When people start talking about rappers and supermodels shunning the US dollar, you know there's a problem.
As the greenback recently hit historic lows against other major currencies, rap mogul Jay-Z released a new video in which he flashes euros, not US dollars. It was also widely reported recently that one of the world's richest supermodels, Gisele Bundchen, opted to be paid in euros because of the dollar's weak outlook. Her spokeswoman has denied that the model was spurning the dollar, saying Bundchen is paid in the currency of a job's location.
Nevertheless, the euro bought an all-time record US$1.4752 earlier this month and the British pound has also been trading at its highest levels against the dollar since the early 1980s. The Canadian dollar, often called the "Loonie," reached parity with the dollar in September for the first time since 1976, and has climbed steadily since.
PHOTO: AP
While investors, multinational businesses and travelers have been witnessing the dollar's slide for years, pop culture is new territory.
Jay-Z's Blue Magic video seems to have been an attempt to acknowledge the dollar's decline in an ironic way and to paint the artist as an international superstar who is smarter than those accepting greenbacks.
"It is probably a particularly good strategy as the 'image of the dollar' loses its 'currency' as an emblem of extravagance and success,'' Steven Tepper, associate director of Vanderbilt University's Curb Center for Art, Enterprise and Public Policy, said in an e-mail. "So, you have the combination of a weakening visual icon - the dollar - and a growing international audience that will understand and connect to the image of the euro.''
As for Bundchen, she would not have been the first to favor contracts in other currencies - others include billionaire investor Warren Buffett and PIMCO Managing Director Bill Gross.
"Any international business person that is moving assets around the world will want to do as many deals in the strongest currency available, which is certainly not the dollar these days,'' Tepper added.
The dollar's decline represents expectations the US economy will slow relative to other economies. Recent cuts to the Federal Reserve's key interest rate have also weakened the dollar, as investors transferred funds to countries where they can earn higher returns.
A weaker dollar also makes US goods cheaper and more competitive in foreign markets, tightening the trade deficit. It helps some US companies with operations abroad whose profit is greater when converted into dollars. But at the same time, a cheaper dollar makes foreign goods and travel more expensive.
Although pop culture preferences are not the most important factors in the equation, some say they can have enough of an impact to support the dollar's decline.
"Obviously a supermodel changing preferences is not going to rock the markets overnight,'' said Axel Merk, manager of the Merk Hard Currency Fund. "This is just a symptom. But sure, yes, it does have an impact and that's going to happen more and more."
Recent hype about Jay-Z and Bundchen, US travelers' tighter budgets and hordes of foreigners flocking to the US for holiday shopping may have pushed Americans to the "point of recognition,'' at which they realize the dollar has lost its dominance. If so, the most significant effect will be felt by those who weren't aware of its rapid decline, said Kathleen Vohs, an assistant professor at the University of Minnesota who has researched the psychology of money.
While economists and market watchers can debate the economic pros and cons of a weaker dollar, its decline will whittle away at national pride, according to Vohs, making it harder for the dollar to regain its footing.
"A strong national currency is in some ways signaling the strength of the nation,'' she said. "You can see that when the home currency is weak, people just have this sense of inferiority in the world.''
Vohs cited Canadians' one-time complex about the Loonie, which remained weaker than the dollar for 31 years. Now the tables are turned: Americans are the ones getting ribbed by their northern neighbors. But not everyone agrees on whether such an atmosphere will affect the currency's direction.
"I don't know how important it is that Jay-Z is flashing euros,'' said Marc Chandler, head of currency strategy at Brown Brothers Harriman.
Americans dealt with an opposite currency issue in the 1980s, as fuel-efficient vehicles from Japan gained popularity in the states and Japanese were buying up US companies and real estate. A backlash ensued, with Americans blaming foreign interests for the loss of jobs and US politicians demanding that Japan either strengthen the yen, or face trade sanctions.
Chandler expects a less dramatic outcome, with the dollar bouncing back next year against other major currencies as other central banks lower interest rates.
For now, online chatter indicates that some fans and commentators are treating the incidents with a humorous bent, sensing that it was only a matter of time before the dollar's decline hit BET and the fashion runways.
One observer speculated that the rapper 50 Cent might soon change his handle to 34 Pence.
Others suggested that celebrities give up on currency altogether, instead favoring gold, whose value has recently surged to decades-high levels. One advised that "any real gangsta hedging against recession" should be "flashing gold chains, not dabbling in fiat currency."
But another noted altering the hook to a famous Wu-Tang Clan tune - to say "Euro, Euro bill, y'all" instead of "Dolla, dolla bill, y'all" -just wouldn't have the same ring to it.
Last week Joseph Nye, the well-known China scholar, wrote on the Australian Strategic Policy Institute’s website about how war over Taiwan might be averted. He noted that years ago he was on a team that met with then-president Chen Shui-bian (陳水扁), “whose previous ‘unofficial’ visit to the US had caused a crisis in which China fired missiles into the sea and the US deployed carriers off the coast of Taiwan.” Yes, that’s right, mighty Chen caused that crisis all by himself. Neither the US nor the People’s Republic of China (PRC) exercised any agency. Nye then nostalgically invoked the comical specter
April 15 to April 21 Yang Kui (楊逵) was horrified as he drove past trucks, oxcarts and trolleys loaded with coffins on his way to Tuntzechiao (屯子腳), which he heard had been completely destroyed. The friend he came to check on was safe, but most residents were suffering in the town hit the hardest by the 7.1-magnitude Hsinchu-Taichung Earthquake on April 21, 1935. It remains the deadliest in Taiwan’s recorded history, claiming around 3,300 lives and injuring nearly 12,000. The disaster completely flattened roughly 18,000 houses and damaged countless more. The social activist and
Over the course of former President Ma Ying-jeou’s (馬英九) 11-day trip to China that included a meeting with Chinese Communist Party (CCP) leader Xi Jinping (習近平) a surprising number of people commented that the former president was now “irrelevant.” Upon reflection, it became apparent that these comments were coming from pro-Taiwan, pan-green supporters and they were expressing what they hoped was the case, rather than the reality. Ma’s ideology is so pro-China (read: deep blue) and controversial that many in his own Chinese Nationalist Party (KMT) hope he retires quickly, or at least refrains from speaking on some subjects. Regardless
Approaching her mid-30s, Xiong Yidan reckons that most of her friends are on to their second or even third babies. But Xiong has more than a dozen. There is Lucky, the street dog from Bangkok who jumped into a taxi with her and never left. There is Sophie and Ben, sibling geese, who honk from morning to night. Boop and Pan, both goats, are romantically involved. Dumpling the hedgehog enjoys a belly rub from time to time. The list goes on. Xiong nurtures her brood from her 8,000 square meter farm in Chiang Dao, a mountainous district in northern Thailand’s