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Last Updated: Wednesday, 21 November 2007, 12:10 GMT
Is the dollar losing its lustre?
Briefcase full of dollars

By Finlo Rohrer
BBC News Magazine

It's the lingua franca of currencies - a symbol of wealth in movies, music, backpackers' pockets and central banks all over the world. But will the dollar's current doldrums end all this?

The dollar is suffering. Rarely a day passes when something is not written about its weakness against the pound and the euro.

The pound is stronger than the dollar, holla
Sway, UK rapper
Since World War II, when the influx of GIs into the UK and the triumph of the American economy on the world stage ushered in a new era, the dollar has been a symbol of US industrial and cultural dominance, as well as of the glitz and glamour of the world's ultimate showbiz nation.

But in this era of uncertainty, will the dollar stay iconic or will it lose its lustre to the euro or the Chinese yuan?

IN POPULAR CULTURE

In hip hop music, the dollar is ubiquitous. Unsurprising, as it is a scene dominated by American stars and infused with US culture.

Jay-Z
Jay-Z waves euros in his video
In 1996, P Diddy sang "It's all about the Benjamins", referring to the slang for his beloved $100 bills, which feature the head of inventor and statesman Benjamin Franklin. Rappers also like to refer to "dead presidents" because of the heads that adorn the lower denomination bills.

The song is a celebration of a genre, which has one sector - gangsta rap and its inheritors - that is dominated by commodity fetishism of a very American character.

But there are cracks in the shining symbol of the dollar in hip hop, with a recent video by Jay-Z - known almost as much for his reported business acumen as his music - where he riffles a wad of 500 euro notes.

And 1Xtra DJ Semtex says while the dollar is obviously important in hip hop, not giving in to the temptation of using such Americanisms is key in maintaining a British identity.

UK rapper Blak Twang sings about "Queen's heads" rather than dead presidents, and another, Sway, sings "the pound's stronger than the dollar, holla".

"He isn't just talking about financial rates and the IMF, the whole English vibe is stronger," says Semtex.

David van Day and Theresa Bazar
Dollar's David van Day (left) is affected by the weak dollar
Away from hip hop, the dollar is still associated with glamour, as David van Day, singer with 1980s group Dollar can attest.

"We needed a name and we had been watching Arthur Hailey's The Moneychangers with the sound turned down. Every ad break a dollar sign kept on coming up. I said I would like to make lots of dollars... it sort of stuck. It was very glitzy and Hollywood.

"The other reason was I thought every day people would see the name dollar on the back of the money pages and hopefully there would be some subliminal link," he jokes.

Even Day is affected by the weakening dollar, as he is currently selling his home in Hove and planning to purchase a holiday home in dollar-pegged country such as Barbados.

Clint Eastwood
A Fistful of Lira wouldn't sound right
In the world of movies, the dollar is king. The dominant film industry in the West is Hollywood. Hollywood is in the US, and the US uses dollars.

The classic Sergio Leone western was titled A Fistful of Dollars. Even the Italian title was Per un pugno di dollari. A fistful of pesos or lira just wouldn't sound right, even though the town where the film was set was on the Mexican border, the film location was Almeria in Spain and the director was Italian.

However, the movie business will continue whatever the current economic situation. The falling dollar might even encourage foreign film producers to do more location work in the US, suggests film critic Kim Newman.

IN THE LANGUAGE

Long before rap's references to "dead presidents", the dollar has been a fixture in the English idiom.

In the past 12 months alone, British newspapers made more than 50 mentions of "the $64,000 question". It's the phrase of first resort when describing the key question in an issue.

But few Britons will have ever seen the 1950s US game show of the same name, or even the 1950s and 1990s UK versions. Its adoption is testament to the power of the US cultural machine driving the iconography of the dollar.

John Ayto, editor of the Oxford Dictionary of Modern Slang, says the current weakness of the dollar and strength of the euro and yuan is yet to change the way British people speak.

"I'm not aware of any linguistic impact from the euro on the English language. There is a long history of colloquial use associated with the dollar - greenbacks and sawbucks and lettuce."

IN THE BACKPACKER'S POCKET

Away from the abstract, real dollars can typically be found in the pockets of backpackers and business travellers. There are countries where the local currency is sufficiently unreliable to necessitate taking some hard currency. For many, the only choice is the dollar.

But there are some places, such as the Taj Mahal and dozens of other sites in India, that no longer accept dollars.

Tourists in Paris
Have dollars, will travel
Rough Guide travel books advise taking whichever hard currency is easily convertible, which often means the dollar, says spokeswoman Liz Statham.

"That will mostly mean a choice between taking UK sterling, euros or US dollars. It is still a little too soon to tell whether the dollar will diminish as the currency of choice for travellers, as it is still the most widely recognised."

The dollar is still ahead, but the euro is rapidly catching up, says Richard Portes, president of the Centre for Economic Policy Research and a professor of economics at London Business School.

"You have about $400 billion in currency circulating outside the US and about $150bn worth of euros. The euro is more widely used than the deutschmark ever was."

IN ECONOMICS

The dollar is the dominant reserve currency worldwide, with a little under two-thirds of foreign reserves held in dollars and just over a quarter in euros. This dates from the Bretton Woods economic conference in the US in 1944, says Prof Portes.

Industry in China
Will the yuan's influence grow?
"Harry Dexter White [US treasury department official] asserted his authority over [John Maynard] Keynes and made the dollar the linchpin of the Bretton Woods system which lasted until 1971.

"The transition had been underway for some time, accelerated by the UK going off the gold standard during World War I, then by the pain the country endured going back on gold, only to go off again."

There has been some evidence of reserves shifting to more mixed options, and even as eminent an economist as Alan Greenspan has reportedly indicated it is possible that the euro could eventually overtake the dollar as the world's reserve currency.

And then there's the yuan, as China moves towards becoming the world's biggest economy. But Prof Portes warns there can be a lag. The US was the world's biggest economy by the end of the 19th Century but had to wait another half-century before its currency ruled.

"Typically it is the currency of the country with the most sophisticated, deep and broad financial markets. The US didn't have a central bank until 1913. It took time but by the middle of the 1940s it did have a sophisticated financial system and a much bigger economy."

More bonds for international debts are now issued in euros rather than dollars, Prof Portes says, and it may be that some global commodities, such as gas where the European market is massive, are eventually priced in euros. But the euro or the yuan are not likely to knock the dollar off the top of the pile for some time yet.

Whatever the economics of it, the cultural power of the dollar seems to be here to stay.


Below is a selection of your comments.

The dollar has traditionally being the currency of choice in Nigeria even though few has access to it. There's a very popular highlife artist called Fatai Rolling Dollas (Fatai Rolling Naira wouldn't have commanded enough respect). Numerous singers in the gospel and religious genre (just like those in the secular) also sing to God to grant them the mercy to be able to make and spend dollars, thought in the last few years they've started adding Euro and Sterling to such songs. Head or tail, the dollar is still a prime currency.
Demola, Lagos, Nigeria

Even if the economic significance of the dollar were to substantially diminish its cultural iconography has a different life. When we think of the dollar we are not thinking of its economic foundations - we are, as the article alludes, thinking of all the other associations: Wealth, glamour, eternal sunshine. This, I think, means the dollar will persist long after it has become another in a group of currencies brawling in an overcrowded ring. As long as we think of America as the 'Land of Opportunity' we will associate the dollar with success.
Julian, London, England

When I was at school in London in the early 1960s we used to say "Lend us half a dollar" meaning half a crown, or 2 and 6 as it was then.
David Ballantyne, Raleigh, NC, USA

For those travelling in Eastern Europe the impact of the falling dollar has been very apparrent: a few years ago prices for foreigners in countries like Romania and Bulgaria were universally quoted in dollars. As the dollar fell, more and more businesses moved over to the Euro and these days tourists with dollars are politely but firmly requested to change into the "more stable" local currency or to use Euros.
John Blake, Nijmegen, Netherlands

The term "Greenback", as misleadingly used in the link to this article has nothing to to do with the current US dollar. Greenbacks were 100% backed currency introduced by Abe Lincoln. They were removed from circulation in recent years. The difference is that greenbacks actually had a gold backed value, instead of an unbacked dollar as issued by the Federal Reserve, which (as was quite correctly pointed out earlier this week by the Iranian president) is just a piece of paper with no actual value.
Big Faced Boy, Worcester, UK

Most of the posts I have read thus far are not about US currency but really about the US. We are talking about the dollar here folks, not the fate of the U.S. The dollar has been 'outweighed' by the British pound for quite some time. It is no surprise that a strong European currency, such as the Euro is worth more than the dollar. Every currency, every country goes through periods of ups and downs.
Jeaneen , Corpus Christi TX, USA

Dollars were old Scots currency -so the name does not orginate in the USA. Perhaps not so glamorous then?
JM, Scotland

Dethroning the dollar in favour of the euro will be a long awaited iconic landmark. It will mark the definite point of no return for the euro and silence the euro sceptics once and for all. Let it come!
Roger Oliver, Le Soler, France

I was in Guatemala, very much part of the USD sphere of influence, in 2002. Even then, rates in small businesses were in both USD and euros. No mention of Sterling whatsoever. The fact that millions of international travellers carry the euro has made small business people all over the world take it seriously.

Where small scale trade amongst travellers has set the pace, supermodels and actors are now following and the money markets are on the trailing edge. So often, the professionals secretly wait to see the way the wind is blowing and then pile in. The euro will take over, simply because it is the actual and de facto currency for so many people; a blob of stability. People in the former USSR and Islamic world are much less hostile to the euro than the USD. If it ceases to be the currency of oil dealing, the USD will be finished. Get out now while you can. The USD, which is held up by its international position, could become the "Spanish Dubloon" of this millenium.
Des, London, UK

I have always thought that dollars look the way real money should: stylised, with class and history in equal measure, and distinctively unforgettable - the wide green bills with cream beneath. Euros on the other hand just look plain silly! A hotch-potch of unnamed cathedral windows which could be from anywhere in the EU! Shame the dollar's financial value falls short of its aesthetic value...
Nigel Reid, Doha, Qatar

Nothing is ever permanent. The US Dollar will withstand a lot more erosion than many other currencies but that doesn't make it invincible. Its reputation is certainly weakened.
Simon Densley, London

When the Dollar succeeded the British Pound as leading currency, the world did not fall into chaos or cease to exist. If the Euro should take the lead in future, then I suppose that will be o.k. as well. It just takes a bit of getting used to. When then someday the Chinese currency takes over, it will be the same story again.
Daniela, Berlin, Germany

Cultural power or not, the value of the dollar has long reaching implications. From US imports and exports, to tourism. I'm especially curious about the value of the dollar as I am an American living in Britain. My English wife and I are considering moving to the United States for the cheaper and larger houses, but if we do, the decline of the dollar may abruptly end our frequent travelling due to its weakness compared with the pound and the euro. However, it would be great to continue to get 2 dollars to 1 pound if we decide to buy a house there in the future.
Richard, St Albans, Herts

My company sells products in US $ but is headquartered in Canada. We have seen a wide re-balancing of exchange rates involving the US $, C$, the Euro, the pound Sterling and also currencies used further eastward such as the Turkish Lira. We have decided to stop selling our products in US $ in Europe and start selling in Euro's. Should have done that long ago anyway, but the Euro seems to hold the best longer term stability.
Maarten Kronenburg, Roosendaal, Netherlands

It seems to me that for the Euro to be a reserve currency it has to be accessible. That accessibility will come if the Euro nations were willing to run deficits in their balance of payments. That means, in short, a willingness to open up trade and deal with the inevitable re-structuring of their economies that massive increases in trade would entail. Some people might welcome a restructuring of the Euro nations' economies, while other people would want to resist change. Thus, the making of the Euro as a reserve currency quickly becomes a political question, and a hot political question at that.
Eric Sandquist, Philadelphia

The euro will never permeate popular culture in the same fashion that the dollar has. The dollar brings associations of glamour, opulence and ostentatious, self-aware style. The euro is a synthetic bureaucratic creation devoid of any heritage or character.
Matt Wood, Oxford, UK



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