Saturday, February 04, 2012

D&D Alignment Chart for International Financial Economics



* SFr(Swiss Franc): Lawful Good

This currency is internationally influential and still yet keeps the stability of its value. The information confidentiality of investors is very safely protected. Switzerland economic growth is robust. The value of this currency is always guaranteed because the strength of its value is always strong. The Swiss monetary policy is relatively conservative and stable and hardly takes a deviant action so that its value is predictable almost all the time. Thus, this currency is known to be the most trust able currency in this world (Lawful and Good).



* Gold: Neutral Good

The value of Gold never becomes zero because Gold itself has its own value as a commodity. Gold has been used as the most frequently used currency in the human history. The value of currencies used to be fixed with the convertibility to Gold. Nowadays, both Gold value and the value of all currencies moves flexibly. However, Gold is still considered as the safe asset to keep especially when the world financial situation is unpredictable and/or under a severe crisis. All in all, Gold is a neutral character, and always a good last resort for investors to secure their wealth.



* Euro: Chaotic Good

The newly introduced common currency in some European countries. Due to the compromised design of the fiscal structure in the Eurozone economy, this currency market is in a big chaos, and then also causes chaos in this global economy. Originally, this currency has a good aim, but its introduction induced to the chaotic consequence. The monetary policy by European Central Bank (ECB) is very rational and trustable, and realises the economy will not be stable unless the fiscal structure is reformed. The monetary policy still has a rational decision making power, and there is still a good expectation of this currency's future. Nonetheless, the attempt of introducing this currency under such a unique monetary system is very challenging, and it is still not sure whether this attempt becomes successful or simply fails.

Please read my essays about the European Union economy shown in the following link:
http://art-blue-liberalism.blogspot.com/search/label/European%20Union



* British Pound Sterling: Lawful Neutral

The value of this currency is always fluctuant so that not so good to trust its value but not bad to distrust. The monetary policy by Bank of England is relatively rational and proactive to the economic situation concerning the UK. Both the value of this currency and the monetary policy seem to always follow the natural law of this global financial market. The influence of the money supply of this currency is neither good nor bad.


* Japanese Yen: True Neutral

This currency is always a very neutral currency in terms of its action and characteristics. Japanese monetary policy is very passive to both Japanese and the world economic situation. There is no motivation of the monetary policy encouraged by any objectives. People still fairly trust this currency but not as much as the currencies in the Western world and the commodities.



* Russian Rouble: Chaotic Neutral

Although Russian economy has gained some credibility, her market situation is still unstable. This aspect caused her currency value is not so stable. It is still influential but does not have much unique characteristic yet.



* US dollar: Lawful Evil

The excess quantitative easing seems to stimulate neither US economy nor the world economy. This depreciates the value of this currency very sizably so that many investors feel very unsecured to keep this currency. However, the volume of this currency's money supply still has an enormous influence over this entire world economy. The monetary policy plays the game fair, and does not betray those who are royal to the USA and her economy. However, as soon as the US sees someone as an enemy of the USA and her economy, the punishment toward this enemy is very severe. In the history, this currency has acted as a leader of the world trade. However, the value is very fluctuating, and always suddenly changes not only its monetary policy but also the international policy such as termination of the Bretton Wood system. It still follows the international agreement on the international finance and trade, but it is known as a bully.



* Oil: Chaotic Neutral

Oil is a commodity which is frequently traded as a financial asset as well. In particular, since the derivative trade was introduced, Oil has been traded as a financial asset. Oil is an important natural resource for many economic activity so that the contingency of its value fluctuation is extremely big in the global financial market. Especially since the derivative trade started, the value of Oil has become very fluctuant so that the movement of its value severely affects people's life. In addition, the OPECs' political situation is very unstable, so the policy made by the OPECs often tends to be very bully for both the real market and the financial market in this world. It is neutral by means of characteristics because the value of Oil is dependent on not only by the OPECS, the suppliers, and the financial traders, but also the real market situation such as the demand for Oil and the technology of Oil usage. There are so many variables influencing the value of Oil.


* Renminbi: Chaotic Evil

The utterly selfish Chinese monetary policy caused the havoc in this global financial situation! Even though China joins WTO, it has never made any consensus with the organisation members. The artificial increase in the money supply to artificially reduces its value to increase the trade surplus in terms of the current account takes place, and then it induced a chaotic currency depreciation race among many countries. Although Chinese economy has grown to become the 2nd largest in the world, nobody does not rely on Renminbi as a reliable monetary asset. China should have realised that, although Chinese economy produces a trade surplus in their current account, they certainly make a significant loss in their capital account.

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