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Floating Rates Versus Fixed Rates
Reem Heakal

Did you know that the foreign exchange market (also referred to as FX or forex) is the largest market in the planet? In fact, over $one trillion is traded in the currency markets every day. This article is definitely not a primer for currency trading, but it will help you understand exchange rates and why some fluctuate whereas others do not.

What Is an Exchange Rate?
An exchange rate is the rate at that one currency can be exchanged for an additional. In other words, it is the price of another country's currency compared to that of your own. If you're traveling to a different country, you would like to "obtain" the local currency. Simply like the price of any asset, the exchange rate is the worth at that you'll be able to obtain that currency. If you're traveling to Egypt, as an example, and therefore the exchange rate for USD 1.00 is EGP 5.fifty, this implies that for each U.S. dollar, you can buy five and a [*fr1] Egyptian pounds. Theoretically, identical assets should sell at the identical worth in several countries, as a result of the exchange rate must maintain the inherent price of 1 currency against the opposite.

Mounted
There are 2 ways in which the value of a currency can be determined against another. A mounted, or pegged, rate could be a rate the govt (central bank) sets and maintains because the official exchange rate. A set worth will be determined against a major world currency (usually the U.S. dollar, but additionally other major currencies like the euro, the yen, or a basket of currencies). In order to maintain the local exchange rate, the central bank buys and sells its own currency on the foreign exchange market in return for the currency to which it is pegged.

If, for instance, it is determined that the value of a single unit of local currency is equal to USD three.0zero, the central bank can have to make sure that it can offer the market with those bucks. In order to keep up the rate, the central bank should keep a high level of foreign reserves. This could be a reserved quantity of foreign currency held by the central bank that it can use to unleash (or absorb) additional funds into (or out of) the market. This ensures an appropriate money supply, applicable fluctuations within the market (inflation/deflation), and ultimately, the exchange rate. The central bank can additionally regulate the official exchange rate when necessary.

Floating
Unlike the fastened rate, a floating exchange rate is set by the non-public market through provide and demand. A floating rate is typically termed "self-correcting", as any differences in provide and demand will automatically be corrected in the market. Take a look at this simplified model: if demand for a currency is low, its worth will decrease, thus creating imported product a lot of expensive and therefore stimulating demand for local goods and services. This in turn can generate additional jobs, and hence an auto-correction would occur in the market. A floating exchange rate is constantly changing.

In reality, no currency is wholly fastened or floating. In a fixed regime, market pressures will conjointly influence changes within the exchange rate. Typically, when a local currency does mirror its true worth against its pegged currency, a "black market" which is more reflective of actual offer and demand could develop. A central bank will often then be forced to revalue or devalue the official rate so that the speed is per the unofficial one, thereby halting the activity of the black market.

In a very floating regime, the central bank could additionally intervene when it is necessary to ensure stability and to avoid inflation; but, it is less usually that the central bank of a floating regime will interfere.

The planet Once Pegged
Between 1870 and 1914, there was a global mounted exchange rate. Currencies were linked to gold, which means that the price of a native currency was fastened at a group exchange rate to gold ounces. This was known as the gold customary. This allowed for unrestricted capital mobility plus world stability in currencies and trade; but, with the start of World War I, the gold standard was abandoned.

At the tip of World War II, the conference at Bretton Woods, in a shot to get global economic stability and increased volumes of world trade, established the essential rules and regulations governing international exchange. As such, a world monetary system, embodied within the International Monetary Fund (IMF), was established to push foreign trade and to take care of the monetary stability of nations and therefore that of the world economy

It had been agreed that currencies would once again be mounted, or pegged, but now to the U.S. dollar, which in flip was pegged to gold at USD thirty five/ounce. What this meant was that the price of a currency was directly linked with the worth of the U.S. greenback. So if you needed to shop for Japanese yen, the value of the yen would be expressed in U.S. bucks, whose value in turn was firm within the value of gold. If a country required to readjust the value of its currency, it may approach the IMF to regulate the pegged worth of its currency. The peg was maintained till 1971, when the U.S. dollar could now not hold the price of the pegged rate of USD thirty five/ounce of gold.

From then on, major governments adopted a floating system, and all makes an attempt to move back to a world peg were eventually abandoned in 1985. Since then, no major economies have gone back to a peg, and the use of gold as a peg has been utterly abandoned.

Why Peg?
The reasons to peg a currency are linked to stability. Especially in nowadays's developing nations, a country might decide to peg its currency to create a stable atmosphere for foreign investment. With a peg the investor can invariably know what his/her investment worth is, and therefore can not have to worry regarding daily fluctuations. A pegged currency will also facilitate to lower inflation rates and generate demand, which results from bigger confidence in the soundness of the currency.

Fastened regimes, but, can usually cause severe money crises since a peg is troublesome to maintain in the future. This was seen in the Mexican (1995), Asian and Russian (1997) money crises: an try to maintain a high worth of the native currency to the peg resulted in the currencies eventually turning into overvalued. This meant that the governments might no longer meet the strain to convert the local currency into the foreign currency at the pegged rate. With speculation and panic, investors scrambled to urge out their money and convert it into foreign currency before the local currency was devalued against the peg; foreign reserve provides eventually became depleted. In Mexico's case, the government was forced to devalue the peso by thirty%. In Thailand, the govt eventually had to permit the currency to float, and by the top of 1997, the bhat had lost its value by fifty% because the market's demand and supply readjusted the price of the local currency.

Countries with pegs are usually related to having unsophisticated capital markets and weak regulating institutions. The peg is thus there to assist create stability in such an setting. It takes a stronger system in addition to a mature market to maintain a float. When a rustic is forced to devalue its currency, it's also needed to proceed with some type of economic reform, like implementing larger transparency, in an effort to strengthen its money institutions.

Some governments could select to own a "floating," or "crawling" peg, whereby the govt reassesses the price of the peg periodically and then changes the peg rate accordingly. Usually the amendment is devaluation, however one that is controlled thus that market panic is avoided. This methodology is typically used in the transition from a peg to a floating regime, and it permits the government to "save face" by not being forced to devalue in an uncontrollable crisis.

Although the peg has worked in creating international trade and monetary stability, it had been used solely at a time when all the main economies were a half of it. And while a floating regime is not while not its flaws, it's proven to be a additional efficient means that of determining the long term worth of a currency and making equilibrium in the international market.


Article Courtesy:
http://finance.yahoo.
com/education/
currencies/article/
106076/Basic_
concepts_for_
currencies_markets


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Forex news and articles about spot Gold prices and oil

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Catherine Hardwicke: From Skateboards to Jesus Christ

Director and set designer Catherine Hardwicke tackled one of the biggest movies made about the birth of Jesus Christ: The Nativity Story

An exclusive interview with the director of "The Nativity Story"


Director - The Nativity Story

Catherine Hardwicke is a fellow Texan who has been making movies for more than 20 years. After directing stories about adolescents coming of age and early legends of the skateboard craze, she's taking on the greatest story ever told: the birth of Jesus Christ.

You've mentioned that you grew up reading Bible and attending Sunday School. How does your faith as an adult affect your work?

Catherine: I try hard to find projects and work on movies that I think are positive messages in some way. I also look for those examining a difficult subject that needs to be talked about and discussed.

There are so many movies that are just pure entertainment and bloody action where they kill everybody. It's difficult in Hollywood to try to find some other options as you work and try to survive. I think that's part of it; it affects my daily life. Can I in any way spend my time trying to do something good for the world instead of something bad?

Your early work has been in production design, then you wrote and directed "Thirteen". How did that transition happen?

Catherine: I was doing production design jobs to work and survive. You work your heart out and try to do everything great and make the set beautiful. The movies may or may not come out that good or anything necessarily to be proud of. It really is a risk. There is no precise formula.

I really wanted to make my own films. I took acting classes to understand what actors go through, and directing and screenwriting classes. I did anything I could in between jobs. It seemed like any ideas I had were too expensive to make.

I found a great story about a woman who fought in the Civil War disguised as a man. She really believed in the cause of delivering slaves and she had all these brave stories, but that was too expensive to make.

Finally, my friend Nicki and her family were going through all these really tough times that you see in Thirteen. I realized I could probably make it for very little money because it took place in an average lower-middle income family. I could almost shoot it in my own house and people could wear their own clothes. It didn't have to be expensive, so I finally got the chance.

You used your time on the set and between jobs to really learn and become very well-acquainted with what it takes to make a good movie.

Catherine: I worked with a lot of really good directors, as well as some first-time directors. Some of the movies came out fantastic, some didn't come out so great.

I tried to learn what worked, what didn't work. How did they work with the actors? How did they get the moment to feel very alive? I would talk with the directors, get advice from them and tell them I wanted to make my own movies. I'm sure they heard that every day! Many of my director friends were pretty surprised when I actually did it.

How have those you asked for advice responded to the movies you've directed?

Catherine: Pretty much everyone I've remained in contact with has been very supportive and proud and happy for me. That's pretty nice. I've lost touch with some people. You do a movie and get very close to people because you work so hard together. You work 24/7 and then when the movie is finished you go your own ways. You might each go work on another project in another state and not see each other again, or for a long time.

Of course, before making Nativity, I had a wonderful crew here in LA that I worked very well with. But because we filmed in Morocco and Italy, none of them could go. We had to use local crews from Morocco and Italy, so my friends who had helped me before couldn't work with me on that movie.

It's very unusual for a film with that large of a budget to have a woman director. What unique things did you bring to the table that made the producers and New Line Cinema want to hire you?

Catherine: I think part of it was that we are trying to understand Mary and be inside her head. We wanted to understand how it must have been for this girl to go through this extraordinary circumstance. So they could see how having a female director could help that.

I think they thought it was a neat idea to have a female perspective on Mary. When I went in for my interview I had a lot of photographs about that age from the Middle East. I wanted to show feelings and faces. I took a lot of artwork, drawings and photographs that I thought were relevant to try to show her heart. I had an idea for it, a plan, and they went with it.

How did you learn that this project was available?

Catherine: It was kind of an accident. I'm with CAA, one of the biggest agencies in Hollywood. When they know that a script, often from one of their writers, is turned into the studio and the studio wants to make it, they send copies of that script and many other ones to their different directors.

They sent me probably 10 scripts in the middle of January last year. I had this stack that I started reading, and then I picked up this one and started reading it. I knew one of the producers, it was kind of random.

I think they didn't really intend it to come to me. They'll give you 10 things, and if you really love one of them, they'll try to get you an interview for it. I thought "I like this project, it could be amazing!" I had never thought of the Nativity story in that way, so I did a lot of research to get drawings and photographs, then I went in and convinced them that I was the right person.

Mike Rich (screenwriter) has said that one of your strengths is being able to draw really good performances from teenagers, girls especially. To what do you attribute that?

Catherine: A lot of people ask me about working with teenagers, and I don't separate them so much from other people. They are very intelligent and usually have their own wisdom and depth so I treat them as adults, or as just another person. I want to hear their ideas and what they think and what they're feeling.

I don't ever give actors "orders". I usually try to create an atmosphere where they feel natural and do what is right too. They probably know better how this person will act because they're really getting into the character, getting to it from the inside.

So I try to find good people and then trust them to do a good job in an atmosphere where they feel good and I give them confidence in what they think.

What steps do you take when you feel someone is not getting into the head of the character? How do you help them find out who that person is and how they can portray that?

Catherine: What we did in this case was we had a "Nazareth boot camp". I felt that was very important because 2000 years ago things were very different than they are now. We really had to strip away all our modern conveniences, easy ways to get food and communicate to help our actors understand a very different kind of mindset.

I think that was important to understand even the basics of ordinary life. The rain mattered - they had to save the rainwater. And their animals mattered greatly. They had to realize how intertwined the people were with life cycles and seasons in getting food and water. I think that was sort of a revelation for most modern kids.

We just don't think that way, and don't care. That's one reason we don't really take good care of our planet. We can just run to the 7-11 for food any time. I think that was one of the first things we considered.

How do we get back to 2000 years ago on a physical level and on an emotional level? We built a small synagogue there and a Jewish scholar came in and tried to help us all understand how Mary would have prayed, how educated she would have been.

How much of the Scripture would she have known? What would Joseph have known? What were the customs of their daily lives? How much did they pray? I think all those things helped give an emotional basis. Then from there you can start to get you head into this other time and start to feel what it would have been like in their world.

When I saw the scenes of their ordinary life it hit me as being very primitive, as opposed to the romanticized way it's usually portrayed. What were some of the key moments you hoped would translate strongly to the audience?

Catherine: I did want you to try to understand the world these people lived in, and I wanted you to understand the political circumstances they lived under. Under the rule of Herod and the Roman soldiers, it was extremely difficult to preserve their religion and practice what they wanted to practice.

They wanted to stay hopeful even though they worked really hard to raise all this food and it would be suddenly taken away as part of a tax. There was a lot of brutality and they were really looking for a Messiah and a Savior. That was an important thing to establish at the beginning. Another thing was how Mary would feel, or how anyone would feel, when she was forced to marry someone she didn't know. And then this other circumstance comes upon you.

One really difficult thing was the angel. Everyone has their own versions and visions of what an angel might be. I knew that not everybody would agree on the angel. That was an interesting challenge.

Then there is the spiritual aspect, the supernatural aspect of the birth. How do you convey this sense of wonder, this star? How do you translate that? These were all really interesting challenges that I hoped would come across.

Whether it's based on movies, or Christmas pageants, or just our own readings of Scripture, we all have different ideas about those things. What was part of your process for making some of the creative decisions?

Catherine: There are minimal kinds of descriptions of angels in Scripture. So then you look at how various painters and sculptors have portrayed them over the years. I think it was around 300 A.D. where you start to see angels with wings. So we had to think how can we be the most true to the time period? Where do you read between the lines?

Usually the first thing an angel says when he appears to someone is "Fear not" so there has to be some mystery, wonder and fear that's involved. Somehow the harnessing of this other power seems like it scares people when they first see it. But then momentarily the angel's manner and voice seems to calm the person down and they accept and listen to the angel.

So we made the angel look like the other people of that region; the same Mediterranean skin tones and hair instead of having someone with blonde hair and blue eyes appear in the Middle East. So we had a person who looks like he's from the people.

Then we had the phenomenon of the wind, this natural kind of energy force, and the earth move as this spiritual being appears. We tried to keep it simple. We didn't want people to see tricky effects and think "I think I saw that on Star Wars." "Did that happen with Darth Vader?" I

f this movie would have been made maybe 100 years ago before all these others came out there may have been other ways we may have portrayed the angel. But I think now we've seen so many supernatural and Hollywood-type movies that we just didn't want to go into that territory!

There's an incredible amount to think about in the planning and making of a movie. You've said that once you got the job, you flew almost immediately to Israel.

Catherine: This project was on a very tight timeline. They knew they wanted a Christmas release and so once I got the script I knew we were basically on a 9-month timeline, which is very, very short for a Hollywood film. Really, any film.

I had never been to Israel, and in fact that was the first thing I thought. I cannot make a movie about the Holy Land without going there, which had been a dream of mine my whole life! So that was the first thing I did.

Of course there is a sense of disappointment because you want it to look like it did 2000 years ago, but the whole place is very modernized. You have to dig really deep to get to something you want to see because you have these big churches built many years later over what are supposed to be these shrines. So you really don't feel like you're back in the time period.

I think the Nazareth village is a wonderful place because they seem to have the same kind of feelings. They're trying to excavate down and really re-create that area. That was exciting to me.

The Garden of Gethsemane was also stunning because probably the same olive trees, or shoots of the same trees, have been around since the time of Christ. But most of the other sites felt distant to me. They felt manmade with layers and layers of interpretations on top of them.

Is that primarily why you chose not to film in Israel? Are there other reasons as well?

Catherine: It's such a small country and it's so modernized that you can't film really in any direction without seeing modern structures. The real Bethlehem is right behind the Gaza Strip, a place of great strife right now, so it's not safe. And there is a huge church built right over it, so it would look nothing like a little town, like it was 2000 years ago. Even the little Nazareth village is surrounded by apartment buildings and is completely modern. So you would really have to go out into the country to re-create the towns.

That's what happened when we went to Italy. We found the rolling hills and ancient olive groves in areas that are more preserved and more historic than most of Israel is. Not to mention all the wars making it very dangerous.

As you thought about working on this tight timeline, what were 4 or 5 key components that you felt really had to be in place for this project to be successful?

Catherine: Certainly the casting of Mary and Joseph was important. It needed to be believable that they could be from that time period and that part of the world. That was key, as was the actor who played Herod.

Then we had to find a way to create a beautiful Nativity scene. That was an important thing, an important location to find. Nazareth was important too because that is really where everything is set up.

When I first got this I thought maybe we could find a little town in Italy or Morocco that could stand in for Nazareth, but there is nothing in Italy or Morocco that is the same as it was 2000 years ago! Morocco comes closest. There are some villages that are just mud huts, but they have electricity and there are people living there. They have glass windows. We would have had to go in and literally turn these people's lives upside down and restore it to them. We'd have to move them out, and it's their land, where they live with their goats. So it's not very practical.

The big challenge is how do we go back in time and re-create this world and all these little towns? Another thing that's very sensitive to the script was building the Holy Temple in Jerusalem. Luckily that had been built and filmed in for an Italian mini-series filmed in Morocco 15 years ago. We had to restore it and make it safe to shoot there again.

Since you filmed in Italy, were you able to use some of the sets from The Passion of the Christ?

Catherine: No. We did use some of the locations though. Well, we actually did get to use one olive tree they had made for the Garden of Gethsemane. We did get to use that in Nazareth. We probably did re-use some of the costumes because we had the same costume designer. A lot of times the costumes will go into a costume house, like in Rome. So I think for some of the background actors, not the main people, but for some of the background people, we would have used the same costumes.

Once you've created this world, what happens when the filming is over?

Catherine: We don't build up to building code. For example, if we don't need the back or front walls of a house, we don't build them. It might not even be completely enclosed; it might just have a tarp sealing it off. It's not a permanent building.

And then there's the question of what the landowner wants. The land where we built Nazareth was a public park, an ancient olive grove. So as part of our deal to rent the land we had to agree to restore it to the same, if not better, condition as we found it. That all had to be torn down.

In some cases if the landowner sees some advantage to keeping the structure, he might keep it and then try to promote it on the internet as a location for other movies. That's why the temple had been saved. It was out in the desert, and you don't have much rain, so the temple was in pretty decent shape, even though one giant wall had blown off in a windstorm.

Ridley Scott had also filmed the Crusades movie "Kingdom of Heaven" there and so one day we filmed on what had been part of his set. Then we took our shots and added some CGI (computer-generated images) to make it look a bit more like 2000 years ago, instead of Jerusalem during the Crusades.

What advantage does your background as a production designer offer in your work as a director?

Catherine: In this case, and in a lot of the films I've done, I've had to be the production designer on the movie too. For example, we had to do this very rapid location scouting. Even if the production designer couldn't go because he was trying to build Nazareth back in Italy, I could go and say "Yes, this will work.

I know how to make it work. I can shoot this angle and that angle, and I'll need a wall here." It's like shorthand. I could make a quick sketch and draw in a street here, a house here. We had so many locations to put together.

I would take digital photographs and load them into the computer even as we were driving to the next location. I'd rearrange, manipulate and organize them and say "this will work for this house, we'll shoot this here." I never could have made this movie on schedule if I didn't have my production background.

What advice would you give other women who want to follow in your footsteps?

Catherine: I think there's no substitute for education, hard work and being prepared when and if you do get the opportunity. I went to architecture and film school. I worked on a lot of other people's movies. On the weekends I did seminars, workshops and classes and wrote screenplays. I'd have my friends read and critique them. I really did a lot of homework.

For example, when I walked into New Line to get this job, I was really prepared. I took photos of other movies and projects I'd done and explained how we made different things work. I actually did a schedule for them showing when I thought I should have the locations. I had gone on the internet and done a lot of research for all the different places. Get as ahead as you can and be prepared as you can be.

CC.com: What projects are in the works right now?

Catherine: I'm trying very hard to get an environmental film made. It's called "The Monkey Wrench Gang." It's very difficult, like we talked about earlier, to get studios interested in things that might actually help the world. At the same I'm trying to get that made, I'm reading other scripts and seeing if there is something that a studio might actually want to make that I also want to make. So I'm in the struggles right now.

2007 ChristianCinema.com

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