Kermit's words of wisdom echo across the pond

THE wisdom of that much-loved amphibian Kermit the Frog has found currency in, well, currency markets, as well as in the general outlook for world economic stability.

Miss Piggy's squeeze croaked: 'It's not easy bein' green, having to spend each day the colour of leaves. . .'

The US dollar, the 'greenback', is the mightiest currency in world history. But it has fallen with the autumn leaves, last week hitting new lows against a number of currencies including sterling and the euro.

The main reason for the drop appears to be that the Bush administration has abandoned the long-held 'strong dollar' policy to trim a growing trade deficit with cheap-labour nations, led by China.

This imbalance has caused a stampede of US manufacturing jobs overseas and placed US assets in foreign hands - particularly IOUs issued by Washington DC to pay for its own yawning federal budget deficit.

Every year, China and Hong Kong together buy $290bn of US Treasury securities, making them jointly the US government's biggest overseas creditor.

The Saudis hold several hundred billion dollars in US assets - if there were political instability in their country, would they cash in American chips to diversify their political risk?

And what of the threat by members of Opec, the oil-exporting nations' cartel, to price their product in euros rather than dollars?

Continuing dollar falls would send American funds fleeing abroad. UK and Continental markets could see short-term benefits, but virtually all stock markets suffer the same fate in the end.

Trade is an even more pressing worry as America's deficit yawns ever wider. Already, Bush has moved to protect the US steel industry. The fear is of a worldwide retreat into beggar-my-neighbour protectionism of the sort that triggered the Great Depression in the Thirties. The test for investors will be to find investments that withstand the storm.

Or, as Kermit sang, finding things 'not standing out like flashy sparkles in the water or stars in the sky'.

Fat is big business and is leading to bigger profits for nimble companies as waistlines affect bottom lines. But curiously, the winners and losers in the battle of the bulge are not the more obvious suspects.

Newly released quarterly reports show McDonald's was a big winner by introducing low-fat dishes and salads. Weight Watchers lost by failing to counter the low-carb routines of the Atkins Diet army.

With a third of America's population officially obese, and Britain's obesity rate climbing above 20%, the rush is on for calorie killers.

And what if you could produce a drug that helped the fat become slim and quit smoking at the same time?

Such a drug is in the works at French pharmaceutical maker Sanofi-Synthelabo. Rimonabant works by blocking the same brain receptor that caused marijuana users to become hungry. In fact, that was how scientists zeroed in on the cannabinoid receptor.

Rimonabant blocks the pleasure signals sent to the brain when we eat ice cream or a juicy steak or smoke a cigarette. Scientists believe it might even help alcoholics by taking the joy out of drink.

Who would have thought that the flower children of the Sixties, with their munchie attacks, would indirectly help solve the health crisis of their generation?

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