More Dollar Nonsense

First, we had the breathless The Demise of the Dollar piece from the Independent’s Bob Fisk claiming that several Gulf countries, developing nations and Russia have been in ‘secret talks’ to discuss dumping the greenback. And now we have the New York Post joining in with an article announcing the dollar has lost “reserve status to the euro and yen.”

With Fisk — a journalist who has no economics background – the UK Independent didn’t even seem a jot red-faced when virtually every country mentioned denied flatly being involved in such talks. Fisk had no sources on the record and no details of where and when such talks were held. At least the New York Post had some currency traders on the record spouting off.

So what evidence does the Post’s Paul Tharp have for the claim. Well, apparently banks (which ones?) put 63 percent of their new cash in euros and yen in the past three months and Tharp says that is a “complete reversal of the dollar’s onetime dominance” when it comes to reserves.

Hmmm. So no longer the world’s reserve currency despite the fact that 62 percent of all currency reserves in central banks are in dollars?

A reality check is needed here. Yes, the dollar is going to have to share the stage with euros and yens and some other currencies in the future. This will mark a decline for the U.S. Sure, there is an evolving change in the order of power and developing nations such as China, the Gulf states, Brazil and India want more influence at international institutions and on the global financial system. And sure too there has been a long debate about pricing oil against a basket of currencies. But that is all a long way from how Fisk or Tharp write.

None of this is going to happen overnight. The last thing any of the developing countries want is a further decline of the U.S. dollar as they hold so many in their reserves. China and developing nations need an economically vibrant U.S. as a market to sell to. The U.S. will recover — so even will the UK (!) — and there will be in economic terms an even more multi=polar world — that is no bad thing for the world or the U.S.


Gagging the Guardian

Very troubling report from the UK Press Gazette about the Guardian newspaper receiving a High Court injunction preventing it from reporting on a written question posed by a Member of Parliament to a government minister. The question was placed on the House of Commons Order Paper and has immunity from libel proceedings. Carter Ruck are the lawyers involved and it looks as though the unprecedented move may be to protect an oil trader.

Future of News: Matching Readers and Advertisers

A lot of sense from Alan Mutter, former newspaper editor and now a new media maven and blogger, in this interview with mediabistro. He echoes a lot of my thoughts on how the news business has to develop, if professionally generated newsgathering and reporting is going to transition from the old to the new.

His position is the same as mine: there are only two options when it comes to monetizing the news – namely, charging for content or relying on advertising. Charging for general news has failed when tried in the past and will continue to fail despite the upcoming efforts of the likes of Rupert Murdoch. Readers may pay for specialized information and niche products – business information primarily – but otherwise they have plenty of free sources of news to choose from.

Advertising has been the real financial bedrock of news in the past and will continue to be so but only if the industry becomes far more sophisticated in matching content with audiences and advertisers and to do that publishers have got to understand their audiences far more and to gather much more information about them. As Mutter notes: “if publishers owned that information and could sell it, [they] could sell advertising at a much higher rate than they can today. If publishers owned their own system to capture demographic information about their readers and the content that they are reading, they could really gain a considerable amount of the power that they’ve lost in terms of being able to sell and the profits that they can extract from that business.”

Trawl through the online versions of newspapers. How many request registration and secure even basic information of those viewing their content? NGOs – from think-tanks to charities – have been a lot more sophisticated in trying to finds ways to identify their traffic and the audience landscape than many media companies.

An entrepreneur, Mutter has been pushing Viewpass. “Our idea is to create a well-known brand and get a lot of affiliates — in the interest of getting people to register with the service so that we begin to track their activities (who they are, where they’re living, what they buy, what we know about their families, and also what they’re reading…)…Publishers on the ViewPass system — if they are able to capture a holistic view of the person’s reading patterns as well as deep, detailed demographic data about consumers, publishers will have an unsurpassed advantage in the future, when it is all about creating ‘audiences of one in the moment.’”

Spot on. I like especially his comment: “Modern advertising is going to be like nano-surgery.”

Bloggers Must Disclose Gifts When Newspapers Don’t

The Feds want bloggers who review products to disclose any connection with advertisers and whether or not they were paid by advertisers. The move from the Federal Trade Commission is based on the principle of transparency. From the perspective of wanting to see truth in advertising there is nothing wrong with the Feds move – some consumer protection on this front seems necessary.

But the Feds are over-reaching surely when they want bloggers to indicate when they received free products. As a lawyer at Manatt Phelps & Phillips, a firm that represents marketing groups, commented, “If a product is provided to bloggers, the F.T.C. will consider that, in most cases, to be a material connection even if the advertiser has no control over the content of the blogs.” I don’t recall newspapers or broadcasters being required to reveal if they received a free product. How else can you review unless you have a vast expense account?