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Financial services in developing countries

"Access to traditional financial services, such as deposit-taking accounts and automatic teller machines (ATMs), in developing countries has expanded in recent years. Since 2004 the number of ATMs per 100,000 adults has more than doubled, to around 22 (compared with over 70 in rich countries). Russia and Brazil have more ATMs relative to their population than other emerging markets, but according to a World Bank survey less than 2% of adults there used a mobile phone to receive money. Mobile payments are a substitute for traditional banking. In Kenya, where there are 2,381 ATMs (less than ten for every 100,000 adults), over two-thirds of people use mobile money." Continue reading →

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China’s State Press Calls for ‘Building a de-Americanized World’

"Key among its proposals: the creation of a new international reserve currency to replace the present reliance on U.S. dollars, a necessary step to prevent American bumbling from further afflicting the world, the commentary suggests. 'The cyclical stagnation in Washington for a viable bipartisan solution over a federal budget and an approval for raising the debt ceiling has again left many nations’ tremendous dollar assets in jeopardy and the international community highly agonized,' says Xinhua. 'The world is still crawling its way out of an economic disaster thanks to the voracious Wall Street elites,' it adds. It’s not a new refrain." Continue reading →

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It’s back with a vengeance: Private debt

"As Washington is struggling with debt and all its political ramifications, American companies and consumers are embracing it, running up record amounts in 2013. Consumer credit, for instance, surged past the $3 trillion mark in the second quarter of 2013 and continues on an upward trajectory, according to the most recent numbers from the Federal Reserve. At $3.04 trillion, the total is up 22 percent over the past three years. Student loans are up a whopping 61 percent. Total household debt, according to the Fed's flow of funds report, is at $13 trillion, nearly back to its pre-crisis level in 2007 and a shade below government debt of $15 trillion." Continue reading →

Continue ReadingIt’s back with a vengeance: Private debt

‘Professor of Entrepreneurship’ at MIT Predicts a Bitcoin Backlash

"Simon Johnson, a professor of entrepreneurship at MIT’s Sloan School of Management, expects Bitcoin to face political pressure and aggressive lobbying from big banks because of its disruptive nature. Johnson says that Bitcoin’s success will draw increased attention from governments and regulators, who are used to having tight control over currencies. He believes they will be egged on by established financial institutions, which will likely seek to quash the currency. Bitcoin enables very rapid, cheap transfers and payments that could compete with existing fee-based ways of moving money around. 'Any bankers watching this should be very afraid,' said Johnson." Continue reading →

Continue Reading‘Professor of Entrepreneurship’ at MIT Predicts a Bitcoin Backlash

China warns US to ‘stop manufacturing crises’ and raise debt ceiling

"Premier Li Keqiang added his voice to concerns that the world’s biggest economy could default on its debt. Mr Li told John Kerry, US secretary of state, that China was paying 'great attention' to the issue of raising America's $16.7 trillion (£10.5 trillion) debt ceiling. China is the largest foreign owner of US debt, holding more than $1.277 trillion in Treasury bills. Mr Li's remarks, published by the state-owned Xinhua News Agency, follow comments by vice finance Minister Zhu Guangyao on Monday that 'the clock is ticking' and any US default would have global repercussions. Mr Kerry [is said to have] made clear to Mr Li that President Barack Obama was 'committed to resolving the issue.'" Continue reading →

Continue ReadingChina warns US to ‘stop manufacturing crises’ and raise debt ceiling

Venezuelan Inflation Rate Tops 49 Percent

"Venezuela's Central Bank says prices have risen nearly 50 percent since last September as the country struggles to rein in a quickening rate of inflation and widespread shortages. The country's leftist government has spent heavily on social programs, rapidly increasing the amount of currency in circulation. It also tries to control prices while restricting access to bolivars at the official rate of exchange of 6.3 per dollar. That leads many to pay seven times as much for dollars on the black market. Officials say speculators are to blame for soaring prices and shortages. The inflation rate for 2012 was 20.1 percent." Continue reading →

Continue ReadingVenezuelan Inflation Rate Tops 49 Percent

Caribbean and Central America Close Tax Loopholes

"In Panama, owners of bearer shares no longer have their anonymity ensured. In the Cayman Islands, tax information will soon be shared under the US Foreign Account Tax Compliance Act (FATCA). These are just two striking examples of how jurisdictions in Central America and the Caribbean are cracking down on tax cheats. For decades, Switzerland prided itself as a haven for the world’s most affluent, with strict provisions for privacy. But now the former advantages of isolation and non-compliance are becoming a liability due to the limitations they place on access to the global financial system." Continue reading →

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Surging Bitcoin Downloads in India

"Fears that the Federal Reserve will scale back its easy-money policies sent India’s rupee tumbling to record lows against the U.S. dollar this summer. And more recently, Moody’s warned that when the Fed does actually begin tapering its $85 billion in monthly bond purchases, countries with large current-account balances, like India and Brazil, will see even greater capital outflows. The outflows, in turn, will put their currencies and debt ratings further under pressure. In 2013 so far, India’s current-account deficit has grown to a record 4.9% of GDP. That loss of confidence in the rupee has translated into an opportunity for bitcoin." Continue reading →

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‘Rejoice: the Yellen Fed will print money forever to create jobs’

"We now know where we stand. Janet Yellen is to take over the US Federal Reserve, the world's monetary hegemon, the master of all our lives. The Fed will be looser for longer. The FOMC will continue to print money until the US economy creates enough jobs to reignite wage pressures and inflation, regardless of asset bubbles, or collateral damage along the way. No Fed chief in history has been better qualified. She has pedigree. Her husband is Nobel laureate George Akerlof, the scourge of efficient markets theory. Her lodestar is the 'non-accelerating inflation rate of unemployment' (NAIRU). When the rate is above NAIRU, she is a dove: when below, she is a hawk." Continue reading →

Continue Reading‘Rejoice: the Yellen Fed will print money forever to create jobs’

Will Migrant Workers Drive Bitcoin’s Mundane Future?

"Several companies have determined that the biggest opportunity to prove their worth is in the decidedly boring race to help emigres handle remittances, a global market expected to total $550 billion this year, according to the World Bank. The average fee on remittances is 9 percent of the transaction cost, and some banks charge additional 'lifting' fees of up to 5 percent when someone wants to turn the remittance into cash. Sitting in the middle of money transmissions is a lucrative business. Western Union(WU) brought in $4.6 billion in transaction fees charged to consumers last year and almost $1 billion further in foreign-exchange revenue from its consumer business." Continue reading →

Continue ReadingWill Migrant Workers Drive Bitcoin’s Mundane Future?