Models, China, and the Struggling Dollar

This article from SPIEGEL ONLINE says a lot about the dollar's state. I won't even elaborate anymore.

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SPIEGEL ONLINE - November 13, 2007, 02:18 PM URL: http://www.spiegel.de/international/world/0,1518,517060,00.html

WEST WING

A Pearl Harbor without War
By Gabor Steingart in Washington, D.C.

The dollar crisis has politicians alarmed worldwide. The US currency has lost 24 percent of its value since the introduction of the euro, and now there is even a chance that China could abandon its policy of pegging its currency to the dollar -- a problem the United States should take very seriously.

Patricia Bündchen, the twin sister and manager of the world's top model, announced that Gisele now prefers to be paid in euros rather than dollars. Almost simultaneously, the Chinese central bank predicted that the dollar is likely to lose its status as the world's leading currency.

One could easily overlook a supermodel's currency preferences, but China is a different story. It's the beast breathing down America's neck.

The most important country in the world for the United States isn't Great Britain, Germany, Saudi Arabia, Russia or Iraq. China holds that dubious distinction, because it is also the country the US can least do without. Without its willingness to buy an almost unlimited supply of US treasury bonds, there would be no American spending miracle. Without a spending miracle there would be no economic growth. In other words, without China the US superpower would lose a significant share of its economic clout.

The Money Paradox by Efren Ll. Cruz

Funny, I haven't thought about this until Sir Efren posted this in our yahoogroups.

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Money	High Price/Return	Low Price/Return
Spending	with warranty	without warranty
Investing	not guaranteed	guaranteed

by Efren Ll. Cruz, RFP

Peso seen to hit P43:$1

According to visiting HSBC economist, Frederic Neumann, our peso would hit P43 against the dollar by the end of this year. He also added that by next year it would hit P41 and would further rally to P40 towards 2009. (Inquirer story here.)

The rise of the peso is mainly driven by the huge inflow of dollars due to remittances of Filipino workers overseas.

Well, this is good news for some...

1. Importers
2. Travellers (to US)
3. Consumers

Bad news for the others...

1. Exporters
2. Families relying on dollar remittances
3. People with dollar funds.

Holiday Economics - a new law

Yep! The practice of shifting legal holidays to the nearest Monday is now a law. Hooray for employees like me!

President Gloria Macapagal Arroyo signed Republic Act 9492, "an act rationalizing the celebration of holidays", into law yesterday.

However, not all holidays are included in this law. Exempted are religious holidays: Christmas Day (December 25), New Year’s Eve (December 31), New Year’s Day (January 1), Holy Thursday, Good Friday, Easter Sunday, Eid’l Fitre (October 13) and All Saints Day (November 1).

Click here for the whole story.