of the EU) have tremendous balance sheet exposure to PIGS’ sovereign debt, which means that any default would multiply across the Eurozone in the form of bank failures. (You can see from the chart below that the exposure of the US is small, relative to GDP).

Some analysts insist that all of this has already been priced into the Euro. Citigroup Said, “The market is treating many of these [sovereign credit rating] downgrades as rearguard actions which are already well discounted.” Personally, I don’t think that forex markets have made a sincere effort to grapple with the possibility of default, which appears increasingly inevitable. In fact, when S&P issued a warning on the US AAA rating, traders responded by handing the Euro its worst intraday decline in 2011.

Any way you cut it, I think the Euro is overvalued. Regardless of what the ECB is doing, market interest rates don’t really confer much benefit to those holding Euros. Even if the rate differential widens to 1-2% over the next year (which is certainly not guaranteed, as Jean-Claude Trichet himself has conceded!) this isn’t really enough to compensate for the possibility of default or other risk event. Regardless of whether you want to be long or short risk, there isn’t much to be gained at the moment from holding the Euro.

Bopha Khmer Krom video

Length: 1 hr 16 min

Our sincere thanks to S. Sophan!

Khmer History

Legend
Traditional stories passed down from generation to generation tell how the land of Cambodia was formed. Once, there was an ocean ruled by Naga who built an empire under the sea. The land was ruled by the Indian Empire. One day, Neang Neak, a daughter of the Naga king, took a bath by the seashore. Her beauty caught the eyes of Preah Thong, a young Indian prince who was visiting the area. Falling in love with the princess at first sight, the prince went to ask the Naga king for Neang Neak’s hand in marriage. The king refused to give his permission unless Preah Thong defeated the Naga’s most powerful warrior. The prince won the contest, and the marriage took place. Keeping his word and as a token of his love for his daughter, the Naga King swallowed the water to uncover the land that is now known as Cambodia and gave it to the newlywed couple as a wedding gift.

Prehistoric era
Let’s set aside the legend for now. Archaeological evidence suggests that early Cambodians were cave-dwellers. The earliest known site is Laang Spean cave which occupies the country's northwest region and inhabited by a Neolithic culture that may have migrated from southeastern China to the Indochinese Peninsula. Laang Spean cave was first occupied beginning in 7000 B.C. Rice has been grown on Cambodian soil since well before the 1st century AD. The inhabitants had developed relatively stable, organized societies far surpassed the primitive stage in culture and technical skills. The most advanced groups lived along the coast and in the lower Mekong River. Some historians speculate that these people arrived before their present Vietnamese, Thai, and Lao neighbors.

Funan (68 AD – 550 AD)
Cambodians consider Funan to be the earliest kingdom of Cambodia. Little is known about Funan except that it was a powerful trading state. Archaeological evidence indicates that this commercial society centered on the Mekong Delta and flourished from the 1st century to the 6th century. Through increasing trade and contact through the travels of merchants, diplomats, and learned Brahmans, Funan became an Indianized state. Immigrants, believed to have arrived in the fourth and the fifth centuries, accelerated the process. By the fifth century, the elite culture was thoroughly Indianized. Language, character symbols, tradition, custom, ceremony and the structure of political institutions were based on Indian models. The Sanskrit language was widely used.

Chenla (550 AD – 802 AD)
Chinese called a group of inland kingdoms Zhenla (Chenla) which flourished in the 6th and 7th centuries from southern Cambodia to southern Laos. The first stone inscriptions in the Khmer language and the first brick and stone Hindu temples in Cambodia are dated from the Chenla period. People of Chenla, referred to as Khmer, established control over Funan. They embarked on a course of conquest that continued for three centuries. They subjugated central and upper Laos, annexed portions of the Mekong Delta, and brought what are now western Cambodia and southern Thailand under their direct control.

Khmer Empire (802 AD – 1431 AD)
The Khmer Empire was the largest empire of Southeast Asia. The empire, which seceded from the kingdom of Chenla, at times ruled over great parts of modern-day Laos, Thailand and Vietnam. Cultural accomplishments, immense political power and wealth, as well as a variety of belief systems during the period made Cambodia a powerful state. This was the golden age of Khmer civilization. Its greatest legacy is Angkor, which was its capital during the empire's zenith. The official religions included Hinduism and Mahayana Buddhism, until Theravada Buddhism prevailed after its introduction from Sri Lanka in the 13th century.

Angkor Era (802 - 1431 A.D)
A young prince, Jayavarman II, returned home after a long stay at the court of Sailendra in Java. The purpose of his stay in Java is unknown, but he brought back the art and culture of Javanese Sailendran court to Cambodia. After his return to the former kingdom of Chenla, he quickly built up his influence and conquered a series of competing kings. He inaugurated a cult honoring the Hindu god Shiva (one of the principal deities of Hinduism) as a Deva Raja (Sanskrit term meaning “god-king”). He was crowned in 790 by the Khmers and became king of a kingdom then called "Kambuja" or “Kampuchea”. In the following years he extended his territory and eventually established his new capital of Hariharalaya near the modern Cambodian town of Roluos, where he laid down a foundation of Angkor. In 802, he declared himself Chakravartin in a ritual taken from the Indian-Hindu tradition that made him a divinely appointed and uncontested ruler. He simultaneously declared the independence of his kingdom from Java. Jayavarman II died in 834. His successors continued to expand territory and built many great temples (more than a thousand sites) within the vicinity of Angkor. Indravarman I (reigned 877 - 889), with the wealth gained through trade and agriculture, began extensive building projects, most importantly, the temple of Preah Ko and the irrigation systems. His son, Yasovarman I (reigned 889 - 915), established a new capital, Yasodharapura - the first city of Angkor, a central temple of Phnom Bakheng, built on a hill, 60 m above the plain. East Baray, a massive water reservoir of 7.5 by 1.8 km was also created under his reign. Among the Khmer builder-kings was Suyavarman II, who built the temple known as Angkor Wat in the mid-12th century, and Jayavarman VII, who built the Bayon temple at Angkor Thom and several other large Buddhist temples half a century later. Cambodia was defeated in great naval battle of Tonle Sap and the Cham conquered and reigned over Cambodia for four years. Jayavarman VII was a military leader prince. He led the army to regain the capital. He ascended the throne. He defeated Champa in 1203 and conquered large parts of its territory. A fervent Buddhist, he built hospitals and rest houses along the roads that crisscrossed the kingdom. Just like his predecessors, he continued to build an impressive network of reservoirs and canals which supplied irrigation to support large population and enable them to build even more temples.

Dark Ages (1593 – 1863)
Jayavarman VII was the last great kings of Angkor. Unlike his predecessors, he was not a tyrant. He unified the empire, and above all, he carried many building projects, and called the new capital Angkor Thom. After his death, the Khmer power declined. Some suspect a connection with the kings' adoption of Theravada Buddhism that contradicted Hinduism in many ways. Under the Buddhism, kings were no longer considered "devarajas", and there was no need to erect huge temples to gods who protected their people. The retreat from the concept of the devaraja may also have led to a loss of royal authority, leading to a shortage of workers. Neighboring Thai kingdom that once paid homage to Angkor kings became more powerful and waged wars against Cambodia. The Khmers abandoned Angkor capital, retreated to a region near today Phnom Penh. For four centuries, little is known about Khmers.

French Colonial Rule (1863–1953)
In 18th century, there were frequent invasions by powerful Thai and incursions by Vietnamese forces. In the late 18th century, a civil war in Vietnam spilled over into Cambodia. Vietnam and Thailand competed for control over the Cambodian court. The continuing warfare came close to destroying Cambodia. France sought control over Indochina. In 1884, France forced King Norodom to approve a treaty with Paris that promised to protect Cambodian territory. In return, France sought abolition of slavery, institution of private land ownership, and the establishment of French residents in provincial cities. The king reluctantly signed the agreement. Local elites opposed its provisions and formed rebellions which were severely suppressed. France invested little in Cambodia’s economy, but it left the monarchy, Buddhism, and the rhythms of rural life undisturbed. They developed rubber plantations in eastern Cambodia, restored the Angkor temple complex and deciphered Angkorean inscriptions, which gave Cambodians a clear idea of their medieval heritage and kindled their pride in Cambodia’s past.

Post-Independence Cambodia
Cambodian gained independence from France in 1951. The Geneva Accords of 1954 acknowledged Sihanouk’s government as the sole legitimate authority in Cambodia. Sihanouk’s campaign for independence sharpened his political skills. In 1955 he abdicated the throne to pursue political career. In 1965, Sihanouk broke off diplomatic relations with the United States and sided with Vietnamese Communists in the Vietnam War. In March 1970 Cambodia’s National Assembly deposed Sihanouk, abolished monarchy and created a republic state (Khmer Republic), elected a pro-western general, Gen. Lon Nol, to be its first president. Vietcong invaded Cambodia soon afterward in an attempt to liberate the monarchy for Sihanouk. The invasion against Lon Nol’s poor and ill-equipped armies did not fully succeed because American troops helped Lon Nol fight the Vietcong as well. The Vietnam war spilled into Cambodia. Lon Nol was hoping that the U.S. aid would help him defeat the invasion, but the U.S. was more focused on the war in Vietnam. The Khmer Rouge gained strength and popularity during that period. With help from the Vietcong and its formidable ability to recruit fighters, the Khmer Rouge defeated the Khmer Republic in 1975 and reigned over Cambodia until 1979 when Vietnam invaded Cambodia and ended the Khmer Rouge regime. Under its rule, the Khmer Rouge abandoned free economy, currency, religion and completely destroyed the education system. The regime caused close to 3 millions Cambodians to lose their lives from starvation, political persecutions and murderous acts.

1992–93 UNTAC (UNITED NATIONS TRANSITIONAL AUTHORITY IN CAMBODIA)
From 1979 to 1991, the Khmer Rouge waged a guerrilla war against the Vietnamese-installed government. Other Non-communist militia groups also fought the Vietnamese occupation as well. UNTAC was established to ensure implementation of the Agreements on the Comprehensive Political Settlement of the Cambodia Conflict, signed in Paris on 23 October 1991. The mandate included aspects relating to human rights, the organization and conduct of elections, military arrangements, civil administration, maintenance of law and order, repatriation and resettlement of refugees and displaced persons and rehabilitation of Cambodian infrastructure. The Paris agreement resulted in a general election in 1993 with a number of political parties participated. Cambodia has made a lot of strides in recovering from the devastations of more than 30 years of war and the genocidal regime of Khmer Rouge. Much progress has been made. Although some still suffer from political intimidation, people now can live relatively in peace. The international community has helped rebuild Cambodian economy, roads and infrastructure, which has all lead to a boom in the tourism industry. Millions of visitors pay visits to Cambodia each year to see remnants of many temples scattered around Cambodia.

References:

http://encarta.msn.com/encyclopedia_761570298_8/Cambodia.html

http://en.wikipedia.org/wiki/History_of_Cambodia

http://workmall.com/wfb2001/cambodia/cambodia_history_index.html

http://geography.about.com/library/cia/blccambodia.htm

History of Cambodia

The Khmer or Angkor Civilization came into existence during the period from 802 to 1431 A.D. and stretched as far as the modern Thailand-Burma Border in the West and Wat Phou of Laos in the North during its peak.

Its emergence lies in the fact that the ancient Khmer rulers adopted a right political doctrine of its time, which enforce the unity among people. Moreover, they had developed an intelligent irrigation system to control the water of the great Mekong River for agricultures, which enhanced its prosperity. The Khmer Civilization had long been perished over 5 centuries ago, but it left outstanding monuments such as the great Khmer temples of Angkor Wat and Bayon and numerous unique sculptures like Apsara.

The word "Angkor" is derived Sanskrit, an ancient Indian language, of "Nagara" which means "City". Angkor Wat literally means "City of Temple" and Angkor Thom "The Magnificent City".

No doubts, the ancient Khmers were great masters of stone carving. As we can see today the unarguable evidences of various Angkor temples lying on the vast plain of Siemreap, or even beyond its present-day border to the Preah Vihear at Dangrek Mountain, Phnomrung and Phimai in Thailand and Wat Phu in Laos. All these were created and carefully crafts by the ancient Khmers in successive centuries. This seems to contradict with the normal and easy-going life of the local Khmer people and villagers of their time. What drive them to put such an extraordinary efforts and time will be explained in the next chapters.

The study of Khmer civilization in depth is not easy and pain-taking by the historians and archaeologists. Most of the writing, found after the excavation of Angkor, were carved in the stones which became the unperishable materials against time. Although these evidences are important for us to understand the basic constituency of Khmer society and its chronology, they were mainly concerned with religious rituals, King's praise, and literature of Indian epics of "Ramayana" and "Mahabharata". There were little things saying about the ordinary life of the local people.

Interestingly, we learn about the daily way of life of the ancient Khmers, not from the Khmer themselves, but from the Chinese annals. In the middle of 13th century during Chinese Yuan Dynasty, a Chinese ambassador named Zhou Daguan traveled to Angkor, stayed with the local villagers, and explored this empire for a year before his return. He wrote in his Chinese chronicle about this amazing empire, and explain vividly how the people lives with the clear portrayal of the Khmer society during those days.

The center of the Khmer Civilization is at the Angkor Wat area which is situated on the plain of present-day Siemreap province north of the Great Lake of Tonle Sap. Throughout the course of Khmer history, the kingship was frequently attained by violent means with bloodshed throne. There were successive capitals built by different kings in the region, not far from each others; these capitals are at area of Angkor Wat and Roluos with the different names such as Harihalara, Yasodharapura, Jayendanagari, Angkor Thom and a few unknown names.

Angkor Wat, Angkor Thom and several other Khmer temples are undoubtedly the relics of the past Khmer Civilization. In order to help travelers as well as readers to get a clearer picture of Cambodia and these temple complexes, we have put up several articles on Khmer Civilization which covers the historical background, successive eras from the beginning till the end, reasons of rise and fall of this civilization and a chronology.

China official plays down yuan shift

BEIJING (Reuters) - Chinese Vice Commerce Minister Chen Jian on Sunday played down talk of a shift in the central bank's currency policy as well as mounting expectations of a rise in the yuan's exchange rate. Speculation that China might let the yuan resume its climb after a 16-month pause swirled after a change last Wednesday in the long-standing wording used by the People's Bank of China to describe its currency stance.



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China official plays down yuan shift

BEIJING (Reuters) - Chinese Vice Commerce Minister Chen Jian on Sunday played down talk of a shift in the central bank's currency policy as well as mounting expectations of a rise in the yuan's exchange rate.

Speculation that China might let the yuan resume its climb after a 16-month pause swirled after a change last Wednesday in the long-standing wording used by the People's Bank of China to describe its currency stance.

In its third quarter monetary policy report, the central bank failed to refer to keeping the yuan "basically stable at a reasonable and balanced level" when discussing the outlook for the exchange rate.

Asked whether the PBOC was heralding a return to the gradual appreciation of the yuan against the dollar seen from July 2005-July 2008, Chen told Reuters: "I don't think the central bank meant to say that."

Chen, however, said the yuan should reflect movements in major international currencies, which was also part of the PBOC's policy formulation.

China is coming under growing international pressure to let the yuan rise. Its manufacturers have been gaining market share at the expense of rivals in countries whose currencies have risen against the falling dollar, to which the yuan is pegged.

But, speaking on the sidelines of a forum, Chen said his ministry was not worried about rising appreciation expectations.

Turning to China's trade, Chen said there was only a small chance that exports would resume year-on-year growth by the end of 2009.

Many private economists, by contrast, expect positive growth in November or December because of the low base of comparison in 2008. Exports in October were 13.8 percent lower than a year earlier.

Chen also said a leap in China's trade surplus to $24 billion in October from $12.9 billion in September did not constitute a new trend.

(Reporting by Aileen Wang and Alan Wheatley; Editing by Alex Richardson)

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No double-dip US recession

The pace of the recovery in the US economy remains sluggish but Mr Strauss-Kahn does not believe there will be a double-dip recession. -- PHOTO: AFP

THE International Monetary Fund's managing director, Dominique Strauss-Kahn, said on Friday the pace of the recovery in the US economy remains sluggish but he does not believe there will be a double-dip recession.

He also said China's economic stimulus is helping to rebalance its economy towards relying more on domestic demand but it still needs to let its currency rise over time.

In October, the IMF raised its US growth outlook to 1.5 per cent in 2010 but Mr Strauss-Kahn said that forecast could be on the pessimistic side.

'Our forecast has that, not only in the United States but also for the rest of the world, 2010 will be a year of recovery,' Mr Strauss-Kahn told a news conference in Singapore where he was attending an Asia Pacific Economic Cooperation (Apec) meeting.

'I must say, in some respects, we had been a little pessimistic because growth has resumed a little earlier than expected, by one quarter or so.'

He said the dollar had remained resilient throughout the global crisis but most Asian currencies were undervalued and reiterated calls for the Chinese yuan to be revalued. 'China's economy in the coming years will be focused on domestic growth and the value of renminbi will have to be increased,' he said. -- THOMSON REUTERS

Times coverage: Funeral held for Melody Ross, 16

Chantha Ross, right, puts a rose on the casket of her daughter, Melody. As the three-hour funeral service ended, other mourners also placed roses there. Credit: Barbara Davidson / Los Angeles Times

Los Angeles Times (California, USA)

The Times' Ruben Vives reports from Saturday's funeral for Melody Ross, a 16-year-old Cambodian American teen who was shot and killed Friday, Oct. 30, in the 4400 block of East 10th Street in Long Beach while leaving her high school's homecoming football game. Tom Love Vinson and Daivion Davis, both 16-year-old black males, have been charged as adults in her slaying, which authorities say was gang-related. From the report:

Melody Ross, the Wilson High School honors student whose shooting death after a Long Beach football game touched off an outpouring of sympathy from around the country, was buried Saturday in Whittier.

A hushed throng of family members, friends and dignitaries gathered at SkyRose Chapel at Rose Hills Memorial Park and Mortuary, where her first name was spelled out in a collage of photographs taken over the 16 years of her life.

A slide show was screened above her open wooden casket, set amid wreaths of flowers. Nearby, a Wilson football helmet, a Gatorade bottle and a football sat on marble stands, each bearing signatures of those who knew her.

Looking over the crowd, Melody's uncle, Sam Che, 36, said he was touched by the expressions of love for his niece. He pointed to a photograph of Melody and gently said, "Look at her smile."
Read the complete story: Funeral held for Melody Ross, teenager shot after high school football game

Cambodian AIDS orphans have good plans for future

By Zhang Ruiling

PHNOM PENH, Nov. 16 (Xinhua) -- They are a hidden population, living with HIV/AIDS at a very young age. What we do know is that they are very vulnerable. It is this state of being hidden that puts AIDS orphans at special risk during their lifetime.

But those living with HIV in Cambodia are lucky. They live in the National Borey for Infants and Children, a state-run orphanage located in the suburb of the capital city Phnom Penh, which is supported by the government and humanitarian agencies.

"The center accommodates more than 100 orphans, among them 27 are living with HIV, and Sei La is one of them," Sani, a teacher at the center, told Xinhua while pointing at the boy who was orphaned at an early age when his parents died of AIDS.

Sei La is a typical Khmer boy with brown skin. He looks happy and healthy. He said he had just returned from school.

"How old are you, Sei La? Do you know China?" we asked.

"I am 15 years old now. I know China, it's a big country with a lot of people," Sei La answered with a shy smile.

"I am happy here. I have friends here and the teachers treat us like mothers. I study in the Khmer language school in the morning, and in the afternoon I go to English school," he continued.

"I have been working here for nearly 25 years. I love these poor children, they are just like my own sons and daughters," said Sani. Her warmth for these children is reciprocated, as Sani's proteges respectfully call her "Mama."

Sani told us that Sei La was a clever boy, and that he worked part-time in a small restaurant in the city every Sunday.

"Just clean dirty dishes, set tables, and serve as an assistant," he said.

"The payment is little, just 3,000 riel (about 0.73 U.S. dollars)," he admitted. "I only want to earn some pocket money, so I can buy some snacks and sometimes repair my bicycle, but first of all, I want to gain some experience for seeking a good job in the future."

When talking about the HIV/AIDS disease, Sei La looked calm while replying that he knew he was infected with HIV.

"I was very scared at first and hated my parents, but after I learned about HIV/AIDS, I know if I keep taking pills and do some exercise, the disease can be controlled," he explained.

We have reason to believe that Sei La has already overcome his fear and public prejudice, and learned how to stand on his own two feet.

On the playground, we saw a group of children playing frisbee and some girls playing on the swirls.

"I like here very much," Nani, a five-year-old girl, said while riding a bike in the yard.

Enjoying the sight of little boys and girls giggling and running around, one can hardly imagine that this is an orphanage and that these lovely children are AIDS orphans. At that moment, we gratefully realized that poverty and illness would never prevail over the purity of a child's mind, and that these children's aspirations for living and learning would rise above these impediments.

Mak Phanna, director of the National Borey for Infants and Children of the Department of Child Welfare in the Ministry of Social Affairs, Veteran and Youth Rehabilitation, told us that the Royal Government of Cambodia always paid great attention to children, especially the disabled and orphans infected with HIV. In effect, the government has adopted a law on HIV and AIDS, which went into effect in 2002.

Cambodia diagnosed the first case of HIV in 1993, and HIV prevalence in the country peaked at 3.7 percent in 1997. Chhim Sareth, director of the AIDS Health Foundation, Cambodia Care Organization, said Cambodia had one of the highest rates of HIV/AIDS in the region, but the good news was that the rate was decreasing every year.

The Joint United Nations Programme on HIV and AIDS (UNAIDS) estimates that 75,000 Cambodians live with HIV, but the prevalence of the virus among the population halved to 0.9 percent between 1998 and 2006. The measures taken by the government include publicity campaigns and education to raise understanding of HIV/AIDS. Also, a condom campaign, offering free HIV tests, has made some progress.

"It is unfortunate for these children to suffer this illness. However, it is very fortunate for them to have received various assistance. Through much support, these children have attended elementary school without paying any tuition, and have received treatment and medicines free of charge," Phanna said.

We also have high hopes for these children and wish them a happy and healthy life.

Hun Sen defiant on Thaksin role

Updated November 16, 2009 13:46:37

In Thailand 15,000 People's Alliance for Democracy members rallied over the weekend to denounce convicted former prime minister Thaksin Shinawatra and Cambodian Prime Minister Hun Sen.

Relations between Cambodia and Thailand hit another low last week after Mr Thaksin began his role as an economic advisor to Prime Minister Hun Sen. It's led to the recall of diplomatic staff by both countries, and a Thai extradition demand for Mr Thaksin, that Cambodia has turned down. Mr Thaksin's begun his new job with a pledge to regenerate the Cambodian economy, saying that will be good for both Cambodia and Thailand. But analysts say all he'll do is to deepen fractured relations between the Asian rivals even further.

Presenter: Matt Conway
Speakers: Hun Sen, Cambodian Prime Minister; Thaksin Shinawatra , forer Thai Prime Minister; Andrew Walker, Senior Fellow at the Department of Political and Social Change with the Australian National University

Thailand's PAD rally against Thaksin, Hun Sen kicks off in Bangkok

www.chinaview.cn 2009-11-15 17:27:51

BANGKOK, Nov. 15 (Xinhua) -- The People's Alliance for Democracy's (PAD) protest against ousted former Thai premier Thaksin Shinawatra and Cambodian Prime Minister Hun Sen kicked off on Sunday in Thailand's capital Bangkok.

By 18:30 p.m. local time, over 10,000 PAD protesters or the yellow-shirted people were rallying at Sanam Luang in the center of capital Bangkok after they officially started their protest from 04:00 p.m. local time.

The PAD rally, which was participated by the supporters from both Bangkok and many provinces across the country, was occurring after Thailand and Cambodia have downgraded their diplomatic relations due to conflict over an appointment of Thaksin as an economic advisor to Cambodia's government and Hun Sen on Nov. 4.

More PAD protesters are arriving at the rally site, the PAD staff announced on the rally stage. The PAD supporters range from the general public, students, employees of state enterprises, war veteran members to taxi drivers.

They were announcing that they were uniting to show the world the Thai people's strength and to protect the country's dignity against Cambodia and Thaksin.

A day after the appointment of Thaksin, the Cambodian government announced recall of its ambassador to Thailand in a move to respond to the Thai government's recall of its ambassador to Cambodia.

Moreover, on Nov. 11 Cambodia refused to extradite Thaksin to Thailand after Thailand officially submitted a letter asking Cambodia to extradite Thaksin.

Thailand's government will continue issuing measures to pressure Cambodia's appointment of Thaksin, Prime Minister Abhisit Vejjajiva disclosed Friday.

The weekly cabinet on this Tuesday will discuss about the possible measures and also review bilateral projects with Cambodia.

Also, the cabinet will discuss to suspend loan worth of 1.4 billion baht (42.02 million U.S. dollars) planned for Cambodia.

About 1,500 police staff were deployed to ensure law and order around the rally site.

Deputy Prime Minister Suthep Thaugsuban said Sunday the government has not imposed the Internal Security Act (ISA) during the PAD rally since there was no sign of violence to occur, Thai News Agency reported.

Also, Suthep denied reports, which said the government took its people to join the PAD rally as he said "the government wouldn't do this."

In a related development, Thailand's Acting Police Chief, Police General Pateep Tanprasert echoed Suthep's statement saying that he was not reported about a third hand, who was feared to incite violence.

Police General Pateep said he has ordered his policemen to closely monitor the rally situation and areas surrounding the rally site.

The PAD core leaders earlier announced that the rally will not prolong as the PAD demonstrators will disperse peacefully at about23:00 p.m. local time.

Thaksin was ousted by the military coup in September 2006, in accusation of corruption, and has been kept in exile since then.

He returned to Thailand in February 2008 to face corruption charges, but he later fled into exile again and was convicted in absentia.
Editor: Wang Guanqun

Thai-Cambodia border trade reviving

SA KAEO, Nov 15 (TNA) – Cross-border trade at the Thai-Cambodian frontier in Sa Kaeo’s Aranyaprathet district on Sunday showed a gradual return to normal after convicted former Thai prime minister Thaksin Shinawatra left Cambodia.

At Aranyaprathet’s Ban Klong Luek border crossing, trade activities at Rong Klua market were lively as most Cambodian traders from Poipet resumed their business activities in the area.

Border tensions eased after Thailand’s fugitive ex-premier flew out of Cambodia's Siem Reap on Saturday.

Many Cambodians were following Cambodian media reports on Thursday’s detention of a Thai engineer by Cambodian authorities in Phnom Penh on charges of spying on Mr Thaksin.

Local Cambodian market talk suggested that the issue could be a trivial matter which will affect bilateral relations to the extent that the Aranyaprathet border crossing would be closed.

Regular Thai gamblers, meanwhile, begin returning to hit the casinos in the neighbouring country.

The atmosphere in on the border in Si Sa Ket province, on the other hand, is still worrisome.

Both Cambodian military and traders along the border of Thailand’s Si Sa Ket province and Cambodia are still concerned about rumours of the closure of the Chong Sa-ngam border crossing.

Anxieties led to Cambodians crossing the border Sunday to stock up on dried Thai foodstuffs and everyday necessities from a market in Phu Sing district to keep in reserve.

Chakkrit Tomasa, a customs official at the Chong Sa-ngam border point, said that the number of Cambodians crossing the border sharply decreased while the amount of purchased goods increased.

Meanwhile, Thai villagers in Praipattana subdistrict near the border have built underground shelters, with financial support of provincial officials, to improve the security of the villagers.

In other developments, Thai foreign ministry official Thani Thongphakdi said that Thailand had presented the letter asking for access to the Thai detainee in Phnom Penh.

The foreign ministry information department deputy director said the ministry had forwarded a letter seeking permission from Khmer authorities to visit detained 31-year-old Siwarak Chothipong, an engineer at Cambodia Air Traffic Services (CATS).

The Thai worker was accused of given confidential information on Mr Thaksin’s flight schedule to the Thai embassy in Phnom Penh.

Mr Thani said until now there was no reply from Cambodia giving permission, but it is the weekend and the office concerned is not open. The ministry would closely follow up the request. (TNA)

General News : Last Update : 19:57:45 15 November 2009 (GMT+7:00)

Miss Cambodia Landmine 2009 to boost self esteem

By Men Kimseng, VOA Khmer
Original report from Washington
14 November 2009


Cambodian community in Norway will organize a beauty contest for landmine victims on Saturday after failing to organize it in Cambodia.

The event, organized in collaboration with the Association of Cambodians in Norway and the Khmer Buddhist Council in Norway, will also feature Khmer traditional dance and food display.

There are 20 landmine victims taking part in the contest, but since no contestant is able to travel to Norway, organizers will ask volunteers there to dress up as beauty queens and carry photos of the contestants. A winner will then be selected by potentially more than 300 participants.

“We want to show [people of the world] that our society doesn’t need a war and landmines to kill more people. We want to live in peace,” said Men Nath, one of the main organizers. “Another positive point that our program wishes to show is that every individual has equal value and once a person is disabled, how would he/she live if we don’t value them”.

Contestants, aged between 18 and 48, are from many of Cambodia’s provinces like Siem Reap, Kampong Speu, Battambang, Kampong Thom, Kampot, Svay Rieng, and Sihanoukville.

“The reason why I take part in the contest is to seek an equal right and call for an end to discrimination [against disabled people],” Song Kosal, 25-year-old contestant from Battambang province, told VOA Khmer by phone.

“Though we are disabled women, we have our beauty to compete and to show people around the world. We have the rights to tell our own story to all people; and the beauty is not the physical appearance, but our pure heart,” she said.

Song Kosal, who lost her right leg to a landmine 20 years ago, hopes that country that has not yet taken action to ban landmine will change their mind after they see the disabled women.

The contest was initially planned for August in Cambodia, but was not allowed on the grounds that it will be a “mockery” at the victims.

But, the organizers disagree.

“This project is very beneficial for the self esteem of the people taking part since they are being looked upon as beautiful and they are allowed or they should be allowed to present themselves as the beauty queens that they all are each in their own way,” said Morten Traavik, program leader of Miss Landmine Cambodia. “As for Cambodia and Cambodian government as a whole it would be given a signal that the government really cares about its own disabled citizens and let them present themselves as they themselves see fit”.

The Prey Nokor News number 97

Cambodians cheer Pacquiao victory

pacquiao-finalstats

By Leila Salaverria
Philippine Daily Inquirer
First Posted 15:55:00 11/15/2009

MANILA, Philippines -- It's not only Filipinos who are shouting in jubilation over Manny Pacquiao's victory.

Cambodians are also cheering for the Filipino boxer, who has gained a following in the Southeast Asian country, according to journalist Ung Chamroeun.

Chamroeun said in a live chat with this reporter, that the match between Pacquiao and Puerto Rican Manuel Cotto was broadcast live on free TV on the Cambodian Television Network (CTN). The airing was also uninterrupted by commercials. The match was also shown on two cable channels.

Chamroeun said Cambodians had gathered in coffee shops to watch the much-awaited match.

Thailand's PAD rally against Thaksin, Hun Sen kicks off in Bangkok

BANGKOK, Nov. 15 (Xinhua) -- The People's Alliance for Democracy's (PAD) protest against ousted former Thai premier Thaksin Shinawatra and Cambodian Prime Minister Hun Sen kicked off on Sunday in Thailand's capital Bangkok.

The PAD protesters or the yellow-shirted people officially started their protest at Sanam Luang in the center of capital Bangkok from 04:00 p.m. local time.

The rally was occurring after Thailand and Cambodia have downgraded their diplomatic relations due to conflict over an appointment of Thaksin as an economic advisor to Cambodia's government and Hun Sen on Nov. 4.

A day after the appointment of Thaksin, the Cambodian government announced recall of its ambassador to Thailand in a move to respond to the Thai government's recall of its ambassador to Cambodia.