ips creatine includes people, loft, entertainment, people want to watch it. you have a lot of filmmakers as well now, who want it to be standard, like we want it to go places we want it to have, you know, to, to have the proper structure. but then we are also have few makers who think that or who want our fields to cross, you know, to the tilt. so the global or north and you know, for the war to see because we now need the, the exposure. we need the film industry to be developed to that will have, you know, people can actually get pete and be able to leave off their earning, asked creators, for me or my hopes and dreams for my career in the industry would be that. first of all, to tell stories that are very, you know, genuine to me, it's very important for me to toaster is i feel it to be seen by the world. ah, hello there. this is al jazeera and these are the headlines. millions of north

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hello, i'm rob matheson, this is counting the cost on al jazeera, your weekly looked at the world of business and economics this week, getting more buying for your buck. the dollars been on the up in 2022. what's next for the greenback? also this week, gold hasn't been doing so well this year, but could now did the perfect time for investors to pile back in questions over cryptic crypto prices up in sliding all year. we're going to look what's next for these in tangible assets as the industry struggles to regain trust . now the us dollar is stronger now than it's been for 2 decades. that's because of the federal reserve. what the central bank raises interest rates. it makes the green back more appealing to investors around the global, but the global economy is teetering on a cliff edge and the fears mount of

a world wide recession dollars a scene. it's a safe place to hold your money. now this shows how the doll has been doing against nearly all other g 20 economies. overall, the picture seems pretty good. the greenback rallied around 19 percent in 2022. the dollar is still strong, even though the u. s. economy has been weakened by the coven pandemic, and a threatening global recession. it's be going up going up, thanks to aggressive rate hikes by the federal reserve economic issues overseas and geopolitical uncertainty from the war in ukraine. but there's one big stand on the dollar versus the russian rule, but we're going to get into that later on to discuss all of this and join know by francesco, papa. dia francesco is former director general for market operations at the european central bank. he's also currently a senior resident fellow at the brutal thank thank. thank you very much. indeed for being with us. the dollar is still dominating the investment markets around the world, the currency markets around the world. and yet the u. s. economy has,

over the last few years because of the pandemic, primarily, but other issues being faltering. why is it that the dollar is still so popular still? well, that donor has characterised, you know, other currency has, 1st of all, the most to develop the sophisticated financial market in the world, then an economy that, notwithstanding, the current issues is still the most important economy economy in the world. then beyond that, there is the strength of the us as a country, merely to really, politically that remains of the most dominant country in the world. so it's no surprise that the it says here having to be the site for don't see the currency market in the financial world. one of the things i think that might surprise a lot of people is the fact that the rubel has been actually performing pretty pretty well. it's not more than 30 percent against the dollars in smart. and yet,

as we know, the russian economy is said to be struggling at the moment. what do you attribute that to? well, i don't think i would give a lot of weight that to that. first of all, we don't know how liquid the michael, the rubel is that we know that there are 4 in a change controlled. and then it's a fact that the inputs of russia just because the entrance have gone down very, that shall be so they can in, in high circles. so i would not take the strength of rouble as a sign the strengths of the underlying russian economy. we've heard stories for saudi arabia, for example, just recently said that it was going to do trade deals with china in remember, as opposed to other currency, which means of course, that saudi arabia is building up a stockpile of remember, does not in any way limit, saudi arabia in terms of its ability to trade for other countries, particularly against the dollar. well,

i mean there is no comparison between that i mean b and the dollar in terms of liquidity in terms of underlying financial market. where they heard what they hear about different countries putting on their reserves . you know, they may be, it's a pilot just to test the market just to see how it works. there is nothing substantial and the, the weight of the rain may be, for instance, in foreign reserve, is very limited on the cost of that. i mean, be, is one of the, of the, of the, the, are about these is a more political than an economic economic that there is a future for the re mean. be just that a future, nothing carrying in terms of people's reliance on the dollar. how much of it is done to the fact that as you were talking about before the dollars? so the structure that is built around the dollar is so strong that actually it would take a great deal to logistically and pick all of that in order to focus on another

currency. it's not a legitimate argument. is there a to, to some degree in national for people wanting to have to go to the effort of detached themselves and the dollar? well, there is no shame in the way it is called economic network, which is the clearest case for telephone, for instance. i mean, there's no purpose of having a telephony, if you have nobody on the other side of the line and the more people you can reach you, the telephone more, the telephone is wet. and that's the same with, with a dollar. i mean, there is a strong network effect then, but i would repeat is based on the stronger foundations, i mean, the only country that could resolve the dollar is repeating units, but it's fall behind in many, including the sophistication of the financial market. and everybody else is, is way, way, way below. what does surprise, a lot of people, myself included, is the exposure that many countries of around the world have to the dollar,

particularly at times of crisis when we see be the level of antagonism. for example, we see between russia and the u. s. and china and the u. s. and that the holdings of dollars and china, of dollars by china and russia still seem to be significant. do you think, given recent worse world events or countries like that, or perhaps going to try and move away from the amount of dollars that they have in order not to expose themselves to the level of sanctions that the u. s. can subsequently bring in? well, i think there is a difference between russia and china. i mean, the holding of dollars of china are being commensurate higher than the holding of the dollars by, by russia. so just this is a kind of a procedural point on your question. i'm sure there is the wish to move away from the dollar, but we're doing the wish and the realization. there is the fact that no other

currency is a said with the very partial exception of the euro dollar have the same liquidity, the same ability to trade, the same underlying force of the financial market. so yes, so there is a wish to do it, but then when it comes to it, it's very difficult to do it. and for instance, for china, but the killer, differentiating the trillions of dollars of reserves into other current it is very, very difficult. also, because any move of that kind would affect doesn't value of their own return. so you know, way they are caught into this and it's difficult to move away. yes. so they will try, but it's difficult to do it. i mentioned before uniform a director general for market operations at the e. c. be given your level of experience. how do you see the currency markets and the dollar market particularly moving forward in the next few years? are we going to see any significant changes the way that dollars and other

currencies are trading? well, the foreign exchange market is this, when it comes to large guarantees. so, so euro dollar, yen dollar stalling, euro is the most resilient or the most sophisticated market in the world. of course it doesn't have much of a structure in the sense that much of that just goes on bilateral deals. but it's a very strong market and it's a market that never stopped functioning, even during the most deep crisis. the only competitor to that in terms of creativity is the treasury market of the united states. but we know that there have been some trend mostly in that market as well. so i would say that for a change of mind could be the most resilient market being in the global financial, global financial world. so the reason need that to have more transparency into, into the market. and so i see that that could be more say in that in that direction

. but i don't think that there will be dramatic changes seen the way the major carriers are exchanged. francesco poverty, or we really appreciate your giving us the benefit of your expertise. thank you very much. indeed for joining us on kind of cost you welcome. so what's next to for gold? well, it's always being seen as a safe haven for investors. many turn to the precious metal to protect the hard earned savings when high inflation hits other investment products. but gold is denominated in dollars, so the strength of the greenback can have a significant impact on its price. well, with us now is on that he's the chief investment strategist for middle east of africa, the well known international brokerage all parties joining me now from london. very good to have you with us in your estimation, what's been happening to gold over the last year say thank you very much. know firstly, what's really precious global financial. the share included us and all that stuff

says this is trevor. the green back, as she pointed out, the green back to the us dollar had its strongest year in roughly 20 years. and we haven't seen the pace of us interest rate increases from the us be so aggressive in a generation. so essentially the strong for the dollar has pushed all global assets to lower, including us denominated assets such as god. so this is essentially what happens at gold practice. we still look up a long term goal is roughly $1760.00 to you. this is an all time high for gold, pretty much historically whether gold prices have dropped as much as 20 percent based on the dollar strength is recover and now, but the strength from the dollar, which is like a store to remain supported as much make gold crisis small, medium is it's all done to the interest rate rises with by the federal. are there other elements that could be playing into this as well? essentially, yes, the us interest rate rises up against this,

but we say the global economy right now. let's say it's a large piece of cake. k, just divide into different pieces. we've got us interest rate increases because inflation rates globally with god such to the global energy practice. of course, we're still seeing the drawbacks from the cobra and damage, and the impact of government are in and locked down at the same point because it's very unfortunate that's taken place in eastern europe. all of these factors altogether has been what driven the dollar towards, you know, its highest level and roughly 20 years. and we can't say to any one i selected all of these factors combined. i've really got a dollar at the same point. there is some hope that the dollar has peaked, which would be supportive to gold prospects and other global assets over the medium sound as well. so mr. ramos, in the event that interest rates, right? interest rates do come down. i would like to see people making an exodus from gold or and if so, where would they be likely to go or do they stick with it? actually, the concern is going to be with the likelihood because lower interest rate,

dictation, or science that we've seen a peak and interest rates, obviously, inflation to remain a very sustained level. we know this bunch signs of a cool down could actually increase to get towards precious metals like gold. and this is because the pace of the us interest rate increases, which is obviously the dollar significantly the share that's likely to cool down. so proceed proper taken on the us dollar. we are more than likely to see i rebound in gold prospects. and this is a trend that we're starting to see over the past couple of weeks in global financial markets were china and hysteria and russia are 3 of the main producers of gold in the world. what kind of impact does that demand have on their economies? if anything, well, if you're looking for the longer term go, practice is still very high. $1750.00 above this level would still be 10 years ago . the highest level we've seen the global financial crisis in time. what happened is we saw the peak in because it would go to 2000. we also saw a rebound source,

those levels and the beginning of the ukraine bowl. and since then, we should go down. but generally speaking of the longer term go, crisis is still strong. so this is still supported towards those economists produces gold at the same time, obviously. and of course, if we do a rebound increase in gold value ation, there should be positive news for those of producers also. so far it all seems very positive, but historically, speaking has ever been the time when gold prices are at least gold, as an investment has become really not worth that. and we've seen people moving away from it. and if so, what would be the signs that we should look for in the event that was likely to happen? this is an excellent point. i'm looking at point. so here is that the global economic concerns and the potential crisis where now is completely different to the global financial crash the 15 years. now, 15 years ago this was seen as like the birth of gold. something that really pushed all precious higher, but the same point then interest rates globally would be push slower. today we're

having a completely different set of forces pushing interest rates higher, which is being negative goal prices. at the same time, we do think best potential as long as you can see around the global economy continue to extend it right. course thing is cross there that we can see optimistic 2023 for gold. if you had any spare cash lying around with gold, be your 1st option or would you be looking at other possible investments as well? not necessarily because you have to follow the trend and very clearly the trend to being your friend in 2022. and that friend has been in the us dollar an uncertain times such as the very sensitive dynamics we've taken place right now in the global economy. the donor is still your best friend. hopefully we see a bit of a change towards the global circumstances that might mean the dollar. it's not so much of your best friend, and we can start to bring over friends into the mix, such as gold mail and we appreciate you being with us on kind of the cost. thank you very much indeed for your time, sir. well, that's not been

a great year for group to currencies, particularly the companies behind them. there still isn't much oversight of the market. and there are growing calls from regulators and even some crypto industry leaders for more controls that kind dominates the market and search by 300 percent at the start of the pandemic in 2020 investors. we're looking for safety, for economic volatility since and high inflation fuel shortages and the water ukraine are caused a sell off and perceived risky assets like stocks and crypto currencies. so the markets already volatile and key crypto lenders have seen a slew of other setbacks for the industry, including withdrawal limits on the collapse of the crypto giant, f t x, which would be causing more panic. and more cells. want to talk about those issues in more detail. let's bring in hugh robert space, director of research and analytics that conte insight in london. very good to have you with this. what's your assessment of how the industry has been working, say over the last 12 months or so?

oh, to bit of background 1st, because content we come to to be from a macro perspective. so when we're looking at an industry like crypto, we're really thinking, well point does this kind of new, relatively new industry start to behave a bit more like a traditional financial asset. and the short answer there is, for the 1st part of this year, it wasn't trading like a macro instrument. it was like an equity or commodity or any other risky asset. it was being driven by news that was specific to crypto. so it was nice things like the merge i guess for, for syria, but around early summer time, our model. sure. actually all the major currencies, bitcoin, us area, i'm all moved into new macro regimes. and what we mean by that is that all of a sudden they behave much more like traditional financial markets. they care about inflation. they care about what the state is doing. they care about what sister asset classes, whether they're dollar strengthening, with

a credit spreads widening. and the main message from that was in a period of high inflation and to the fed and others, central banks, hiking interest rates that was negative for risky assets including crypto. so the bear market was something that was entirely consistent with the kind of broad macro fundamental conditions. and how much is it also about faith? i don't understand a tremendous amount, but about crypto currency simply because to me it's incredibly technical. but to an outsider like me, it seems as though it is essentially based on the trust of the people that are creating the cryptic currency that is going to work and the trust of people investing in it, that it will work. but as soon as that trust is gone, then things start to come apart. how fragile is the market? would you say, even though it's at a mac or a macro economic stage that you're talking about? yeah, that's a very fair summary. i mean, in a way that the central tenant is how decentralization means if you remove a trusted,

i'm going to central counter party. now for traditional financial players. now, one of the big lessons from the 20082009 financial crisis was important of the counter party. you and i could have a bet now on whether the dollar is going to get stronger this year next year. and i might be right and you might be wrong, but if i say it was accountability, then you got no one to actually pay out your winnings. so the importance of the ex frost at the counter party is absolutely critical to the financial system. and as soon as you lose that trust, and that's obviously we've had a few blows already, but the latest f t x as obviously just taking this to a whole new level. so i think your summary is very fan. i think the short answer to your question is, this is done. i'm told damage to the industry as a whole, and you've got to think there will be some die hard to stick to the end. but anyone who is a marginal participant, you've got to think this is very scary news. how much of this is done to the

reliability for want of about a phase of crypto currency itself and how much of it know is about the efficient running of the companies which are supporting it as for example, the example, the used f t x. yeah, absolutely. so i think the that the 2nd part of that question is probably the most important part. i mean, they would just know what we can tell our i'm not a specialist in the area of regulation or compliance, but you know, the more news that emerged or than november with regards to the f t x story suggest a complete absence of control. so all the normal regulation and compliance checks that should be seen in the most basic one segregation of accounts. people who are depositing money with f t x. it was in the contract. that money should not be that electrons are trading on, and yet there was a back door side thing that money out. so that is just about basic one or one company policy company regulation. and if you, if you destroy that and it does

a lot of damage reputation, yes, it's going to again to be on your question is going to really damage trust or the last year or so we've seen or heard stories of a significant number of governments from a local level up to a national level investing and things like bitcoin and other crypto currencies. there are countries which are bringing it, are attempting to bring it in as legal tender. is that a mistake? or do you think that actually they are doing the right thing as long as the companies running it are regulated? yeah, i have no degree of specialization in this area, but i would towards that not being there, you can actually get a good thing. know a lot of the technology underpinning this now to block chain or some of the advantages that it brings are clearly beneficial for individuals for companies, for the broader system. but for it to operate from outside of any control has to be a mistake. in my opinion, so i think having kind of central bank digital tokens,

given the central central banks have to main roles. typically it varies country by country. but on the whole, central banks are there to fight inflation, keep inflation under control and oversee that countries. financial system and ensure stability. so they have a vested interest and ensure that there are no blocks on their watch. so central banks having involvement in this and the crypto industry to my mind is, is almost inevitable, taking the wider view. and i appreciate of course, that you know that that's what you do want inside. and if it gets to the stage where crypt occurrences are, do become regulated in a similar way to say regular banks. if they become more exposed to the macro economics that we see around the world, what's the benefit of them compared to regular currencies, for example and investments? one of the technical advances that it is used as the efficiency from

a kind of traditional financial market asset allocation perspective. if you like. the way that the traditional investor will think about things as well, given where we are in economic cycle, what's the best asset class to, to put my money in. so if we're in a kind of an economic boom, then you'll invest in risky assets like equities, crypto is going to be viewed as a risky asset, so it will tend to do well in good times. if we're asked that question we scenario as many people say or maybe sitting over in. ready session in 2023. then people will look for safe havens. now at one point, crypt i was how that as a safe haven. i don't think anyone would really buy that argument today. but the other argument that gets rolled out with script currency is an inflation hedge and actually we have the ability in our. ready models to look at the independent relationship between an asset and all the various factors including inflation and been going does do a good job of tracking inflation expectations. so these relationships have been flow. that's the whole point of the business on the white markets trade. but i can

see advantages for crypto over and above the, the technical, technological advances that it brings as potentially maybe the information. for example, here of it's a director of research analytics content site in london. we appreciate you being with us. i thank you very much indeed. thank you. and that is our show for this week. but remember, you can get in touch with us via what's up. use the hash tag, ha, ctc. when you do or you can drop us an email out, address is counting the cost at al jazeera dot next. but this more for you online that al jazeera dot com slash ctc, that's going to take you straight to a page and get individual port links, an entire episodes for you to catch up on. and that's it for this edition of kind of the cost. i'm rolled matheson in the whole team. thanks for joining us. the news and algebra is next. i all ready for the

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