Green back

The dollar, for all its blemishes, is the least hideous-looking. So far this year it has risen against the other main currencies (the yen, pound, and euro) that are traded internationally and held as reserves by central banks.

The case for a further drop in the euro against the dollar has more than just momentum to back it. Business cycles favour it: the euro-area economy is picking up speed again, but America’s recovery is more advanced. The pressure to tighten fiscal policy in some parts of the euro area will make it hard for the European Central Bank to even consider raising interest rates. A weaker euro also addresses the deeper cause of the present crisis.

A cheaper euro hurts America, which will feel it is owed a chance for export-led growth after almost ruining itself as the world’s main consumer.

Are there any beautiful currencies left? A handful had comfortably outpaced the dollar this year before the latest market tremors had investors grasping for greenbacks. Two such currencies are the Australian dollar and the Canadian dollar. Both are issued by rich countries with stable banks that have not sullied the public finances. Another is the South Korean won. Brazil’s real may over time develop as a reliable store of value. The trouble is, securities issued in these currencies are a tiny fraction of those available in the world’s four main currencies.

1) In a world of ugly currencies, the dollar is sitting pretty.

2) A weaker euro does not help Greece, Portugal and the rest compete with Germany, but it at least gives their firms a chance against imports from outside the euro bloc.

3) The lack of scale and liquidity limits the role of the yen, pound, and euro as reserve currencies.

4) There are many other stable currencies which have certain plain qualities in abundance, and they can compete with the dollar successfully.

5) Treasury bonds, with their liquid markets and unique issuer, look prettier.

1. Speaking

a) Work in pairs. Take it in turns to speak for about three minutes on the following topic. Before you begin, spend a minute thinking about what you are going to say.

Speak about money

You should say:

1. Can you imagine life without money?

2. Do you know anything about the history of money?

3. What kinds of money do you know?

4. What are the dangers of using a credit card to pay with instead of money?

5. What do you know about digital money?

6. What is an ATM?

b) What do you know about a barter economy?

Organise your answer into four paragraphs. You may wish to use the useful expressions below in your answer.

1) Introduction to the topic __________________________________

2) Advantages

There are several obvious benefits, such as ___________________

Another positive aspect is _________________________________

3) Disadvantages

The impact has not all been positive _________________________

The most common criticism is ______________________________

Another negative effect is __________________________________

A final drawback is _______________________________________

4) Summary and own opinion

To sum up ______________________________________________

In conclusion, I believe ____________________________________

The advantages/disadvantages outweigh the disadvantages/advantages__