Dollar value – Alg A http://alg-a.com/ Fri, 06 May 2022 19:52:32 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://alg-a.com/wp-content/uploads/2021/10/icon-6-120x120.png Dollar value – Alg A http://alg-a.com/ 32 32 Putting a monetary value on nature will give governments and businesses more reason to protect it https://alg-a.com/putting-a-monetary-value-on-nature-will-give-governments-and-businesses-more-reason-to-protect-it/ Fri, 06 May 2022 06:02:16 +0000 https://alg-a.com/putting-a-monetary-value-on-nature-will-give-governments-and-businesses-more-reason-to-protect-it/ Recasting society’s concept of wealth to include ‘natural capital’ – the value nature provides to humans – is a critical step to slowing and reversing the loss of valuable ecosystems. Photo: Pixabay/12019 President Joe Biden calls climate change “the existential crisis of our time” and has taken steps to curb it that fit those words. […]]]>

Recasting society’s concept of wealth to include ‘natural capital’ – the value nature provides to humans – is a critical step to slowing and reversing the loss of valuable ecosystems.

Photo: Pixabay/12019

President Joe Biden calls climate change “the existential crisis of our time” and has taken steps to curb it that fit those words. They include the United States’ return to the Paris Agreement; creation of a new position within the Climate Cabinet; the introduction of a plan to reduce fossil fuel subsidies; and announcing ambitious goals to reduce greenhouse gas emissions in the United States.

But climate change is not the only global environmental threat that demands our attention. Scientists largely agree that the loss of wildlife and the natural environment is an equally urgent crisis. Some say the loss of biodiversity threatens to become Earth’s sixth mass extinction.

But unlike climate change efforts – which focus on clear, measurable goals to reduce greenhouse gas emissions – there is no globally accepted measure to save biodiversity.

As an expert in budgeting and public finance, I know that governments and private companies pay much more attention to resources when they have a well-defined price. I believe that reshaping society’s concept of wealth to include “natural capital” – the value that nature provides to humans – is a crucial step in slowing and reversing the loss of valuable ecosystems.

What is natural capital?

Natural capital can be defined as the global stocks of natural assets – soil, air, water, grasslands, forests, wetlands, rocks and minerals – and all of its living things, from mammals and fish to plants and microbes. Conservation experts estimate that these resources contribute more than US$125 trillion annually to the global economy.

Humans depend on nature’s contributions for their survival. For example, forests absorb carbon and filter the water we drink. Wetlands and coral reefs mitigate flooding. Bees and other insects pollinate crops, allowing us to produce food.

But human societies do not formally recognize the economic value of these services. This oversight encourages people to recklessly deplete the natural environment.

A recent study on the economics of biodiversity, commissioned by the UK government and led by University of Cambridge economist Sir Parth Dasgupta, warns that human prosperity is rising at a ‘devastating cost to nature’ and estimates that it would take 1.6 Earths to maintain the current standard of living. The report calls on the world to treat nature as an asset to be included in financial statements and national accounts.

The Capitals Coalition, a global consortium of 380 initiatives and companies, is trying to “change the math”. The organization seeks to persuade at least half of the world’s businesses, financial institutions and governments to integrate natural capital into their decision-making by 2030.

Valuing ecosystems

Current accounting methods used by companies and governments largely ignore what ecosystems and their services contribute to the economy and social well-being, jobs and livelihoods. As a result, modern societies spend far more on investments that deplete or exploit natural assets than they do to preserve them.

In the current model, the short-term economic gains generally outweigh the longer-term ecological benefits. For example, not maintaining forests can trigger forest fires. And building homes on fragile coastal wetlands can erode soils and reduce fish stocks, destroying local communities.

A recent study by the Paulson Institute, a research institute founded by former US Treasury Secretary Henry Paulson, estimated that global investments that degrade nature exceed conservation efforts by $600 billion to $824 billion annually.

Natural capital accounting would require businesses and governments to calculate how human activity affects nature, much like they assess the depreciation of buildings or machinery. Thus analyzed, nature is a financial asset, and its degradation becomes a liability. This approach creates incentives to conserve natural resources and restore others that have been degraded or depleted.

Global recognition of this problem is growing. In March 2021, the United Nations updated a statistical framework for standardizing ecosystem accounting, which was first published in 2012. These guidelines help countries track changes in ecosystems and their services and provide leaders with a baseline against which to compare their stocks and flows when developing policies. the decisions.

Some 90 countries have adopted this system of environmental economic accounting and produced benchmark “national capital accounts”. They include members of the European Union, Australia, Canada, the United Kingdom and more than 40 developing countries. The United States is considering implementing this approach, but has not yet done so.

Assessment of the value of nature

Placing values ​​on natural assets is really no different from government assessments of the benefits of new roads, bridges and other infrastructure. People intuitively understand that natural resources are valuable. And the COVID-19 pandemic has clearly shown how intertwined human health is with the health of the planet.

In response to the biodiversity crisis, President Biden has aligned the United States with the global 30×30 campaign, a plan to protect at least 30% of the world’s land and oceans by 2030. Multiple scientific studies have shown that achieving this goal would conserve the species. , store carbon, prevent future pandemics and drive economic growth.

The year 2021 marks the start of the United Nations Decade on Ecosystem Restoration, which aims to prevent, halt and reverse the degradation of ecosystems around the world. Today, according to a recent study, less than 3% of the world’s land remains ecologically intact with healthy wildlife populations and undisturbed habitat.

The United States has lost decades of potential progress since Congress suspended nascent Bureau of Economic Analysis efforts to develop environmental accounting methods in 1995. Researchers from the U.S. Geological Survey and other federal agencies urge now the United States to adopt national capital accounts using the framework.

In contrast, the UK created public environmental accounts and set up a natural capital committee in 2012, led by its finance ministry, to help companies develop natural capital accounts. Today, the UK manages these accounts, which capture data on the size, condition, quantity and value of habitats and ecosystem services. President Biden could empower the US Treasury Department to lead a similar initiative.

Adopting measures to measure and track the benefits people derive from wildlife and ecosystems would clarify how human activities affect nature and show how much investment is needed to reverse humanity’s current destructive trajectory. Conservation advocates will be in a much better position to protect our planet’s resources with a strong track record to back it up.

This article was written by Linda J. Bilmes, lecturer in public policy and public finance at the Harvard Kennedy School. It is republished from The Conversation under a Creative Commons license. Read the original article.

]]>
New calculator estimates dollar value of prairie wetlands https://alg-a.com/new-calculator-estimates-dollar-value-of-prairie-wetlands/ Wed, 20 Apr 2022 16:13:50 +0000 https://alg-a.com/new-calculator-estimates-dollar-value-of-prairie-wetlands/ A new online tool developed at the University of Saskatchewan will help both policy makers and producers estimate the value of prairie wetlands. “When we push for wetland conservation, sometimes the language our leaders and decision-makers understand best is dollar value,” said researcher Eric Asare, who led the project for the USask College of Agriculture […]]]>

A new online tool developed at the University of Saskatchewan will help both policy makers and producers estimate the value of prairie wetlands.

“When we push for wetland conservation, sometimes the language our leaders and decision-makers understand best is dollar value,” said researcher Eric Asare, who led the project for the USask College of Agriculture and Bioresources. .

“They will be spending money to design and implement conservation policies for these wetlands, so if they even spend $1, they should know what the return of that $1 is.

“If we make an effort to conserve wetlands, we should actually know the value of these wetlands.”

And the pressure for conservation is ongoing and urgent, as an estimated 50-70% of prairie wetlands have been lost to agricultural uses.

“It’s a huge lost wetland. It’s scary,” Asare said. “The average person might think of wetlands as wasteland – it looks like dirt with water standing on it, so most people don’t pay attention to these wetlands.”

To create the calculator (available online at Wetland Ecosystem Evaluation Tool), a research team analyzed various factors, including agricultural productivity, the number of bird and amphibian species that use the wetland, and the density of population in the region. It’s not an exact value but it’s useful, Asare said.

“Wetlands are very complex, so putting a monetary value on them can be difficult,” he said. “But we can use all of these factors to explain how wetland values ​​vary across the landscape. From this we can determine how wetland values ​​may change if we change, for example, the population density or the area of ​​the wetlands. »

Not surprisingly, in densely populated areas (where more people will benefit from ecosystem services), wetlands can be worth a lot – up to $6,500 per hectare per year.

It’s not as surprising as it sounds, Asare said.

“Wetlands are extremely valuable to our society,” he said. “If you spend $1 to conserve a wetland, society can get a return of $2 on that investment. That’s why we have to put a value on these wetlands.

An example is flood control.

“If you imagine severe flood damage in a city, the insurance payout can run into the millions. But if you have a wetland that reduces that damage, you can imagine the economic contribution of those wetlands alone for flood control.

Values ​​estimated for agriculture alone—from $85 to $500 per hectare depending on location—are somewhat higher than net returns from growing a canola or spring wheat crop.

But Asare does not expect farmers to trade crops in favor of wetland conservation. For one thing, it’s not economical to do (yet).

“Conserving the wetland can reduce their profits, so if a farmer thinks only in terms of profit, they may not be considering the value of the wetland,” he said. “But if they know the value of the wetland, they are in a better position to conserve it.

On the other hand, farmers do not yet see many direct financial benefits from their conservation efforts. Although these wetlands have monetary value, this does not usually translate to more money in the bank.

That’s starting to change as conservation organizations start paying producers for ecosystem services on their land, he said.

“If we want to conserve wetlands, we have to pay attention to farmers. Organizations like Ducks Unlimited are now paying farmers to conserve wetlands,” Asare said. “With this tool, the farmer can actually estimate the value of the wetland, which might give him some bargaining power.”

]]>
The rupee-dollar value can be stable with good economic direction: Ishaq Dar – Pakistan https://alg-a.com/the-rupee-dollar-value-can-be-stable-with-good-economic-direction-ishaq-dar-pakistan/ Wed, 13 Apr 2022 18:54:42 +0000 https://alg-a.com/the-rupee-dollar-value-can-be-stable-with-good-economic-direction-ishaq-dar-pakistan/ Former Finance Minister Ishaq Dar said on Wednesday that the exchange rate will improve once Pakistan’s economy is headed in the right direction, going so far as to say it could even drop to 160 rupees against the US dollar in a few months when “political fiscal and monetary policies are fixed”. Dar’s remarks came […]]]>

Former Finance Minister Ishaq Dar said on Wednesday that the exchange rate will improve once Pakistan’s economy is headed in the right direction, going so far as to say it could even drop to 160 rupees against the US dollar in a few months when “political fiscal and monetary policies are fixed”.

Dar’s remarks came during the Aaj News ‘Faisla Aap Ka with Asma Shirazi’, where he said that the historical fall of the rupee was due to the “incompetence” of the previous government.

Ishaq Dar interview with Asma Shirazi on Wednesday

“It’s their incompetence,” he said when asked by Shirazi if the value of the rupee could improve now that the Pakistan Muslim League-Nawaz (PML-N) has taken over.

During its previous tenure, the PML-N gained a reputation for keeping the rupee strong, much to the annoyance of the International Monetary Fund (IMF) and exporters who argued that keeping the currency “artificially strong” hurts the long-term economy. Course.

However, Dar said the dollar cannot be administratively controlled beyond “limited intervention”.

“The dollar cannot be administratively (controlled) – you can intervene in a limited way. Economic fundamentals have to be right, inflation has to be under control, the budget deficit has to be under control, while foreign exchange reserves have to be in good shape. level. level.”

When Shirazi flatly asked him if the rupee could strengthen to 160 against the dollar, Dar replied “it is possible”.

“God willing, it is possible. But you will have to work hard for it. You will have to correct the economic policy. You will have to take fiscal and monetary measures as well as set the economic direction. Revenues must be increased. He is right, the dollar can be stabilized.”

Responding to a question about inflation, which has been in double digits for months, Dar said the government’s giving “carte blanche” to the exchange rate has been the “mother of all evils”.

“When inflation started to rise, they raised the interest rate, attracting ‘hot money’. When the pandemic came, they lowered the interest rate and an outflow of dollars occurred .”

The exchange rate has been a hot topic in the South Asian economy which saw its currency hit a record high last week when it depreciated to 188.18 rupees against the US dollar. Since then, the rupiah has appreciated for four successive sessions as the market reacted to central bank measures, and clarity on the political front after the vote of no confidence against Imran Khan finally took place on Saturday night. The rupee closed at 181.82 against the dollar on Wednesday, a cumulative gain of 3.5% over the four sessions.

Current account deficit

Earlier in the interview, Dar said that the previous government had again brought the current account deficit to a high level.

“We left the current account deficit at around $18 billion. It was high due to capital investment.

“They (the Pakistani government Tehreek-e-Insaf) brought it down but at what cost?

“Pakistani economy experienced negative growth for the first time since 1952. As soon as they started focusing on growth, their current account deficit also started increasing.

“They don’t have any experience. They admitted that we didn’t plan an economic policy.

Arrival in perspective?

When asked if he and PML-N leader Nawaz Sharif could return to Pakistan, Dar replied, “That information is correct.”

“A passport is a fundamental right of a person – you cannot cancel it or not renew it. It is a constitutional right.

“My passport, through which I entered the UK, was canceled in 2018. Nawaz Sharif’s passport, which also recently expired, has also not been renewed. In politics, sometimes we stoop to a level where we ignore fundamental rights.

“The passport process will take place. I am trying to move up my medical appointments, as is Nawaz Sharif. In the meantime, if the passports and other travel documents are finalized, we will come back.

“No one could have thought this would happen three months ago. This all happened thanks to the efforts of Nawaz Sharif and the common opposition.

“The country had come to such a situation where it had to happen. It wasn’t done against one man. We were at a crucial moment.”

vote of no confidence

Asked about the start of consultations on the no-confidence vote, a hotly debated issue, Dar said it had been underway for three months.

“We held rallies, but we didn’t threaten them. We didn’t say ‘resign or we will continue to hold rallies’. We wanted to take a constitutional and democratic path. We didn’t want to pressure them.” We didn’t want to use “street politics” either. We had been working there for 2.5-3 months.

“It didn’t work out the way the encryption came on March 7, and we submitted the motion of no confidence on March 8. We met with political parties, completed our numbers and incorporated them. We spoke to PPP which was also It was a tall order since in the history of Pakistan, a vote of no confidence had never been successful.We had to be careful to avoid the embarrassment of a failed vote.

“Encryption has nothing to do with it,” he said, referring to PTI chairman Imran Khan and his party’s claims that encryption was evidence of a Western plot against him, as well as the motivation behind the opposition’s vote of no confidence in parliament.

]]>
Exporters expecting declines in the value of the New Zealand dollar may be disappointed https://alg-a.com/exporters-expecting-declines-in-the-value-of-the-new-zealand-dollar-may-be-disappointed/ Sun, 13 Mar 2022 18:58:00 +0000 https://alg-a.com/exporters-expecting-declines-in-the-value-of-the-new-zealand-dollar-may-be-disappointed/ Summary of key points:- Currency risks for future exporters Three price charts that testify to our long-standing inflation problem Currency risks for future exporters Exporting companies from all industry sectors in New Zealand currently considering their business plans for the next few years should not be content with the financial risk posed by the appreciation […]]]>

Summary of key points:-

  • Currency risks for future exporters
  • Three price charts that testify to our long-standing inflation problem

Currency risks for future exporters

Exporting companies from all industry sectors in New Zealand currently considering their business plans for the next few years should not be content with the financial risk posed by the appreciation of the New Zealand dollar against all currencies against at current levels.

Over the past few years there have been regular declines in the market spot rate of all currencies against the NZD to provide the opportunity to add and extend forward hedging. Going forward, there is a real risk that these setbacks will be both fewer and much shallower than has been the case in recent times.

The risk management rationale for exporters to maintain high levels of hedging in the current and future environment centers heavily on our cousins ​​across Tasmania.

Based on superior economic growth performance in the post-Covid era, rapid increases in mining and metal commodity prices to record highs, and the inevitable shift in monetary policy stance from the Reserve Bank of Australia ( “RBA”) to raise interest rates this year, will all add up to potentially large gains in Australian dollars.

In the author’s view, there is a much higher risk of the Kiwi dollar following the Australian dollar higher than the counter risk of the New Zealand dollar depreciating on its own due to the economy New Zealand national who looks decidedly ill. The RBNZ and the New Zealand economy actually need a higher value of the New Zealand dollar to help mitigate the spiraling rate of inflation. The expected appreciation of the Australian dollar will provide solutions to the problem of high inflation, as the Kiwi dollar follows the AUD religiously.

The second risk to consider is the direction in which the US dollar itself will move over the next two years.

The US Dollar has appreciated 10% over the past 12 months, rising from 90.00 on the USD Currency Index to 99.10 currently. Prior to the Russian-Ukrainian war that pushed the USD higher in recent weeks, it appeared that USD gains were waning around 96 on the index.

This column has believed for some time that currency markets have already fully priced in the USD value of upcoming US interest rate increases by the Fed.

The war has, for now, prevented any inevitable weakness in the USD as currency speculators unwind their accumulated long USD position in anticipation of US interest rate hikes.

The latest US inflation data in February, at an annual rate of 7.9%, further fuels the view that the Federal Reserve needs to step up its monetary tightening and raise interest rates by 0.50 % next week.

However, given the high volatility in equity, bond and commodity markets over the past few weeks, it seems unlikely that the Fed will risk spooking the horses at this time with a more aggressive interest rate hike. interest.

The Fed is always careful not to cause a stock market crash that would reduce confidence and spending in the US economy.

In the short term, there could well be a downward correction in the value of the USD as the markets reflect some disappointment that the Fed did not rise by 0.50%.

In the medium term, provided the Russian-Ukrainian war ends relatively quickly, markets will focus on the Europeans who will be the next to end their monetary stimulus and begin to tighten policy.

Provided the uncertainty around Ukraine and European security abates over the next few months, the Euro is likely to recover in earnest from its current level of $1.0900 towards $1.2000.

The problem of the US economy’s double deficit will remain a major negative factor for the value of the US dollar over the next few years. To attract foreign capital/investment funds to fund its deficits, the US first needs a lower currency value, otherwise the funds won’t come in. A return of the USD currency index to 90 from 99 would have the NZD/USD rate well above 0.7200.

The balance of probabilities for local exporters is reasonably heavily weighted by a higher NZD/USD rate due to AUD appreciation and general USD depreciation over the next 12-24 months. Stable at higher cross rates against the euro, the yen and pound look much more likely than to decline. Aussie dollar exporters won’t yet be hedged at policy limit highs at 0.9330, but expected NZD underperformance against USD against AUD/USD rate moves should produce further rate cuts crossed at 0.9200 and 0.9100 over the coming months. Over the past seven years, NZD/AUD rates in this zone have been the time to push the hedge percentages to the max.

Three price charts that testify to our long-standing inflation problem

The ‘cost of living crisis’ debate among our politicians lately has arisen from the sharp rise in food and energy prices due to Covid, supply chain disruptions and shortages on the labor market. Add the excess monetary and fiscal stimulus to the economy in 2020 and 2021 and we have the perfect inflation storm.

However, as this article has consistently pointed out, we have a more fundamental and longstanding problem of inflation in the national economy that the authorities have failed to recognize and address.

The following three graphs are only small samples of the Housing and Household Services component which accounts for 28% of New Zealand’s CPI inflation index. There is something totally wrong with the supply/demand equation to house our population as local government rates, rents and property maintenance costs increase by approximately 4% every year without fail. The causes of this constant increase in prices can be traced back to government legislation/regulation and local government land zoning.

Select chart tabs



*Roger J Kerr is Executive Chairman of Barrington Treasury Services NZ Limited. He has been writing commentaries on the New Zealand dollar since 1981.

]]>
Fantasy Baseball – How to Use the Custom Dollar Value Generator https://alg-a.com/fantasy-baseball-how-to-use-the-custom-dollar-value-generator/ Wed, 09 Mar 2022 08:00:00 +0000 https://alg-a.com/fantasy-baseball-how-to-use-the-custom-dollar-value-generator/ If you’re getting ready to play fantasy baseball, ESPN has you covered. We have leaderboards, salary cap values, and cheat sheets for Rotisserie, Head-to-Head Categories, Head-to-Head Leagues, and Seasonal Points. But what if you play in a league with different settings than these most popular offers? In this sabermetric era, it’s not uncommon to find […]]]>

If you’re getting ready to play fantasy baseball, ESPN has you covered. We have leaderboards, salary cap values, and cheat sheets for Rotisserie, Head-to-Head Categories, Head-to-Head Leagues, and Seasonal Points. But what if you play in a league with different settings than these most popular offers?

In this sabermetric era, it’s not uncommon to find a league that uses on-base percentage instead of batting average, quality starts in place of wins, or even includes up to 10 categories on either side of the ball. For any of these custom formats, there’s no easier way to create a set of ratings yourself than by using ESPN’s Fantasy Baseball Custom Values ​​Generator.

Let’s illustrate, using the 6×6 rotisserie format I’ve talked about many times in these pages. In this format, I took the traditional 5×5 categories, added a sixth to each of the hitting and pitching sides, and made some categorical adjustments to keep up with the sabermetric times. Batting average, for example, was replaced with on-base percentage, and stolen bases were replaced with stolen clean bases, with slugging percentage added as a sixth hitting category. On the pitching side, wins were replaced with quality starts and strikeouts over K/9, with innings pitched added as the sixth pitching category.

]]>
A spike in energy prices raises the dollar value, causing flows to havens https://alg-a.com/a-spike-in-energy-prices-raises-the-dollar-value-causing-flows-to-havens/ Tue, 08 Mar 2022 11:21:54 +0000 https://alg-a.com/a-spike-in-energy-prices-raises-the-dollar-value-causing-flows-to-havens/ As the United States of America, along with Europe and its allies, consider banning the import of crude oil from Russia, investors have begun to weigh its impact on the global economy. It turns out that the US dollar has gained its value in the global market, while the euro has lost its charm. According […]]]>

As the United States of America, along with Europe and its allies, consider banning the import of crude oil from Russia, investors have begun to weigh its impact on the global economy. It turns out that the US dollar has gained its value in the global market, while the euro has lost its charm.

According to estimates, the euro could face more serious consequences as it depends more heavily on Russia for the import of crude oil. The price of oil is already at its highest level in 14 years, and the future remains uncertain about its further increase.

The conflict continues to affect foreign currencies

Crude oil hit a 14-year high in value. As the United States of America and Europe, along with their allies, plan to go ahead and ban the import, there is growing uncertainty as to how prices will go. to augment.

The US Dollar rose in value after being lifted by Safe-Haven Flows. Online FX Brokers have their eyes on other currencies in the market as the Russian-Ukrainian conflict escalates.

A rise of 0.33% was recorded by the Dollar index to reach the bar of 99.24; however, the euro fell to $1.08575 by 0.7% against the US dollar.

The US Dollar Index measures the value of the greenback against six global peers.

The euro would be lower amid growing concerns over energy prices. They are expected to cause stagflation and batter the economy of Europe. The region is trying to recover from the Covid-19 pandemic, but it seems that the Russian-Ukrainian conflict could slow it down a bit.

Edward Moya, senior analyst at Oanda, noted that the Russian-Ukrainian conflict was indeed hurting the European region’s growth prospects, as the conflict led to surges in several commodities in addition to crude oil.

According to Edward Moya, the US dollar will receive support in the short term and the country’s economy was still well positioned as it was not as dependent on Russian supplies as Europe has been.

Another worrying factor is that the volatility of the euro/dollar has reached its highest value since March 2020.

Joe Manimbo, senior market analyst at Western Union Business Solutions, presented statistics. He said the euro had lost 3% in the past three days and stood at $1.08 on Monday.

He also said the market could be more cautious in pushing it down before the meeting of the European Central Bank scheduled for midweek.

Other currencies that recorded a downward trend were the British pound and the Australian dollar, with a drop of 0.91% and 0.56%, respectively.

]]>
What is the impact of “Putin’s war” on the value of the New Zealand dollar? https://alg-a.com/what-is-the-impact-of-putins-war-on-the-value-of-the-new-zealand-dollar/ Sun, 27 Feb 2022 19:12:00 +0000 https://alg-a.com/what-is-the-impact-of-putins-war-on-the-value-of-the-new-zealand-dollar/ Summary of key points:- Geopolitical risk of Russian invasion of Ukraine proves short-lived RBA’s change in monetary policy stance remains key to AUD’s gains (and NZD’s gains) RBNZ again fails to tackle inflation’s ‘elephant in the room’ Geopolitical risk of Russian invasion of Ukraine proves short-lived So far, it looks like the New Zealand Dollar […]]]>

Summary of key points:-

  • Geopolitical risk of Russian invasion of Ukraine proves short-lived
  • RBA’s change in monetary policy stance remains key to AUD’s gains (and NZD’s gains)
  • RBNZ again fails to tackle inflation’s ‘elephant in the room’

Geopolitical risk of Russian invasion of Ukraine proves short-lived

So far, it looks like the New Zealand Dollar has weathered “Putin’s War,” the Russian invasion of the Ukrainian storm that hit financial and investment markets last week.

It was somewhat surprising that the US Dollar had not strengthened on safe-haven flows in recent weeks as the Russians threatened to invade. However, the markets’ natural reaction was to buy US dollar, buy oil and sell stocks when Russian tanks crossed Ukrainian borders last Thursday.

The NZD/USD exchange rate depreciated sharply against the USD, falling from above 0.6800 last Wednesday after the RBNZ monetary policy statement to a low of 0.6630 on Thursday 24 February, as all the markets revolved around the Russia/Ukraine event which risked affecting the media.

As a rule, the reaction of the foreign exchange market to such geopolitical developments is very short-lived because the direct economic consequences often turn out to be much less than initially feared.

Admittedly, a spike in the price of WTI crude oil to over US$100 a barrel at some point is hardly positive for global economic growth. However, oil price gains were not sustained and WTI oil prices just as quickly returned to US$92 a barrel.

Global financial and investment markets regained some confidence on Friday February 25 when news arrived that the Chinese were not supporting the Russians and that Chinese state-owned banks stopped letters of credit/trade finance for Russian customers of raw materials.

The geopolitical risk would have increased further if the Chinese had stepped in to buy Russian gas or financed Russian trade after the West imposed sanctions on Russian banks.

Fortunately, the Chinese have joined the West in imposing financial sanctions on the Russians.

Over the weekend, the Germans finally agreed to back a ban on Russian banks using the SWIFT international interbank payments system after some initial reluctance.

Russians currently hold more reserves of gold and US dollars than they did at the time of sanctions and previous economic crises. However, not being able to trade their commodities with the world will have dire economic consequences and they are likely to be heavy sellers of US dollars over the next few months as they use their dollar reserves to shore up their domestic economy.

The war will continue in Ukraine, but there will be no new surprises for the markets, and they will move on to the next potential risk.

A strong rebound in equities on Friday February 25 quickly reversed the broad USD buying, allowing the EUR/USD exchange rate to return to $1.1270 from a low of $1.1100. The Aussie also quickly reversed the engines from the 0.7100 lows to bounce up to 0.7240. The Kiwi dollar follows the AUD/USD rate religiously, so the NZD/USD rate also rallied more than a cent to 0.6750.

With the turmoil in Ukraine currently at the forefront of market concerns, the US Federal Reserve is highly unlikely to be forced by geopolitical tensions to alter its plans to begin raising interest rates next month. The US dollar will not strengthen with the Fed’s interest rate hike, as this is totally expected and therefore already fully priced into the value of the dollar.

RBA’s change in monetary policy stance remains key to AUD’s gains (and NZD’s gains)

Prior to the Russia-Ukraine crisis that sent the Kiwi dollar into a short-lived tumble, the New Zealand currency was showing a slow but steady recovery after depreciating into the 0.6500s in mid-January when the more hawkish Federal Reserve drove stock markets lower and risky currencies were punished.

For the first time since October 2021, the Kiwi Dollar has seen some buying interest on its own following more aggressive monetary policy tightening by the RBNZ last week.

The USD side of the NZD/USD exchange rate equation continued to dominate daily movements, with local positives such as rising New Zealand interest rates and rising New Zealand commodity prices n ‘having no real impact.

While the outlook for New Zealand’s domestic economy presents challenges, our higher interest rates and commodity prices remain positive influences for the Kiwi Dollar in their own right if and when offshore currency investors/traders turn away from the USD and start looking for alternatives to open bets on.

In reality, over the coming weeks/months, the likelihood of the Kiwi Dollar attracting new interest from global investors will only occur when the Reserve Bank of Australia (“RBA”) is forced to change its current monetary policy.

It seems inevitable that the growing economic evidence of rising inflation and rising wages in Australia will force the hand of the RBA sooner rather than later.

When observers such as former RBA board member Warwick McKibbin indicate that several interest rate hikes are needed this year, you have a strong feeling that the game is almost over for intransigence. of the RBA.

When the RBA finally gives the signal that it needs to raise interest rates sooner (i.e. this year), international currency investors will have the official green light to buy the Australian dollar. The RBA’s stubbornness is the only thing holding the AUD back it seems.

The counter-argument is that the RBA might be reluctant to change monetary policy so close to the Australian general election in May. Australia’s impressive economic fundamentals of superior GDP growth and large current account surpluses make the AUD a standout and attractive currency for global players looking for alternative currencies to the USD.

RBNZ again fails to tackle inflation’s ‘elephant in the room’

Despite all the analysis and explanations from the RBNZ as to why annual inflation rose to 6.00% in New Zealand, they still failed to resolve the ‘elephant in the room’ with our inflation problem, namely that core domestic inflation (non-traded goods) has been high and out of control for most of the past 15 years (see RBNZ chart below).

Local government rates and the cost of building a new home (including the cost of land) have increased by more than 4% per year for many years due to central government regulatory requirements and restrictive laws on local city land zoning.

Several other economic commentators are also realizing that the government itself is the main cause of the persistence of high non-tradable inflation. Negative or low tradable goods inflation from 2012 to 2020 (we imported deflation from Chinese manufactured consumer goods price cuts) covered and disguised the problem.

The RBNZ has become complacent about the underlying causes of inflation and seemingly oblivious to risk. Households and businesses are now paying the price in the form of significantly higher interest rates due to the RBNZ’s failure for many years to tackle the root causes of inflation in New Zealand.

Select chart tabs



*Roger J Kerr is Executive Chairman of Barrington Treasury Services NZ Limited. He has been writing commentaries on the New Zealand dollar since 1981.

]]>
Dollar value of home sales in Northumberland last year tops $1 billion https://alg-a.com/dollar-value-of-home-sales-in-northumberland-last-year-tops-1-billion/ Mon, 14 Feb 2022 08:00:00 +0000 https://alg-a.com/dollar-value-of-home-sales-in-northumberland-last-year-tops-1-billion/ Northumberland’s real estate market has reached an all-time high in total dollars, surpassing $1 billion in 2021. With the total dollar amount of home sales in Northumberland last year exceeding $1 billion, 2022 is already an expensive start for potential buyers. The average home price jumped to $1,122,819 in January, an increase of nearly 60% […]]]>
Northumberland’s real estate market has reached an all-time high in total dollars, surpassing $1 billion in 2021.

  • Stacy Vermeire, president of the Northumberland Hills Association of Realtors.

With the total dollar amount of home sales in Northumberland last year exceeding $1 billion, 2022 is already an expensive start for potential buyers.

The average home price jumped to $1,122,819 in January, an increase of nearly 60% from the same month in 2021.

Low inventory continues to drive sales prices up, but the sharp increase in the average can also be attributed to a number of high-priced homes being sold as well as buyers rushing to get ahead of what they perceive to be a booming spring market, says Stacy Vermeire, president of the Northumberland Hills Association of Realtors.

She adds that the higher-priced homes may still have been on the market from last year and were bought up because there simply weren’t enough other options available.

“We certainly saw a lot more niche sales in January.”

Even though December was a relatively slow month for the local market – 54 units were sold through MLS, a 25% drop from the previous year – looking at 2021 as a whole, home sales were up slightly, pushing the total dollar value the highest it has ever been.

The average price of a home purchased in Northumberland in December 2021 was a record $876,448, compared to the annual average of $828,177, both representing increases of around 30%. at the same time in 2020.

The price increase was heavily influenced by a lack of inventory in the market.

At the end of 2021, active residential listings stood at 45, down more than 50% from the end of 2020 and a three-decade low.

January saw a gain of more than 20% over last year in new listings on the market, with 93, but Vermeire is quick to add the bump is not likely to be the beginning of the end for inventory problems locally.

“There’s always a slight increase in January because people are past the holiday mood and into a new year,” Vermeire says.

“Currently we’re sitting at less than a month of inventory and for a balanced market, we’re hoping to see inventory at around 3.8 months, so I think it’s going to take a while for this issue to unfold. inventory is resolved; it could take years to be perfectly candid.

Although the most immediate future of the market cannot be known, Vermeire says there is hope in the industry for the traditional push of a spring market, but she is realistic about what it will look like.

“We’re not going to hit that 3.8 months of inventory, it’s just not going to happen. But could you see a little more inventory than last year? Maybe.”

Even if the inventory improves, it does not necessarily mean that it will be easier for local buyers.

Over the past six months, Vermeire has noticed an increase in out-of-town investment buyers, particularly in the county, looking for a relatively affordable rental property. This influx increases competition for local buyers, especially for mid-range homes that would generally be attractive to first-time homebuyers or retirees.

“Investors were still there, but they seem to be making up a growing share of buying power in the midscale market,” says Vermeire, who sees a lot of investment properties turned into short-term rentals because it’s more lucrative. .

“But it takes a full-time tenant opportunity out of the market, making it somewhat difficult for traditional tenants to find a one-year lease at a fair price.”

]]>
1964 JFK Accented Hair Half Dollar Value https://alg-a.com/1964-jfk-accented-hair-half-dollar-value/ Tue, 01 Feb 2022 17:30:12 +0000 https://alg-a.com/1964-jfk-accented-hair-half-dollar-value/ Most of the coins that click into our wallets and coin jars are worth exactly the amount affixed to them, but some sneaky coins may have much higher values ​​hidden in plain sight. If you’re ever lucky enough to spot a 1964 JFK half dollar in your collection, you might be able to cash out […]]]>

Most of the coins that click into our wallets and coin jars are worth exactly the amount affixed to them, but some sneaky coins may have much higher values ​​hidden in plain sight. If you’re ever lucky enough to spot a 1964 JFK half dollar in your collection, you might be able to cash out well over 50 cents.

The first impression of these coins included highly detailed hair on Kennedy’s head just above his ear, experts at Professional Coin Grading Services (PCGS) explain. Aptly known as the 1964 JFK Accented Hair Half Dollar, these locks can add up to a major moolah. For example, one sold at auction in 2017 for a whopping $19,975!

Another telltale sign that you have one of these 50 cent coins will be a missing serif at the bottom of the “I” in the word “Liberty”. Unlike the hair, this letter is less detailed on its lower left side. There were approximately 4 million of these half dollars produced before moving on to the more common JFK coins which feature no visible strands of hair, plus the fixed “I”.

Apparently, it was Jaqueline Kennedy who requested that the hairstyle highlighted in her hubby’s image be toned down after the initial print. You can find pictures for comparison on the PCGS site.

Of course, like other coins worth money, the quality will make a huge difference in the value of the 1964 JFK Accented Hair Half Dollar. Aside from the nearly $20,000 jackpot mentioned above, prices listed on PCGS range from the low end of $150, a middle ground of around $1,000 to $3,000, and the high end of $9,000 to $17,000.

Obviously, even if you find one of those half dollars that isn’t in pristine condition, you can still make quite a bit of money out of it.

Now go ahead and check your coin jar! Who knows, you might have a few other valuable coins hidden in there (like a penny worth over $100,000 or a rare nickel worth millions).

]]>
The dollar remains stable: traders are waiting https://alg-a.com/the-dollar-remains-stable-traders-are-waiting/ Thu, 27 Jan 2022 09:57:00 +0000 https://alg-a.com/the-dollar-remains-stable-traders-are-waiting/ CiydemImages/E+ via Getty Images In the week of Jan. 10, Fed Chairman Jerome Powell and Lael Brainard, nominated to become Fed Vice Chairman, testified before Congress as part of the process to get them approved for another term in as members of the Federal Government’s Board of Governors. Reserve system. Mr. Powell and Ms. Brainard […]]]>

CiydemImages/E+ via Getty Images

In the week of Jan. 10, Fed Chairman Jerome Powell and Lael Brainard, nominated to become Fed Vice Chairman, testified before Congress as part of the process to get them approved for another term in as members of the Federal Government’s Board of Governors. Reserve system.

Mr. Powell and Ms. Brainard have spent much of their time before Congress defending the Federal Reserve’s response to the growing threat of inflation and their commitment to launching a serious effort in the future to reduce inflation. .

At that time, I was writing about the concern in the foreign exchange market about the willingness of Mr. Powell and Ms. Brainard to fight the growing threat of inflation in the United States.

I wrote,

“During this week of testimony, the value of the US dollar has fallen, indicating traders’ concerns that the United States will not fight inflation as well as other countries.”

Concerns have been raised about the willingness of the two under review to execute the effort.

Well, since this week traders in the forex market have apparently been willing to give Mr. Powell and Ms. Brainard a chance to show their plans and actually begin the battle to fight rising prices.

Admittedly, many are concerned that so far the Fed continues to pump money into the economy as it “reduces” its securities purchases.

But, so far, currency traders are willing to give the Federal Reserve more time.

The US dollar remains stable

For now, the value of the US dollar has remained relatively stable.

The US Dollar Index (DXY) was around 96.0 at the start of the week of January 10.

On Wednesday morning January 26, the US dollar index is still around 96.00.

The index fluctuated around this level between these two dates but centered on a value of 96.00.

Meanwhile, the yield on the 2-year US Treasury note rose 14 basis points from a yield of 0.90% on the prior date to 1.04% today.

The S&P 500 stock index fell from 4,677 to 4,400 during this period, a decline of 277 points.

The performance of these last two variables gives us market data that investors believe the words of the two Federal Reserve leaders and expect them to start raising the Fed’s key interest rate, federal funds in March of this year.

My interpretation of this data is that traders are prepared to give the Fed until March to see whether or not it follows through on what Mr. Powell and Ms. Brainard promised us to do.

The euro and the pound

For the Euro and the British Pound, we see some divergence in the results.

Since January 14, the dollar has appreciated against the euro. On that date, it cost $1.1455 to acquire one euro.

On Wednesday morning January 26, it cost $1.1285 to buy one euro.

The sentiment here is that European Central Bank President Christine Lagarde has signaled that she doesn’t believe the time has come to end her accommodative monetary policy.

That is to say, compared to the Federal Reserve, which has indicated that it will raise rates in March, the European Central Bank plans to wait a little longer.

On January 14, it cost around $1.3700 to acquire one British pound.

On Wednesday morning, January 26, it cost around $1.3500 to buy a pound.

In the case of Britain, the feeling is that the Bank of England is ahead of the Federal Reserve in the battle against inflation.

It seems that, overall, central banks are trying to take ownership of their local situations and respond, individually, according to what they feel they should do now.

The future

I continue to believe, as I wrote in my January 14 post, that FX traders are unsure that Mr. Powell will do whatever is necessary to combat the powerful forces of inflation.

Throughout his tenure as Chairman of the Board of Governors, the Federal Reserve has always acted to prioritize monetary easing to avoid making mistakes that could cause major economic disruption.

For this reason, the Fed has injected an excessive amount of reserves into the banking system in the United States and has continued to add even more liquidity to the banking system, even as it tries to reduce its securities purchases.

And, as Mr. Powell moves forward, it seems he always wants to continue to err on the side of monetary easing as he battles inflationary pressures.

Forex traders are unconvinced that Mr. Powell can truly wage the necessary war.

For this reason, it seems to me that the value of the US dollar will tend to fall further.

Mr. Powell might surprise me, but he still hasn’t presented the markets with a real picture of what his battle with inflation will be like.

Will he, at some point, start selling securities?

And what will he do with all the reverse repurchase agreements the Fed has on its balance sheet? As of Wednesday, Jan. 19, the Fed had sold nearly $2 trillion in securities under a near-future repurchase agreement.

How is the Fed going to reduce its use of “repos” while at the same time analysts are calling on the Fed to “sell” the securities it has bought, plain and simple?

So there are still some major unanswered questions regarding the Fed’s plans for the future.

The year 2022 will not be boring.

]]>