Aussie Dollar Boosted by Its Own 'Gold Standard'
THE DAILY TELEGRAPH: The Australian dollar is one of the strongest currencies in the world because it is a commodity-backed currency. That’s why it hit a 29-year high against the US dollar today – and it’s all related to the gold price.

The gold price is hitting new all-time highs on a daily basis because many investors have lost faith in paper money. They believe that central bank printing presses are devaluing currencies on a daily basis.

It is the same lack of belief in paper money that has been boosting the Aussie dollar. Paper money used to be backed by gold held in a central bank, but this was abandoned all over the world, allowing central banks to print money via processes such as quantitative easing.

Today, no currency in the world is on the gold standard – all money is “fiat” money.

However, Australia has significant resources of gold, uranium, iron ore, coal and many other important and valuable commodities. They are in the ground, not in a central bank, but this is the nearest thing the world has to the old gold standard. That’s why the Australian currency is so strong.

The same is also true of currencies in Canada, South Africa and Russia. They are effectively backed by commodities in the ground. » | Garry White | Friday, April 08, 2011

Euro und Dollar zurzeit schwach
SCHWEIZER FERNSEHEN: In den letzten Tagen hat sich neben dem Euro auch der Dollar abgeschwächt. Die Ökonomen sind sich jedoch uneinig, wie sich die Währungen weiterentwickeln werden.

The Worst Publicity Stunt of the Year? Putting President Obama on a Dollar Bill Is Simply Ridiculous
THE TELEGRAPH – BLOGS – NILE GARDINER: British graphic design firm Dowling Duncan has come up with a series of controversial ideas for the Dollar Redesign Project, an open competition run by New York designer Richard Smith (and not associated with the US government). According to their ambitious PR spiel: “we want to rebrand the US Dollar, rebuild financial confidence and revive our failing economy.”

The new garish multicolour notes conceived by the firm bear a striking stylistic resemblance to the Euro, and remove America’s Founding Fathers altogether. The company has proposed replacing George Washington with Barack Obama on the new dollar bill, and Benjamin Franklin with Franklin D. Roosevelt on the $100 dollar note.

Dowling Duncan, whose corporate clients include some big names such as Apple, Gap, Google, HP and Microsoft, obviously think this is a smart PR move, designed to win it global publicity and enhance its profile in the States where it has an office in San Francisco. But I very much doubt it will play well outside of diminishing left-wing circles on the East and West Coasts. If anything the publicity it gains with its Barack Obama stunt is highly likely to lose it business rather than bring in more revenue, especially in Middle America. Continue reading and comment >>> Nile Gardiner | Friday, August 27, 2010

Global Sell-off Shudders Markets as Euro Plunges to Eight-month Low Amid Fears of Debt Default
MAIL ONLINE: The euro fell for a second straight day today amid fears that economies of Portugal, Greece and Spain could collapse in a sea of debt.

In Europe, the FTSE 100 index of leading British shares was down 1.6 per cent, while Germany's DAX fell 1.3 per cent and the CAC-40 in France was 2.1 per cent lower.

The euro tumbled below $1.37, its lowest level since May 2009.

It also slumped against other safe-haven currencies like the Swiss franc, forcing the Swiss National Bank to take the unusual step of intervening in the market.

But the currency remained steady against sterling, reflecting the weakness of the British economy. >>> Lucy Farndon and Heath Aston | Friday, February 05, 2010

Nouveau décrochage de l'euro face au dollar
LE FIGARO: Face aux détériorations des finances publiques de plusieurs états de la zone euro, la monnaie européenne est passée à 1,3648 dollar ce vendredi matin.

L'euro est tombé vendredi à son niveau le plus bas depuis mai 2009. Ce matin, la monnaie unique enchaîne sa troisième séance de repli et est passé sous les 1,37 dollar, après avoir franchi en baisse le seuil des 1,38 dollar la veille (jeudi soir vers 22 heures). Il a atteint 1,3648 dollar vers 9 heures 30. C'est un niveau inédit pour la monnaie unique depuis le 9 mai.

Depuis le début de l'année, l'euro a cédé 2,5%.

Cette chute s'explique en particulier par l'inquiétude des cambistes due aux difficultés budgétaires de plusieurs pays de la zone euro. Beaucoup s'attendent à une intervention musclée de l'Europe, voire à un appel auprès du Fonds monétaire international (FMI), pour aider la Grèce à se sortir d'une crise budgétaire sans précédent.

Un autre sujet vient inquiéter l'euro sur le marché des devises, le cas de l'Espagne qui a très mal digéré la crise avec notamment un taux de chômage atteignant près de 20%. D'ailleurs Dominique Strauss-Kahn, le patron du FMI, a parlé ce jeudi sur RTL d'une crise «très forte en Espagne» et que le pays devait faire «un effort considérable» pour réduire les déficits publics. La dette publique espagnole s'est envolée un peu au-dessus des 60% du PIB en 2010 alors qu'en 2007 elle ne représentait que 36,2% du PIB. >>> Jean-Guillaume Brasseur (lefigaro.fr) | Vendredi 05 Février 2010

Gulf Petro-powers to Launch Currency in Latest Threat to Dollar Hegemony
THE TELEGRAPH: The Arab states of the Gulf region have agreed to launch a single currency modelled on the euro, hoping to blaze a trail towards a pan-Arab monetary union swelling to the ancient borders of the Ummayad Caliphate.

“The Gulf monetary union pact has come into effect,” said Kuwait’s finance minister, Mustafa al-Shamali, speaking at a Gulf Co-operation Council (GCC) summit in Kuwait.

The move will give the hyper-rich club of oil exporters a petro-currency of their own, greatly increasing their influence in the global exchange and capital markets and potentially displacing the US dollar as the pricing currency for oil contracts. Between them they amount to regional superpower with a GDP of $1.2 trillion (£739bn), some 40pc of the world’s proven oil reserves, and financial clout equal to that of China.

Saudi Arabia, Kuwait, Bahrain, and Qatar are to launch the first phase next year, creating a Gulf Monetary Council that will evolve quickly into a full-fledged central bank.

The Emirates are staying out for now – irked that the bank will be located in Riyadh at the insistence of Saudi King Abdullah rather than in Abu Dhabi. They are expected join later, along with Oman.

The Gulf states remain divided over the wisdom of anchoring their economies to the US dollar. The Gulf currency – dubbed “Gulfo” – is likely to track a global exchange basket and may ultimately float as a regional reserve currency in its own right. “The US dollar has failed. We need to delink,” said Nahed Taher, chief executive of Bahrain’s Gulf One Investment Bank.

The project is inspired by Europe’s monetary union, seen as a huge success in the Arab world. But there are concerns that the region is trying to run before it can walk. >>> Ambrose Evans-Pritchard | Tuesday, December 2009

Bernanke's Rare Intervention Fails to Calm Fears Over Weak Dollar
With the dollar going into steep decline, with the price of gold rising to record levels, with the US’s huge deficit having to be financed through printing money (or ‘quantitative easing’ as they prefer to call it by way of euphemism these days), with Ben Bernanke talking about the dollar “remaining strong” and a “source of global financial stability”, one really has to question the competence, judgment and ability of the head of the Fed – Ben Bernanke! This is, after all, the age of the resurgence of soup kitchens in America, a country in which fifty million Americans are finding it difficult to get adequate nourishment. It is also an age in which bankers continue to pay themselves ginormous bonuses. Surely, this must be the age of ultimate financial mismanagement. Shame on Ben Bernanke! Shame on them all! – © Mark

THE TELEGRAPH: Federal Reserve chairman Ben Bernanke's attempt to shore up support for the US currency failed yesterday as the dollar fell to fresh 15-month lows.

In a rare moment of intervention into the currency markets from America's leading central banker, Mr Bernanke admitted the Fed is watching the dollar "closely" as part of its focus on employment growth and price stability.

Mr Bernanke stressed the dollar will remain "strong" and continue as a "source of global financial stability". >>> James Quinn, US Business Editor | Tuesday, November 17, 2009

Rekordhoch am Goldmarkt: Misstrauensvotum gegen den Dollar
ZEIT ONLINE: Der Goldpreis bricht Rekord um Rekord. Schwellenländer stocken aus Angst vor einem Dollarverfall ihre Goldreserven auf – und treiben so die Nachfrage. Von Stefan Frank

Ein Juwelier in New York wirbt um Kunden, die Gold und Diamanten verkaufen. Der Goldpreis erreichte am Montag ein neues Rekordhoch. Bild: Zeit Online
Am Montag brach der Goldpreis einen neuen Rekord: Auf mehr als 1.130 US-Dollar kletterte der Preis für eine Feinunze. Das sind hundert Dollar mehr als noch vor zwei Wochen. Innerhalb eines Jahres hat sich das Edelmetall sogar um rund 400 Dollar – oder 50 Prozent – verteuert. Begonnen hat der jüngste Anstieg im September, als der Preis zum ersten Mal seit Anfang 2008 die psychologisch wichtige 1000-Dollar-Marke überspringen konnte.

Vor zwei Wochen beschleunigte sich die Entwicklung. Da wurde bekannt, dass sich der Internationale Währungsfonds (IWF) von der Hälfte seiner Goldreserven trennt – das sind 200 Tonnen. Diese Nachricht hätte den Goldmarkt eigentlich belasten müssen. Doch der IWF wirft das Gold nicht auf den Markt, sondern verkauft es an die indische Notenbank, die damit in die Gruppe der zehn Zentralbanken mit den größten Goldreserven aufsteigt. Offenbar sind die Schwellenländer selbst bei den derzeit hohen Preisen bereit, ihren Dollarreserven einen größeren Anteil Gold beizumischen.

Das ist ein Misstrauensvotum gegen Amerikas Währung. Der Wert des Dollars wird immer fragwürdiger, weil die USA immer mehr Geld drucken müssen, um ihr Budgetdefizit in Höhe von geschätzten zwei Billionen Dollar zu finanzieren. Gold hingegen kann von Regierungen oder Notenbanken nicht aus dem Nichts geschaffen werden. Seine Menge wächst nur sehr langsam. Obwohl sich der Goldpreis seit Beginn des Jahrzehnts vervierfacht hat, sind die Minenbetreiber nicht in der Lage, die Fördermenge zu erhöhen. >>> Von Stefan Frank |, Zeit Online | Dienstag, 17. November 2009

Gold Hits Record against Euro on Fear of Zimbabwean-style Response to Bank Crisis
THE TELEGRAPH: Gold has surged to an all-time high against the euro, sterling, and a string of Asian currencies on mounting concerns that global authorities are embarking on a "Zimbabwe-style" debasement of the international monetary system.

"This gold rally is driven by safe-haven fears and has a very different feel from the bull market we've had for the last eight years," said John Reade, chief metals strategist at UBS. "Investors are seeing articles in the press saying governments should deliberately stoke inflation, and they are reacting to it."

Gold jumped to multiple records on Tuesday, triggered by fears that East Europe's banking crisis could set off debt defaults and lead to contagion within the eurozone. It touched €762 an ounce against the euro, £675 against sterling, and 47,783 against India's rupee.

Jewellery demand – usually the mainstay of the industry – has almost entirely dried up and the price is now being driven by investors. They range from the billionaires stashing boxes of krugerrands under the floors of their Swiss chalets (as an emergency fund for total disorder) to the small savers buying the exchange traded funds (ETFs). SPDR Gold Trust has added 200 metric tonnes in the last six weeks. ETF Securities added 62,000 ounces last week alone.

In dollar terms, gold is at a seven-month high of $964. This is below last spring's peak of $1,030 but the circumstances today are radically different. The dollar itself has become a safe haven as the crisis goes from bad to worse – if only because it is the currency of a unified and powerful nation with institutions that have been tested over time. It is not yet clear how well the eurozone's 16-strong bloc of disparate states will respond to extreme stress. The euro dived two cents to $1.26 against the dollar, threatening to break below a 24-year upward trend line.

Crucially, gold has decoupled from oil and base metals, finding once again its ancient role as a store of wealth in dangerous times. >>> By Ambrose Evans-Pritchard | Wednesday, February 18, 2009

SKY NEWS: Bank To 'Print Money' To Tackle Recession

The Bank of England could begin 'printing money' next month in a bid to tackle the recession.

Minutes of the Bank's Monetary Policy Committee (MPC) showed members were in agreement that more radical measures were needed to ward off deflation.

The committee voted 8-1 in favour of the half point rate reduction of the interest rate to an historic low of 1%.

The Bank of England does not actually print money when it moves to increase the amount of cash in the economy.

Instead it engages in a process known as quantitative easing, whereby it creates money to buy up Government securities - gilts - and private sector assets. >>> | Wednesday, February 18, 2009

THE NEW YORK TIMES: Fed Offers Bleak Economic Outlook

The Federal Reserve cut its economic outlook for 2009 on Wednesday and warned that the United States economy would face an “unusually gradual and prolonged” period of recovery as the country struggles to climb out of a deep global downturn.

In gloomy economic projections released by the central bank, the Fed’s Open Market Committee said it expected that the economy would contract by 0.5 percent to 1.3 percent this year, that unemployment would rise to 8.5 to 8.8 percent and that inflation would remain under greater pressure.

Bleak economic data reflecting a sharpening slide in housing, trade, industrial production, spending and employment rates “more than offset” any potential impact from an economic stimulus plan, the Fed said, forcing it to cut its economic outlook. >>> By Jack Healy | Wednesday, February 18, 2009

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