Tabloid economics

Many business writers think their professional niche is the last bastion against the barbarism of tabloid journalism, but there are always exceptions.

 If specialist business publications were more like, say, The Herald on Sunday, they wouldn't publish stories about the current account deficit.

The tabloid business press would instead write about the cancer  eating away at the  underbelly of the nation's soul.  A little like Paul Holmes, then, but less fruity and better informed.

What would tabloid economics writing be like? The staple is sex, drugs and  rock'n'roll. Business Herald editor Liam Dann co-hosts a fine DJ night at the Shakespeare tavern in Auckland but, alas, his best rock tabloid days are behind him.

Sex, as the editor likes to remind me, has perhaps been a too frequent topic in this column, leaving drugs  the global killer commodity with the market-moving power of the Federal Reserve.

One of the biggest stories recently was the appreciation of the New Zealand currency. Surely there's a drug angle in that? There's a lot to write about the dollar, particularly the spooky correlation between the United States-New Zealand cross-rate and the S&P500.  But there's not a lot of opportunity for a drug headline.

What would a tabloid economics editor  let's call him Piers Curry  advise?  The trick with tabloid writing  is to accentuate the negative and eliminate the positive.

Drug users employ dollar bills to snort killer commodities and get high, Curry would note. In other words, big-note scumbags holding a tightly rolled even bigger note with which to hoover a line of white death up their noses.

In drug nations  such as the US, up to 90 per cent of bills circulating in urban centres are contaminated with traces of cocaine. Two years ago, the rate was 67 per cent. These are solid indicators of a country awash with murderous merchandise.

The New Zealand headline should have been,  Greenback keeps on taking us higher  a sly nod to local exporter pain, a cheap excuse to talk drugs and a bit of  rock'n'roll via a passing reference to a Sly and the Family Stone song. All it needed was the sex.

Cocaine residue contaminates more than 80 per cent of Canadian loonies (an apposite noun if ever there was one) and the Brazilian real is anything but, given  a long history of methamphetamine abuse.

Surely a look at the New Zealand currency would  reveal a dollar debased. The police aren't helpful. Suspicious types waving big wads of cash get their dosh checked out but no general testing  is undertaken.

The Reserve Bank's indefatigable but put-upon Anthea Black seems taken aback at my query, delivered in a suitably hectoring tabloid tone. What percentage of this country's fiscal heritage is defaced with traces of this foul trade?

Black  later regrets to advise  the bank doesn't get involved in this kind of thing. Readers might think the story would die,  but Curry demands a headline: Cops and regulators turn blind eye to Devil's wares.

Perusal of Reserve Bank documents (Recent trends and developments in currency by Alan Boaden and Kristin Langwasser) reveals further evidence of dereliction of duty. Polymer notes replaced paper dollars in 1999 and, the pair report, the new currency is more durable.

They don't mention  this better designed and longer lasting bill  makes detection of methamphetamine consumption more difficult.

More white powder adheres to paper dollars than polymer because of its smooth surface, a trait that also facilitates more efficient inhalation.

Further, the number and dollar amount in circulation is soaring. The public held currency worth more than $2.5 billion in December 2003. Last Christmas, more than 145 million potential tools of the drug trade carrying a face value of $3.5b  were doing the rounds. And the Reserve Bank and the police have no idea of how much of it is contaminated.

Bigger bills are in favour. More than $2.3b in $50 and $100 bills was in circulation in December, if you include the banks. And we all know drug fiends prefer higher denominations  they like  to  big note it.

Boaden and Langwasser can't see the obvious tabloid story. They contend the sharp rise in the number of bills and higher value was a direct consequence of the credit crunch. When no asset price is safe, people flee to cash. The issuance of higher-denomination notes returned to normal levels shortly after the government announced the retail deposit guarantee scheme, they say.

This is interesting. The public fear at the onset of the crisis could  be precisely measured by the amount of currency in circulation. People were literally stuffing the mattresses with money.

The real story may not involve drugs but an experienced tabloid hack can still make this a headline. All we need to do is slap the data on a chart and call it the Fear Index.

 Nick Smith is a senior financial journalist.