24 ноября, 06:34

Unveiling the Future of Liberty

Earlier today, I was honored to join Treasury Secretary Jacob Lew and Deputy Secretary Sarah Bloom Raskin to unveil designs for the 2017 American Liberty Gold Coin. The unveiling not only marked a historic milestone for the allegorical Lady Liberty, who has been featured on American coinage since the late 1790s, but also served to kick-off the Mint’s 225th anniversary—a year-long public awareness campaign about its mission, facilities and employees. I am very proud of the fact that the United States Mint is rooted in the Constitution. Our founding fathers realized the critical need for our fledgling nation to have a respected monetary system, and over the last 225 years, the Mint has never failed in its mission to enable America’s growth and stability by protecting assets entrusted to us and manufacturing coins and medals to facilitate national commerce. We have chosen “Remembering our Past, Embracing the Future” as the Mint’s theme for our 225th Anniversary year. This beautiful coin truly embodies that theme. The coin demonstrates our roots in the past through such traditional elements as the inscriptions United States of America, Liberty, E Pluribus Unum and In God We Trust. We boldly look to the future by casting Liberty in a new light, as an African-American woman wearing a crown of stars, looking forward to ever brighter chapters in our Nation’s history book. The 2017 American Liberty Gold Coin is the first in a series of 24-karat gold coins the United States Mint will issue biennially. These coins will feature designs that depict an allegorical Liberty in a variety of contemporary forms including designs representing Asian-Americans, Hispanic-Americans, and Indian-Americans among others to reflect the cultural and ethnic diversity of the United States.​ 2017 American Liberty Gold Coin obverse (left) and reverse (right). (United States Mint Photos)   Rhett Jeppson is the Principal Deputy Director of the U.S. Mint.    

20 ноября, 18:15

JPMorgan (JPM) Sanctioned by FINMA for Money Laundering

Swiss regulator, FINMA, finds out that the Swiss unit of JPMorgan (JPM) was involved in money-laundering.

19 ноября, 04:30

We're Living In The Age Of Capital Consumption

Authored by Ronald-Peter Stöferle via The Mises Institute, When capital is mentioned in the present-day political debate, the term is usually subject to a rather one-dimensional interpretation: Whether capital saved by citizens, the question of capital reserves held by pension funds, the start-up capital of young entrepreneurs or capital gains taxes on investments are discussed – in all these cases capital is equivalent to “money.” Yet capital is distinct from money, it is a largely irreversible, definite structure, composed of heterogeneous elements which can be (loosely) described as goods, knowledge, context, human beings, talents and experience. Money is “only” the simplifying aid that enables us to record the incredibly complex heterogeneous capital structure in a uniform manner. It serves as a basis for assessing the value of these diverse forms of capital. Modern economics textbooks usually refer to capital with the letter “C”. This conceptual approach blurs the important fact that capital is not merely a single magnitude, an economic variable representing a magically self-replicating homogenous blob but a heterogeneous structure. Among the various economic schools of thought it is first and foremost the Austrian School of Economics, which stresses the heterogeneity of capital. Furthermore, Austrians have correctly recognized, that capital does not automatically grow or perpetuate itself. Capital must be actively created and maintained, through production, saving, and sensible investment. Moreover, Austrians emphasize that one has to differentiate between two types of goods in the production process: consumer goods and capital goods. Consumer goods are used in immediate consumption – such as food. Consumer goods are a means to achieve an end directly. Thus, food helps to directly achieve the end of satisfying the basic need for nutrition. Capital goods differ from consumer goods in that they are way-stations toward the production of consumer goods which can be used to achieve ultimate ends. Capital goods therefore are means to achieve ends indirectly. A commercial oven (used for commercial purposes) is a capital good, which enables the baker to produce bread for consumers.  Through capital formation, one creates the potential means to boost productivity. The logical precondition for this is that the production of consumer goods must be temporarily decreased or even stopped, as scarce resources are redeployed toward the production of capital goods. If current production processes generate only fewer or no consumer goods, it follows that consumption will have to be reduced by the quantity of consumer goods no longer produced. Every deepening of the production structure therefore involves taking detours. Capital formation is therefore always an attempt to generate larger returns in the long term by adopting more roundabout methods of production. Such higher returns are by no means guaranteed though, as the roundabout methods chosen may turn out to be misguided. In the best case only those roundabout methods will ultimately be continued, which do result in greater productivity. It is therefore fair to assume that a more capital-intensive production structure will generate more output than a less capital-intensive one. The more prosperous an economic region, the more capital-intensive its production structure is. The fact that the generations currently living in our society are able to enjoy such a high standard of living is the result of decades or even centuries of both cultural and economic capital accumulation by our forebears. Once a stock of capital has been accumulated, it is not destined to be eternal. Capital is thoroughly transitory, it wears out, it is used up in the production process, or becomes entirely obsolete. Existing capital requires regularly recurring reinvestment, which can usually be funded directly out of the return capital generates. If reinvestment is neglected because the entire output or more is consumed, the result is capital consumption. It is not only the dwindling understanding of the nature of capital that leads us to consume it without being aware of it. It is also the framework of the real economy which unwittingly drives us to do so. In 1971 money was finally cut loose entirely from the gold anchor and we entered the “paper money era.” In retrospect, it has to be stated that cutting the last tie to gold was a fatal mistake. Among other things, it has triggered unprecedented instability in interest rates. While interest rates displayed relatively little volatility as long as money was still tied to gold, they surged dramatically after 1971, reaching a peak of approximately 16 percent in 1981 (10-year treasury yield), before beginning a nosedive that continues until today. This massive decline in interest rates over the past 35 years has gradually eroded the capital stock. An immediately obvious effect is the decline in so-called “yield purchasing power”. The concept describes what the income from savings, or more precisely the interest return on savings, will purchase in terms of goods. The opportunity to generate interest income from savings has of course decreased quite drastically. Once zero or even negative interest rate territory is reached, the return on saved capital is obviously no longer large enough to enable one to live from it, let alone finance a reasonable standard of living. Consequently, saved capital has to be consumed in order to secure one's survival. Capital consumption is glaringly obvious in this case. It is beyond question that massive capital consumption is taking place nowadays, yet not all people are affected by it to the same extent. On the one hand, the policy of artificially reducing the interest as orchestrated by the central banks does negatively influence the entrepreneurs’ tasks. Investments, especially capital-intensive investments seem to be more profitable as compared to a realistic, i. e. non-interventionist level, profits are thus higher and reserves lower. These and other inflation-induced errors promote capital consumption. On the other hand, counteracting capital consumption are technological progress and the rapid expansion of our areas of economic activity into Eastern Europe and Asia in recent decades, due to the collapse of communism and the fact that many countries belatedly caught up with the monetary and industrial revolution in its wake. Without this catching-up process it would have been necessary to restrict consumption in Western countries a long time ago already. At the same time, the all-encompassing redistributive welfare state, which either directly through taxes or indirectly through the monetary system continually shifts and reallocates large amounts of capital, manages to paper over the effects of capital consumption to some extent. It remains to be seen how much longer this can continue. Once the stock of capital is depleted, the awakening will be rude. We are certain, that gold is an essential part of any portfolio in this stage of the economic cycle.  

18 ноября, 19:00

Выход из кризиса — всемирный дефолт?

Суверенные государства, правительства штатов, калифорнийские города, мелкие предприниматели, домовладельцы, средний класс, недавние выпускники ВУЗов и все прочие люди и организации по всему миру сталкиваются с одной и той же растущей проблемой – ЗАДОЛЖЕННОСТЬ. В то время как в данный момент времени все внимание сосредоточено на Европейском Союзе, долговой кризис в Соединенных Штатах, пожалуй, достиг худшей […]

17 ноября, 19:49

The Saudi Purge is a Global Crisis

The House of Saud is in crisis as MBS consolidates his hold on the kingdom and prepares to transform Saudi Arabia in his image. But what is behind the purge, and how does it relate to the future of the world monetary system. Join James for a classic Corbett Report debriefing on the Saudi purge and... [[ This is a content summary only. Visit http://FinanceArmageddon.blogspot.com or http://lindseywilliams101.blogspot.com for full links, other content, and more! ]]

15 ноября, 20:42

Деньги без процентов и инфляции (часть 3)

АК ЛЮБОЙ ИЗ НАС МОЖЕТ УЧАСТВОВАТЬ В ИЗМЕНЕНИИ ДЕНЕЖНОЙ СИСТЕМЫ?Вначале попробуйте проверить, насколько вы владеете проблематикой в кругу семьи и друзей. После этого можно переходить к беседам с людьми, которых знаете меньше, не стесняйтесь говорить об этом со служащим вашего банка, страховым агентом, местными политиками, журналистами и представителями прессы. Многочисленные беседы с банковскими служащими и экономистами убедили меня в том, что реальных трудностей не существует, за исключением духовных баррикад, воздвигнутых во время воспитания и ограниченность представления о функционировании денег. Вы должны осознать, что деньги являются одной из основных проблем жизни многих людей. Они самым глу6оким образом связаны с представлением людей о самих себе и своем отношении к окружающему миру. Щедрость или скупость, открытость или изолированность, теплота или холодность - все это отражается в отношении к деньгам. Обычно очень сложно рассматривать деньги в отрыве от других проявлений. Сначала, однако, вы должны быть в состоянии объяснить, каким образом за счет процентов происходит перераспределение доходов и что даже чисто математически постоянное взимание процентов невозможно. Только после этого вы можете говорить о социальных и политических последствиях. Необходимо также понять, что проблема денег теснейшим образом связана с большим числом других проблем, которые не могут быть решены автоматически только одной реформой. Сама по себе денежная реформа не обеспечит потребности бедных, престарелых, больных и других социально слабых. Денежная реформа лишь облегчит оказание помощи этим группам. Это, однако, не означает, что без специальных программ и значительных усилий можно решить социальные и экологические проблемы, как иногда утверждали в прошлом слишком восторженные и наивные сторонники денежной реформы. Если вы следите за развитием мировых проблем через средства массовой информации, то все больше будете убеждаться в необходимости безотлагательного осуществления изменений и вместе с тем осознаете ту ответственность, которую несет за распространение таких знаний каждый, кто знает решение.

15 ноября, 19:00

В чем ошибки предсказателей кризиса

Суть хазинской теории кризиса в том, что экономисты посчитали межотраслевой баланс США. Баланс не сошёлся. Отсюда он сделали вывод: у экономики США только два выхода: a)     Гиперинфляция, чтобы обесценить долги. b)    Дефолт – отказ от выплат долгов с заменой доллара на амеро или что то другое. Вывод: мировой кризис приведёт к ужасной мировой катастрофе, а […]

14 ноября, 20:09

Деньги без процентов и инфляции (часть 1)

ЧЕТЫРЕ ОСНОВНЫХ ЗАБЛУЖДЕНИЯ ОТНОСИТЕЛЬНО ФУНКЦИИ ДЕНЕГДень за днем практически каждый человек на нашей планете пользуется деньгами. Большинство зарабатывает деньги своим трудом и тратит их на те товары, в которых нуждается. Но очень немногие четко представляют себе, как функционируют деньги и каково их прямое или косвенное влияние на нашу жизнь. Сначала мы рассмотрим положительную сторону этого феномена: деньги чрезвычайно облегчают обмен товаров и услуг в обществе, основанном на разделении труда, что и делает их одним из наиболее гениальных изобретений человечества. Если бы вы, например, жили в деревне, где царит натуральный продуктообмен, и создали бы произведение искусства, то смогли бы обменять его только на гробы и скоро перестали бы заниматься искусством. Итак, деньги делают возможной специализацию и служат таким образом основой нашей цивилизации. Проблема теперь заключается в том, что деньги служат не только для обмена товаров и услуг. Они могут и тормозить его, если они накапливаются у тех, у кого денег больше, чем им нужно, и [деньги] не поступают в обращение. Таким образом, создается своеобразный частный "таможенный пункт", на котором те, у кого денег меньше, чем им необходимо, платят пошлину тем, у кого их больше, чем им требуется. Разве это честно? Ни в коем случае. Фактически нашу современную денежную систему, как я покажу ниже, можно назвать беззаконной для всех демократических наций. Для того, чтобы пояснить это, необходимо рассмотреть четыре заблуждения относительно функции денег. Конечно же, в действительности их значительно больше. Наши представления о деньгах являются довольно точным отражением мира в нас самих, и эти образы так же многообразны, как и сами люди на нашей планете. Тем не менее рассматриваемые ниже четыре заблуждения являются основными препятствиями на пути понимания конструктивных изъянов современной денежной системы. Вместе с тем они очень важны для понимания тех возможностей, которые открываются для новой денежной системы.

11 ноября, 16:45

SAPVoice: A Grand Vision For A Blockchain-Powered Overhaul Of Money

Meet James Zdralek, a man who has devoted much of the past two years to a whitepaper – The Future is Money – that does no less than propose a new blockchain-powered monetary system running on inflation-proof, bubble-resistant digital currencies.

10 ноября, 07:15

Китай и Россия заменяют «устаревшую» SWIFT и удаляются от доллара

Пока весь мир обсуждал к скольким девицам приставал американский кинопродюсер Харви Вайнштейн, совсем тихо в мире произошло очень важное событие — Китай объявил о создании межбанковской системы «оплата по оплате» (‘payment versus payment‘ - PVP) для взаиморасчетов при операциях в китайских юанях и российских рублях. Как сообщают китайцы, целью системы станет «снижение рисков и повышение эффективности» национальных валютных систем. Символично, что данная система была запущена аккурат перед XIX съездом Коммунистической партии Китая, после получения одобрения Центрального банка Китая. Целью этой системы ставится ни мало, ни много, а составить конкуренцию давней монополии американской межбанковской платежной системы SWIFT (обеспечение одновременного проведения сделок в двух различных валютах)

08 ноября, 21:04

How India Is Moving Toward a Digital-First Economy

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Ashima Narula/EyeEm/Getty Images On November 8, 2016, India’s government did something that had no other government had  attempted before at the same scale: it decided to remove 86% of the country’s currency notes by value from circulation. Over the months that followed, more than one billion people participated in a “reboot” of the country’s financial and monetary system. An active debate has since ensued as to how the transition unfolded. Some have seen calamity for the economy while others, like us, see something quite different: a threshold moment in India’s digital transformation. Consider, for example, a government payment system created in 2016 that was processing 100,000 transactions per month in October of that year, prior to the sudden demonetization. A year later, after demonetization, the same system is processing 76 million transactions per month. Meanwhile, according to the Ministry of Finance, the Indian economy is operating with $45 billion less cash than it did prior to demonization. India’s digital infrastructure is coming to life, with a combination of policy and technological innovation having played an important role. The country is moving rapidly toward a digital-first economy. One of us, Arvind Gupta, is head of technology for Indian Prime Minister Narendra Modi’s BJP party, and has been for the past seven years. His views on digital transformations include his experience as a member of the research team that developed the first web browser (Mosaic, the predecessor to Netscape) in the early 1990s and a technology entrepreneur. The other, Philip Auerswald, is an economist whose most recent book traces processes of digital disruption over the long arc of human history. We collaborated here to describe what we see as a truly unique story of government-led digital disruption. Demonetization isn’t the only high profile economic act India’s government has undertaken recently. It has also implemented what was arguably the largest-scale tax reform ever implemented at a single time: the replacement of a complex web of 17 different taxes with a single Goods and Services Tax (GST). Once again, predictions of dire consequences preceded the move, and critiques of the implementation of the policy have followed since. Yet the fact remains that, in the first month after the introduction of the GST, over 1 million businesses registered with the system. In only the first few weeks after implementation, the increased transparency and digital data availability that are integral to the GST began to open up new sources of lending to small- and medium-sized enterprises (SMEs). However haltingly and with whatever inevitable difficulties occurring along the away, the bottom line is that a process of rationalization of the tax code is, after decades of delay, is underway at last. Digital Transformation in Government Does Not Happen Quickly The benefits of digital transformation in the provision of government services do not occur overnight. In fact they are always greatest over the long-term, while the costs are concentrated in the near-term. That is exactly why technology-led disruption is generally resisted by status quo interests: at least some of them lose out as a consequence of change. For this reason, the debate over short-term consequences of disruption largely misses the point of this, or any, technology-led disruption. This general point holds very specifically for demonetization and GST implementation: these were policies designed to have long-term and dynamic effects. While the accelerated uptake of digital financial services following demonetization and the increased lending to small businesses following tax code reform came as a surprise to many outside observers, neither was an unintended consequence of the policy, but rather were consciously intended to activate India’s digital infrastructure. The name for this digital infrastructure reflects its roots in the world of software development rather than public policy: it is referred to as “The India Stack.” In the software world, a “stack” refers to multiple interdependent layers of software services that are built on top of one another. The India Stack is also comprised of multiple layers, but the layers in this case are defined by different categories of government services. At the base of the stack — and thus also at the beginning of India’s story of digital transformation — is a nationwide system of digital identity generically termed the UID (Unique Identification) system, but more often in India referred to by its project name, Aadhaar. Aadhaar: The Base of the India Stack In broad terms, digital disruption by government has not kept pace with digital disruption in business. Of the systems to have broken the one-billion-user mark, many originated in the U.S. and are private sector efforts — Facebook and Google being among the prominent examples. An exception is Aadhaar, which means “foundation” or “base” in a number of Indian languages, including Hindi. To state the fact directly: Aadhaar is both the only technical system globally to have broken the one-billion-user threshold that originated from outside the United States, and the only such system to have been developed by the public sector. Due it in part to its unique public sector origins, it also has the distinction of having reached one billion users the most rapidly; the services built upon Aadhaar, through the inter-operability that defines the India Stack have, in turn, built their own record of scale and scope. India launched Aadhaar in 2009 with the then-improbable goal of giving every Indian a single digital identity in the form of a biometric authenticated 12-digit number. This National Unique Digital Identity system combined the best of open technologies to build a system which generates a unique number based upon de-duplication of the applicants’ biometric information, their submitted iris scans and fingerprints. Within five years of the first registration the Aadhaar system, over 600 million people had voluntarily registered with Aadhaar and obtained UID numbers. However, during this initial period, the search for a “killer app” to prove the value of Aadhaar was elusive. While the ability to authenticate identity was now digital, bank accounts and payment systems were still paper-based — requiring separate and laborious Know Your Customer validation procedures that had the result of continuing to exclude a majority of the people in India from accessing the benefits of banking. When Prime Minister Modi assumed power in 2014, he put digital transformation at the center of his plans. For this reason, to the surprise of some, Prime Minister Modi not only backed the system developed by the previous government, but dramatically increased its funding, broadened its scope, and — most importantly — amplified its impact. Using Technology to Go From Identity to Financial Inclusion Among the first actions the Modi government undertook was to launch the Pradhan Mantri Jan–Dhan Yojana (PMJDY, or Jan Dhan) financial inclusion program on August 28, 2014. On the very first day that Jan Dhan was implemented, the government created 10 million bank accounts using existing Aadhaar IDs in a paperless manner, at a fraction of the minimum previous customer acquisition costs. Since then, the government has created more than 300 million new, no-frills bank accounts. In additional to a free, zero-balance account, the Jan Dhan provides accident insurance coverage of 100,000 Rupees (about US$1,500), along with an overdraft facility of 5,000 Rupees (US$80) available for account holders—the entire point being to incentivize people to participate in the formal banking system. Having a biometrically-verifiable identity number and a bank account created the potential for adding another layer to the service stack: mobile payments. With an identity to create a bank account, and a bank account to receive funds, the hundreds of millions of people eligible for the receipt of government services in India suddenly had a way to access those services digitally, from beginning to end. In India this digital infrastructure is nicknamed the “JAM” trinity, referring to innovative interlinking of Jan Dhan (low-cost bank accounts), Aadhaar (identity), and mobile numbers. The India Stack could now have four layers: an identity layer, a documents layer, a payments layer, and a transactions layer. To understand the human impact of these changes, consider the plight of a mother in an Indian village who is eligible for a government subsidy to send her two daughters to school. Until less than two years ago, in order to avail herself of those funds she would have needed to fill out of a form verifying her daughters’ attendance; to get that form validated by the school; and to bring that form to a government office. Assuming that there were no impediments in the processing of the form — a big assumption — she would then have waited as the form travelled up the system to the point when a check would be issued to her in the amount of her benefits. To collect the check she would have needed to travel to a government office. If there turned out to be corruption in the office, she would have needed to produce a sum in cash equal to 15%-20% of the total amount before finally receiving the check. Then, of course, she would have needed to travel again to a bank to cash the check. In the end, of the 2,000 rupees to which she was entitled, she would (in a good outcome) have received about 1,400 rupees, with the balance having gone to travel and corruption money. If we consider this same situation using India Stack, the mother can use a tablet or smartphone to validate her identity using her Aadhaar number in the office of her daughters’ school. Her eligibility for the program is already in the system, and her Aadhaar number is now linked to the zero-balance bank account created for her under the Jan Dhan financial inclusion program. The workflow approves her request in a batch process. Within 24 to 48 hours she gets an alert on her phone that the full 2,000 Rupee amount has been transferred to her bank account. The India Stack has had a similarly transformative impact on the provision of government services through a number of other programs, notably including pensions, the provision of cooking gas, and [others], with comparable gains in both the quality of the citizen experience and in government efficiency. In the cooking gas program alone, more than 20 million people have voluntarily given up a benefit that they had previously claimed, but for which they were not rightly entitled, and over 25 million households now get their cooking gas subsidy directly into their bank accounts, simply as a consequence of having government services linked to their Aadhaar number. As with the case of the school fees, the subsidy is going to the intended beneficiaries directly—as with the mother of the schoolgirls—and not to intermediaries. The Shock Therapy of Demonetization As of our writing, 1.18 billion users have registered with the Aadhaar system. (For the record, these registrations are voluntary. However, the fact that an Aadhaar ID is required to link bank accounts, SIM connections, and income tax returns, among other services, has made the possession of an Aadhaar ID number a functional requirement in Indian society today, much as a driver’s license or other government-issued ID is a functional requirement in the United States.) But the government of India did not—and does not—conceive the deployment of the India Stack as a purely technical undertaking, designed exclusively to improve the delivery of government services. Rather, India Stack is envisioned as a new social infrastructure with the capacity to increase the resilience of Indian society to change and, thus, to help propel India into the twenty-first century digital economy. The deployment of the India Stack was one significant precondition for major structural reforms undertaken by the Modi government. This brings us back to demonetization and implementation of tax reforms. The idea of accomplishing a dramatic shift in the nature of the economy with a set of suddenly-implemented policies is not new. The “shock therapy” programs of the early 1990s, intended to accomplish the shift from socialist to market economies in Eastern Europe and the former Soviet Union, were based on a similar premise. However, where those programs created an environment in which a powerful few individuals were able to appropriate vast quantities of formerly government-held assets, India’s digital shock therapy has—measurably and verifiably—accomplished the opposite: it is eliminated vast concentrations of “off-the-books” wealth, resetting the clock of development at a more equitable starting point. When India underwent demonetization, the India Stack was suddenly and dramatically thrown into action. India’s own payments corporation launched BHIM application, a digital payments platform using the Universal Payments Interface (UPI) underlying the JAM Trinity. BHIM became one of fastest downloaded financial payments applications in recent history. The UPI system is very inclusive such that it serves both smartphone and non-smartphone users, so that every Indian can access banking and make payments digitally. The result? To begin with quantitative outcomes, the Indian economy is operating at about $45 billion less cash than what it would have been if demonetization had not taken place. Banks have far greater liquidity, SME lending is at all time high and digital transactions have multiplied 760 times over in some cases. When it comes to the tax system, the India Stack also plays a big role. To appreciate the magnitude of change involved in this policy change, it is important to note that the government of India is structured as a federal system, with states having powers and responsibilities at least as great as those of states in the federal system in the United States. Prior to the introduction of the GST, companies of any size in India had to keep track of no fewer than seventeen different categories of taxes on sales and transactions, including state-level value added taxes (VAT) and levies on the inter-state transportation of goods. On July 1, 2017, all of those seventeen taxes were subsumed into one tax: the GST. The implication of this policy change meant an opaque and irrational system that had developed over decades and varied across states was replaced by a simple and transparent system applicable nationwide. For this reason, the slogan the government of India adopted for the introduction of GST was “one nation, one tax.” But as with other types of disruptive change, GST can only be understood as the beginning of a long-term process. State governments must do their part to simplify and harmonize the tax code—rather than protecting treasured exceptions and localized benefits. The central government must continually respond to use feedback to ensure that its online payment system is as easy to use as possible. And, yes, businesses will need to adjust to a new reality, which will be costly in the short-term. The reward will come when India truly sheds the antiquated and inefficient tax systems that built up during the first seventy years after independence, and replaces it with the twenty-first century, digitally-enabled digital alternative to which the country is currently adapting. Building a Digitally-Empowered Society India is adding almost 110 million smartphone users every year and is on the verge of launching Aadhaar compliant devices with biometric authentication built into phones and tablets. The power of the “JAM trinity” will come into full force when transactions are enabled using Aadhaar and biometric authentication, creating a system that is not only cashless but card-less. Already, a new entrant into telecommunications service in India succeeded in using the India Stack to enroll 108 million consumers in 170 days with a totally paperless, mobile-centric manner—in the process, achieving customer acquisition costs of less than one U.S. dollar per customer as compared with the prior industry standard of $25. The process of digital disruption — whether or not led by government — creates numerous, significant social challenges. Rather than seek to slow that process to reduce those challenges, India has taken the opposite approach: to not only embrace, but to accelerate digital disruption to ensure that realizes its full potential for economic and social inclusion. India’s development was inequitable and inconsistent for far too long. The country still has a long way to go to reach its full potential. The societal challenges created by digital disruption, those both expected and unintended, are real. They will only be addressed with a combination of administrative humility and entrepreneurial determination. But the long-term benefits are real as well. The reality is that India is moving into the future at an unprecedented rate. And the path it is taking to get there is digital.

08 ноября, 03:10

Mauldin: The Next Crisis Will Reveal How Little Liquidity There Is

Authored by John Mauldin via MauldinEconomics.com, This is something I’ve been pondering for some time. I think the next crisis will reveal how little liquidity there is in the credit markets, especially in the high-yield, lower-rated space. Dodd–Frank has greatly limited the ability of banks to provide market-making opportunities and credit markets, a function that has been in their wheelhouse for well over a century. However, when the prices of massive amounts of high-yield bonds that have been stuffed into mutual funds and ETFs begin to fall, and the ETFs want to sell the underlying assets to generate liquidity, there will be no buyers except at extreme prices. My friend Steve Blumenthal says we are coming up on one of the greatest buying opportunities in high-yield credit that he has ever seen. And he has 25 years of experience as a high-yield trader. There have been three times when you had to shut your eyes, hold your breath, and buy because the high-yield prices had fallen to such extreme levels. That is going to happen again. But it is going to unleash a great deal of volatility in every other market. As the saying goes, when you need money in a crisis, you sell what you can, not what you want to. And if you can’t sell your high-yield, you end up selling other assets (like equities), which puts strain on them. But that is not just my view. Dr. Marko Kolanovic, a J.P. Morgan global quantitative and derivative strategy analyst, has written a short essay called “What Will the Next Crisis Look Like?” and it’s this week’s Outside the Box (subscribe to this free weekly publication here). He sees additional sources of weakness coming from other areas, too. Frankly, the lack of volatility is beginning to scare me a bit. Minsky constantly reminded us that stability begets instability. Stability is a pretty good word to describe the current markets. But such stability always ends in a "Minsky moment." We don’t know when; we don’t know where it starts; but we know it’s coming. What Will the Next Crisis Look Like? By Marko Kolanovic, PhD, and Bram KaplanOctober 3, 2017 Next year marks the 10th anniversary of the Great Financial Crisis (GFC) of 2008 and also the 50thanniversary of the 1968 global protests against political elites. Currently, there are financial and social parallels to both of these events. Leading into the 2008 GFC, some financial institutions underwrote products with excessive leverage in real estate investments. The collapse of liquidity in these products impaired balance sheets, and governments backstopped the crisis. Soon enough governments themselves were propped by extraordinary monetary stimulus from central banks. Central banks purchased ~$15T of financial assets, mostly government obligations. This accommodation is now expected to reverse, starting meaningfully in 2018. Such outflows (or lack of new inflows) could lead to asset declines and liquidity disruptions, and potentially cause a financial crisis. We will call this hypothetical crisis the “Great Liquidity Crisis” (GLC). The timing will largely be determined by the pace of central bank normalization, business cycle dynamics and various idiosyncratic events, and hence cannot be known accurately. This is similar to the 2008 GFC, when those that accurately predicted the nature of the GFC started doing so around 2006. We think the main attribute of the next crisis will be severe liquidity disruptions resulting from market developments since the last crisis: Decreased AUM of strategies that buy Value Assets: The shift from active to passive assets, and specifically the decline of active value investors, reduces the ability of the market to prevent and recover from large drawdowns. The ~$2T rotation from active and value to passive and momentum strategies since the last crisis eliminated a large pool of assets that would be standing ready to buy cheap public securities and backstop a market disruption. Tail Risk of Private Assets: Outflows from active value investors may be related to an increase in Private Assets (Private Equity, Real Estate and Illiquid Credit holdings). Over the past two decades, pension fund allocations to public equity decreased by ~10%, and holdings of Private Assets increased by ~20%. Similar to public value assets, private assets draw performance from valuation discounts and liquidity risk premia. Private assets reduce day-to-day volatility of a portfolio, but add liquidity-driven tail risk. Unlike the market for public value assets, liquidity in private assets may be disrupted for much longer during a crisis. Increased AUM of strategies that sell on ‘Autopilot’: Over the past decade there was strong growth in Passive and Systematic strategies that rely on momentum and asset volatility to determine the level of risk taking (e.g., volatility targeting, risk parity, trend following, option hedging, etc.). A market shock would prompt these strategies to programmatically sell into weakness. For example, we estimate that futures-based strategies grew by ~$1T over the past decade, and options-based hedging strategies increased their potential selling impact from ~3 days of average futures volume to ~7 days of average volume. Trends in liquidity provision: The model of liquidity provision changed in a close analogy to the shift from active/value to passive/momentum. In market making, this has been a shift from human market makers that are slower and often rely on valuations (reversion), to programmatic liquidity that is faster and relies on volatility-based VAR to quickly adjust the amount of risk taking (liquidity provision). This trend strengthens momentum and reduces day-to-day volatility, but increases the risk of disruptions such as the ones we saw on a smaller scale in May 2010, October 2014 and August 2015. Miscalculation of portfolio risk: Over the past 2 decades, most risk models were (correctly) counting on bonds to offset equity risk. At the turning point of monetary accommodation, this assumption will most likely fail. This increases tail risk for multi-asset portfolios. An analogy is with the 2008 failure of endowment models that assumed Emerging Markets, Commodities, Real Estate, and other asset classes are not highly correlated to DM Equities. In the next crisis, Bonds likely will not be able to offset equity losses (due to low rates and already large CB balance sheets). Another risk miscalculation is related to the use of volatility as the only measure of portfolio risk. Very expensive assets often have very low volatility, and despite downside risk are deemed perfectly safe by these models. Valuation Excesses: Given the extended period of monetary accommodation, most of assets are at their high end of historical valuations. This is particularly true in sectors most directly comparable to bonds (e.g., credit, low volatility stocks), as well as technology- and internet-related stocks. Sign of excesses include multi-billion dollar valuations for smartphone apps or for ‘initial crypto- coin offerings’ that in many cases have very questionable value. We believe that the next financial crisis (GLC) will involve many of the features above, and addressing them on a portfolio level may mitigate the impact of next financial crises. What will governments and central banks do in the scenario of a great liquidity crisis? If the standard rate cutting and bond purchases don’t suffice, central banks may more explicitly target asset prices (e.g., equities). This may be controversial in light of the potential impact of central bank actions in driving inequality between asset owners and labor (e.g., see here). Other ‘out of the box’ solutions could include a negative income tax (one can call this ‘QE for labor’), progressive corporate tax, universal income and others. To address growing pressure on labor from AI, new taxes or settlements may be levied on Technology companies (for instance, they may be required to pick up the social tab for labor destruction brought by artificial intelligence, in an analogy to industrial companies addressing environmental impacts). While we think unlikely, a tail risk could be a backlash against central banks that prompts significant changes in the monetary system. In many possible outcomes, inflation is likely to pick up. The next crisis is also likely to result in social tensions similar to those witnessed 50 years ago in 1968. In 1968, TV and investigative journalism provided a generation of baby boomers access to unfiltered information on social developments such as Vietnam and other proxy wars, Civil rights movements, income inequality, etc. Similar to 1968, the internet today (social media, leaked documents, etc.) provides millennials with unrestricted access to information on a surprisingly similar range of issues. In addition to information, the internet provides a platform for various social groups to become more self-aware, united and organized. Groups span various social dimensions based on differences in income/wealth, race, generation, political party affiliations, and independent stripes ranging from alt-left to alt-right movements. In fact, many recent developments such as the US presidential election, Brexit, independence movements in Europe, etc., already illustrate social tensions that are likely to be amplified in the next financial crisis. How did markets evolve in the aftermath of 1968? Monetary systems were completely revamped (Bretton Woods), inflation rapidly increased, and equities produced zero returns for a decade. The decade ended with a famously wrong Businessweek article ‘the death of equities’ in 1979. *  *  * Every week, celebrated economic commentator John Mauldin highlights a well-researched, controversial essay from a fellow economic expert. Whether you find them inspiring, upsetting, or outrageous… they’ll all make you think Outside the Box. Get the newsletter free in your inbox every Wednesday.

07 ноября, 11:02

Октябрь-1917: Царьград или Дрыщув?

Название крохотной карпатской деревушки Дрыщув – яркий символ истинной сути наших мечтаний планетарного масштаба, иллюзий и химер, а выбор между Царьградом и Дрыщувом — одна из любимейших национальных забав.

03 ноября, 19:26

Singapore Average Overnight Interest Rate

The benchmark interest rate in Singapore was last recorded at 1.10 percent. Interest Rate in Singapore averaged 1.66 percent from 1988 until 2017, reaching an all time high of 20 percent in January of 1990 and a record low of -0.75 percent in October of 1993. Sibor is a reference rate based on the interest rates at which banks offer to lend unsecured funds to each other in the Singapore interbank market. In Singapore, the monetary policy decisions are taken by The Monetary Authority of Singapore (Penguasa Kewangan Singapura). The Monetary Authority of Singapore does not control the monetary system by monitoring interest rates. Instead, it manages the Singapore dollar (SGD) exchange rate against a trade-weighted basket of currencies of Singapore's major trading partners and competitors. On January 28th, 2015 Singapore’s Monetary Authority surprisingly reduced the slope at which the SGD appreciates against main currencies, citing lower inflation expectations due to falling oil prices. This page provides the latest reported value for - Singapore Average Overnight Interest Rate - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.

03 ноября, 13:04

Belize Interest Rate

The benchmark interest rate in Belize was last recorded at 2.50 percent. Interest Rate in Belize averaged 4.01 percent from 2010 until 2017, reaching an all time high of 6.88 percent in September of 2010 and a record low of 2.31 percent in December of 2015. In Belize, the Interbank Rate is the rate of interest charged on short-term loans made between banks. The Central Bank of Belize does not control the monetary system by monitoring interest rates. Instead, it is responsible for maintaining a stable exchange rate. Since May of 1976, Belize has maintained a fixed exchange rate of BZD 2.00 to USD 1.00. This page provides - Belize Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

03 ноября, 09:11

Начало конца фиатных денег уже близко?

Месяц назад глава отдела кредитных стратегий Deutsche Bank Джим Рид опубликовал феноменальный отчет, который несколько лет назад был бы предан анафеме, поскольку речь шла о двух ранее запрещенных темах.

02 ноября, 09:48

Ответ про биткоин. История денег.

Навеяно https://smart-lab.ru/blog/430027.php а так же постоянными утверждениями уважаемого Спекулятора о том, что биткоин это просто мусор. Самое важное. Ребята, кто вам сказал, что валюта должна быть чем то обеспечена? Эти времена прошли давным давно. Небольшой экскурс в сжатом виде. Максимально упрощая. Тысячелетиями на планете земля была эпоха простого воспроизводства: создал продукт, съел продукт или обменял. С промышленной революцией пришло расширенно воспроизводство. Это когда создают уже не продукт, а средства производства и с их помошью уже сам продукт, т.е. например — создаешь ткацкий станок, а он производит уже в 1000 раз больше ткани. Эффективность выросла грубо говоря в 1000 раз. И товарная масса тоже в 1000 раз. Далее… казалось бы, живи и радуйся, но начинают возникать кризисы перепроизводства. Причем с завидной регулярностью. Как же может быть кризис перепроизводства спросите вы, людям не нужны товары? Нужны. Только вот денег нет их купить. Нет денег, не работает предприятие, не работает предприятие, нет зарплат, налогов, стоит розница, без продаж какой смысл производить? Замкнутый круг. Общество погружается в депрессию. На самом деле это были величайшие трагедии, это потеря миллионами людей веры в завтрашний день, невозможность обеспечить себя, семью и детей. В чем же проблема? Проблема в том, что перейдя в эпоху расширенного воспроизводства, экономики стран продолжали использовать обеспеченные золотом денежные системы. Обеспеченные золотом! Продуктом простого воспроизводства! Нельзя выпустить станок производящий золото! Можно ускорить его добычу, да… даже в десятки раз. Но товарная масса выросла на несравнимо бОльшую величину. Не течет кровь по жилам экономики, нет денег соразмерно совокупному росту товарной массы и экономики — и экономика погружается в депрессию. Значимые шаги по выходу из этой проблемы были предприняты в период глубочайшей депрессии — Великой депрессии. И кейнсианцы и монетаристы сходились в одном — проблема в нехватке денежной массы. Пришлось. Именно. Пришлось отказаться временно от золотого стандарта. В 1933м в США. Великобритания отказалась еще раньше в 1931м. Кейнс, по моему это он был, даже шутил: мы будем закапывать бутылки с деньгами, чтобы люди их искали и вливали в экономику. Конечно, это не пришлось делать, вместо этого развернули грандиозные инфраструктурные стройки. Безработные получали работу и зарплату, они привлекались к общественным работам, деньги вливались в экономику, а США получила еще и крупнейшие инфраструктурные объекты. Тогда были построены каналы, мосты, дороги и пр. Медленно, постепенно страна начала выкарабкиваться. Потом была еще и Вторая Мировая, где вовсю уже был запущен механизм загрузки экономики необеспеченными деньгами. Золото это как религия, не смотря на противодействие в 1944м году опять вернулись к золотому обеспечению. Уже конечно с поправками, но вернулись. Соглашения подписали в городке Бреттон-Вудс. Однако, довольно скоро изжившая себя система погрузилась в кризис и в 70х годах ушла в историю. Итак, выводы: Религия золота только лишь религия. Бог золота не существует. Не в почитании золота суть, а в функционировании экономики. Не принципы во что бы то ни было сохранить старые догмы важны. Важно дальнейшее развитие. Сегодня финансовые власти постепенно перешли на таргетирование инфляции, гибко регулируя денежное предложение через ставку, депозиты и размещение гос. ценных бумаг. Вообще не имеет значения сколько денег в принципе. Важно лишь, что экономика работает, обеспечена занятость, люди уверены в завтрашнем дне, дети накормлены. Исключительно это лишь важно. Да мы потеряли деньги, как инструмент накопления. Но мы приобрели большее. Рост, занятость и развитие. Теперь к главному. Биткоин. Деньги как мы уже выяснили, нужны исключительно для функционирования товарно-денежных отношений, они не должны быть обеспечены золотом, вином или литром молока. Наоборот, литр молока может номинироваться в деньгах. Чем прозрачнее валюта перетекает между экономическими субъектами, чем меньше барьеров, тем лучше для экономики. Сегодня мы видим только зарождение новой технологичной валюты, тоже ничем не обеспеченной, как классические, но абсолютно прозрачной. Да, сегодня это этап первоначального накопления новой валюты, но завтра она неизбежно перетечет в производство, розницу, в оплату труда. Не будьте долбоящерами, ребята. Сейчас 21 век.

30 октября, 19:29

Налоговый кодекс и золотой стандарт. Что мешает Америке на пути к процветанию

Статья Малкольма Стива Форбса младшего была опубликована 14 апреля 1995 года в американском Forbes

27 октября, 19:09

Между песочницей и железным забором. Что будет с регулированием криптовалют

Россия делает сложный выбор пути регулирования цифровой экономики, какие есть варианты? Стоит ли участникам процесса бояться отсутствия компетенций и ICO, выбрать американскую модель или создать крипторубль?

26 октября, 09:45

Китай и Россия заменяют «устаревшую» SWIFT и удаляются от доллара

Пока весь мир обсуждал к скольким девицам приставал американский кинопродюсер Харви Вайнштейн, совсем тихо в мире произошло очень важное событие — Китай объявил о создании межбанковской системы «оплата по оплате» (‘payment versus payment‘ - PVP) для взаиморасчетов при операциях в китайских юанях и российских рублях. Как сообщают китайцы, целью системы станет «снижение рисков и повышение эффективности» национальных валютных систем. Символично, что данная система была запущена аккурат перед XIX съездом Коммунистической партии Китая, после получения одобрения Центрального банка Китая. Целью этой системы ставится ни мало, ни много, а составить конкуренцию давней монополии американской межбанковской платежной системы SWIFT (обеспечение одновременного проведения сделок в двух различных валютах). Стоит отметить и тот факт, что введение в строй данной системы произошло в канун доклада генерального секретаря ЦК КПК Си Цзиньпина, который там особо отметил, что реализация китайской мечты невозможна без мира и процветания у соседей, то есть нас, в первую очередь.