So, on average, the Fed is going to make profits even without the assets backing currency notes.
If another Middle East country were to revalue or float its currency, assets denominated in that currency would automatically appreciate against the dollar.
When a currency drops, the nominal price of hard assets in that currency generally rises.
Olympus's net loss narrowed as a weaker yen boosted the value of its foreign-currency assets, though soft digital-camera sales still hurt its bottom line.
The irony is that Japan won't be recycling its savings and trade surpluses abroad into high-yield foreign currency assets as much as in the past.
In economic textbooks currency movements counter the differences in nominal interest rates between countries so that investors get the same returns on similarly safe assets whatever the currency.
But they are buying assets in a currency that is steadily losing its worth as a store of value, which should presumably be set against any possible advantages for their exporters.
Low net worth individuals owning a high proportion of foreign currency assets would likely need to sell some of these assets if their cash deposit holdings (in Japan) did not cover their (immediate) needs.
In this scenario, fixed income assets tend to suffer while inflation-hedging assets benefit from the currency devaluation.
The closer to the dollar it gets, the better for investors holding assets priced in that currency because as that currency appreciates, so does the investment.
The bleaker outlook for the yuan would make investors more cautious about buying assets denominated in the currency, like the dim sum bonds that until recently had been dominated by a desire among global investors to bet on yuan's rise.
One reason is that their usual sources of capital, institutional investors, hitherto often trapped by regulations requiring them to keep a certain proportion of their assets in their domestic currency, are now, thanks to the euro, able to spread their wings.
On the non-operating side, the rapid depreciation of the Korean won against the US dollar in September resulted in foreign exchange-related losses of around 420 billion won due to translation of foreign currency- denominated assets and liabilities.
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German banks and companies, in a mirror image of what would happen in Greece, would suffer from the sudden devaluation of euro assets outside the new hard-currency zone.
The M1 is a very liquid measure of the money supply, as it contains cash and assets that can quickly be converted to currency.
Currency traders are rapidly shifting assets to countries seen as less likely to try to weaken their currencies, amid concern that the fresh round of US monetary easing could trigger another clash in the "currency wars".
In addition, the rapid expansion of the money supply causes the currency to lose value against hard assets and foreign currencies.
Instead, such wealth, if it does stay at home, is being parked in whatever assets might bring a speculative return or a currency hedge against a falling U.S. dollar.
If there is ever a collapse of the euro, being invested in assets that could be denominated in a German currency would amount to "catastrophe insurance, " said Peter Papadakos, of Green Street Advisors.
At least 80% of their assets earmarked for policyholders must be in the same currency as the claims.
It is true that Russia's problem is a lack of hard currency, not a lack of hard assets.
Hawallah is a recordless, traditional system widely used to change currency, send money abroad, hide assets from tax authorities in South Asia and the Middle East.
Much of the recent weakness simply reverses the earlier safe-haven flight to dollars, a sign of investors' optimism about riskier assets rather than their fears about America's currency.
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The idea that using borrowed money to buy assets is the smart road to riches might lose currency, changing attitudes to home ownership as well as to parts of the finance sector such as private equity.
When currency markets become over-inflated, hard assets like commodities come into more favor with investors.
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Your currency is devalued, stocks and other risky assets will rise, and inflation will slowly, but surely start to creep in.
Martin is also bullish on Time Warner because of its acquisition of cable operator Adelphia, which will be accretive to earnings and create a "separate currency" for the company's cable assets.
Then unless an outside patron provides the central bank with an infusion of new, valuable assets that it can sell to soak up the excess currency, the unwanted currency has to stay outstanding.
To add to its woes, the debt crisis in the eurozone and weak recovery in the US have seen many investors flock to safe-haven assets such as the yen, resulting in the Japanese currency strengthening against the US dollar and the euro.
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In Asia today the assets and liabilities are mismatched not only in duration but in currency.
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