Posts Tagged ‘Mexico’

Japan, Mexico, Australia and New Zealand’s Currency Falls

Friday, March 6th, 2009

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Japan’s yen will fall to 102 to the U.S.’s dollar as of tomorrow. The yen had been as strong as 87.12 to the dollar in January and has lost 8.8% since then. The forecast calls for the yen to fall 4% more in the next 3 months. Mexico’s peso has dropped 32% since September. The peso is 16th out of the top 16 most-traded currencies, showing the largest drop and the worst performance also since September. For the fourth week in a row, Australia and New Zealand’s dollars fell against the U.S. dollar. The dollars also fell against the yen. Australia’s economy shrank in the fourth quarter and grew less than expected in January. What is going on here?

Though misery loves company, I don’t think we (by “we” I mean the United States) would wish our economical woes on any other country. So is our economy falling because of the currency issues in foreign countries or are they failing because of our falling dollar and failing stocks?

Because the yen and other Japanese accounts are declining, their investors started and continue to purchase foreign securities. In February, the yen had its worst monthly drop in 13 years, and Japan’s overseas stocks and bonds rose to record numbers. At the same time, Japan’s Prime Minister Taro Aso’s disapproval rating also rose to record highs. Carry trades could have helped Japan borrow foreign currencies with low interest rates and invest in nations with high borrowing costs. Don’t think that the U.S. is safe because our big investors could start purchasing foreign securities also, starting this whole downward spiral.

Mexico’s peso fell 1.4% to the U.S. dollar after an announcement of the country’s currency commission regarding changes to the foreign-exchange auction system. Yesterday the peso was down another 1% to 15.39 to the U.S. dollar. The same currency commission said it will offer to buy $100 million worth of pesos a day in order to guarantee that the central bank’s projected foreign reserve accumulation is sold. Even high ranking Mexican officials say that this will not be enough to jump start Mexico’s economy and failing peso. Mexico is in a state just below panic at this time and if things continue falling, the U.S. is going to have to step in before this goes too far. Just like any other nation, the United States could end up like this at any moment.

Australia has an overall negative dynamic which will be the main issue pushing their dollar lower. The Aussie dollar fell from a value of 64.3 U.S. cents two days ago, to 63.9 U.S. cents yesterday. Even New Zealand is feeling the pain, their dollar falling from 50.2 U.S. cents to 49.8 cents yesterday.

The thing to remember is for one, we are not the only ones feeling this bite of economical downfall. Different countries are hurting to different extents and in slightly different ways, but we can all empathize because if we’re not there, we have been or know we will be. Besides focusing on rebuilding the United States’ economy, we have to remember that the world will follow. This is not the first time we have seen crises and it won’t be the last. Your best weapon in this battle is staying informed and using that knowledge to the fullest.

The Story of Change- No not President Obama, I’m talking about money here!

Monday, March 2nd, 2009

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The story of American money started more than three centuries ago. Before this, settlers mostly bartered goods for goods. Crops like tobacco and corn and pork and butter were widely used. Learning from the Native Americans who used stringed clamshell beads, or wampum, European colonists adopted the wampum among trades with the Native Americans and then, amongst themselves.

The Massachusetts Bay Colony contracted John Hull to begin minting coins. Hull set up a mint in Boston and began producing “NE” (New England) coins in 1652. The NE coins were very easy to counterfeit, only having NE on one side and XII on the other. The coin was redesigned from 1667-1682. Eventually as more and more people came to the New World and brought their money with them, the settlers and colonists relied on foreign money for buying and selling. Money from Europe, Mexico and South America could be found at any given time. These coins mixed in with the NE coins and wampum and were all used for purchasing, barter and trade.

Early in the 18th century, a large amount of copper coins were imported from England and Ireland for the purpose of making more coins for the colonies. In 1776, dollar-sized coins were produced with a sundial and the inscription “Mind Your Business” on the front and “American Congress We Are One” on the back. These pieces were struck in three different metals; those struck in pewter are scarce or rare, while the silver and brass examples as extremely rare. The Articles of Confederation, adopted on July 9, 1778, gave Congress the ability to place the value on the coins that were struck by each state. At that time, the states each had the right to strike their own coins, there was just no fluidity in their values until the Articles came about.

Finally in 1792 the U.S. Mint was established by Congress. The U.S. Mint makes all U.S. Coins and became an operating bureau of the Treasury Department in 1873. To this day, U.S. coins typically have a mint mark showing which mint it was produced by. The Philadelphia Mint has been the longest in continuous operation, since 1792. The Denver Mint began coin producing in 1906. The newest mints were the West Point, New York, and San Francisco which gained official status in 1988.

From 1965-1968 there were no identifications used to tell where coins were minted. In 1968 the mints resumed putting their initials on the coins. Coins minted in Philadelphia had a P or no letter, Denver has a D, West Point a W and S for San Francisco. To this day, look at your coins and right under the date there should be a letter telling you where that coin was minted and if no letter is present, your coin was minted in Philadelphia!

Coins’ designs and values have changed over the years from the half-penny to silver dollars. The designs will continue to change as society deems it necessary . For now, the coins in your pocket have come a long way to get there because there was a time when there was a lack of United States coins.