certain behaviours come forward whenever there is a lack of faith.
media coverage, for the sake of its definition, does not help, at all. their function is le catalyst. the age of media pushing forward humanity is not over, but fear hungers for information that feeds on its own fear. vicious circle. and media feeds to that.
government interventions are inevitable, even for the most anarchist minds. the foundation of free market, as far as i understand, is the collective behaviour of self-interests rather than altruism. Self interest means differences, a boundary that distinguishes one from otherness.
hence of course government will have to do something if it can, so as to define its one existence, that can be done and done by no other. i'm the boss. period. even though i may not know anything.
modernity made people believe in deliberate changes as the answer to everything, machines, laws, systemized morality, and therefore it is inherently contradictory to the idea of freedom. contrary to what the world of democracy tells themselves, what they are enjoying is not freedom, but leisure and complacency. and people are doing whatever they can do to keep that laziness.
i've been asking myself in recent weeks, is this the form of chaos that i so eagerly fanthomed? i found that it is not, on the contrary, things have become extremely predictable. something cannot be chaotic if everybody knows exactly what is going to happen, or can it? but we are just too scared and blind to admit it.
i'm feeling more optimistic as the days go by. amen.
m.
Thursday, October 16, 2008
Saturday, October 11, 2008
EXCHANGE RATE
Disclaimer: the intention of this article is for intellectual entertainment only, rather than serious economic and financial advices. Any consequences due to actions taken as a result of reading this article, or perceiving representations of this article through a third party, will not be the responsibility of the author.
Exchange rate can be in a simple way considered as a function of demand and supply between two currencies. Considering what money does essentially is to purchase local goods and services, including interest repayments due to savings in banks, an exchange rate really is just a love affair between two economies and the question is who's paying more for it.
Australian dollar plunged in the last couple of days because the world economy melt-down. No, really. Australia is a commodity based economy that sits on resources and energies. The world craves for aussie dollars whenever they want a new building built, or new cars, or railroads, because Australia has loads and loads of them, and what's more, because it is closer to the biggiest consumer of steel, i.e. China, than, say, India or Brazil.
But what happens with the current crisis is that the markets are expecting the economic developments globally to drop and the demand for these natural resources would be the first to plunge. So financial institutions seek for refuge away from commodity based economies and put their money away from the australian dollars to safer havens such as government bonds or precious metals.
The thing with market speculation is that the buying actions are always due to exaggerated greed and the selling actions are driven by blown up fear, so the actualized crash in the dollar value may not have honestly reflected upon reality. But the theory stays. There's no rush immediately to absorb aussie dollars even at these attractive levels, yet. Clouds of uncertainty should be expected to clear in the following week or two.
Some key things to pay attention to:
Oil price, commodity prices, Chinese building sector figures, but a rule of thumb is the oil price, wait for it to stablize, if it ever does.
Exchange rate can be in a simple way considered as a function of demand and supply between two currencies. Considering what money does essentially is to purchase local goods and services, including interest repayments due to savings in banks, an exchange rate really is just a love affair between two economies and the question is who's paying more for it.
Australian dollar plunged in the last couple of days because the world economy melt-down. No, really. Australia is a commodity based economy that sits on resources and energies. The world craves for aussie dollars whenever they want a new building built, or new cars, or railroads, because Australia has loads and loads of them, and what's more, because it is closer to the biggiest consumer of steel, i.e. China, than, say, India or Brazil.
But what happens with the current crisis is that the markets are expecting the economic developments globally to drop and the demand for these natural resources would be the first to plunge. So financial institutions seek for refuge away from commodity based economies and put their money away from the australian dollars to safer havens such as government bonds or precious metals.
The thing with market speculation is that the buying actions are always due to exaggerated greed and the selling actions are driven by blown up fear, so the actualized crash in the dollar value may not have honestly reflected upon reality. But the theory stays. There's no rush immediately to absorb aussie dollars even at these attractive levels, yet. Clouds of uncertainty should be expected to clear in the following week or two.
Some key things to pay attention to:
Oil price, commodity prices, Chinese building sector figures, but a rule of thumb is the oil price, wait for it to stablize, if it ever does.
starbucks
From a distance, the Starbucks model seems to be the ideal model of a market mechanism in this era. It is extremely big on one hand, being a multnational franchise with the maximum bargaining power for material prices, wages and resources allocation, extremely small on the other, being able to fit in any block of buildings on the planet with its green coloured logo and minimum requirements for spatial strategies.
It worked like magic in Asian cities, bringing the franchise an elite Manhattan fifth avanue aura to newly developed cities like Shanghai and Shenzhen, powerful enough to slowly change the food culture in local cultures.
A friend of a friend visited Melbourne from Malaysia and over dinner in Tiamo we asked her what kind of coffee she liked. "Oh, you know, the Starbucks type" Silent for two seconds. we pursued further "what Starbucks coffee?" with a tone of sarcasm. But in fact it makes perfect sense, Starbucks offers coffee in a very efficient model, large cups, and a comfortable indoor environment where one will just go to read a book for hours without being bothered. In fact the company always proudly said that people will just pay to have the Starbucks experience without the coffee.
Then something interesting happened. Without any massive protest by the local community, quietly and slowly, on Lygon street where the coffee shops are everywhere, Starbucks closed down. The reason is quite obvious. The Starbucks model simply fails to capture the rhythm of the Carlton area. People don't grab and go with their hot cappucino as they do in New York, they expect good coffee, and what's more, friends and families come in small groups to dine on the street with an expectation of that noisy, human, sometimes slow Carlton-ness. People don't rush to anywhere after their caffeine fix. They look for cakes, flowers, books, movies, and sometimes nothing, just plain conversations with each other. It's almost the opposite of everything this international franchise provides.
Then I start to wonder if this can be that little niche for our observations and research. What the Google map shows and what it does not show. The rhythm of urbanity. Really small things that touch you. And really small things that connect with each other to form another sense of free market, in no way a market of homogeneous product providers. This is what we try to find from here, small things, which are also extremely large and solid things.
max.
It worked like magic in Asian cities, bringing the franchise an elite Manhattan fifth avanue aura to newly developed cities like Shanghai and Shenzhen, powerful enough to slowly change the food culture in local cultures.
A friend of a friend visited Melbourne from Malaysia and over dinner in Tiamo we asked her what kind of coffee she liked. "Oh, you know, the Starbucks type" Silent for two seconds. we pursued further "what Starbucks coffee?" with a tone of sarcasm. But in fact it makes perfect sense, Starbucks offers coffee in a very efficient model, large cups, and a comfortable indoor environment where one will just go to read a book for hours without being bothered. In fact the company always proudly said that people will just pay to have the Starbucks experience without the coffee.
Then something interesting happened. Without any massive protest by the local community, quietly and slowly, on Lygon street where the coffee shops are everywhere, Starbucks closed down. The reason is quite obvious. The Starbucks model simply fails to capture the rhythm of the Carlton area. People don't grab and go with their hot cappucino as they do in New York, they expect good coffee, and what's more, friends and families come in small groups to dine on the street with an expectation of that noisy, human, sometimes slow Carlton-ness. People don't rush to anywhere after their caffeine fix. They look for cakes, flowers, books, movies, and sometimes nothing, just plain conversations with each other. It's almost the opposite of everything this international franchise provides.
Then I start to wonder if this can be that little niche for our observations and research. What the Google map shows and what it does not show. The rhythm of urbanity. Really small things that touch you. And really small things that connect with each other to form another sense of free market, in no way a market of homogeneous product providers. This is what we try to find from here, small things, which are also extremely large and solid things.
max.
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