“One does not exchange money for money “

Autor: Ljiljana Tatic                                                                                                                     Nicosia, 17.07.2016

Bitcoin should not be incorporated into the existing system of central banks. Problem of Central Banks is not only a fact that they are centralized. Bigger problem is that they consider money as a capital ‘per se’. The role of Bitcoin has to become a new standard of value, and as such to become an alternative to the current financial gambling system.  

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The Bank for International Settlements (BIS) is a treaty organization that is not under the jurisdiction of any government. The BIS operates as a kind of central bank of central banks that settles international imbalances caused by uneven international trade.1

Friedman, whose monetary economic theories heavily influenced Greenspan, was concerned about the stifled nature of the debate on why Federal Reserve Bank engaged almost 500 prestiges Economists. Milton Friedman, in a 1993 letter to Auerbach that the author quotes in his book, argued that the Fed practice was harming objectivity: “I cannot disagree with you that having something like 500 economists is extremely unhealthy. As you say, it is not conducive to independent, objective research. You and I know there has been censorship of the material published. Equally important, the location of the economists in the Federal Reserve has had a significant influence on the kind of research they do, biasing that research toward noncontroversial technical papers on method as opposed to substantive papers on policy and results,” Friedman wrote.2

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HOW MARKET DEMAND FOR BITCOIN MIGHT BE AFFECTED BY FAILED MONETARY POLICY

Ljiljana Tatic
Nicosia, 13.07.2016.all-the-worlds-money-and-markets-dv

All of the World’s Money and Markets in One Visualization How much money exists in the world? Strangely enough, there are multiple answers to this question, and the amount of money that exists changes depending on how we define it. The more abstract definition of money we use, the higher the number is. In this data visualization of the world’s total money supply, we wanted to not only compare the different definitions of money, but to also show powerful context for this information. That’s why we’ve also added in recognizable benchmarks such as the wealth of the richest people in the world, the market capitalizations of the largest publicly-traded companies, the value of all stock markets, and the total of all global debt. The end result is a hierarchy of information that ranges from some of the smallest markets (Bitcoin = $5 billion, Silver above-ground stock = $14 billion) to the world’s largest markets (Derivatives on a notional contract basis = somewhere in the range of $630 trillion to $1.2 quadrillion). In between those benchmarks is the total of the world’s money, depending on how it is defined. This includes the global supply of all coinage and banknotes ($5 trillion), the above-ground gold supply ($7.8 trillion), the narrow money supply ($28.6 trillion), and the broad money supply ($80.9 trillion). All figures are in the equivalent of US dollars.

 

If all cash money will be replaced with crypto currency, and even if Central Bank lose its clearinghouse monopoly and bitcoin is spread everywhere, the CB can still exert itself over the economy because it issues the one special asset that defines the unit of account: reserves. Central Bank monetary policy can still exist in a world without central bank money.

While bitcoin could one day shut down most of the roles that the Central Bank plays, the monetary policy will most probably stay intact. The reason for this is that the no matter what happens to all its other functions, the Central Bank will continue to define the economy’s unit of account.

Small minorities of transactions are made with bitcoin so far. Most of these transactions are rarely priced in terms of bitcoin. Rather, a merchant’s website typically display prices in terms of dollars, and then compute the amount of bitcoin that a customer must fork over by referring to the current dollar-to- bitcoin exchange rate. The dollar is very much the unit of account in the US, not bitcoin. In Europe even less.

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Europe should welcome more refugees and economic migrants—for the sake of the world and itself

Refugees in Europe

Exodus

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FOR too long Europe has closed its eyes to Syria’s foul and bloody civil war, and tried to keep the suffering multitudes out. Suddenly the continent’s gates have been pushed open by two political forces. One is moral conscience, belatedly wakened by the image of a drowned Syrian child on a Turkish beach. The other is the political courage of Angela Merkel, the German chancellor, who told her people to set aside their fear of immigrants and show compassion to the needy.

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The last surprise Fed rate hike was followed by the ‘bond market massacre’ of 1994

larry summersREUTERS/Stefan WermuthLawrence H. Summers.

The Federal Reserve meets on Wednesday and Thursday to decide if it will end the era of 0% interest rates first introduced inDecember 2008 in its effort to stimulate growth and inflation in the wake of the global financial crisis.

Currently, the consensus is that the Fed will keep rates unchanged.

However, there are many economists with high conviction that the Fed will indeed hike rates in its latest policy statement, set for release at 2:oo p.m. ET on Thursday.

The market would be surprised

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Kineski trenutak istine

Nebojša Katić - Iz drugog ugla

Da li poslednja zbivanja na kineskim finansijskim tržištima – veliki pad vrednosti berzanskih akcija i devalvacija juana – konačno daju za pravo zapadnim kritičarima kineskog modela razvoja? Da li je reč o najavi nove, velike ekonomske krize?

Ima već dve decenije kako neke od skeptičnih, često i zluradih zapadnih analiza iskazuju rezervu prema kineskoj ekonomskoj budućnosti. U početku su osporavane kineske stope rasta i njihova visina je proglašavana za statističku obmanu. Kasnije, kada je fantastičan uspon kineske privrede postao više nego očigledan, statistika rasta je priznavana, ali se kritika usmerila ka neodrživosti kineskog ekonomskog modela.

U poslednjih 35 godina kineska privreda je rasla po prosečnoj stopi od preko 9 procenata godišnje. Tako visoka stopa u tako dugom periodu jeste spektakularna čak i za visoke standarde istočne i jugoistočne Azije. Kina je postala ne samo industrijska velesila i šampion modernizacije, već je 2014. (mereno paritetom kupovnih snaga), po visini ukupnog BDP-a…

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