Friday, 23 October 2015

The Dying Dollar and the Rise of a New Currency Order

The dollar has been the World's Reserve Currency since the 1970s when the Gold Standard was abandoned by President Nixon. Since then, the US dollar is widely accepted across the world making it the world's leading currency. Today 43% of all cross border transactions use the US dollar. Furthermore, central bank reserves indicate that the value of the dollar is strong with 61% of these reserves being in dollars.

However, speculation has been rife over the past few years that this currency may die even as its percentage of the world's currency supply diminishes. This is backed by a report by the International monetary fund that shows how the dollar has drifted marginally to a 15 year low. What this means is that countries that have been willing to use the dollar are ready to adopt other currencies to do business.

There are a number of circumstances that set the ground for the collapse of the dollar among them an underlying weakness, the presence of another viable currency alternative for all and a trigger towards the collapse. Presently, the first condition exists as the US dollar has recorded a 54.7% decline against the Euro in as span of 10 years. During this time the US debt almost tripled. Analysts claim that this is a sign that the U.S. will allow the value of the dollar to decline so as to pay its debt with cheaper currency.

China is consolidating its share of gold with the hope that it will become the international currency in the near future. Gold is considered a better replacement to the US dollar because of its worth. As such, China is buying into the world's gold reserves in a bid to create a new currency.

Economists argue that should China succeed in increasing its market share in the world currency market, then there are high chances that the US dollar will be a loser. Even then, pessimists hold the belief that this can only work for the Chinese and not the Americans.

To understand this better, it is worth noting that the reason why the death is the dollar is inevitable is that an asset backed currency needs to replace it. According to financial experts, the biggest shock will be in the currency reset that will be followed by the Gold Trade Standard. Hence the return of the gold standard is near although it will be through trade vehicles as opposed to SWIFT bank platforms and Forex currency. Consequently, Gold Trade Notes will be used in the place of a letter of credit.

China's recent slowing of economic growth as well as potential credit problems has worked for the dollar that has gained strength over the Yuan.

China's recent slowing of economic growth as well as potential credit problems has worked for the dollar that has gained strength over the Yuan. In summary, the future of the US dollar is worth looking out for in light of the possible return of the gold standards. Ultimately, there is no need to panic and sell assets as economists will be available to offer advice on the best way forward for investors as well as speculators.

Saturday, 10 October 2015

Samsung Galaxy S6 Flagship Line Rebooted

The latest flagship smartphone from the Korean electronics giant is a polarising proposition. On one hand, the latest Galaxy S6 eschews many features that Samsung fans have loved. These features have been touted by Android fanboys and girls to their iOS loving friends, for many years, as definitive advantages of using a Google powered smartphone. The features are: removable and expandable storage in the form of an SD, SDHC or SDXC card and a removable battery. In fact, with previous generations of Galaxy phones, Samsung even highlighted the ability to easily swap batteries on their phones, in advertisements that poked fun of iPhones.

Thus, it comes as a great loss to diehard Samsung fans who also liked the idea of being able to swap out a dying battery with a fully charged one in less than a minute. Also gone is the ability to buy replacement Samsung Galaxy S6 covers and swap them with the ugly covers that Galaxy phones shipped with. In the past, this was the only way to cover up the hideous, fake leather effect backs on Galaxy phones such as the Note. On some models, Samsung truly got carried away and even added fake stitching that was just moulded plastic.

But all that is gone with the new S6. You can still buy Samsung Galaxy S6 Cases if you want to add a little style and protection to your phone but you no longer have to do it just to hide the ugly plastic back or the tacky metallic accents on your phone. This is because every shiny metal accent on the latest S is actually metal and not just plastic with a thin layer of silvery paint on top of it. While the Galaxy has lost a removal battery and expandable memory, what it has gained is a sexy metal chassis that makes it stronger and thinner on the inside and much better looking on the outside.

The metal chassis also means that with wear and tear, there is no paint that will fade off the S6 like it did with previous generation Galaxy phones, so the latest version should keep looking as good as new for much longer. Samsung may have roused the ire of many of its long time fans but most other smartphone makers are also moving in the same direction. The trend now is towards manufacturers making thinner phones that lose the removal memory card slots and the removable batteries in the interest of making thinner, sturdier phones. Apple has had huge success with its iPhone line despite the fact that it has never ever had either of these two features and now Android phone makers are realising that they can get away with it as well, as long as the phones make up for the loss of features, with other advantages.

Friday, 2 October 2015

US, Iran and ISIS

With respect to the continuing diplomatic and economic battlefield between the west and Iran comes another unspoken issue and possibly never discussed: with the possibility of the lifting of sanctions, how will this new relationship impact the battle against ISIS? Iran has invested considerable resources supporting the Shiite militia while the US has supported the Iraqi government forces with few, if any, direct coordinated military efforts.

What happens on the economic front won't necessarily translate on the same level of cooperation and coordination on the battle front. Nonetheless it will be more difficult for ISIS to play one side against the other. In fact ISIS has more to worry about Iran than the US.

Overseas military adventures are an exceptionally expensive endeavor for any country, Iran is no exception. Which begs the question as to how Iran managed to project their military efforts under tough sanctions?

With the lifting of sanctions, Iran will have access to critical international financing which will be enhanced through the sale of oil and natural gas. Iran can then increase their military efforts in the region by providing the Shiite militias more sophisticated weaponry with greater firepower. Ironically in this role Iran may reluctantly become the US' proxy. For the US this is a rather inconvenient arrangement yet more politically acceptable than sending in US ground troops.

It's a similar approach and concept to how the Allies and Soviet Union battled Nazi Germany. Neither side was fond of the other, yet the war required a certain level of coordination to defeat an implacable enemy. The US provided Uncle Joe Stalin substantial amounts of materiel when the Soviets factories were in ruins.

In the never ending Iraq campaign, the US might provide more satellite intelligence and coordinated air strikes supporting ground based Iranian-led Shiite assaults to retake ISIS-occupied provinces, cities and towns. With respect to military operational performance, the Shiite militias are highly motivated and are superb ground fighters who lack air support. The Iraqi government forces have poor ground fighters who require extensive air support.

Particularly with any major historical agreement there are always embedded secret agreements and understandings with respect to topics outside the scope of the signed documentation. Iran's presence in the Middle East has been a vexing issue not only for the US but many Arab countries especially Saudi Arabia. The key to whether such agreements were made is to be vigilant of any change in Iran's movement in the region, regardless how subtle. Despite all the hard-liner posturing, it's always the specific acts after such agreements are made that confirm whether unwritten mutual understandings are being carried out.