The weakening dollar and increasing prices have not effected or resulted in the slowing down of growth of world reserves. Inspite of the declined dollar value, currency reserves of global central banks’ have seen a major upsurge in the first quarter of 2008, according to media reports. The increasing oil prices have not affected the reserves that much as far as saving is concerned. The increasing reserves are a clear indication of the strength of the world economy against whatever market analysts may say about the negative impacts of the escalating oil prices.

According to a recent report published by the International Monetary Fund (IMF), the world premier in controlling and monitoring global monetary health, about 7.4 percent of currency reserves have been increased from the previous three months. This makes the current currency reserve to almost $6.873 trillion.

The revealing of such data by IMF is significant, as about two-thirds of world’s foreign exchange reserves are directly or indirectly being watched and controlled by them. World leaders may now take the report seriously and stop fuelling speculation about a feeble economy.

With revelations of IMF’s data, all speculations should come to an abrupt end about the central banks possible intention of trimming extra cash reserves on their currency holdings. An increased reserve does not necessitate implementing safety guards against the declining value of dollars. Although, the dollar economy was very erratic during the recent past, the increasing currency reserves by the central banks, has once again brought it into the forefront that the dollar alone cannot restrict the growth of the world economy. According to the financial details of the last few years, it can be easily seen that after the launching of the Euro in 1999, the dollar’s share has been reduced from about 71 percent. Also, during the last few years it has not shown any spectacular improvement from its usual value.

The present reduction of the dollar’s share was never at such a low other than during the last decade. If you remember, it was in 1996 when 62.1 percent for the dollar’s share was recorded. In the previous quarter the share was 64.0 percent and then suddenly it dropped to 63.0 percent giving way to the speculations about a fallen economy. However, making all supposition meaningless, allocated reserves have increased by a huge 6 percent, thereby taking the net value to almost $4.322 trillion. At 63.0 percent, dollar reserves have touched the figure of $2.7 trillion - a comfortable reserve indeed!

According to Ashraf Laidi, New York based CMC Markets’ chief currency strategist, “the impact of the falling value of the dollar on composition valuations did play a factor in dragging down the dollar’s share of FX reserves versus the Euro”.

Increased currency reserves can be equated with the increasing value of the Euros, said a market analyst. Euro is increasingly becoming stronger against the value of the dollar. During the first quarter of 2008, the Euro’s share of allocated reserves have reached to 26.8 percent against 63.0 percent that of the dollar’s. Though, the growth of the Euro’s share is very marginal - it is only 0.4 percent hike from the previous quarter - even such minute changes have a greater impact for other complex socio-economic reasons.

A London based market analyst from Citigroup, Michael Saunders, observed, “The rise in the Euro’s weighting in Q1 mostly reflected the fact that the Euro appreciated sharply in that quarter — hence raising the value in dollar terms of existing Euro assets”. Of course, it has now been accepted worldwide that the currency value does not always determine status of the reserves. Though, the dollar and the Euro share major allocations of the reserves, other significant players in this regard are the Pound Sterling (4.7 percent), Swiss franc (0.1 percent), and the yen (3.1 percent) etc.

In consideration of the increasing oil prices which pose a substantial economic threat for sustaining growth and controlling food prices worldwide, finance ministers of G-8 countries have come out strongly favoring enhanced oil production, this strategy they hope will eventually curb the uncontrolled increase of prices and thereby stabilize fuel demands across the globe.

Finance ministers of G-8 countries constituting Britain, Canada, France, Germany, Italy, Japan, Russia and the U.S have recently concluded a two days brain storming session of talks in Osaka, Japan on ongoing trends of economic growth in view of the rising oil prices and increasing market demand for energy and food grains.

Terming the present situation as dangerous, the most powerful finance ministers of the world have appealed to the oil producing countries to boost productivity in order to avoid major economic crisis in very near future.

In a joint statement, they stated “We will remain vigilant and will continue to take appropriate actions, individually and collectively, in order to secure stability and growth in our economies and globally.” Simultaneously, they have also issued a warning saying “the world economy continues to face uncertainty and downside risks persist.”

Of course, market has seen a recent comeback after the great setback received from the U.S. housing fiasco and following credit crunch. But since the newly developed oil crisis, the world economy is once again facing “headwinds”, and this is giving rise to instability of the world economy.

The Osaka meet had expressed great concern regarding the deprecating economic front. “Elevated commodity prices, especially of oil and food, pose a serious challenge to stable growth worldwide, have serious implications for the most vulnerable and may increase global inflationary pressure,” stated reports.

Earlier, the United States, a major world economic player, had played a crucial role in averting the potential threat of dropping dollar values against the euro. Henry Paulson, the U.S. Treasury Secretary, had encouraged the possible intervention in the currency market for the best interest of U.S. economy saying, “…a strong dollar is in our nation’s interest.” Incidentally, the dollar saw an immediate comeback after the strong stand taken by the U.S.

However, there are many questions as to how exactly the U.S. plans to combat the challenges imposed by the short supplies of oil and food grains. Paulson has already warned against imposing of any “short-term solutions”, as that will not help fighting oil crisis in the long run.

The primary reason for the ongoing economic “headwinds”, as observed in the recent Osaka meet is the imbalances created out of the tight supplies of oil against the high market demand. Some ministers present in the meet had also expressed concern over the volatile geopolitical scenario and termed the same as major cause for the steep rising of oil prices. Another factor that has contributed greatly in the increasing oil prices is the weaknesses recently observed in the U.S. dollar. Although the dollar has recovered, the oil prices and food crisis continues to grow, giving a new challenge to the world leaders, particularly those present in the G-8 countries.

According to Paulson, the oil production capacity of the world has not changed for the last ten years while cost of oil has increased five times since 2002. Watching the trend, he has advised the lowering of government subsidies on oil and urged all oil producing countries to make higher investments in locating new oil fields and oil production. Warning against considering the problem as “the speculators’” view, Paulson has added, “We don’t want to misdiagnose the problem. And if you look at the problem, I think it’s pretty clear. We have not had an increase in production capacity in oil for the last 10 years.”

In spite the high pressure to increase oil supplies, Chakib Khelil, president of the Organization of Petroleum Exporting Countries (OPEC), has not revealed any ray of hope for immediate relief as far as the meeting of the high oil demands are concerned. Though rumors have it that Saudi Arabia may soon start producing an extra 500,000 barrels per day taking the country’s oil production to 10 million barrels a day.

The American dollar isn’t nearly as strong as it used to be, according to news that came about this week. Because the United States economy doesn’t look particularly promising at the moment, the dollar fell to a brand new low last week. This news, coupled with the fact that oil prices hit their highest points ever, leaves many economists in the United States with many new worries about the economy.

Among the problems with the US economy are the strangely low earnings from Bank of America, the continually slumping labor market, and the already slumping housing numbers. In addition to that, the Federal Reserve released a report on the economy that was anything but promising.
There has been a ton of pressure added to the credit market in recent weeks, as US banks might be looking at liquidation of their securities in the near future. This news also sparked the increased buying of US Treasury bills, which have long been a safe option for investors. This upswing shows that investors are concerned about the market’s direction and want to play it safe during this time.

Tom di Galoma, a chief executive with Jeffries & Co. had this to say in an interview with Yahoo News. “There are concerns about another rout in the credit market. Housing will be a drag on the economy for the next 12 to 18 months.”
There is also speculation among market veterans that another cut in the federal interest rate is coming either this month or the next. Most felt that the Fed would take action before December.

The government bond market also saw the yield on their three-month Treasury bill slip. The bill dropped 23bp to end up at 3.76%. This marked a three-week low. Other Treasury bonds also saw their stock drop in recent weeks, as the market has taken a hit.
The situation isn’t much better in Europe, where the ten year Bund fell by 4.32%. Over in Asia, the ten year Japanese government bond dropped a remarkable 1.64%, which is just one hundredth of a percentage point above the bond’s month low.
Over in the currency markets, the dollar has also seen a drop. It met a record low when compared to a number of different currencies in the last week. The Euro, on the other hand, made a record high number of $1.43 when compared to the dollar. Speculation has it that potential Fed interest rate cuts have played a role in effecting the situation.

Though there are certainly concerns over what to do about the dollar’s sinking value, all signs point to the federal government staying put at this point. All of the reasons for the dollar’s decline seem to be things that will sort themselves out if they are given the chance. Slumping housing numbers and low rate expectations are contributing factors that should eventually cool down as the value of the dollar increases.
As far as metals go, sterling saw a rise in its value this week. It hit a three-month high against the value of the dollar. This came as a result of above average retail sales data in the United Kingdom, where the economy seems to be heading in the opposite direction.
One of the primary concerns for the US economy comes as a result of the rising costs of US crude oil. With tensions in the Middle East continuing to grow, the price of a barrel of oil rose to nearly $90. This is an all-time high that doesn’t seem likely to come down anytime soon. Platinum and gold also look like they are headed into uncharted, record territory.

Unless you�ve been living in a cave for the past few years, you�ve probably noticed a huge increase in the interest in poker and in particular, Texas Holdem poker. This boom has occurred online with sites like party poker, on TV with the World Poker Tour and of course the first name in poker: The World Series of poker. The 2005 World Series, was the largest poker event in history. The No Limit Hold�em Final had 5619 entries that generated over $52 million in prize money and $5.2 million in fees and untold publicity to Harrahs. Joseph Hachem, was the winner of $7.5 million grand prize. Overall 45 world series events from June 2nd to July 13th generated roughly $100 million in prize money.

Even more impressive than than the boom in casino poker, is the huge size of the online poker market. It is expected to generate over $3 billion in revenues. At any moment of time, 10�s of thousands of people, mainly males, from all parts of the worlds at rooms including Party Poker, Poker Stars, and others. What�s even more interesting is that most of the money, upto 80% comes from US players; while the US Attorney General (and most state counterparts) have declared online gambling illegal. Unlike casino games or bingo, Poker is considered a game of skill in many state. But we�re not hear to talk about poker or it�s legality, so if you want more on poker and online poker in particular, i found this site helpful All Poker Rooms. In particular you might want to read The rules of Texas Holdem or if you�re like me, and can�t ever remember whether flush beats straights, check out Winning Poker Hands, if you are unfamiliar with the game of Texas Holdem.

Now, that you�ve got the big picture, the real question becomes, what is the impact of poker or more generally gambling on an economy. It was years ago that i heard one TV talking heads, labeled the US culture �the casino economy�. I don�t think their entire theory was exponded in the sound bite, but for me, it was a great description of the stock market/Internet hype bubble that popped in 2000 and the executives that scammed shareholders of Worldcom, Enron, Tyco and many others, steal the jackpot for themselves. This casino mentality has transferred to the current, now slowing, real estate boom. The US culture and economy has become a world of nods and winks, were thieves steel by falsifing info, lying on appraisals and wild conflicts of interest around every corner. While this may not be unique to the USA, it was �The Story� in the US, after the �Internet Bubble� and before the most recent story �Outsourcing�.

In particular, what is the effect of offshore operators, attracting players that might otherwise play locally at state licensed and taxed casinos? Just using the figures (i got them from Marketing Sherpa) the figures i quoted earlier, the online gambling industry is generating $8 billion to $10 billion in revenues each year. Probably drawing away US gamblers who might otherwise play at casinos that pay local taxes. Let�s assume that at least $2 Billion to $3 Billion would have paid taxes in the country where the player live. That�s $10 for every american. Given that the online industry, employs people offshore, it�s really the equivalent of outsource our gambling to lower cost offshore providers. This year alone, rapidly growing India will supply nearly $20 Billion of services for a number countries in wealthier/industrialized world.

I guess my point is that market forces generate an advantage in �Offshoring�, whether it be outsourced-offshore IT services or offshore gambling, because the offshore operator has some combination of cost or regulatory advantage. For IT and Accounting services their advantage is nearly all based on price. Online gambling benefits from both the regulatory advantages of being offshore and the cost advantage being virtual. It is this cost advantage ( being VIRTUAL ) that Las Vegas and the US Indians cannot overcome, without a change in the political climae. While most US business being outsourced is being outsourced based soley on wage differencial, online gambling is being �outsourced� offshore, because the US government refused to allow online gaming or even to allow each state to make it�s choice.

Is there anything wrong with gaming going online or offshore? I�m not really seeking to identify right and wrong, but the same governments that have refused to allow licensed online gambling also lose tax revenues to Offshore/Online operators, every day. So as US gamblers send their money offshore, states lose millions a day in taxes while the US gambling industry loses even more revenue and customers. The best way to stem the tide of online gambling taking money offshore is to all US based/regulated gaming online (each state should decide) and US operators compete with there trusted brands against the offshore operators.

The talk of the world�s economy for the past year has been focused in one area, Asia. Both US investors and European investors have been investing heavily in the Asian markets for the past year, but is this trend going to hold strong? I don�t believe so. With rising energy prices worldwide and rates on the increase many small time investors are beginning to back out of the Asian market.

Comparing the Asian markets to the Dow Jones is embarrassing. In the past year the Dow Jones has dropped nearly 3%. When looking at major Asian markets we see trends of 14-39% increases for the year, being commanded by the Korea Stock Exchange with a 38.7% increase. To further the recent success of Asian markets, the Japanese Nikkei Stock Average reached a 4 year high and has risen nearly 20% this year.

All of this sounds very good, until we look at why these jumps have been occurring. All the gains in the market have come as energy prices have jumped which can lead to inflation and cause many investors to speculate as to whether or not these markets are accurately reflecting the strength of Asia�s economies (think .com boom in �99).

The chief economist of The Asian Development Bank was quoted saying ��economic growth could slow further than previously expected.� In addition, The International Monetary Fund cautioned that the risks ahead are �increasingly slanted to the downside.�

Although the downfall of the Asian markets has been a hot topic recently, and many analysts are predicting a downfall in the near future, many foreign investors are not flinching. US investors are still leading the way, pouring billions of dollars into the foreign Asian markets, for two consecutive months now US investors have raised their net investments in these economies. European investors on the other hand have scaled back, but only slightly.

No one can tell for sure what is to come of the booming Asian markets, but many can be skeptical of it. As hundreds of thousands of investors pour billions of more dollars into those Asian economies I see more and more of a resemblance to the overvalued, over saturated and over rated stocks of the .com boom in the late 90�s.