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Have CD (Certificate of Deposit) Rates Bottomed?

Bernanke and the rest of the Federal Reserve are expected to lower interest rates by 25 basis points (0.25%) this Wednesday to 2.00%.

Most experts speculate that after this Wednesday’s cut, Bernanke will keep rates unchanged for the next few months.

This is a tough situation for those looking to open a certificate of deposit account. Rates are so low right now that it is unfavorable to lock these rates in for the long term. Instead, a better choice may be to stash money away in liquid money market & savings accounts, which currently average better returns (APY) than CDs (according to Bankrate national data).

Regardless of whether you open a CD or a money market, the current unfavorable economy makes it very difficult to beat inflation. Low interest rates, record oil prices (almost $120 / barrel), and food shortages are going to make it more expensive for you to maintain your standard of living.

Are you interested in how the Federal Reserve works? Watch the video below to learn!

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  1. Ganesh said:
    on April 29th at 02:04 pm

    Sigh.. what about bonds, can you write about them ,esp. I savings bond?
    Is it a good place to lock some money?

    thanks

  2. Bob said:
    on May 3rd at 02:12 pm

    Why people sit around like the over fed sheep they are while Paulson and Bernanke do for America what Bush did for Iraq is beyond me. America and it’s citizens are truly a lost cause.

  3. Peter said:
    on May 3rd at 06:19 pm

    Thanks for your valuable insight, Bob. What better country would you suggest we all move to?

  4. John said:
    on May 4th at 04:59 pm

    America is slowly rotting from within. In 50 years, at most, the US will just be another country with a lot of domestic problems. Last one out, turn off the lights.

  5. Shirley said:
    on May 5th at 01:25 am

    I believe every adult in our country should watch this video. It is another wake up call that demonstrates the need for change in our government. We need strong, moral leadership in Washington, and we need it right now. Voting in this year’s election should not be an opportunity; it should be a requirement!

  6. Bob said:
    on May 5th at 02:37 pm

    Hi Peter….how about Singapore, how about Switzerland, how about Ireland, Brazil, Thailand or New Zealand. America, one nation under surveillance with urine tests and wiretaps for all. What a shame.

  7. Bloch said:
    on May 5th at 11:23 pm

    I’ve been to every country Bob mentions–in many cases, several times. In order:

    Singapore - well-run police state. If Bob’s worried about “urine tests and wiretaps” in America, he’s gonna love living in a place where you can be caned for chewing gum and executed for smoking pot.

    Switzerland - pretty country and reasonably well-run, with a strong currency and tolerable political freedoms. Still a relatively socialist place, with a massive welfare infrastructure, but I’d agree that it’s a decent alternative. Except that you can’t move there. Switzerland has one of the world’s most restrictive immigration laws, and these laws differ by Canton (read: state). In many Cantons, you actually need to be voted in by a majority of the citizenry. I know that sounds absurd, but I dated a Swiss girl for about a year and spent a lot of time in Zurich and elsewhere. So far as I know, that’s a true statement. Also, it’s cold and crappy in the wintertime. But then again, so is Chicago.

    Ireland and New Zealand - good tax structures, good English skills, but really client states and backwaters, albeit pleasant ones. Bob’s not gonna get rich, but if he can find the right babe to marry these also are legitimate options. I don’t think either are anywhere near preferable to the United States, but de gustibus . . . .

    Brazil - I don’t know anything about Bob other than his name. But I am nevertheless quite confident that Bob has never been to Brazil. Brazil’s good fun. The women are spectacular. The weather’s pretty good most of the time. But every legitimate city is surrounded by a warren of illegal homes that have, over the last 50 years, become entire self-governing (read: anarchic) illegal cities (called favelas). Brazil is still basically a hectic Third World country. Great place to go if you’ve just killed your wife; not so hot if you’re looking for freedom and democracy.

    Thailand - If you’re into transvestite hookers, great. Thailand’s disgusting, poorly governed (you know they still have a king, right?), prone to military adventurism, and full of Third World tropical diseases. Nor is it particularly free.

    The idea that Bob would consider both Singapore and Thailand preferable alternatives to the United States is pretty silly, in the final analysis.

  8. Bob said:
    on May 6th at 10:25 am

    Bloch…you sound like you’ve bought every dis-information campaign and bit of media manipulation for the last ten years. The characterizations of the countries was entertaining but in fact what do you call America? A BADLY RUN, blood thirsty, $10 trillion in debt Police State? Where 2 out of every 10 citizens are delusional right wing Christians. 3 out of 10 are alcoholics. 4 out of 10 are on anti-depressants and 6 out of 10 are either functional illiterates or so dumbed downed my Media Monotony that they can’t tell the difference between a political leader and a can of dog food.
    I’ve tried all the above and everyone of them is preferable to the US. But my real disagreement is that I think the women of Thailand are far superior to those of Brazil, the occasional Ladyboy excepted.

  9. Bloch & friends said:
    on May 6th at 07:24 pm

    Wow. That is very surprising, and I agree with the skew (I think I own
    4 rifles and a shotgun, not counting a couple of air rifles) caused by
    individuals owning multiple guns. I think very few people who do own
    guns in the US own only one.

    —–Original Message—–

    To my surprise, we’re both wrong. The United States is the world’s most
    heavily-armed nation.
    See
    http://www.reuters.com/article/topNews/idUSL2834893820070828?feedType=RS
    S&feedName=topNews&rpc=22&sp=true .

    On the other hand, there’s a significant skew here. While in Israel
    every able-bodied citizen must own a firearm, and in Switzerland the
    same is true for every able-bodied male, in the U.S. you get situations
    where one person owns a dozen firearms (I own 9), which skews the
    average. I’d still think that both Israel and Switzerland have a
    broader distribution of firearms, even if the per capita numbers are
    lower.

    —–Original Message—–

    I think I am right about Switzerland being the most heavily armed
    citizenry. Wikipedia? Surely, a bunch of Nazis fled to Argentina as
    well as Brazil. I think Brazil may in fact be the 800 lb gorilla
    lurking in the wings of the world economy, if it ever awakens. Huge
    natural resources with only a moderately sized population. In contrast
    to India and China.

    —–Original Message—–

    Switzerland: maybe, but I think not. I’d probably take the Israelis
    first.

    Brazil: interesting point, and you’re not the first person I’ve heard
    make that comment (though I more commonly have heard that the Nazis fled
    to Argentina than Brazil). I have to say, though, that I saw absolutely
    no German influence–in food, women, or (understatement)
    efficiency–during my 3 weeks in Rio, Bahia de Salvador, and environs.
    That’s not to say it isn’t there–Brazil’s a big country–but it was
    curiously absent from the places I visited.

    By contrast, Suriname and Guyana are crawling with blonde-haired,
    blue-eyed, inbred Mennonites.

    ————————–

    Switzerland = most heavily armed citizenry in the world.

    Brazil = so heavily Catholic it is frightening and repressed, its
    outward-appearing rollicking reputation notwithstanding. There is a
    reason the Nazis fled there after WWII.

  10. Bloch & friends said:
    on May 6th at 08:12 pm

    Franklin Pearce, When the Rivers Run Dry. Daunting. Not gonna be my problem, but yours and my kids. Desal is not a solution – too slow, too expensive, too energy inefficient – and creates a huge waste disposal problem in its own right. The salt content of the Colorado River from start to finish goes up 700X. What water there is by the end is unusable, and ruins fields more than grows crops. This book (which is not a sensationalist piece, but a pretty objective analysis) will leave a thoughtful person puckered.

    ——————————————————————————–

    I agree, but the guy’s too far gone to be worth engaging.

    In re: water, very intersting observation. I can’t say I know too much about China or India’s water situation, save to say that their rivers look filthy and smell like raw sewage.

    How’s desalinization technology coming along?

    ——————————————————————————–

    Dude, I say offer him free legal assistance to make sure his passport is up to date, get him a visa to his country of choice, we will all chip in on a one way ticket (economy – he will learn to live without luxury and may as well start now), and then form an internet betting pool to see how long he lasts before he comes crawling back. I’m no patriot, and recognize more flaws with what we have than most people, but this guy is not engaging in a dialogue – he is teaching diatribe, which is equally as dangerous as the first three (out of four) problems he identifies, combined.

    Btw: further to our discussion this morning, I think an important limiting force on India and China in the next 20 years will be fresh water. They are running out. Brazil has lots of that. Fresh water will be the oil of the next 50 years.

    ——————————————————————————–

    Wow.

    I think I’ll let Bob have the last word on that, thanks.

  11. Anonymous said:
    on May 6th at 08:49 pm

    I’ve seen this before. It scares the hell out of me. Why on earth do we borrow money from a privately owned bank? It’s absurd.

  12. Bob said:
    on May 7th at 01:06 am

    If you don’t mind a serious reply. It confounds and scares me that Americans sit passively by while a political system that has become so corrupt and deadly to the continued existence of the country merrily goes on its way. From Cunningham to Cheney from Katrina to the national deficit, from the Dept of Justice to the EPA, from the Dept of Treasury to the FCC, the government is riddled with delusional right wing Christian operatives and industry lobbyists.
    America the number one arms seller in world, the largest prison population in the world, the largest polluter in the world, the number one debtor nation in the world. Is this our legacy? The Banana Republic of America, where every government failure is justification for yet another onslaught on the Constitution and peoples freedom?

    I have lived in all the places that originally started this discussion. I feel safer and more personally free in all of these places then in the US. I wouldn’t have said that 10 or 15 years ago. That America killed 3.4 million Vietnamese, burning the skin off of their children with Napalm for no reason, could be deluded by George Bush and the corporately controlled media companies into killing 600,000 Iraqis a generation later is more stupidity then I can handle in a country.

    I live in Asia now and moving my investments into the Pacific Rim countries especially China and Australia as quickly as possible. I’ve given up on America. And just as we were all stunned to watch the seemingly overnight collapse of the Soviet Empire, I’m certain the US is not far behind.

    Thai women, Brazilian Ayuawasca, Australian interest rates and Chinese RMB. That gentleman is the future (or the present….get out while you can!).

  13. Peter said:
    on May 7th at 10:23 am

    Bob, I guess you would prefer that we buy your own dis-information campaign instead? You’re right. The media has tricked us all into loving the country. Maybe one day we’ll see the light like you. Until then, enjoy your Asian utopia. Your fascinating insight and statistics on the state of the U.S. will probably serve you much better there.

  14. Bob said:
    on May 7th at 11:00 am

    Peter…really, what I’m trying to understand is how intelligent people can see a situation so differently. What comes to mind are the Jews in Germany or the Tutsi in Rwanda. Some people anticipated what was going to happen and lived to tell about it, but millions couldn’t see or refused to see what was coming and paid the price. I’m trying to apply that same lesson to my financial and other survival….but am unclear about how to interpret what I’m really seeing. My only desire is trying to understand truth of a situation so I can make rational choices

  15. Kaz said:
    on May 7th at 03:08 pm

    Bob, what’s so great about Thai women? please explain…

  16. Why Bob Loves Thailand said:
    on May 7th at 03:16 pm

    May 2005 | 110 » Witness » Learning the Thai sex trade Buy Issue
    Thailand generates fantasies, both for tourists in search of sex and for aid workers peddling lurid tales of trafficking. The tsunami created more false horror stories. What are the facts of the trade?

    Alex Renton

    ——————————————————————————–

    Alex Renton is a contributing editor of “Prospect”
    January was ugly in our part of Bangkok. We live near Soi Nana, off Sukhumvit Road, a famous tourist site catering for a specific sort of visitor: middle-aged western men. They come to Nana for one reason—to have sex cheaply. November to January is high season in Thailand for holidaymakers from northern nations, and the bars and pavements of Nana are packed with hundreds of people buying and selling sex. January was busier than ever this year. It took a struggle every evening to get through the ranks of skinny Thai women and the pale men in shorts picking them over.

    It was the tsunami, of course. Patong beach, one of the worst hit parts of Phuket island, is among Thailand’s best known destinations for tourists seeking sex. So the men transferred their holidays to Bangkok. Happily for them, there was a drought in northeastern Thailand at the end of 2004. The poor rice crop that resulted sent more young girls than usual down from their impoverished villages on the plains of Isaan to harvest the tourists in the big city. This seasonal migration goes back, historians of the sex trade will tell you, to the Vietnam war and the establishment of Thailand as a brothel for American GIs on leave. Prostitution for foreign visitors developed into a major industry, although official Thailand shrouds its economic and social significance in misinformation and a variety of interesting hypocrisies.

    For a start, no one knows how many foreigners come to Thailand every year to buy sex. Many people have opinions on the matter—not least Thailand’s government, which understandably resists the label “brothel of the world.” It has threatened to expel journalists who impugn the honour of Thai womenfolk, and forced Longman’s dictionary to change its 1993 edition, the entry for Bangkok which included the line “a place where there are a lot of prostitutes.” Thailand, in its turn, has been considerably abused by statisticians and NGOs. Claims that there are 2m or more prostitutes in the population of 64m, as was once stated in a Time cover story, are absurd. This much-quoted figure was drawn from the statistics of the Coalition Against Trafficking in Women, an international NGO. If true, it would mean that one in four Thai women between the ages of 15 and 29 in Thailand was a prostitute. Another anti-trafficking organisation, Ecpat (End Child Prostitution, Child Pornography and Trafficking of Children for Sexual Purposes), claimed in the mid-1990s that there were up to 800,000 Thai child prostitutes—a lunatic figure that still circulates in the US state department.

    The trade in humans across the borders of southeast Asia is a real and ugly story, but it continues to throw up incredible statistics—perhaps because it is an issue that generates large amounts of aid dollars. There are 21 UN agencies and NGOs based in Bangkok which concern themselves with trafficking. The Boxing day tsunami predictably generated a trafficking angle. Within a few days, aid agencies led by Unicef were issuing grim warnings of orphans being sold for adoption or the sex trade. The western media got particularly excited by the picture of an angelic Nordic child, supposedly stolen from a Thai hospital. This proved baseless, and there has yet to emerge a single credible example of a tsunami child, blond or brown, being sold. But the story has flourished in the global consciousness, leaving the few facts from which it seeded far behind.

    The sex industry in Thailand generates fantasies. There are the fantasies of pliant girls which draw the western sex tourists, and then there are the fantasies of lurid exploitation which draw the western moralisers and NGOs. But what is the actual scale of prostitution in Thailand? And how serious is the trafficking problem?

    Selling sex has been illegal in the kingdom since 1960, but Longman’s was right—there are a lot of prostitutes. Ask most sensible analysts in Thailand and you will be told that the number of women employed in prostitution, though a long way short of 2m, is between 150,000 and 220,000 (male prostitutes are a tiny fraction of that). You will also hear that western sex tourism is not economically significant, that most prostitution in Thailand is for local men, and that most of the people who do come from abroad for sex are Asian. There is some truth in this. Sixty per cent of Thailand’s 10m visitors in 2003 were from elsewhere in east Asia, and certainly the brothel-lined towns on Thailand’s Malaysian border, and the entire streets in Bangkok that are devoted to sex clubs for “Japanese only,” are evidence of the sex trade designed for the region.

    But the proof is there—in Pattaya, in Phuket and on my own street in Bangkok—that huge numbers of non-Asian visitors buy sex in Thailand. But how many? Sex tourism is notoriously difficult to measure. How can you ask at immigration if tourists have arrived in Thailand primarily for the prostitution? How do you know if a man on a business trip is likely to visit a sex venue with his Thai colleagues? Yet while the government, and the tourist and aviation industries, resist attempts to measure the significance of the sex trade, there is one way to gauge the extent of sex tourism, even if in fairly crude terms. A look at the Thai immigration department’s statistics, culled from the cards foreigners must fill in on entry, reveals an interesting discrepancy: 60 per cent of visitors are male and only 40 per cent female. The gap grows when you look at arrivals from the rich countries who come to Thailand on holiday in large numbers—the US, Japan, Britain, France. For these places, nearly two males arrived for every female in 2003.

    More British citizens visit Thailand than those of any other non-Asian country. In 2003 (the last year for which full figures are available) some 545,000 British residents arrived on visits. If you remove the children, and the British citizens visiting for business or reasons other than a holiday, you arrive at about 489,000—314,000 men and 175,000 women. That is 139,000 more British men than women coming to Thailand for a holiday—a gap of 28 per cent. The French gender disparity—60,500 more men than women—is 32 per cent, about the same as that of visitors from the US. The Japanese, at 35 per cent, is the highest—over 300,000 more men. If you take Europe as a whole (though there are some countries, like Finland and Sweden, with virtually no disparity) the gap is 25 per cent—494,000 more men than women.

    A look at the major rich-nation visitors—those from the US, Australia, Europe and Japan—shows that 952,000 more men than women visited Thailand on holiday in 2003, a disparity of 28 per cent. (The 2004 statistics, not yet complete, will show a slight narrowing of this gap, but a leap of overall numbers of around 20 per cent.) This pattern is unique among major tourist destinations. Take, for example, the Caribbean, another popular tropical destination for economy tourism. Here, the disparity runs at 2 or 3 per cent—the only country with a significant gap in favour of men, nearly 11 per cent, is Cuba, the Caribbean country most notorious for sex tourism.

    Do nearly a million men from the rich world come to Thailand to buy sex every year? The proposition deserves challenge. Men are capable of holidaying for reasons other than fornication with strangers. There is golf, after all. I asked Sasithara Pichaichannarong, director general of the Thai government’s office of tourism development, how she accounted for the discrepancy. “Businessmen!” she said promptly. “They’re counted as tourists in the statistics.” But I had factored them out—and in any case, only 31,000 Britons stated business rather than holiday as the purpose of their visit in 2003, less than 6 per cent of the total. So did sex explain the extra 950,000 men that arrive from wealthy countries? “Probably,” she said. “But sex tourism exists everywhere, not just in Thailand.” Not in such numbers, however. These extra men represent 10 per cent of all international arrivals in Thailand.

    So what are these men doing in Thailand? I took the problem to John Koldowski, managing director for strategic intelligence at the Bangkok-based Pacific Asia Travel Association. He was understandably cagey: Pata is funded by government, airlines and the hotel industry. But yes, he confirmed, the gender discrepancy is unusual for the global tourist destinations. So these extra men are coming here for sex? “It’s that, or the golf,” said Koldowski.

    And why so many Brits? He thought that the backpacker tourists might account for the gap—young British males, following the traditional trail through southeast Asia to see mates or relatives in Australasia. But the average British arrival is aged 40, I pointed out. “Backpacking is a state of mind, not an age thing,” pronounced Koldowski. That’s an advertising slogan, not an explanation, I said.

    He became tetchy. “Look, if you are really researching the social factors of this, you should consider if men might come here because they’re fed up with the ball-breaking females they have to deal with at home. Maybe they want to meet the sort of gentle, beautiful, kind-hearted women they’ll find here.” This seemed to answer my question. The men are here for sex and, of course, golf. Or both. Female golf caddies who double as prostitutes are, anecdotally, one of the special features of the courses of Thailand.

    Sex tourism is a significant part of Thailand’s economy. Tourism overall has been the country’s major foreign currency earner since 1982. In 2003, international tourism alone accounted for 309.26bn baht (£4.56bn) in receipts—about 6 per cent of GDP—ranking Thailand 15th in the world. That year, the extra adult male holidaymakers from around the world probably generated almost £1bn—over 1 per cent of Thailand’s GDP.

    But prostitution in Thailand is much bigger than just the trade for tourists. There is no official measurement of the economics, but the clues are there. Many Thai men are habitual users of prostitutes, and the trade, while illegal, carries less stigma than in most countries and is acknowledged by the government as a source of revenue. In January, the Thai excise department announced that it was going to seek a larger take in the so-called “sin tax” from massage parlours, a common brothel front. But Thai tax collection is notoriously inefficient. A better indicator of the money around in the prostitution business came last year from Chuwit Kamolvisit, who was employing 2,000 prostitutes in six luxury massage parlours in Bangkok (which he liked to refer to as “semen collection centres”). Chuwit, the “Tub Tycoon,” is an amusing rogue—”very un-Thai,” they say here—who in February 2005 became an opposition member of parliament with an anti-corruption agenda. During his campaign he opened his books to the press, revealing to a largely unsurprised nation that his monthly bill for bribes and payoffs to the Bangkok authorities came to £160,000. Separately, Thailand’s National Economic and Social Advisory Council (Nesac) said that massage parlour owners pay £62m a year in police bribes. The income directly generated by prostitution was estimated at 100bn baht (£1.5bn) by the respected Thai economist Pasuk Phongpaichit in a 1998 study. This is about a third of the value of the agriculture sector, which employs more people than any other in Thailand.

    Westerners form an important—albeit not the major—part of this economic picture. A few have settled here because of it, calling themselves “sexpatriates.” In towns like Pattaya on the Gulf of Thailand, on Phuket island and in the sex trade districts of Bangkok, they run bars, hotels and brothels, mediating the transactions between male tourists and Thai women. They are vocal on websites and in local publishing ventures, churning out guides for sex tourists. Some of these men see themselves as exiles, refugees from the “feminazis” who are crushing the spirit of the western male. Here, the old order of the sexes still reigns. Women know their place, they wash your feet before they have sex with you, they say thank you and help you in the shower afterwards. And, of course, westerners’ savings and pensions go a long way. Beer is a dollar a bottle, and a woman for the night available for £10 or less. It’s the “last place you can be a white man,” says one bar-owning sexpat on his website.

    Their guidebooks picture a world of grasping, stupid peasant girls, known as “LBFMs” (little brown fucking machines), out to entrap and rip off the honest, randy male visitor, who must treat them firmly and be sure to stamp out any nonsense for the sake of the next bloke who comes along. Books like Sex, Lies & Bar Girls are available in mainstream shops, including at Bangkok airport. They are full of robust advice on “scrogging” as many Thai women in as short a time and for as little money as possible.

    One of the self-justifications put forward by the sexpats is that the business makes everyone happy—the exploitation is two-way. It is not like normal prostitution, you hear. All the girls are smiling! (”All smile, all the time!” is an official tourism slogan). But you don’t have to be a feminazi to see that the power relationship is grossly unbalanced. The real choices lie with the man with the wallet.

    The famous Thai smile hides a lot. The women of rural Thailand who descend on the tourist areas are driven by poverty. Around a third of the Thai population lives on less than $2 a day; in the agricultural northeast, where farmers are beset by drought and collapsing prices (chiefly because of the dropping of trade barriers with China), one in six people lives on less than $1 a day. A high proportion of prostitutes—over 60 per cent, according to some surveys—have left children at home in the countryside. In traditional Thai society, a girl’s first duty is the support of her family. Seventy-five per cent of prostitutes, according to one study, entered the trade after the failure of a relationship—”damaged goods” in a society that still puts a high premium on female virginity. Another common reason given for entering prostitution is the pressure of family debts.

    And the gains to be had are fabulous. The price of sex from a street prostitute in Nana starts at perhaps 500 baht, a little over £7. That is a fortnight’s living costs in the countryside, or half a week’s salary for a Thai police constable. There is little doubt that the sex trade is vital to the economy of the poor northeast, which is another of the well-rehearsed justifications of the sexpats. Tales of bar girls who retire rich and happy to their home villages—some of them with a farang (foreign) husband—are many, and there is no social disgrace attached. “The land a girl child ploughs lies between her legs,” goes a saying from rural Thailand. But some women are broken in the process, and on my street, occasionally, you can see the damage that results.

    Still, there is a grain of truth in the sexpat argument. Soi Nana is not like the grim red light districts of London or New York, with their backdrop of organised crime, violence, and drug use. The only fight I have seen on Nana was between drunken Englishmen. Amphetamines are widely used by the prostitutes, it is said, but not heroin. I have spotted one used syringe in the gutter in our four years here: there was worse to be seen nightly on the crack-infected street in west London where we used to live. Most women soliciting rich-world foreigners are relatively free agents. Their worst affliction appears to be the corrupt Bangkok police. In Thailand, the industry is not generally pimp-driven and, although technically illegal, its openness undoubtedly provides some protection for women. The sex tourist is more likely to visit a bar or a massage parlour than a traditional “closed” brothel (these appear to be more common for the domestic sex trade). NGOs say that condom use is close to 100 per cent, and HIV infection has been in decline in Thailand for a decade.

    My family and I have become blasé about the street over the four years since we rented a house off Nana. We used to stare, transfixed by the grotesque Beauty and the Beast scenes: slender girls being slobbered over by beery skinheads, the doddery grandfathers being escorted to hotels by tiny teenagers. But you come to realise these objections are chiefly aesthetic. The tourists, as opposed to the sexpats, are not so bad—often ignorant, yes, but lonely and innocent too. We have only once on our street seen a girl who was plainly underage. She was being bundled into a car by two western men—we tried to get the police to stop the vehicle but they were not interested. (Of the 21 agencies and NGOs working from Bangkok on the trafficking problem, not one has managed to set up a 24-hour hotline where foreign visitors can report it actually happening.)

    On my street you get snapshots of sadness—the look of a woman as she turns her face from her elderly male escort, her smile slipping to reveal what she is really thinking; the desperate patience of the older women, not pretty enough any longer to be attached to a bar, who must patiently wait in line under the glaring lights of the Nana Hotel sign. These can make you feel like crying for humanity, but, rationally, you must think, this is what globalised tourism and the laws of supply and demand will produce. What specifically should we object to? To stamp out the sex trade would cause enormous harm in a country that fails abjectly, despite its relative wealth, to provide for its poor. After four years, I find that the only aspect that can get me really heated about sex tourism in Thailand is the hypocrisy, from both the trade’s apologists and its enemies.

    There is another sex-related industry in Bangkok—run by those who survey and lobby, preach and analyse and argue endlessly with each other about how to stop or curb prostitution and human trafficking. There is a harvest here, too, for cultural anthropologists and social historians. The books on why people have sex in Thailand line the bookshop shelves next to those on how to have sex in Thailand. There are socioeconomists analysing the “incomplete dialectic between tourist and prostitute”; anthropologists on the Foucaultian relationship between a Thai prostitute and her body; social historians on the growth of the myth of the exotic Orient, as promulgated by Puccini, Gauguin or the young British men who ran the trading posts of the East India Company. There are, as Pasuk Phongpaichit points out, many people beyond the prostitutes themselves who make a living on the back of Thailand’s sex trade.

    And there is one aspect about which everyone agrees something must be done: “trafficking,” the sale of women and children into the sex trade. Worrying about trafficking is another business, employing its own community of expats in Bangkok, which is the southeast Asian hub for many international NGOs. Thirteen UN agencies and eight international NGOs are involved in anti-trafficking work, so many that a further UN body (Uniap, the United Nations Inter-Agency Project on Human Trafficking in the Greater Mekong Sub-Region) was established in 2000, employing 18 people, to co-ordinate them and all the international NGOs (Save the Children, Oxfam and so on) which run programmes or policies on trafficking in the six countries through which the Mekong river flows.

    Donors—particularly the US and British governments—throw millions of dollars at trafficking every year. Spending on the issue has shot up during the Bush administration—it was $50m in 2003—for which the trafficking of women and children for sex is an ideal target for foreign aid. “It fits the demands of an ideological morality that says that in essence all sex issues should be dealt with by abstinence. And it’s about defenceless kids and teenagers,” said one former Unicef worker. Another who was involved in the agency’s anti-trafficking programmes in east Asia told me that within Unicef they are seen as “a great collecting bucket,” a reliable method of raising funds that can then be spent on less donor-thrilling projects, like education or immunisation.

    Thus hardly a fortnight in Bangkok goes by without another seminar, conference or children’s forum, organised by Uniap or others. In November, I dropped in on the “post-Yokohama mid-term review of the east Asia and Pacific regional commitment and action plan against commercial sexual exploitation of children,” held by Unescap (UN Economic and Social Commission for Asia and Pacific), Unicef and Ecpat. This three-day meeting, attended by delegates from more than 20 countries, was to report on what had happened since the last such meeting three years earlier in Yokohama. The only concrete development, it seemed, was the signing in Burma a month earlier by ministers from Cambodia, China, Laos, Thailand and Vietnam of a “memorandum of understanding to co-ordinate action to prevent trafficking.” This was being hailed as a big achievement. But it was also noted that “a lack of reliable data remains a major hindrance to the implementation of well-targeted and effective measures to stop the commercial sexual exploitation of children.”

    That is an understatement. Everyone in the anti-trafficking industry is painfully aware that there is no real data at all. There are gruesome anecdotes and a few unimpressive figures for arrest and prosecution, but hard facts do not exist. You are told that each year many Thai women are sold into the sex trade in Japan, that they arrive thinking they are going to work as nannies or waitresses and find themselves saddled with “debts” of $25,000-45,000 and forced to work them off by yakuza gangsters in brothels known as “black jails.” Such was the report of human rights lobbyist Kinsey Dinan, published by the Harvard Asia Centre in 2002. But that article, like so many others, made no attempt to attach numbers to the stories. Dinan’s “several-year long research project” with Human Rights Watch merely says she “found that thousands of women from Thailand were being trafficked into… Japan each year.” That is it. The truth is there are no useful statistics on this issue in Japan, other than some on the female visa overstayers (10,000 from Thailand in 2001). But the NGO lobbyists need better than that to tickle the donors. There are much more frightening ones around, and they are widely quoted: Unicef’s estimate, for example, that 1.2m children (meaning under-18 year olds) are trafficked every year, a third of them in Asia.

    At a recent anti-trafficking meeting of international NGOs, I met a woman from Oxfam India who told the meeting that in Delhi alone child-trafficking was a business worth $1m a day. No one raised an eyebrow. Another agency claims the child sex trade has a $7bn annual turnover in Asia (a figure the US state department gives as the global value of the human trafficking trade). These numbers are endlessly parroted by lobbyists and journalists, and never, it seems, challenged. The trade in humans is an area where anyone seems pretty much able to say anything. David Feingold, international co-ordinator on HIV and trafficking for Unesco, analyses the statistics on these issues, but even he has not been able to get Unicef to explain its figure of 1.2m children. “Trafficking is a dangerous word,” Feingold says. “It stops the brain working.”

    If you ask the agencies how they get these figures, you get a weary response: “Why are you journalists so obsessed with statistics?” At the post-Yokohama mid-term review, I put the question to Anupama Rao Singh, regional director of Unicef for east Asia. She replied that she understood the journalistic “compulsion” for figures, but added, “I must make one point: the trafficking of children for sexual exploitation is one of the worst and most abhorrent abuses, one that cannot be condoned, irrespective of the numbers!” For this, she earned a cheer from her colleagues. Question the figures and you will be told you are helping the exploiters. A researcher I know who has worked in east Europe and west Africa on trafficking surveys for Unicef and Save the Children says that the problem lies in the fact that the data everyone wants are near impossible to come by. “It’s not like measuring HIV infections, or seeing if children have access to safe drinking water. How do you extrapolate from the anecdotes? How do you separate a woman whose uncle gave her a lift to the big city to help her find work from a woman whose uncle paid her mother money to be allowed to put her to work?” But the commissioners of reports demand hard statistics. “The pressure to fudge them is enormous.”

    Feingold has a favourite example: the commonly used figure of 5-7,000 girls trafficked each year from Nepal to India. “It dates from a 1986 NGOs’ seminar, when it was, I gather, a wild guess, and it was published in the Times of India in 1989. It has been in use ever since.” After we met, I searched for the terms “5,000-7,000 Nepali girls” in Google and got 110 results, most of them relevant and appearing in documents by eminent organisations, including the World Bank and USAid. The most recent references to this 19-year-old “wild guess” were dated February 2005, and appeared in a Unicef paper and on the website of the Catholic aid agency APHD.

    Bad statistics have a habit of reproducing and mutating. “The US government,” says Feingold, “recently revised its figure of 700,000-2m people trafficked worldwide—a figure which no one could possibly know. On the state department website, this is now down to 600-800,000. Then they say that 80 per cent of these are female and 50 per cent minors. How could anyone possibly know that? I’ve been given a private explanation of their methodology and it’s ludicrous.”

    I asked Anne Horsley for statistics. She is project co-ordinator for the International Organisation for Migration, working on “long-term recovery and reintegration assistance to trafficked women and children.” Based in Phnom Penh, Horsley seemed more hands-on than most trafficking lobbyists. Cambodia to Thailand is meant to be a big export route for women and children. There is migrant labour going, legally and illegally, across these borders in the hundreds of thousands. Horsley, though, was also reluctant to be specific. Her rehabilitation project dealt with “a few hundred” Cambodian children each year, repatriated from Thailand. Some 25 per cent had had sexual experience, and two per cent said they had been involved in prostitution. If “a few hundred” were, say, 400, then 2 per cent would amount to eight under-18 year olds.

    Shortly after the tsunami, Unicef started raising the spectre of orphans from the disaster being preyed upon and sold for sex, quoting “reports” of this having already happened. This was seized on by other agencies, and doubtless brought more money into appeal funds that were, as some organisations will admit, already subscribed beyond the organisations’ ability to spend the cash. (Privately, the agencies are staggered at the success of their appeals. One international NGO says it will take eight years to spend the money donated in the first month after the wave hit.) No one at Unicef has come up with a credible example of a tsunami orphan being sold for sex—despite journalists’ repeated requests. A British aid agency worker returning from the devastation in Aceh said to me: “Well, I heard that only one case of that actually having happened has been proved. But the good thing about that story is that it made the Indonesians wake up to the fact that there could be a problem, and that their people needed training to look out for it.”

    The statistics are seductive: a powerful tool for raising money, but also, as in Aceh, for embarrassing complacent governments whose women and children are demonstrably vulnerable. Some shocking stats and opprobrium in the media have got the Thai government to beef up its laws and policing, and in Thailand, arrests on trafficking or child abuse charges have risen a little. In May 2004, Thailand’s autocratic prime minister Thaksin Shinawatra announced a “war on trafficking and prostitution,” shortly after the International Labour Organisation (ILO) announced that 200-300,000 children were trafficked for sex into Thailand annually (though it is hard to see how they would fit into an existing population of 200,000 prostitutes), and shortly before the US state department released a report putting Thailand on its “watch list” of countries not working adequately to prevent human trafficking. Special police squads now exist to track the trafficking gangs, which are said to number about 30 in Thailand, and to have links to 70 or 80 in other countries; and in April 2005 a deputy prime minister was put in charge of a new human trafficking control board. But arrests and prosecutions remain few. In December 2004, in a report on one of the special 36-man anti-trafficking squads now patrolling 1,165km of the northern Thai-Burmese border, it was revealed that not a single arrest had been made, nor any victim rescued. In fact, in the first year of operation, on the entire Burmese border only four arrests had been made and four suspected trafficking victims freed. Many things can be deduced from this—not least the inefficiency of the Thai police. But a worrying question remains: how can you stop the trafficking of children for sex if you cannot find out where or how or in what numbers they are being trafficked?

    Some of the agencies are beginning to admit that bad numbers can undermine their credibility. Ecpat, the child prostitution agency, does impressive work at the “demand side,” including the training of hotel staff in Thailand to report on customers who may be using underage prostitutes. Formerly one of the worst offenders with exaggerated numbers, Ecpat now bases its statistics on figures provided by national governmental bodies, which are likely to be underestimates. In 2003, the ILO started a $10m, five-year project to combat trafficking in Thailand and four neighbouring countries, largely funded by Britain’s department for international development. Allan Dow, communications officer for the project, partially disowns that ILO figure of 200-300,000 children trafficked into the region. “We’ve stopped using numbers now. We know the problem is serious: there’s no point coming up with unreliable statistics. Not having numbers doesn’t mean we don’t know what we’re doing… but we have to admit that the current methodology for getting statistics doesn’t work.”

    Trafficking is a real problem and, though there is little prospect of it being measured accurately, circumstances suggest that it will grow. Tourism into southeast Asia is forecast to increase by 14 per cent a year. Even after the tsunami, 13m people are expected to visit Thailand during 2005, and the kingdom plans to push that to 20m by 2008, which would make it the world’s seventh most popular destination, just after Britain. And sex is demonstrably one of Thailand’s major tourist attractions. What must concern those who, like me, take a liberal view of the sex trade is that underage prostitution is an inevitable part of it. Teenagers, research shows, are brought into the trade not principally because of the dedicated paedophiles we read so much about, but because youth is a valuable commodity. Men like to buy sex with young women: the young poor are the most easily obtained for them.

    A few in the anti-trafficking community admit they have to reassess their approach. Amid the self-congratulation of the post-Yokohama meeting, there was one note of caution sounded. Vitit Muntarbhorn, a law professor and former special rapporteur for the UN secretary general on child prostitution and trafficking, told the meeting: “We’ve focused a lot on supply issues. It’s time we placed as much focus on demand.” The professor is a Thai, but his own country is set, if anything, to increase the demand for prostitutes. “The Thai government is committed to quality tourism,” said Sasithara Pichaichannarong of the office of tourism development, “and that includes being anti-sex tourism.” She gave no details of exactly what the kingdom is doing to oppose sex tourism—though if you tried to set up a sex tourism business today you would probably be discouraged. It was not always thus. In the 1980s, overt sex tourism flourished with considerable government encouragement. Doctors were even asked to play down the threat of Aids in order not to put off tourists.

    Quietly, though, Thailand appears to have accepted its role as provider of sexual services to the rest of the planet. All that can be realistically asked is that it sets about doing it as cleanly and kindly as possible: that means tackling poverty in the rural north and corruption in the police force, as well as properly addressing the problem of the trafficked and the underage. The country would be aided in the latter by more honesty from the NGOs who have been given so many millions of aid dollars to tackle these problems.

    Travelling to Thailand for sex will continue. The brand is established. The beautiful young woman wrapped in silk with her demure but inviting smile is a feature of Thai travel posters across the world. The promise is of “happiness on earth”—the delights of paradise just a cheap flight away. Most of the traditional tourist attractions are disappearing. The country’s beaches are overexploited, its forests shrinking and the islands poisoned by tourists’ waste. But Thailand and its neighbours retain one renewable resource for the tourists that is not in danger of running out—the supply of poor, smiling women.