Tag Archives: decline of dollar
With Love Comes Strange Currencies: China and Turkey Cement Strategic Partnership With Fiscal Diversification
Squeezed between the established CNN and the dynamic Al Jazeera, BBC News – all too often characterised by tired sets, characterless hosts and unchallenging programming – is rarely the choice of the global viewer seeking quality current affairs output. Yet in the last 48 hours or so, the channel has delivered a genuine ‘scoop’ of sorts: the definitive arrival into the pantheon of economic punditry of none other than Alessio Rastani.
Resplendent in a Bishopsgate suit and coral pink tie, Rastani stunned the watching lunchtime audience with his take on the latest proposed eurozone rescue plan. His comments can be summarised thus:
1. Markets are ruled by fear;
2. The euro is going to crash spectacularly;
3. There will be an investors’ rush towards the ‘safer’ assets of the US dollar and Treasury bonds;
4. The market is ‘toast’, with the stockmarket in particular being ‘finished’;
5. The savings of millions are in jeopardy;
6. The recession is a huge money-making opportunity for those that are prepared for it; and
7. Goldman Sachs – as opposed to national, purportedly sovereign governments – rules the world.
Perhaps predictably, acres of coverage have ensued. Much of it has concentrated on the issue of whether Rastani is in fact a ‘prank’ or ‘hoax’ analyst; some of it has dwelled on how Rastani’s prosaic reality – accommodation in a semi-detached house in Bexleyheath, one of south-east London’s most remote and anonymous suburbs, and directorship of the presently indebted Santoro Projects company – contrasts with his Midlantic drawl, impeccable grooming and newly-acquired status as a fiscal savant.
Yet few if any in the media appear to be asking the following question: to paraphrase the legendary former tutors on the Advanced MBA programme at the Stockholm School of Economics, Jonas Ridderstråle and Kjell Nordström, what if Rastani is even 10% right?
While Mediolana would question Rastani’s contention that – at least in the medium-term – United States Treasury securities and the American dollar will be viewed as ‘safe havens’ for international capital, many of his other assertions raise vital questions about the structure of much of the present historical phase of Western (particularly Anglo-American) capitalism that do not have any easy – or certainly palatable – answers. Those commentators and journalists who are quick to deploy crude snobbery over someone’s residential address or supposed City of London credentials (whatever that means in the current context) would do well to turn their pens to some of the most profound economic questions of our time and answer Rastani’s primal scream with a measure of cogency. Until they do so, the independent trader with a first name straight out of Shakespeare could yet return to haunt them.
From time to time – whether leafing through it at a mainline railway station or on the Web – we feel that The Economist, which went through a period when it was clinically dead from drinking the Kool-Aid of macroeconomic orthodoxy, is in danger of becoming a periodical of record once more. And tweets such as the above one – a brief missive which says what many of the world’s more visionary financial analysts are thinking about the rise of the Chinese Renminbi – are further evidence that The Economist is beginning to think outside the tired box of infinite dollar supremacy.
But were Economist staff at least in part inspired by this blog’s post of 21st April 2011, ‘Renminbi 1, Dollar 0?‘, the tweet of which is reproduced below? We reported on Singapore’s ambition to become a hub for the PRC’s currency, a move that makes South-East Asia’s real-life take on Sim City one of many states – including Russia, Turkey, Brazil, Nigeria and Iran – that are beginning to marginalise the US dollar and conduct business in other currencies, a trend that surely deserves further examination. But where will you read about it first?