Is the US dollar a load of old rap?

So the world has finally twisted off its delicate axis.

Japanese politics are imploding, US banks seem to be creating board-level vacancies every hour and it now looks as though the future of currency markets pivot on the answer to this one, diabolical question: when it comes to the bull/bear case for the US dollar, whom do you trust - the "American Gangster" rapper Jay-Z, or a supermodel's panicky PR girl?

This story comes to me courtesy of Teal'c (see The Times Snitch List) and from his new desk assistant, an American pants-man who wishes to be known on this blog by the codename "Sugizo" [more on this enigmatic fellow later].

Anyway, with the yen carry story off the screens for the time being, currency brokers will clutch at anything for a lead these days. Of course there's all the usual gubbins going on - comments by the Fed chief, the ex-Fed chief and every other pundit on the block. But for that real "on the streets" sense of market direction, the traders have taken a surprising interest in Gisele Bundchen - a Brazilian scorcher generally considered the world's richest supermodel.

A story appears to have appeared on the Bloomberg wire and other trading websites this morning to the effect that Ms Bundchen had asked, perhaps wisely, for her stonking fees to be paid in Euros rather than the good old greenback. She reads the papers, you see, and had supposedly formed the view that the US currency was peering over the abyss and would soon take the inevitable plunge. Had this story been true, Ms Bundchen would have been in really excellent bearish company: Warren Buffet is among those casual market observers to have "gone grizzly" on the greenback.

But the Buffet-Bundchen partnership was never to be. Her PR was clearly worried that overt bearishness on the dollar was going to hurt her reputation in the US - the country that turned so savagely and patriotically on the Dixie Chicks. So the story was firmly and quickly denied. Gisele, it seems, is actually a great big stars and stripes fan of dollars, needing them to fund her "big city lifestyle" in New York.

Deprived of their clever "Gisele ditches the dollar" news story, the currency brokers immediately dropped their copies of Marie Claire and Vogue and consulted their next-best source of new ideas. Newspapers? Economists? The pretty receptionist in the executive suite? Nope. They switched on MTV Base.

Now, I heartily discourage internet piracy, but if you look very carefully at the 55th second of this clip you will discover clear evidence that rapper-cum-entrepreneur Jay-Z favours the euro as the "flashable" cash of choice for every self-respecting rapper. The video includes all the traditional  trappings of "classy" ostentation - the Rolls-Royce, cigars, champagne, diamond necklaces and so forth - but in an interesting break with the norm, not a single dollar-bill is to be seen. Instead, we get repeated glimpses of wads of EUR500 notes.

"Jay-Z says sell dollar-euro!" was the excitable scream in certain dark corners of Tokyo's currency floors this morning as the clip did the rounds on the message-boards and trader chat-rooms.

Which is all very well, but does rather depend on where you think Jay-Z (or any other rich rapper, for that matter) features in the wider currency cycle. Are these artists leading or lagging indicators? Are the forex decisions made in Brooklyn and West Compton ahead or behind Wall Street and the City? Is it like the story of John Pierpont Morgan and the shoe-shine boy? Does Jay-Z's coded bull-call on the euro mark the bottom for the dollar, or will the market "pop another cap" in the greenback's arse?

Comments

[David Wozney]

A “Federal Reserve Note” is not a U.S.A. dollar. In 1973, Public Law 93-110 defined the U.S.A. dollar as having the value of 1/42.2222 fine troy ounces of gold.

[Live out Loud]

Thank you for this delicious treat. Gallows humor for the Greenback!

[Ben]

I don't know about Jay-Z's 55th second, but your image clearly shows AUD rather than EUR. Definitely another high performing currency lately, although the chances of Gisele taking all her payments in 'Aussie' is probably quite slim - damn it!

[Kv]

Ben Bernanke may well be saying, "I've got 99 problems and a b$$$h ain't one!!"

[Ross]

I’m sorry if I missed something but was this supposed to genuinely make readers think about the future of the dollar? Or just a tool to tediously and arguably pointlessly deride the images of models and rappers...

[Eugene]

Thank's for the blow-up pic. Her currency seems safe in any bank.

[Paul A Whitelaw]

Leo, I'm with Ben. Whilst the video definitely shows EUROs, your photo is of the gold old "South Pacific Peso".

[Leo Lewis]

Ben and Paul - chaps, I'm with you on this and delighted that you've noticed. I'm a bit cack-handed with the blogging software, and what has happened is that the pic has drifted down the page a bit. The pic was meant to be Aussie$ and supposed to be cleverly alongside the bit where I mentioned the yen carry trade. It was supposed to be oh-so ingenious, but instead, I fully recognise, it is a bit confusing.

[Paul A Whitelaw]

Leo - don't take it so hard. you deserve a Pulitzer for the first photo alone.

[Daniel Harris]

I think you're being unfairly dismissive of Jay-Z. He is one of the wealthiest and most successful musicians in the world, head of one of the most successful record labels of the past twenty years, and owner of the New Jersey Nets. In short: just as

Your suggestion that "forex decisions [are being] made in Brooklyn and West Compton ahead or behind Wall Street and the City" seems to carry connotations of the kind of ignorance that is usually most typical of established white men about to be made fools by changing times.

Sure, I recognize that rumors about supermodels and clips from rap videos are unreliable economic indicators, but I don't think that makes supermodels and rappers unreliable. And this is what you seems to be implying with the (snobby) tone of your piece.

[Joey Diggs]

The US version of the video uses US dollars.

The euro version of the video uses Euros.

Multiple versions of videos are made all the time for various markets.

[Almir]

Dear Leo Lewis,
Why such a patriotic article? Your American super-stars have been performancing all over the world and collecting money everywhere. They allways demanded dollars instead of local currency, and nobody blamed them for that. Contracts are contracts. Why shouldn't pretty Gisele choose the most advantageous currency for her contracts? Why are you prognosing that she would be rejected by their fans because of that? Madonna, Michael Jackson & Company collects their money everywhere in the world, and never suffered such a accusation. You American are used to rule the world, but you must get used to new times: world is starting to rule America... and that's the way things should be forever. Stop the stupid reactionary American nationalism!