Thursday, April 16, 2009

World Reserve Currency. IV.

Today I elaborate on criterion III, viz., "the currency must have a widely accepted value (even if such value fluctuates moderately). "

What destroys a nation's currency ? I mean actually destroys it, not the hyperventilation of the pundits about a bit of inflation.

1. Loss of a major war.
2. Revolution.
3. Close calls with either of the above.

Over the past 100 years, China, Germany, Japan, France, Italy, Spain, Russia and Great Britain have all suffered one or two or all of the above. The US has not.

What nation NOW has the military power to forestall ANY concern about loss of a major war?

The United States of America.

What nation has had a stable, democratically elected republic for over 200 years ?

The United States of America.

What nation's currency has over 100 years of continuous value for the purchase of goods or services ?

The United States of America. I recently received a quarter minted in 1910 as change at a drug store. That quarter was still accepted as true money. This is NOT true for even the British pound. Old currency is NOT accepted, but must be turned in at the Bank of England with great inconvenience.

I have a few hundred Deutche Marks in my safe that are now effectively worthless, as the Euro has replaced them. But old US currency even the 19th century is still acceptable as money. It's actually worth a lot more than its face value to collectors. But that money is still money.

What nation has a large enough economy to permit other nation's to be assured of being able to actually spend the money they hold as reserves for their own currency?

The United States of America.

Recent news reports show that nation of big mouth leaders, Red China, refusing to let Coca-Cola purchase even a simple juice company. So much for any value for the Chinese yuan in size. Government permission is needed to spend it. And that means risk of confiscation.

Markets

JPM good earnings. Fido Fund owns a good bit (average price 22) for the long term ... uh ... that is until it hits 45. hehe.

Word of the Day

"Wain" - noun [$10] archaic.
"Wainwright" - noun [$10]
Wain means a wagon. Wainwright means a wagon maker.
Sentence: LBJ's "anti-poverty" programs created poverty by providing incentives to climb onto the wain to ride while others pulled it. The Reagan years of supply side provided incentives to become a wainwright (metaphorically), not a mere rider. And the Clinton welfare reforms pushed many of the lazy riders off the wain.

Le Mot du Jour

"Agacer" - verb, regular -er conjugated like commencer.
Agacer means to irritate, to annoy; to egg on.
La Phrase: Une personne certaine qui commente sur ce blog s'amuse à agacer tout le monde. C'et liberté.
Sentence: A certain person who comments on this blog enjoys himself by irritating everyone. That's freedom !

33 comments:

Bud said...

excellent piece Bman


all the dollar and US bashers need a history lesson.......political stabilty and threat from foreign armies are perhaps the most important factor in choosing a currency

like i said..........go ahead ......i welcome any nation to convert their dollars into dinars or rupees or euros .........and watch the panic when those nations collapse


i dare them

Bud said...

texas wants to secede from the union ???

Bud said...

gotta a couple text messages from some of my yankee friends ( and yes........they are douchebags too )



now you know why i hate them..........cocky arrogant tete de noeuds

Bud said...

Oui Bman


c'est la freedom !!!!!!!

Bud said...

william o'neill says market has seen it's lows



PS....GS goin to 200 ???

Bunkerman said...

text messages - I wonder why anyone likes those? Seem to be quite a step back - like a telegraph. LOL.

I've never sent one nor received one. My iPhone can accept them, but I would not know how to read it.

Spin-em said...

tejasjeff said...
my goal here is to piss everyone off at me............get them so mad using wit and humor and shots that they have no desire to interact with me


When does the wit and humor gig start?

ROFLMAOOOOOOOOOOOOOOOO

Spin-em said...

friends???

Spin-em said...

smarten up Bud-ee'...you pusant salaud beyatchole

mfl59 said...

Citi Field..."The greatest sight these eyes have ever seen"

Bunkerman said...

hmmm

"smarten up Bud-ee'...you pusant salaud beyatchole"

you stinky bastard ____ ?

'beyatchole' is not in my unabridged French dictionary

Spin uses a 1000 euro word !!! I wonder what the French equivalent to the OED is ?

Bunkerman said...

hmmm

Beyatch - 7 definitions - another way of saying bitch.

Perhpas it was an English idiom

bitchhole ?

Hmmm that's a $^&#. Gosh, I think I can find French word for that.

Bunkerman said...

French would be "con" or "chatte" - those are both *** words, by the way, which means very offensive to many persons. 'Con' is masculine noun (odd ?) and chatte is a feminine noun.

Let's use "chatte" is necessary - it's a bit less obvious.

la chatte.

Spin-em said...

"you stinkin scumbag bitch"

beyatchole "a spinism"..loool

mfl59 said...

"all the dollar and US bashers need a history lesson.......political stabilty and threat from foreign armies are perhaps the most important factor in choosing a currency"

Thanks Bud...I read Bman's piece as well...

Now don't go yapping in la acquairum and pass that off as your own idea....

Spin-em said...

ohhhhhhhhhhhhhh myyyyyyyy..yes he has that habit

Spin-em said...

tell it to your friends.. teddy bear..mr sock and rubber tree at the ah party...

Bud said...

'when does the wit and humor start'


well played tejas..........well played indeed



lmaoooooooooooooooooo

Bud said...

L'aquarium de requin c'est magnificique !!!!!!

Bud said...

that citi fields does look outstanding on tv


stupid met fans whinin and bitchin and moanin to francesa

mfl59 said...

Francesa lmaoooo....cut from his high school team as a senior...big hero...

Bunkerman said...

going to MG range this PM ... practice, practice ...

Bunkerman said...

enjoy the fun.

Bunkerman said...

Go Yankees !

Spin-em said...

but Bunk Yanks playin Indians

Bud said...

john sterling looking for nicknames for the new stadium ?? some suggestions


' the house that HGH built '

' A-fraud's palace '

' douchebag heaven '



LET's GO YANKEES !!!!!!!!!

mfl59 said...

pretty good Bud....pretty good indeed....

I'm embarassed to say I am taking my dad to he new satdium in May...he loves the Yankees, spinny-style....I'll be wearing my Mets hat that day...

Frosty said...

M's 7-2...why play 162, NY M's ALCS a lock...Blazers 54-28, 10-1 run to close it out...down went the rockets spurs lakers nuggets...need I go on...frost standing in tall cotton like a Merny prom date.

JJ Putz $21.3 million...oh man, money to burn indeed.

Spin-em said...

making my pilgrimage Sunday but when I goto Citi Field..Ill be wearing a Mets hat..lool

Spin-em said...

HIP HIP!!! JORGEEEEE!!!!!!

mfl59 said...

Jose Veras?

lmaooooooooooooooooooooooo

Bunkerman said...

oops. Go Indians !!

Bud said...

L'aquarium de requin c'est magnificique !!!!!!