Ground Floor: I'm a science fiction fan, quite happy to while away a Saturday afternoon watching re-runs of Star Trek, Stargate and Battlestar Galactica on Sky One.
But I always have trouble with the temporal shift storylines - the ones where the characters travel back in time and save the world even though they're not meant to meddle with the timeline. I don't have the kind of brain that can grasp the concept of the event happening before the cause. And, even after reading Einstein for Dummies, I struggle with the concept of time and relativity.
To me a minute is a minute and I'm uneasy with the idea that a minute travelling at the speed of light towards another galaxy might be a lifetime on earth. However I've come to accept the concept that moving clocks tick slower than stationary clocks, and that clocks at altitude tick faster than clocks on the ground (that's why I'm now on the ground floor).
Certainly, as we get older, the passage of time takes on a wholly different relative speed. It doesn't seem like a full twelve months ago since I was writing about the decline of the US dollar from $1.0460 at the beginning of 2003 to its level of $1.22 at the end of December. And here we are again, a year later, with the dollar's value still a main topic of conversation, although now at a rate of around $1.33.
The declining dollar and its impact on the world economy was a recurrent theme of the Ground Floor this year although my main focus of interest was on why the administration insisted on reiterating their commitment to a strong dollar when clearly that commitment has waned as much as the currency itself. George W (also a regular topic in the column last year) popped his head above the economic parapet recently when he informed a breathless world that "my nation is committed to a strong dollar". I can't imagine that anyone actually believes him. But then half the US population believed him in November when he told them that he was the only man who could be trusted with their country's future.
Traders, however, should be more likely to believe Alan Greenspan who said at around the same time that "a diminished appetite for adding to dollar balances must occur" - his roundabout way of saying that nobody in their right mind would buy more dollars at the moment.
The reason for Greenspan's doubts about his currency's strength? The enormous current account deficit (something that I also banged on about in 2004).
Despite the general decline of the world's so-called reserve currency, the US economy has done relatively well over the last 12 months. Well enough for the Fed to raise its reserve rate 5 times, bringing it to 2.25 per cent from an all-time low of 1 per cent at the beginning of the year.
But the whole thing is terribly precarious since US growth is being funded by the rest of the world. The trade deficit is now at yet another record level of $55.5 billion. In some ways this is not entirely surprising.
The whole focus of US policymakers since the bursting of the dotcom bubble has been on encouraging consumers to spend and that's exactly what they have done. This month the dollar rallied slightly when the quarterly current account deficit (which worries Greenspan so much) of nearly $165 billion was a little less than expectations, but I can't help feeling that by this time next year we'll still be looking at a currency in the throes of further depreciation.
So it may not matter at what point in the current timeline we look at the dollar - whenever we pop in it'll still be in decline.
The other issue that bothered me most in 2004 was the price of oil. I freaked out about it a number of times and, despite a pullback in prices this month, the supply and demand issues that dominated 2004 are still in evidence.
Yukos, the Russian oil giant which has been pursued by the Russian government over tax issues, filed for Chapter 11 in the US on December 15th with the intention of preventing a sale of its main subsidiary by the Russian government. The bankruptcy court temporarily blocked the sale but the Russian government offloaded it by auction to a mystery buyer anyway.
The actions of the government has made Russia a trickier place for investors to put their money in the future. Only time will tell whether the Russian government has made a mistake and it's hard to know whether they actually have time on their side. Meanwhile, OPEC, having increased oil production earlier in the year is now cutting back in order to keep oil prices "stable".
As the dollar-denominated value of the product decreases, the oil producing nations want to claw back that depreciation in price increases - stability, like time, is relative.
In my last Ground Floor of 2003 I mused that perhaps the Luas really would start operating in 2004 and indeed it did! Although for Bus Eireann now to use the fact that a decline in their passenger numbers (due to them travelling on the Luas) is a valid reason for them putting up prices makes me want to hold my head in my hands in despair.
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