On the web: nuclear progress, gold bubbles, Ashton’s diplomacy, and key thinkers of 2009…

– With the US and Russia reportedly close to agreeing a successor START deal, Gareth Evans and Yoriko Kawaguchi chart the next steps for a secure nuclear future. Details of their recently published report on nuclear non-proliferation and disarmament can be found here. Henry Kissinger, meanwhile highlights the importance of kick-starting progress on six-party talks with North Korea.

– Elsewhere, Nouriel Roubini reflects on “gold bubbles” and the need to beware the calls of “gold bugs”, given that the “recent rise in gold prices is only partially justified by fundamentals”. The FT’s Alphaville blog offers an alternate view.

– Catherine Ashton, the EU’s High Representative for Foreign Affairs and Security Policy, outlines her vision of a “quiet diplomacy” keenly focused on “getting results”. The BBC’s Europe Editor, Gavin Hewitt, assesses the upcoming challenges she is likely to face – whether a winter energy crisis, shaping a coherent EU policy towards the Middle East, or establishing the much-trumpeted EU diplomatic service. Charlemagne, meanwhile, argues that when it comes to European foreign policy there are simply “too many cooks”. Philip H. Gordon, US Assistant Secretary of State for European and Eurasian Affairs, offers his thoughts on what the post-Lisbon landscape is likely to mean for US-EU relations.

– Finally, Prospect presents 25 key public intellectuals that have helped us navigate the squalls of the financial crisis – Simon Johnson, Avinash Persaud, and Adair Turner make up the top 3. Niall Ferguson, meanwhile, offers his take on the most influential thinkers of the past now showing renewed relevance – Keynes, Polanyi, Kindleberger and Darwin, among others, have places on his list.

The next reserve currency

Last week’s G8 saw more rumblings of dissatisfaction from China about the US dollar’s continuing role as the world’s reserve currency: State Councillor Dai Bingguo said in a statement to the G8+5 that,

We should have a better system for reserve currency issuance and regulation, so that we can maintain relative stability of major reserve currencies’ exchange rates and promote a diversified and rational international reserve currency system.

This is the latest in a series of such statements from China, building on Wen Jiabao saying he was “worried” about China’s stash of US T-bills in March, central bank governor Zhou Xiaochuan‘s essay on reform of the international monetary system a couple of weeks later, and then China’s $120bn contribution to an Asian emergency currency pool in May – potentially an important step towards an “Asian IMF”.

So if / when the dollar does lose its perch as the world’s reserve currency – something that isn’t likely to happen in the short term, admittedly – then what are the candidates to replace it? Continue reading

Fool’s gold

The good stuff - Flickr User BuillionVault

The good stuff - Flickr User BullionVault

It’s well known that in times of crisis, people fall back on the certainties of old. Among these is that gold is a good investment, for gold always holds its value far better than, say, real estate. The current recession is no different. Back in October there was a brief media hullabaloo about people buying up gold in droves, forming queues outside bullion merchants.

Now we are seeing something totally new. Indeed, there is no end to human ingenuity. While Japan has long led the pack in eccentric vending machines (purportedly used underwear being the most famous among many products available), in Germany a bright spark named Thomas Geissler has hit upon just what’s needed in these trying times: gold bullion vending machines! I’m kicking myself for not having come up with that one. According to the FT:

For €30 airport shoppers could buy a 1g wafer of gold, with a larger 10g bar priced on Tuesday at €245 and gold coins also on sale.

When the Financial Times bought the cheapest product it was dispensed in an oblong metal box labelled “My Golden Treasure”, with a certificate of authenticity signed by Mr Geissler but no receipt and the wrong change. Mr Geissler said he hoped to have a more advanced prototype available this month.

Still, I suppose spending your money on gold from a vending machine has to be a better investment plan than that of the woman who saved $1 million in her mattress, only for it to be thrown out by her daughter.