Sunday, March 16, 2014
Number Of Millionaire Households In The U.S Hits New High
There has been an increase in the number of millionaire households in the United States. These are people who have a recorded net worth of 1 million dollars or more. According to recent reports for the 2013 year 9.63 million Americans were classified into this bracket. This surpasses the pre-recession high of 9.2 million recorded in 2007. This is also a huge increase from 2008 where numbers fell to around 6.7 million. There is hope that these steady increases are signs of a brighter economic future for the US. There has also been a significant increase in households with net worths of 5+ million and 25+ million. With new levels of wealth being obtained these are signs of households trusting markets and making new investments. This then correlates to a stronger/ healthier economy.
http://money.cnn.com/2014/03/14/news/economy/us-millionaires-households/index.html?iid=SF_E_River
After Mt Gox: Bitconned
This article is a reflection on the recent article from Schumpeter
about the collapse of Mt Gox. Bitcoins have been a hot topic in the past year
and its uses and (short) history have gained the currency a lot of criticism. Schumpeter’s
article states that 744,400 Bitcoins are missing as a “result of ‘malleability-related
theft’ that may have been going on since the exchange began operating” along
with a software bug, which has been known since 2011, and many other technical
problems related to the Bitcoin currency.
Japan’s thought to tax Bitcoin transactions and profits is
interesting. Bitcoins were invented, in part, to avoid taxes and tariffs and so
I would be curious to further analyze the possible effects of implementing
taxes on the currency, when it is already in a delicate state. The rumors of a death
possibly related to Bitcoins is scary, adding onto the dangerous incidents in
the recent past relating to Bitcoins such as the trading website SilkRoad has
been subject to.
I think the idea of an “outside of the system” currency,
especially one online in today’s technological era, has a lot of potential to
be resilient and have a lot of value, but it is obvious that the Mt Gox and
Bitcoin system has not been sustainable and therefore must change.
Schumpeter article: http://www.economist.com/node/21597651
Dubai Rolls Over $20 Billion at Below National Inflation Rate
Dubai has recently refinanced 20 billion dollars in order in order to free cash and fund expansion plan. The sheikdom rolled over $10 billion of bonds to the central bank at 1%. The government also loaned $10 billion at a rate of 1%. It will be interesting to see if this act will increase its credit. Dubai has seen a decrease in lending of late. The sheikdom is hoping that by refinancing their funds, they will have higher credit worthiness and also increase lending.
Crimea Votes to Secede From Ukraine as Russian Troops Keep Watch
Just today, as seen by the title of the article, Crimea has voted to secede from Ukraine at this time while Russia occupies there territory. This is against the advice of western powers and action will likely occur soon in response to this choice.
What should the United States do about this situation? There are many options all with their own pros and cons, but it is hard to say what is right at this time as we do not want to aggravate tensions any more.
http://www.nytimes.com/2014/03/17/world/europe/crimea-ukraine-secession-vote-referendum.html?hp&_r=0
Oil Imports Push U.S. Trade Deficit Higher
Link
The United State's trade deficit increased slightly in the month of January as imports and exports both increased 0.6%. Due to the fact that imports are already larger than exports, the same percentage increase leads to a larger quantitative increase in the import sector. The increase in the trade deficit tells us that U.S. companies are making less abroad compared to what foreign companies are making in the United States. This also means that the world interest rate is higher than the current interest rate in the U.S. market, leading to the increase in foreign investment. Though, the trade deficit is increasing, the rate at which it increases is beginning to decline. One major reason for this is the development of the domestic energy sector. The U.S. is having to import less resources and can increase its energy exports with the recent increase in domestic energy production.
The United State's trade deficit increased slightly in the month of January as imports and exports both increased 0.6%. Due to the fact that imports are already larger than exports, the same percentage increase leads to a larger quantitative increase in the import sector. The increase in the trade deficit tells us that U.S. companies are making less abroad compared to what foreign companies are making in the United States. This also means that the world interest rate is higher than the current interest rate in the U.S. market, leading to the increase in foreign investment. Though, the trade deficit is increasing, the rate at which it increases is beginning to decline. One major reason for this is the development of the domestic energy sector. The U.S. is having to import less resources and can increase its energy exports with the recent increase in domestic energy production.
Annual Change of the Inflation Basket in the UK
This talks about the annual reshuffle of the goods basket used to calculate the CPI and inflation in the UK. It gives an interesting look into how priorities and culture changes in society even over a period as short as one year. DVD recorders were dropped while online streaming sites such as Netflix were added, reflecting a change in technology and taste. The Office for National Statistics also changed the weights attached to each item to account for a change in the cost of living. Inflation in the UK as been below the targeted 2 percent, causing many to hope that the economy is on its way to recovery.
http://www.theguardian.com/business/2014/mar/13/inflation-basket-netflix-flavoured-milk-dvd
China Loones grip on Currency
http://money.cnn.com/2014/03/15/investing/china-currency/index.html?iid=H_E_News
The Chinese have alway kept s very tight hold on its net exports in order to keep its exchange rate to favorable yields. This has always resulted in the control of the range of fluctuation of the chines currency. However, this tight security on its currency has hurt it as it hasn’t been able to grow its economy to the extent that it can. China has alway talked about opening its economy and making everyone see that the Chinese want to be a currency that is susceptible to market fluctuations just as anyone else. Because China is known as a “safe bet” people constantly invest in China in some way thinking that it stands above the markets. China however is trying to establish that it has flaws just like any other countries.
The Chinese have alway kept s very tight hold on its net exports in order to keep its exchange rate to favorable yields. This has always resulted in the control of the range of fluctuation of the chines currency. However, this tight security on its currency has hurt it as it hasn’t been able to grow its economy to the extent that it can. China has alway talked about opening its economy and making everyone see that the Chinese want to be a currency that is susceptible to market fluctuations just as anyone else. Because China is known as a “safe bet” people constantly invest in China in some way thinking that it stands above the markets. China however is trying to establish that it has flaws just like any other countries.
China Economy Fears Continue to Drive Markets
http://abcnews.go.com/International/wireStory/china-economy-fears-continue-drive-markets-22909166
Concerns with both the Chinese economy and the Ukrainian Crimea problem are pushing down stock market prices around the world. Sometime today, the preliminary results about the vote to remove Crimea from Ukraine which could shake up the Eastern European economy very much. The article talks of how economic analysts will likely be very concerned with the outcome of the vote in Ukraine. Because of these insecurities in China, because of bad economic news, and in Ukraine which might lose part of its land, and in Russia, who may face sanctions for it's involvement in the Ukraine scandal currencies and trading around the world are down.
This week was a bad week for the worlds economies. What happens next will be interesting.
Concerns with both the Chinese economy and the Ukrainian Crimea problem are pushing down stock market prices around the world. Sometime today, the preliminary results about the vote to remove Crimea from Ukraine which could shake up the Eastern European economy very much. The article talks of how economic analysts will likely be very concerned with the outcome of the vote in Ukraine. Because of these insecurities in China, because of bad economic news, and in Ukraine which might lose part of its land, and in Russia, who may face sanctions for it's involvement in the Ukraine scandal currencies and trading around the world are down.
This week was a bad week for the worlds economies. What happens next will be interesting.
http://www.businessweek.com/articles/2014-03-14/is-russia-pulling-money-out-of-u-dot-s-dot-for-safekeeping
There's new evidence that Russia has pulled money out of the U.S. after the recent events in the Ukraine for safe keeping. The federal reserve holds U.S. treasury securities in custody on behalf of foreign central banks and other institutions. From only March 5th to March 12th the Feds holdings have declined by $105 billion. Russia is most likely withdrawing the money so the U.S. can't freeze it while Russia braces for the next round of sanctions. This same sort of thing happened in 1957 when Russia moved money out of the U.S. for fears that the U.S. would economically punish Russia for its invasion of Hungary.
There's new evidence that Russia has pulled money out of the U.S. after the recent events in the Ukraine for safe keeping. The federal reserve holds U.S. treasury securities in custody on behalf of foreign central banks and other institutions. From only March 5th to March 12th the Feds holdings have declined by $105 billion. Russia is most likely withdrawing the money so the U.S. can't freeze it while Russia braces for the next round of sanctions. This same sort of thing happened in 1957 when Russia moved money out of the U.S. for fears that the U.S. would economically punish Russia for its invasion of Hungary.
Crimea: Economic fallout of a 'yes' vote
http://money.cnn.com/2014/03/15/news/economy/russia-crimea-economy/index.html?iid=Lead
On Sunday, March 17th, Crimea will vote on whether or not the region will break from the Ukraine and join Russia. The decision could have major repercussions if the vote goes to Russia. The US, for one, does not wish for Crimea to join Russia and will likely put several restrictions on Russia, such business from the country. Russia will also have to face the demands of Crimea, as it currently gets a majority of its necessary resources from the Ukraine, and how to balance that with the needs of its own country as well as the rest of the EU. The European economy will see some fallout, but nothing outrageous. Unfortunately, the Ukraine will need lots of financial support over the next few months in order to survive, regardless of Crimea's vote. Ultimately, the vote in Crimea will affect every economy involved in and that works with Russia.
On Sunday, March 17th, Crimea will vote on whether or not the region will break from the Ukraine and join Russia. The decision could have major repercussions if the vote goes to Russia. The US, for one, does not wish for Crimea to join Russia and will likely put several restrictions on Russia, such business from the country. Russia will also have to face the demands of Crimea, as it currently gets a majority of its necessary resources from the Ukraine, and how to balance that with the needs of its own country as well as the rest of the EU. The European economy will see some fallout, but nothing outrageous. Unfortunately, the Ukraine will need lots of financial support over the next few months in order to survive, regardless of Crimea's vote. Ultimately, the vote in Crimea will affect every economy involved in and that works with Russia.
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