Stories about currency

Bitcoin, the magic money, and why I chose to risk it for the biscuit

The Bitcoin saga has been one of mad fanfare, terminological jargon, ridiculous price jumps, and scathing criticism from banking establishments. There is a plethora of information available on how Bitcoin works, and the original proof-of-work paper is available to read on the currency’s organisational website. Yet, despite all the countless articles that detail the schematics of the Bitcoin system, it remains mired in controversy, especially of late as it makes the news on a regular basis for its volatility. Let’s take a look at some of the myths surrounding Bitcoin, and attempt to disentangle this nascent cryptocurrency from the confusion that surrounds ...

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Capitalism: A blessing in disguise

The word ‘capitalism’ — or sarmaya darana nizam’ — has always had an unpleasant ring to it in Urdu language newspapers. That’s probably why one rarely finds a politician in Pakistan praising capitalism. Even our public intellectuals tend to carefully add qualifiers such as economic justice and social equity while calling for a free-market economy. However, shouldn’t the centrally planned economic system, rather than capitalism, stand discredited after the collapse of the Soviet Union in 1991? After all, capitalism has lifted millions of people out of poverty since its concluding triumph over socialism two decades ago. A cursory look at ...

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Afghanistan needs our help!

The central bank of Afghanistan imposes a fine on shopkeepers to stop them from using foreign currency. Pakistani currency also known as Kaldhar in the war-stricken country is widely used, which reflects the lack of confidence of Afghani businessmen and traders in their economy. Afghanistan’s economy appears stable if compared to Pakistani rupee that lost almost half its value to the dollar. 90% of Afghanistan’s budget depends on foreign aid. However, will the bubble economy survive when the US is itself embroiled in a financial crisis back home? Rich Afghans are already escaping with their money stashed in suitcases. $4.6 billion has ...

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How the mighty dollar weakens the rupee

Money only holds value because there are goods and services available to buy with that money. It is the goods and services that create a value for that money. Coconut water would be more valuable on a treasure island than kilos of gold. In that circumstance, it’s not the value of coconut water that has increased, but the diminished value of gold that is being reflected. The fewer goods and services available, the lesser the value of money – even if it is a pile of gold. Pakistan currently produces cotton, rice, fish, fruit, vegetables, pulses and much more. These ...

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Osama’s death will not stop the dollar’s decline

The news of Osama Bin Laden’s death will open new dimensions for the US dollar but only for a short while. The reason I say this is because while global financial markets are terming the news of Bin Laden’s as good news for the currency, the dollar will continue to stay weak in 2011. Stock markets will rally in the US, Europe and Asia, but these efforts will all be short-lived and the status of the dollar will go back to its original position. Analyses of the past The bull market for the US dollar is like an invisible man. An important aspect ...

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Why the US dollar fell during current global crises

An interesting aspect of the Libyan, Tunisian and Japanese crises was that the US dollar fell against other major currencies, by a lot. Normally, in times of crises, investors tend to move towards the dollar. It is viewed as a safe haven. However, during the current crises, the dollar fell to historic lows against the yen, before the massive international central-bank intervention reversed the fall (now, the financial market will remain uncertain in the next two years. You can bet on that). Even the Euro strengthened against the dollar and Europe is considered to be in a messy situation that needs ...

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