Tumultuous times for the dollar this week. Gold has hit an all-time high three days in a row (this morning it’s at $1,045 troy ounce – it was only $990 on 29 September) while WTI oil is up at $71.50 a barrel todaycompared to $66 just over a week ago – both commodities head upwards when the greenback’s going the other way. So what was going on? Over to the NYT for the stocks and bonds report in Wednesday’s paper:
Investors clamored to buy pretty much anything on Tuesday — as long as it was not the dollar. A seven-month slide in the value of the dollar gained force as investors migrated to other markets and fretted over a report that crude oil could one day be priced in other currencies, hobbling the dollar’s role as a vehicle for global trade.
Whatever would give investors that idea, you wonder? Answer:
A report on Tuesday in The Independent, a British newspaper, suggested that China, France, Japan and Russia were in secret talks with Persian Gulf countries to abandon the dollar for international trade in oil and replace it with a basket of currencies and gold.
The Independent? Not the FT, not the WSJ, but the Independent? Yup, the FT’s Alphaville blog says so too:
The Independent appears to have rocked the world on Tuesday with its Robert Fisk exclusive exposing a secret plot by international central banks to topple the US dollar.
So what on earth did he say that managed to move markets on the other side of the Atlantic?
From Martin Wolf in the FT.
OK, here’s the EU’s strategy for Somalia: (1) pay our African allies to put their troops in the line of fire; (2) cut off the money over accounting issues; (3) er…
The European Union has suspended its financial support to African Union peacekeepers in Somalia over the delay by the continental body to account for the past funds, the Defence Minister, Dr Crispus Kiyonga, has said. The suspension has left the peacekeepers composed of Ugandan and Burundian forces in Somalia without operational allowances for the last three months.
However, Dr Kiyonga on Wednesday told Ugandan peacekeepers who returned from Somalia three weeks ago, that the matter will be resolved soon. “We owe you some money. The delay was caused by African Union because the donors have withheld the money due to accountability issues,” Dr Kiyonga told the soldiers in Mubende.
Another triumph for bean-counting over strategy. And then there’s the scurvy.
The minister also said that findings by the World Health Organisation investigation into the causes of the strange ailments that killed two Ugandan peacekeepers indicated that the deaths were caused by malnutrition and not poison as the Al-Shabaab rebels had claimed.
“The investigations indicate that it was lack of VitaminB1 in the food they were eating. But now soldiers are getting sufficient fresh fruits, a move that will prevent recurring of such ailments,” he said.
If we can’t send peacekeepers cash, perhaps we could at least send oranges?
- With the eighth anniversary of war in Afghanistan, debate about the strategic direction of the conflict continues apace. Foreign Policy has an extract from Gordon M. Goldstein’s Lessons in Disaster – chronicling the key turning points of the Vietnam war and reportedly forming required reading in the current White House. Over at the New Republic, William Galston argues that General McChrystal was right to air his concerns about Afghan strategy in public and ratchet up pressure on President Obama.
– RUSI, meanwhile, assesses the issue of troop numbers on British shores, viewing the commitment to hard power through the lens of the country’s world role. In related news, the Conservatives are set to confirm that General Sir Richard Dannatt, recently retired as Chief of the General Staff, is to advise them on defence policy.
– Elsewhere, Professor John Merriman asks if the bombing of a Paris café at the end of the 19th Century spawned terrorism in its modern form. Current policy, he suggests, would do well to take better account of historical experience.
– Finally, with the slew of annual awards from the Nobel committee well under way, attention turns to possible winners of the economics prize – to be announced on Monday. Thompson Reuters offers its annual, citation-based, predications here. Brad DeLong, meanwhile, suggests that this year’s gong should go to Mark Gertler and current Fed chairman, Ben Bernanke.
Honestly, how tedious enthusiasts for European integration are – almost as tedious as avowed Eurosceptics, in fact. Despite the fact that Euro-cheerleaders were among the biggest critics of President Bush’s ‘with us or against us’ approach to foreign policy, they seem wholly unable to recognise their own indulgence in the same fault when it comes to people’s views on the benefits of further European integration.
Case in point: the sources cited in today’s FT by Tony Barber, the paper’s excellent Brussels columnist, who writes that
Many on the Continent see [Euroscepticism] as a British identity problem that extends beyond some acute nervous condition of the modern Tory party. The UK, they say, is already a semi-detached player in Europe. It defends the City of London, but does not join the eurozone; it shapes EU foreign policy, but stays out of the Schengen border-free travel regime; it signs the Lisbon treaty, but secures opt-outs on justice and home affairs. No other EU member-state is so standoffish.
Oh for heaven’s sake. As I noted here a few days ago, I’m pleased that Lisbon finally looks set to enter into force because I think Europe badly needs to raise its game on foreign policy coherence. I’m a big enthusiast for the single market, and a fan of what Europe has achieved on climate change. But why does it follow on that I should be a supported of every possible facet of European integration? Continue reading
So you thought that the Pittsburgh G20 summit had buried the G7/G8? Not quite yet…
Jean-Claude Juncker, the Luxembourg prime minister who chairs meetings of the eurozone finance ministers, has responded sharply to suggestions from Dominique Strauss-Kahn, the managing director of the International Monetary Fund (IMF), that the Group of Seven advanced industrial countries might no longer play a leading role in international economic policy diplomacy.
“We do not want the G7 to be brought to an end,” Juncker said at this year’s annual meetings in Istanbul of the World Bank and the IMF, the government-owned institutions that have been helping to finance the recovery from the global economic crisis. “We think that the G7 is the best place to discuss currency issues,” Juncker said.
His remarks followed comments earlier by Strauss-Kahn which added to persistent behind-the-scenes Anglo-American sniping at the G7. After the meeting of the G20 developed and developing countries in Pittsburgh on September, some countries were suggesting that the G7 should give way to the G20 for international economic policy discussions because the former excludes the increasingly influential emerging market economies China, India and Brazil. Strauss-Kahn referred to the G7 as “perhaps the late G7″, implying that he also questioned the validity of the group as a meaningful venue for international economic policy debate.
This sort of to-and-fro may go on for a while yet, as European leaders attempt to maintain the privileged status of the G7/G8 to counter-balance the rise of the G20…