Items Tagged With Currency

Why Commodities Will Struggle in 2008
Written By: Eben Esterhuizen
2008-03-26 01:10:28
A recent Barrons article points out that "gold and copper are each down 12% from the all-time highs seen on March 17 and March 6, respectively, while crude has fallen 11% from its March 17 high. London International Financial Futures Exchange sugar and cocoa are off 25% and 21%, respectively, from recent highs, while Chicago Board of Trade wheat has slipped nearly 20% since March 13." Is this the end of the commodity bull run?

Photo:gordmckenna, Creative Commons, Flickr

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Why Solar Investors Should Worry About Supermodels and Dick Cheney's Common Sense
Written By: Eben Esterhuizen
2007-10-06 01:28:17

Here at The Panelist, we have noticed that it has become fashionable to trash the U.S. dollar, which is why it doesn’t surprise me that supermodel Giselle Bundchen has asked to be paid in any currency except the greenback. Fashion is the consensus of a small group of people, and we sometimes need, as Derek Zoolander would say, "really really ridiculously good looking people" like Giselle Bundchen to demonstrate what is fashionable. But, as Giselle probably knows, fashion fades and style is eternal.

The (stylish) U.S. dollar has been the world's reserve currency for many years, and it's going to take much more than a global re-balancing process to erode that status. U.S. dollar bears seem to be ignoring the possibility that the recent U.S. dollar weakness we have seen is simply reflecting a correction of the currency's overvaluation from 1997 to 2002. How long will it remain fashionable to dump the hapless U.S. dollar?

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Why We Can't Eliminate the Penny
Written By: Noah Berkowitz
2007-09-12 02:06:33
Every now and then, Congress discusses the need for a change in our currency. Oftentimes, these debates turn political and lead to discussions about whether or not the actor who played Ronald Reagan should be featured on the dime. Recently, a different type of debate has evolved/been intelligently designed in the halls of Washington. Due to an unexpected increase in the price of zinc, some members of Congress insist it is no longer feasible for the United States Treasury to produce the penny. Although pennies have lost much of their flavor since the days I got paid to eat ten for a nickel, I cannot help but point out the importance of this oft neglected coin.

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Will the Dollar Break Out as Correlations Break Down?
Written By: Eben Esterhuizen
2008-05-08 23:31:43

Photo:Eric Gjerde, Creative Commons, Flickr
It has been interesting to see crude oil climbing to record highs despite the resurgent greenback.

The common belief is that there is a negative correlation between the U.S. dollar and oil, a result of oil being priced in dollars. "As the dollar declines in value, so does the price of oil in non-dollar terms," explains Michael Woolfolk at the Bank of New York Mellon. "Consequently, foreigners bid up the price of oil and other dollar-denominated commodities. The result is that the price of crude oil and other commodities rise in dollar terms as the dollar falls in value against other currencies."

If, on the other hand, the dollar gains in value, so does the price of oil in non-dollar terms. The traditional argument is that a higher non-dollar price of oil reduces the demand from foreigners, sending oil prices lower.

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