World Could Face Recession Next Year: World Bank Report

The world could face a recession next year amid simultaneous tightening of monetary policy by central banks around the world, the World Bank has said in a new report that called for boosting production and removing supply bottlenecks to ease inflation. Several indicators of global recessions are already “flashing signs”, the report said. The global economy is now in its steepest slowdown following a post-recession recovery since 1970, it added.

Global interest rate hikes by central banks could reach 4%, double that in 2021, just to keep core inflation — which strips out volatile items such as food and fuel — at 5% levels, the bank said.

From the US to Europe and India, countries are aggressively raising lending rates, which aim to curb the supply of cheap money and thereby help bring down inflation. But such monetary tightening has costs. It dampens investment, costs jobs, and suppresses growth, a trade-off faced by most nations, including India.

“Global growth is slowing sharply, with further slowing likely as more countries fall into recession. My deep concern is that these trends will persist, with long-lasting consequences that are devastating for people in emerging market and developing economies,” World Bank president David Malpass said in a statement after the report was released on Thursday.

The world is facing record inflation due to factors including the Ukraine war that has dwindled food supplies, knock-on effects of the pandemic on supply chains, poor demand in China due to its persistent Covid lockdowns, and extreme weather that has upended forecasts of agricultural output.

The Reserve Bank of India (RBI) announced a third repo rate hike to 5.40% in August, up 50 basis points. A basis point is one-hundredth of a percentage point. The RBI maintained its inflation estimate at 6.7% for 2022-23 while forecasting real (inflation-adjusted) GDP growth at 7.2%.

People Are Trying To Flee The Empire State For Warmer Destinations. Here’s Why.

By, Aarthi Swaminathan

New York has lost more residents than any other state, a new report by moveBuddha, a company that calculates moving cost, said.  New York, maybe the people don’t quite love you anymore.

According to a new report by moveBuddha, a site where people can calculate their moving costs, New York lost more residents than any other state between April 1, 2020 and July 1, 2021, according to the U.S. Census Bureau population estimates.

Over that period, the state lost 319,020 people. New York state’s population as of 2020 was 20.2 million, according to the Census Bureau.

The report also used data collected from users looking for moving options on moveBuddha’s website between January 1, 2022 and August 5, 2022.  There were around 282,000 queries during this period.

New York is the fourth most-searched state to move out of this year, the company added. That’s behind New Jersey, California, and Illinois.

People are leaving for reasons that include unemployment or underemployment, skyrocketing rents, high cost of living, and high taxes, as compared to other states, moveBuddha said in the study. 

People also appear to be leaving the Empire State for warmer pastures. New York to Los Angeles was the most popular search on moveBuddha. About 20% of New Yorkers looking to move were planning to head to Florida, followed by California, and Texas.

Of course, some parts of New York City are still hot. Rising rents and increasing pressure for workers to be in the office is driving demand for apartments in the city. 

There’s also evidence that some people who left New York City earlier in the pandemic are coming back. And some are ready to spend on real estate. ‘Out of towners’ returning to New York (many of whom are actually returning former residents) have an average maximum housing budget of $1.3 million, while locals have budgeted an average maximum of $998, 011 for a home purchase, a recent Redfin report found.

But moveBuddha says that neighborhoods in Queens, the Bronx and Brooklyn all have more folks looking to leave, rather than move in, this year. 

The report also found that four of the top 10 counties that saw a population decline between the same time period are in New York City: New York County (i.e. Manhattan), Kings County (i.e. Brooklyn), Bronx County, and Queens County.

Based on users searching on the moveBuddha site, the number of moves-out outnumbered the number of moves-in Jamaica, N.Y., Bronx, N.Y. and Staten Island, N.Y. the fastest.

In other words, for every 100 people moving out of Jamaica, only 27 people moved in. In the Bronx, that number was 36, and in Staten Island, 27.

The most popular city of origin for people moving to New York was San Francisco, moveBuddha added.

Nonetheless, there have been some gains for the Empire State: moveBuddha saw a lot more people moving in than out into Webster, N.Y., Ithaca, N.Y., and Fairport, N.Y.

The typical home price in Webster and in Fairport, or otherwise together known as Rochester, N.Y., was around $218,000, according to Zillow’s Home Value Index. Home values are up 11.2% from the previous year.

In Ithaca, a college town, the typical home is roughly $302,000, according to Zillow. Homes have grown in value by 21.3% from last year.

Got thoughts on the housing market? Write to MarketWatch reporter Aarthi Swaminathan at [email protected]

Mortgage Rates Rise Above 6% Since 2008

Mortgage rates jumped again, surpassing the 6% mark and reaching the highest level since the fall of 2008.  The 30-year fixed-rate mortgage averaged 6.02% in the week ending September 15, up from 5.89% the week before, according to Freddie Mac. That is significantly higher than this time last year, when it was 2.86%. 

Stubbornly high inflation is pushing rates up, said Sam Khater, Freddie Mac’s chief economist. 

“Mortgage rates continued to rise alongside hotter-than-expected inflation numbers this week, exceeding 6% for the first time since late 2008,” he said. 

After starting the year at 3.22%, mortgage rates rose sharply during the first half of the year, climbing to nearly 6% in mid-June. But since then, concerns about the economy and the Federal Reserve’s mission to combat inflation have made them more volatile. 

Rates had fallen in July and early August as recession fears took hold. But comments from Federal Reserve Chairman Jerome Powell and recent economic data have pulled investors’ attention back to the central bank’s fight against inflation, pushing rates higher. 

The 10-year Treasury yield moved higher last week as markets prepared for further monetary tightening by the Fed, said George Ratiu, manager of economic research at Realtor.com. 

The Federal Reserve does not set the interest rates borrowers pay on mortgages directly, but its actions influence them. Mortgage rates tend to track yields on 10-year US Treasury bonds. As investors see or anticipate rate hikes, they often sell government bonds, which sends yields higher and with it, mortgage rates. 

Investors reacted to August’s inflation numbers, which showed that consumer prices continued to rise at 1980s levels, said Ratiu. 

“Core inflation remains stubbornly elevated, putting pressure on the Federal Reserve to maintain an aggressive stance on monetary tightening,” he said. “Markets are keeping a close eye on the central bank’s meeting next week, expecting another 75-basis-point increase in the policy rate, if not a 100-basis-point jump.” 

Sales are slowing, but affordability is still a challenge 

As mortgage rates rise and home prices remain high, home sales are slowing.  With rates essentially double where they were a year ago, applications for home loans have dropped and applications to refinance into a lower payment have fallen off a cliff, down 83% from a year ago, according to the Mortgage Bankers Association. 

“Higher mortgage rates … have contributed to more homebuyers staying on the sidelines,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. 

A year ago, a buyer who put 20% down on a $390,000 home and financed the rest with a 30-year, fixed-rate mortgage at an average interest rate of 2.86% had a monthly mortgage payment of $1,292, according to calculations from Freddie Mac. 

Today, a homeowner buying the same-priced house with an average rate of 6.02% would pay $1,875 a month in principal and interest. That’s $583 more each month. 

“With real median household incomes remaining relatively unchanged, many first-time homebuyers are finding the door to homeownership is closed for this season,” said Ratiu. 

He said that with borrowing costs expected to continue rising in the next few months, it is becoming increasingly clear that home prices need to decline to bring balance back to housing markets. 

“Many sellers are recognizing the shift in market conditions and are responding by cutting their asking prices,” he said. “These changes are coinciding with the time of the year when buyers have historically found the best market conditions to find a bargain.”

Bezos Loses Title of World’s Second Richest Man to Indian Billionaire

Gautam Adani, the Indian tycoon who has climbed the wealth rankings at breakneck speed this year, surpassed Jeff Bezos to become the world’s second-richest person. Jeff Bezos has lost the title of second richest man in the world behind Elon Musk, electric-vehicle leader Tesla’s  (TSLA)  chief executive. 

The founder and executive chairman of tech and online-retail giant Amazon  (AMZN)   dropped to No. 3, on Sept. 16 at around 10:38 a.m in New York, according to the Bloomberg Billionaires Index

At that time, Bezos had a fortune estimated at $145.8 billion compared with $146.9 billion for the Indian tycoon Gautam Adani who ended the day with a fortune of $147 billion, thus consolidating his second place won in the morning. Bezos has risen a bit and is also worth roughly $147 billion. The day started with Adani at No. 3 and Bezos at No. 2.

According to the Bloomberg Billionaires Index, just $1 billion had separated Bezos from Gautam Adani, the Indian billionaire and chairman of Adani Group, an industrial conglomerate.  

Bezos’ fortune was then valued at $150 billion in this ranking, while Adani’s was estimated at $149 billion.

Since the immense fortune of the two men rests mainly in the shares each holds in his respective company, the safe bet was that Adani would overtake Bezos by the end of the day.

The current volatility in the markets — due to fears about the health of the economy in the face of an aggressive rate hike by the Federal Reserve to fight inflation — is particularly weighing on technology groups like Amazon. 

Amazon stock is down around 26% since January. This translates into a drop in Bezos’s fortune, which has shrunk by $45.5 billion this year.

Adani’s Meteoric Rise

Conversely, Adani is experiencing a meteoric rise. His fortune has increased by $70.3 billion since January. 

His countryman, Mukesh Ambani, ranked tenth richest person in the world with an estimated fortune of $88.7 billion, was the other top 10 billionaire to have seen his fortune increase (+$1.02 billion) this year until Sept.15. But the following day, Ambani, who is chairman and managing director of the Reliance Industries conglomerate, lost of his gains. He’s now down by $1.3 billion. 

At the beginning of the year, Adani became the richest person in Asia, ahead of Ambani. Adani first overtook India’s Mukesh Ambani as the richest Asian person in February, became a centibillionaire in April and surpassed Bill Gates and France’s Bernard Arnault in the past two months. It’s the first time someone from Asia has featured this highly in the top echelons of the wealth index, which has been dominated by US tech entrepreneurs. 

Adani, 60, dropped out of college to try his luck in Mumbai’s diamond industry in the early 1980s before turning to coal and ports. His conglomerate has since expanded into everything from airports to data centers, cement, media and green energy, focusing on areas that Prime Minister Narendra Modi deems crucial to meeting India’s long-term economic goals. The nation’s largest private-sector port and airport operators, city-gas distributor and coal miner are all part of Adani’s empire, which also aims to become the world’s largest renewable-energy producer. Last year, it pledged to invest $70 billion in green power, a pivot that has been criticized by some as greenwashing given that so much of the group’s revenue still comes from fossil fuels. 

The push into renewables and infrastructure has earned Adani investments from firms including Warburg Pincus and TotalEnergies SE, helping boost his companies’ shares and his personal fortune. This year, he added about $70 billion to his wealth — more than anyone else — while many have seen losses.

Repel The Recession With These 5 Tips

It doesn’t hurt your bottom line to take a step back and self-evaluate. Learn how you’ll be able to repel the recession with these 5 tips. 

While the professional pundits debate when or if an economic recession is imminent, it may be a good idea to ensure you’re prepared, nonetheless. It doesn’t hurt your bottom line to take a step back and self-evaluate. Learn how you’ll be able to repel the recession with these 5 tips.

Live Your Life Within Your Means

Many of you may already live your everyday lives with this money-management strategy and if you do, then you’re ahead of the curve. But let’s be honest, we all know people who do not live within their means. Saying ‘no’ when deciding on an unneeded purchase is a skill that sometimes needs to be learned.

It’s important to carefully weigh all decisions about money, especially if a recession is looming. Don’t get caught in the trap of thinking the recession may not last long. The more conscious you are about spending habits, the more you can avoid going into debt with credit cards and loans. It’s better to save now and put off making big purchases, then to build up your debt and struggle to get out from under it later in life. Speaking of saving…

Look For Ways to Save

It’s always a good idea to audit your own finances. Most people are aware of their paycheck, but they are often fuzzy about the money that leaves their account. Re-evaluate your monthly subscriptions. Do you need every single streaming service? How often do you make coffee runs to your local café? It might be time to brew a cup from home.

Divide your monthly expenses into wants and needs. Make sure you’re not overpaying for those wants. Cut down on the trips to the restaurants. If you had any planned vacations or renovations, it might be in your best interest to postpone. Perhaps we learned all those money-saving tricks during the 2020 quarantine for a reason. It might be time to revisit those lessons.

Have an Emergency Fund

You may call it a rainy-day fund. If so, the skies are getting cloudy. If you haven’t already put money aside in a secured FDIC account for emergencies, it may be time to start. In the event of a lost job or your forced to take a pay cut, you want the flexibility to cover expenses while you engage in a plan of action. This fund is designed for necessary expenses. Be diligent with how you use the money. Again, you don’t know how long a potential recession could last.

Obtain Additional Income

A smart tactic — and one that’s been popularized in recent years — is finding other streams of revenue outside of your job. We live in a gig economy and the skills you’ve honed at your current employer may prove valuable in a consulting capacity. You could replace any lost income from a job loss or salary reduction by uncovering potential freelancing opportunities in your specialty. It doesn’t hurt to add more skills to your resume. The more you know how to do, the more attractive you become to your current or future employer.

Anticipate the Worst

No one expects to lose their job, but don’t be unprepared if it happens. It would be appropriate for you to consider your options in the event of the unthinkable. Update your resume. Update your LinkedIn profile. All those professional relationships you developed, both online and in-person, could become leads to new positions. Prepare for the worst, expect the best.

(Courtesy: https://barnumfinancialgroup.com/repel-the-recession-with-these-5-tips/)

McKinsey CEO, Bob Sternfels Calls It India’s Century

McKinsey & Co CEO Bob Sternfels has said, it will not just be India’s decade, but India’s century, with all key components in place – a big working inhabitants, multinational corporations reimagining world provide chains, and a rustic leapfrogging at digital scale-to obtain one thing particular not only for the Indian financial system, however probably for the world.

“Many individuals have stated that it is India’s decade. I truly assume it is India’s century once we have a look at a few of the uncooked components right here. India is the longer term expertise manufacturing unit for the world. By 2047, India would have 20 per cent of the world’s working inhabitants,” Sternfels said in an interview with Economic Times.

According to him, India would be the world’s future expertise manufacturing unit as it should have 20 per cent of the globe’s working inhabitants by 2047. “India has leapfrogged on the digital scale. All these are the uncooked supplies to do one thing particular for not solely the Indian financial system however probably for the world,” he added.

McKinsey plans a “disproportionate commitment” to India and that’s why its global board will be coming to the country in December.  The firm has 5,000 people in India, a number he wants to double to 10,000. 

Sternfels also spoke about the current scandals which have hit McKinsey, the state of the worldwide financial system, inflation woes and deglobalisation.

Reacting to a question regarding what the CEOs are telling concerning the state of their corporations, Sternfels said, “One of many issues that I did over the previous 12 months was get out and speak to purchasers, and I’ve talked to over 500 of our CEOs within the final 12 months.

“CEOs now wish to play offence and protection on the similar time. So defensive measures… shore up the steadiness sheet, enhance effectivity, and make sure the firm can face up to shocks. They’re additionally saying, my steadiness sheet is more healthy than it was in both of these downturns. And I wish to truly take two or three large strategic bets in order that I can come out on prime,” he added.

Mukesh Ambani Plans Next-Gen Leadership At Reliance Industries

Mukesh Ambani, Chairman and Managing Director of RIL, laid emphasis on Next-Gen leadership roles while he will continue to provide hands-on leadership. The 45th annual general meeting of Reliance Industries Limited (RIL) has set the stage for Next-Gen leadership.

Akash and Isha Ambani have assumed leadership roles in Jio and Retail, respectively, while Anant has joined New Energy business. They are part of a young team of leaders and professionals mentored by senior leaders, Mukesh Ambani outlined.

Mukesh Ambani will continue to provide hands-on leadership and along with existing leaders and Board of Directors, will work towards making Reliance more robust, resilient and truly future-ready.

Strengthening institutional underpinning for Reliance by enriching Reliance’s leadership capital and institutional culture along with a robust governance system to ensure accountability at all levels was another emphasis area at the AGM.

Creating robust architecture for tomorrow’s Reliance to ensure that it remains a united, well-integrated and secure institution even as it develops existing businesses and adds new growth engines, Ambani outlined.

V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, “A highlight of the AGM was Mukesh Ambani’s emphasis on succession planning. He concluded his address by seeking everyone’s blessings for the Gen Next taking over the reins confidently.

“With Akash heading Jio, Isha heading Retail and Anant heading Energy, the plans are clearly spelt out. Mukesh Ambani’s promise to double the value of the company by 2027 is reassuring. His commitment to India and faith in the India growth story remains as strong as ever.” (IANS)

Thousands Of Yellow Cab Owner-Drivers To See Debt Relief They Won After 45-Day Camp Out And 15-Day Hunger Strike

(New York, NY) Thousands of yellow cab medallion owner-drivers will finally begin to see the debt relief they won after NYTWA members held a 45-day camp out and 15-day hunger strike last November, as City Hall announced today that the program to provide a city-backed guarantee on restructured loans will be operational starting September 19th.

Under the program, loans that are reduced by medallion lenders to no more than $200,000 will receive a $30,000 grant and the remaining balance will be guaranteed by the city in case of default.

The average debt is currently $550,000 with average monthly payments at $3,000. Under the final program, the new loan term for thousands will be $170,000 payable at $1,234 per month. 

The final program reflects an increase in interest agreed upon in November 2021 from 5% to 7.3% as rates have gone up due to inflation; and a longer term of 25 years from 20 years to help drivers offset some of that cost.  

The loan will be secured by a city-backed guarantee, relieving thousands of drivers from the fear of losing their homes or thousands of dollars in case of default.  

Marblegate Assets, the largest holder of loans, is ready to begin restructurings on September 19th – bringing immediate relief to the largest segment of owner-driver borrowers.  

The City’s program is for all lenders and all eligible medallion owners (medallion owners who do not own more than 5 medallions.) Other lenders representing hundreds more loans are expected to also participate.  

NYTWA Executive Director Bhairavi Desai said: “We are finally at the starting line of a new life for thousands of drivers and our families. The city-backed guarantee is a ground-breaking program that will save and change lives. We are thankful to City Hall, the TLC, the Mayor’s Office of Management and Budget, the Law Department, and to Marblegate for burning the midnight oil to set up this historic program to address the crisis of debt across the industry. As we collectively work to end this crisis and hit re-start, we look forward to working with all lenders. I congratulate all of our union members who chose to organize, and not despair, and won back their lives. Against the darkness of a crushing debt, their courage remained the light, and today, the triumph is fully theirs.”

BACKGROUND:

Since City Hall agreed to a city-backed guarantee in November 2021, the Adams administration’s TLC, Office of Management and Budget and Law Department have been working to make the program operational. The City negotiated program terms and documents with Marblegate Assets, the largest medallion loan holder, and NYTWA.  

NYTWA members voted unanimously to give their sign-off at the end of negotiations. 

The new terms for drivers means:

  • No personal guarantee in case of default 
  • No Confession of Judgment; COJ are pre-signed documents by the borrower accepting responsibility in case of default and waving their right to a hearing. Lenders would be empowered to skip the court process including a trial to receive a judgment that could then be collected on immediately; including going after people’s homes as the COJ would be combined with a personal guarantee. 
  • No balloon payments; Balloon payments meant that the lender could demand the full balance on a loan at the end of a balloon which would typically be every 3 or 5 years. Owner-drivers would be forced to agree to any new terms, including high interest rates, the lender would demand at the end of the balloon. 
  • No pre-payment penalty in case a borrower wants to pay off the loan earlier 

Click here to see our statement on November 3, 2021 when the agreement was first reached

Singapore Unveils Long-Term Work Visas To End Talent Crunch

Singapore is overhauling visa rules to attract foreign workers and ease a tight labor market that’s contributing to wage and price pressures. The new rules will allow foreigners earning a minimum S$30,000 ($21,431) per month to secure a five-year work pass, with a provision to allow their dependents to seek employment, according to the Ministry of Manpower. 

The new rules will allow foreigners earning a minimum S$30,000 ($21,431) per month to secure a five-year work pass, with a provision to allow their dependents to seek employment, according to the Ministry of Manpower. Exceptional candidates in sports, arts, science and academia who don’t meet the salary criteria are also eligible for the long-term visa under the so-called Overseas Networks and Expertise (ONE) pass that will take effect Jan. 1. 

“Both businesses and talent are searching for safe and stable places to invest, live and work in. Singapore is such a place,” Manpower Minister Tan See Leng told reporters on Monday. “It is therefore timely to leverage on this opportunity to cement Singapore’s position as a global hub for talent.”

The announcement is the latest in a string of decisions this year that are meant to address a still-tight labor market, as well as attract international business to drive the city-state’s ambitions as a global financial hub, after a pandemic-era slump in white-collar workers from abroad. Many parts of the economy have seen pay increases this year to lure talent, stoking fears wage-cost escalation will add to headline inflation that’s touched a 14-year-high and force the central bank to tighten monetary policy further. 

Effective Sept. 1 next year, Singapore plans to exempt jobs, comparable to those held by top 10% of Employment Pass holders, from the need to be advertised locally before hiring foreigners under a system called Fair Consideration Framework. The duration of FCF advertisements, where applicable, will be halved to 14 days, the ministry said, adding that processing time for all EP applications will be cut to 10 business days from the current maximum three weeks.

The rule change will help the city-state better compete with rival business hubs like Hong Kong and the United Arab Emirates and catch up to Australia and the UK, which have similar global talent visas. More than 700 finance professionals moved to Singapore from Hong Kong last year, according to recruitment firm Robert Walters.

The UAE this year made it easier for expatriates to work without being sponsored by an employer, as well as switched to a Saturday-Sunday weekend to align the country with global markets as it seeks to win more businesses, with Dubai positioning itself as a crypto hub. 

Singapore has had to grapple with especially challenging labor-market dilemmas as the nation lives with Covid and the need to recharge sectors like hospitality and food and beverage that suffered disproportionately amid social mobility restrictions that are finally all but canceled. 

A key gauge that measures the imbalance between demand and supply of workers rose earlier this year to the highest level since 1998. That trend is a risk to productivity in the economy, which officials expect will grow by 3%-4% this year, narrower than the 3%-5% seen before — a pace that will be among the slowest in Southeast Asia. 

The country is witnessing an easing of labor market tightness, Minister Tan said, adding that labor supply in manufacturing and construction, among others, have gone back almost to pre Covid levels.

The problems are at the high end of the income ladder — where Singapore wants to attract top global talent particularly in next-generation, technology-heavy industries — as well as the lower end. The government fielded criticism during the pandemic that treatment and broader policies for migrant workers primarily employed in the construction industry needed a reboot.

“This is an age where talent makes all the difference to a nation’s success,” Prime Minister Lee Hsien Loong said in his Aug. 21 National Day Rally speech. “We need to focus on attracting and retaining top talent, in the same way we focus on attracting and retaining investments.”

The Biden-Harris Administration’s Student Debt Relief Plan Explained

What the program means for you, and what comes next

President Biden, Vice President Harris, and the U.S. Department of Education have announced a three-part plan to help working and middle-class federal student loan borrowers transition back to regular payment as pandemic-related support expires. This plan includes loan forgiveness of up to $20,000. Many borrowers and families may be asking themselves “what do I have to do to claim this relief?” This page is a resource to answer those questions and more. There will be more details announced in the coming weeks. To be notified when the process has officially opened, sign up at the Department of Education subscription page

The Biden Administration’s Student Loan Debt Relief Plan

Part 1. Final extension of the student loan repayment pause

Due to the economic challenges created by the pandemic, the Biden-Harris Administration has extended the student loan repayment pause a number of times. Because of this, no one with a federally held loan has had to pay a single dollar in loan payments since President Biden took office.

To ensure a smooth transition to repayment and prevent unnecessary defaults, the Biden-Harris Administration will extend the pause a final time through December 31, 2022, with payments resuming in January 2023. 

Frequently Asked Questions:

Do I need to do anything to extend my student loan pause through the end of the year? 

No. The extended pause will occur automatically. 

Part 2. Providing targeted debt relief to low- and middle-income families 

To smooth the transition back to repayment and help borrowers at highest risk of delinquencies or default once payments resume, the U.S. Department of Education will provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education and up to $10,000 in debt cancellation to non-Pell Grant recipients. Borrowers are eligible for this relief if their individual income is less than $125,000 or $250,000 for households. 

In addition, borrowers who are employed by non-profits, the military, or federal, state, Tribal, or local government may be eligible to have all of their student loans forgiven through the Public Service Loan Forgiveness (PSLF) program. This is because of time-limited changes that waive certain eligibility criteria in the PSLF program. These temporary changes expire on October 31, 2022. For more information on eligibility and requirements, go to PSLF.gov

Frequently Asked Questions:

How do I know if I am eligible for debt cancellation?

To be eligible, your annual income must have fallen below $125,000 (for individuals) or $250,000 (for married couples or heads of households)

If you received a Pell Grant in college and meet the income threshold, you will be eligible for up to $20,000 in debt cancellation.

If you did not receive a Pell Grant in college and meet the income threshold, you will be eligible for up to $10,000 in debt cancellation. 

What does the “up to” in “up to $20,000” or “up to $10,000” mean?

Your relief is capped at the amount of your outstanding debt. 

For example: If you are eligible for $20,000 in debt relief, but have a balance of $15,000 remaining, you will only receive $15,000 in relief. 

What do I need to do in order to receive loan forgiveness?

Nearly 8 million borrowers may be eligible to receive relief automatically because relevant income data is already available to the U.S. Department of Education. 

If the U.S. Department of Education doesn’t have your income data – or if you don’t know if the U.S. Department of Education has your income data, the Administration will launch a simple application in the coming weeks.

The application will be available before the pause on federal student loan repayments ends on December 31st. 

If you would like to be notified by the U.S. Department of Education when the application is open, please sign up at the Department of Education subscription page

What is the Public Service Loan Forgiveness Program?

The Public Service Loan Forgiveness (PSLF) program forgives the remaining balance on your federal student loans after 120 payments working full-time for federal, state, Tribal, or local government; military; or a qualifying non-profit. 

Temporary changes, ending on Oct. 31, 2022, provide flexibility that makes it easier than ever to receive forgiveness by allowing borrowers to receive credit for past periods of repayment that would otherwise not qualify for PSLF.

Enrollments on or after Nov. 1, 2022 will not be eligible for this treatment. We encourage borrowers to sign up today. Visit PSLF.gov to learn more and apply

Part 3. Make the student loan system more manageable for current and future borrowers

Income-based repayment plans have long existed within the U.S. Department of Education. However, the Biden-Harris Administration is proposing a rule to create a new income-driven repayment plan that will substantially reduce future monthly payments for lower- and middle-income borrowers. 

The rule would: 

Require borrowers to pay no more than 5% of their discretionary income monthly on undergraduate loans. This is down from the 10% available under the most recent income-driven repayment plan. 

Raise the amount of income that is considered non-discretionary income and therefore is protected from repayment, guaranteeing that no borrower earning under 225% of the federal poverty level—about the annual equivalent of a $15 minimum wage for a single borrower—will have to make a monthly payment. 

Forgive loan balances after 10 years of payments, instead of 20 years, for borrowers with loan balances of $12,000 or less.

Cover the borrower’s unpaid monthly interest, so that unlike other existing income-driven repayment plans, no borrower’s loan balance will grow as long as they make their monthly payments—even when that monthly payment is $0 because their income is low.

The Biden-Harris Administration is working to quickly implement improvements to student loans. Check back to this page for updates on progress. If you’d like to be the first to know, sign up for email updates from the U.S. Department of Education.

India Is Set To Become Largest Digital Economy In The World

India has the potential to become the biggest digital economy in the world, Mastercard global CEO Michael Miebach has said. In an interview with CNBC TV18, Miebach, who was on his first visit to India after taking charge at his role, spoke on a number of topics, including the future of payment systems and the opportunities he sees in India.

“What I see today, particularly through the lens of our business when we look at the digital economy and how it is growing in India and growth rates of UPI and so forth, there is technology put to work at scale and unprecedented ways in India,” Miebach told CNBC TV18 in the exclusive interview. “As a tech company and as a tech geek, I find that hugely exciting,” he said.

The Mastercard CEO said that he sees payment models in India that aligns with his company’s growth ambitions in the country. “One should think about and also see what else Mastercard can do to evolve its business in partnerships with fintech and other companies that are using these technologies here in India,” he said.

There is an amazing drive in India for financial inclusion, Miebach observed on the country’s inclusive digital economy front. “We think that there is going to be 100 million people that will join to form a digital economy in India in the next couple of years,” he noted.

Miebach was asked what kind of financial innovation can be exported from India. “Pay every which way you want, whenever you want always on the basis of it is safe and secure. That is the headline,” he replied.

“It is going to be paying in the metaverse, it is going to be paying through voice, it is going to be paying through offline and in areas of the country where you have no GSM coverage or it is not as good as it needs to be. So every bit of technology that is there today is going to give us a huge boost,” the Mastercard CEO explained.

Miebach also noted that Mastercard is not merely a credit card company anymore and has transformed to become a global payments and technology firm. “We are not a credit card company. As a payment technology company, our strategy is to be in payments, whatever choice of payments is there.”

He further said that he believes the question of trust and security is occupies the central role in a digital economy. “The question on cyber security and how do you make sure that these payments remain safe as this becomes one of the largest digital economies in the world, that is a partnership area,” he said. Miebach was asked what kind of financial innovation can be exported from India. “Pay every which way you want, whenever you want always on the basis of it is safe and secure. That is the headline,” he replied.

“It is going to be paying in the metaverse, it is going to be paying through voice, it is going to be paying through offline and in areas of the country where you have no GSM coverage or it is not as good as it needs to be. So every bit of technology that is there today is going to give us a huge boost,” the Mastercard CEO explained.

Miebach also noted that Mastercard is not merely a credit card company anymore and has transformed to become a global payments and technology firm. “We are not a credit card company. As a payment technology company, our strategy is to be in payments, whatever choice of payments is there.”

He further said that he believes the question of trust and security is occupies the central role in a digital economy. “The question on cyber security and how do you make sure that these payments remain safe as this becomes one of the largest digital economies in the world, that is a partnership area,” he said.

India Ranks Seventh In Digital Currency Ownership Worldwide: UN

The United Nations announced that the Covid-19 pandemic has caused an unprecedented rise in According to a report by the United Nations Conference on Trade and Development (UNCTAD), around 7.3 percent of Indians owned some form of digital currency in 2021. This highlights that over the last couple of years, digital assets have surged to popularity among the Indian populace amounting to over 100 million crypto holders. 

Cryptocurrency use worldwide has risen, with India moving up to the seventh-highest position in terms of ownership. The UN noted that 7.3 percent of Indians possessed assets in the form of digital currency as of 2021. According to data from 2021, developing nations made up 15 of the top 20 economies in terms of the percentage of the total population that owns cryptocurrency. The statistics for other nations were also provided by UNCTAD (United Nations Conference on Trade and Development).

The report also states that 15 of the top 20 nations in terms of digital currency ownership were developing countries, with India ranking 7th, one position behind the US. Pakistan also made it to the list coming in 15th while the UK and Australia occupied the 13th and 20th positions respectively. Topping the list was Ukraine, with 12.7 percent of its population holding crypto assets. 

As per the UNCTAD report, the crypto ecosystem ballooned by over 2,300 percent between September 2019 and June 2021. However, Indian investors have grown sceptical of these digital assets, with regulatory bodies coming down hard on cryptocurrencies. 

While buying and selling crypto assets is not illegal, profits from the same are being treated as winnings from gambling, and the income from the transfer of virtual assets is being taxed at 30 percent. On top of this, there is also one percent TDS deduction on all transactions.

Earlier this year, crypto exchanges in the country were also forced to halt UPI payments due to uncertainty from regulatory bodies. This made it harder to acquire digital assets. Such uncertainties are also driving crypto firms to set up bases elsewhere, with several projects looking to countries like Dubai as a hub for digital asset operations.

Slowdown In Home Prices Broke Record In June

Annual home price growth dropped by nearly 2 percentage points in June, the largest single-month slowdown on record, according to new research. 

 Black Knight, a real estate software and analytics company that has been tracking the metric since the early 1970s, found that annual home price growth fell from
19.3 percent in May to 17.3 percent in June as the Federal Reserve continued hiking interest rates to cool off demand. 

  • Existing home sales have fallen for five consecutive months as record prices and those higher interest rates drive more Americans out of the market. Black Knight’s analysis found that seasonally adjusted home sales were down by more than 21 percent since the start of the year. 
  • Slowing sales have led to recent inventory increases, according to Black Knight, but nationally, the United States still faces a shortage of 716,000 home listings. The company estimates it would take more than a year for inventory levels to fully normalize even with record increases. 

“While this was the sharpest cooling on record nationally, we’d need six more months of this kind of deceleration for price growth to return to long-run averages,” said Ben Graboske, the president of Black Knight’s data and analytics division. (The Hill)

How To Understand Mixed Signals From US Economy

By, Paul Wiseman

(AP) — The U.S. economy is caught in an awkward, painful place. A confusing one, too. Growth appears to be sputtering, home sales are tumbling and economists warn of a potential recession ahead. But consumers are still spending, businesses keep posting profits and the economy keeps adding hundreds of thousands of jobs each month.

In the midst of it all, prices have accelerated to four-decade highs, and the Federal Reserve is desperately trying to douse the inflationary flames with higher interest rates. That’s making borrowing more expensive for households and businesses.

The Fed hopes to pull off the triple axel of central banking: Slow the economy just enough to curb inflation without causing a recession. Many economists doubt the Fed can manage that feat, a so-called soft landing.

Surging inflation is most often a side effect of a red-hot economy, not the current tepid pace of growth. Today’s economic moment conjures dark memories of the 1970s, when scorching inflation co-existed, in a kind of toxic brew, with slow growth. It hatched an ugly new term: stagflation.

The United States isn’t there yet. Though growth appears to be faltering, the job market still looks quite strong. And consumers, whose spending accounts for nearly 70% of economic output, are still spending, though at a slower pace.

So the Fed and economic forecasters are stuck in uncharted territory. They have no experience analyzing the economic damage from a global pandemic. The results so far have been humbling. They failed to anticipate the economy’s blazing recovery from the 2020 recession — or the raging inflation it unleashed.

Even after inflation accelerated in spring of last year, Fed Chair Jerome Powell and many other forecasters downplayed the price surge as merely a “transitory” consequence of supply bottlenecks that would fade soon. It didn’t.

Now the central bank is playing catch-up. It’s raised its benchmark short-term interest rate three times since March. Last month, the Fed increased its rate by three-quarters of a percentage point, its biggest hike since 1994. The Fed’s policymaking committee is expected to announce another three-quarter-point hike Wednesday.

Economists now worry that the Fed, having underestimated inflation, will overreact and drive rates ever higher, imperiling the economy. They caution the Fed against tightening credit too aggressively.

“We don’t think a sledgehammer is necessary,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, said this week.

Here’s a look at the economic vital signs that are sending frustratingly mixed signals to policymakers, businesses and forecasters:

THE OVERALL ECONOMY

As measured by the nation’s gross domestic product — the broadest gauge of output — the economy has looked positively sickly so far this year. And steadily higher borrowing rates, engineered by the Fed, threaten to make things worse.

“Recession is likely,” said Vincent Reinhart, a former Fed economist who is now chief economist at Dreyfus and Mellon.

After growing at a 37-year high 5.7% last year, the economy shrank at a 1.6% annual pace from January through March. For the April-June quarter, forecasters surveyed by the data firm FactSet estimate that growth equaled a scant 0.95% annual rate from April through June. (The government will issue its first estimate of April-June growth on Thursday.)

Some economists foresee another economic contraction for the second quarter. If that happened, it would further escalate recession fears. One informal definition of recession is two straight quarters of declining GDP. Yet that definition isn’t the one that counts.

The most widely accepted authority is the National Bureau of Economic Research, whose Business Cycle Dating Committee assesses a wide range of factors before declaring the death of an economic expansion and the birth of a recession. It defines a recession as “a significant decline in economic activity that is spread across the economy and that lasts more than a few months.”

In any case, the economic drop in the January-March quarter looked worse than it actually was. It was caused by factors that don’t mirror the economy’s underlying health: A widening trade deficit, reflecting consumers’ robust appetite for imports, shaved 3.2 percentage points off first-quarter growth. A post-holiday-season drop in company inventories subtracted an additional 0.4 percentage point.

Consumer spending, measured at a modest 1.8% annual rate from January through March, is still growing. Americans are losing confidence, though: Their assessment of economic conditions six months from now has reached its lowest point since 2013 in June, according to the Conference Board, a research group.

INFLATION

What’s agitating consumers is no secret: They’re reeling from painful prices at gasoline stations, grocery stores and auto dealerships.

The Labor Department’s consumer price index skyrocketed 9.1% in June from a year earlier, a pace not seen since 1981. The price of gasoline has jumped 61% over the past year, airfares 34%, eggs 33%.

And despite widespread pay raises, prices are surging faster than wages. In June, average hourly earnings slid 3.6% from a year earlier adjusting for inflation, the 15th straight monthly drop from a year earlier.

And on Monday, Walmart, the nation’s largest retailer, lowered its profit outlook, saying that higher gas and food prices were forcing shoppers to spend less on many discretionary items, like new clothing.

The price spikes have been ignited by a combination of brisk consumer demand and global shortages of factory parts, food, energy and labor. And so the Fed is now aggressively raising rates.

“There is a risk of overdoing it,” warned Ellen Gaske, an economist at PGIM Fixed Income. “Because inflation is so bad right now, they are focused on the here and now of each monthly CPI report. The latest one showed no letup.’’

Despite inflation, rate hikes and declining consumer confidence, one thing has remained solid: The job market, the most crucial pillar of the economy. Employers added a record 6.7 million jobs last year. And so far this year, they’re adding an average of 457,000 more each month.

The unemployment rate, at 3.6% for four straight months, is near a half-century low. Employers have posted at least 11 million job openings for six consecutive months. The government says there are two job openings, on average, for every unemployed American, the highest such ratio on record.

Job security and the opportunity to advance to better positions are providing the confidence and financial wherewithal for Americans to spend and keep the job machine churning. (Courtesy: Associated Press)

US House Panel Advances Prior Authorization Relief Bill For Seniors

By, American Academy of Ophthalmology (AAO)

Newswise — The House Ways and Means Committee has voted unanimously to advance the Improving Seniors’ Timely Access to Care Act of 2022 (H.R. 8487), positioning the bill for passage in Congress possibly this fall. The bill would reform prior authorization under the Medicare Advantage program to help ensure America’s seniors get the care they need when they need it.

Support for this commonsense legislation is overwhelming. The bill has more than 330 cosponsors in the House and Senate, and has been endorsed by more 500 organizations, including the American Academy of Ophthalmology, and more 30 additional ophthalmic subspecialty and state societies.

recent report from the U.S. Department of Health and Human Services Office of Inspector General underscored the need for reform, finding that Medicare Advantage plans have denied prior authorization requests that met Medicare coverage rules.

The bill was introduced by Reps. Suzan DelBene (D-WA), Mike Kelly (R-PA), Ami Bera, MD, (D-CA), and Larry Bucshon, MD, (R-IN). If enacted, the Improving Seniors’ Timely Access to Care Act would streamline and standardize prior authorization in the Medicare Advantage (MA) program, providing much-needed oversight and transparency while protecting beneficiaries from unnecessary care delays and denials. The legislation would improve prior authorization in MA plans by:

Establishing an electronic prior authorization (ePA) program;

Standardizing and streamlining the prior authorization process for routinely approved services, including establishing a list of services eligible for real-time prior authorization decisions;

Ensuring prior authorization requests are reviewed by qualified medical personnel; and

Increasing transparency around MA prior authorization requirements and their use.

This bill has been years in the making. The Academy is a founding member of the Regulatory Relief Coalition, a group of sixteen national physician specialty and two allied organizations advocating for a reduction in Medicare program regulatory burdens to protect patients’ timely access to care and allow physicians to spend more time with their patients. We thank the bill’s sponsors, as well as the chair and ranking member of House Ways and Means Committee, Reps. Richie Neal (D-MA) and Kevin Brady (R-TX).

“We believe this bill will help remove some of the unnecessary red tape that overburdens our healthcare system and prevents us from providing the care America’s seniors need when they need it,” said David Glasser, MD, the Academy’s secretary for Federal Affairs. “We’re confident that when this bill comes to the House floor, Congress will agree with these commonsense reforms.”

When Will The Indian Rupee Stop Falling?

The Indian Rupee breached the psychological 80-mark for the first time against the US dollar on Tuesday, July 18th, declining to 80.06 per Dollar. The Reserve Bank of India intervened in the currency market to help the Rupee steady after hitting seven straight intraday record lows. A recovery in domestic shares also favored the Indian currency.

According analysts, a wobbly global macroeconomic environment marked by a spell of monetary tightening unleashed, firstly, by the Federal Reserve and being mimicked in earnest by the major central bank governors across the globe has led to an exodus of hot money from developing economies to the “safe haven” of the Dollar. The scenario is compounded further by record-breaking crude oil prices, which balloon India’s imports, diminish the cumulative value of India’s exports and widen our trade deficit.

It is a regular demand-supply market. Currently, there is a greater demand for Dollars than there is for the Rupee. Two factors have pushed demand — India’s current account deficit has sharply widened particularly after Russia invaded Ukraine, and investment in the Indian economy has fallen due to heavy flight of funds in recent months.

Depreciation of the Rupee makes imported items — including petrol and mobile phones — and gives India’s export a competitive edge. But India is a net importer. For those eyeing a trip abroad, earlier budgets on food, boarding, and transportation will now fall short – leaving one with the option to either expand their budgets or opt for countries where the rupee commands a stronger position compared to their domestic currencies.

The dollar has been appreciating against all currencies including the Euro. Market watchers, in fact, say that the Rupee has fared better compared to other currencies including the Euro.

In FY’22, as per the provisional figures released by the Reserve Bank of India (RBI), India’s current account deficit widened to $38.7 billion from a surplus of $23.9 billion in the previous FY. 

A widening current account deficit indicates that Indians have been converting more of their rupees into dollars to complete trade and investment transactions consequently spiking up the demand for dollars. It doesn’t help that foreign institutional investors (FIIs) have been dumping Indian equities after a strong bullish spell, and making a beeline for US treasury notes and bonds.

The RBI has intervened by selling Dollars to check the Rupee’s slide. Else, the free market would have seen a further weaker Rupee. The current exchange market scenarios suggest that the rupee’s fall may continue for a few more months, breaching even the 82-mark. Congress leader Shashi Tharoor took a dig at the Rupee’s slide saying a “strong government” is “giving us a weaker Rupee”.

US Dollar Gains Are Boon To Americans Traveling Abroad

The surging value of the U.S. dollar in recent weeks is a boon to the American traveler, who will get more bang for their buck overseas despite surging inflation at home.  

But a strong American currency could limit international visitors to the U.S., where tourism firms are still licking their wounds from the height of the pandemic.  

The dollar recently hit parity with the euro for the first time in two decades, making trips to Europe 10 to 15 percent less expensive for Americans than at the same time last year.  

The dollar is also soaring in destinations like Thailand, India and South Korea — countries with ample tourism interest from Americans and relatively weaker economic growth than the U.S. 

“With the rising cost of travel, the strong U.S. dollar is a net positive amidst all the disruption in the industry,” said Erika Richter, vice president of communications at the American Society of Travel Advisors.  Richter noted that Americans are spending 11 percent more on travel compared to 2019. 

The idea of a strong dollar might seem like a farce to Americans after annual inflation hit 9.1 percent in June and the price of gas and food rose far faster. But the dollar has still become more valuable abroad even as it yields less in goods and services at home. 

Demand for the U.S. dollar in other countries has skyrocketed amid concerns about a global recession caused by high inflation, the war in Ukraine and lingering COVID-19 supply shocks.  

While the U.S. is not immune from those threats, the economy has held up far stronger than other nations, making its currency more valuable abroad. The dollar is also used as the world’s reserve currency, meaning foreign individuals and companies will often boost their holdings and conduct transactions in dollars to protect themselves from financial shocks. 

The strength of the U.S. economy has allowed the Federal Reserve to boost interest rates at a much faster pace. That makes the U.S. dollar more expensive to acquire — and more valuable in other countries. 

“A stronger dollar benefits American households directly if they want to travel to Europe, as the relative cost of everything is cheaper. It also makes imports cheaper for American households and businesses,” explained Angel Talavera, head of European economics at Oxford Economics. 

Half of American travelers say high prices kept them from traveling in June, up 8 percentage points from the previous month, according to a recent survey from Destination Analysts. 

But favorable exchange rates blunt the impact of inflation, which has risen at similar rates to the U.S. in Europe. Expedia data found that searches for summer trips to popular European destinations such as Paris, Frankfurt, Brussels, Amsterdam and Dublin rose by double digits last week. Copenhagen, Athens and Madrid saw similar increases in lodging interest, according to Hotels.com. 

“The U.S. has never really developed its tourism infrastructure the way Europe has, so a lot of our inventory sold out months ago,” said Leslie Overton, an advisor at travel firm Fora. “While I’m not saying either is cheap, Europe might be considered more competitive than some of the higher end product here in the U.S. right now.” 

One dollar buys roughly 15 percent more than it did one year ago in the 19 European countries that use the euro. The dollar is trading at its highest ever level against India’s rupee and Thailand’s baht. The Mexican peso and Canadian dollar have remained mostly flat.  

But currency fluctuations won’t help much with soaring airfares. While domestic airfare is 13 percent higher than pre-pandemic levels, international flights are 22 percent pricier, according to data from travel firm Hopper. 

Those traveling to parts of Europe face a heightened risk of delays or cancellations.  London’s Heathrow Airport on Wednesday asked airlines to stop selling summer tickets after staffing shortages forced the airport to delay roughly half of its flights this month. The Netherlands’ largest airport is similarly making large cuts to its flight schedules, driving up prices.  

Conversely, the strength of the dollar will make trips to the U.S. far more expensive for many international travelers, potentially weakening the U.S. tourism industry as it aims to claw back some of the millions of jobs lost during the pandemic.  

A stronger U.S. dollar also boosts pressure on global economies to raise their own interest rates to keep up, a force that raises the risk of a severe global recession that could bounce back to the U.S. in dangerous ways. 

The U.S. welcomed 22.1 million inbound travelers in 2021 — down 79 percent from 2019 — amid COVID-19 travel restrictions that lasted throughout most of the year, according to the International Trade Administration. The agency found that the lack of tourism in the U.S. in the first year of the pandemic accounted for 56 percent of the nation’s gross domestic product decline.

The Million Missing Workers Could Solve America’s Labor Shortages

By Dany Bahar And Pedro Casas-Alatriste

The recent tragedy of the death of over 50 migrants in an abandoned overheated truck in Texas forces us to reevaluate whether there is a better way for the United States—and there must be—to deal with the immigrants trying to reach the country.  

This reevaluation includes not only adopting a more humanitarian approach to border policies, but also challenging preconceived ideas about these immigrants, which will allow us to embrace them as they are: much-needed workers that can complement the American workforce. 

A ‘help wanted’ sign is posted in front of restaurant on February 4, 2022 in Los Angeles, California. – The United States added an unexpectedly robust 467,000 jobs in January, according to Labor Department data released today that also significantly raised employment increases for November and December. (Photo by Frederic J. BROWN / AFP) (Photo by FREDERIC J. BROWN/AFP via Getty Images)

Our argument is simple; the U.S. workforce is aging and cannot meet the economy’s capacity. Yet, for nearly 20 years, U.S. authorities have deported over 1 million immigrants originally from Central America’s Northern Triangle to their home countries through Mexico. But these potential workers are essential to the U.S. right now: Historically immigrants have been young and have joined the workforce in occupations that very few Americans are able or willing to fill today.  

The need to fill these occupations is evident from the market forces that continue to attract immigrants from Mexico and Central America, despite the incredible and increasing difficulties they face crossing the border. On the Mexican side, the use of “coyotes” (people smugglers) has gone up by 30 percent⁠—from about 45 percent in the second half of 2020 to nearly 60 percent in the last quarter of 2020⁠—as measured by surveys of returned Mexican migrants

According to these surveys, coyotes charged sums close to $6,000 per person smuggled in 2019, though that cost is reported to have gone down in 2020, presumably because of the slowdown in crossing caused by COVID-19. Nevertheless, the mere existence of this illicit market on the border is, arguably, a result of the dramatic increase in U.S. efforts—and resources—to stop this migration. In May 2022, U.S. Customs and Border Protection registered 240,000 encounters that month, up nearly 70 percent from May 2019, putting fiscal year 2022 on track to hit a record number of border encounters in recent history.  

Despite the conditions at the border, a deep dive into the data speaks for itself on the need for the U.S. to drastically redesign its migration policy with respect to Mexico and Central America and to put forward legal pathways for immigrants to enter and work in the United States instead of trying to apprehend them at the border.  

Let’s first look at the current American reality. According to the latest data from the U.S. Bureau of Labor Statistics, there were over 11.2 million job openings (May 2022). In the construction industry, there were an estimated 434,000 job openings (May 2022), yet there were just 389,000 unemployed in that same industry (June 2022). In other words, there is a shortage of almost 50,000 workers. In retail trade, the gap is even wider. With 1.14 million job openings and 720,000 unemployed, there is a labor supply deficit of 420,000 people. If that’s still not surprising enough: The number of unemployed people in the accommodation and food services industry is 565,000, while the number of job openings totaled 1.4 million. Even if every worker in that industry were employed, there would still be 835,000 job openings.

From a broader perspective, in just 12 years, adults 65 and older will outnumber children under 18 for the first time in the history of the United States. And shortly after, by 2040, projections suggest the country will have 2.1 workers per Social Security beneficiary. According to these calculations, the system needs at least 2.8 workers per Social Security beneficiary to maintain its economic feasibility.

Let’s now add into the equation some stylized facts about the 1 million workers that the U.S. has deported back to Central America since 2009. The data comes from representative surveys carried out by Colegio de la Frontera, a Mexican research institution that surveys deportees from the U.S. in Mexico’s south border on their way back to their home countries of Guatemala, Honduras, and El Salvador.  

The vast majority of these deportees are men and have a high school diploma or less, according to the most recent data from 2019. They are also overwhelmingly young—with nearly 90 percent of them between the ages 15 to 39 and 65 percent being between the ages 15 to 29. Compare this to all other migrants in the U.S. who have a median age of 46 years.  

Among the deportees that gathered some work experience in the U.S. during their stay (the ones who stayed for longer, naturally), they worked in a very diverse set of occupations that, ironically, have remarkable overlap with the occupations in high demand right now in the U.S. For instance, about 60 percent were in the construction industry, about 20 percent worked in services (such as the food industry), nearly 10 percent worked in industry, and 8 percent were technicians and administrative staff.

Migrants on the U.S. southern border are able and capable of filling labor gaps in the American economy if they are given the chance, particularly in fundamental occupations like the ones we document above. Moreover, perhaps with some skills training, they could fill other in-demand occupations, too.

American politicians and policymakers must act to transform the energy and resources poured into keeping these immigrants away into creating enough legal pathways for these migrants to join the American labor force without further delay. These migrants are already paying enormous costs, endangering their lives, and taking massive risks to come to America, which is a testament to their need and determination.

If the United States wants to grow and compete in the global economy, immigration—including that from the Northern Triangle—is part of the solution, not part of the problem.

Wishing To Be Off Billionaires List, Bill Gates Donates $20 Billion To Foundation

That’s Bill Gates’ estimated net worth, making him the world’s fourth-richest person — but he doesn’t intend to rank that high forever. On Wednesday, the Microsoft co-founder said he wants to “move down and eventually off of the list of the world’s richest people” because he feels “obligated to return his resources to society.” 

On the same day, Gates moved $20 billion of his wealth into the endowment of the Bill and Melinda Gates Foundation, one of the largest philanthropies in the world. The foundation plans to increase its payouts from nearly $6 billion to $9 billion each year by 2026. 

Bill Gates is moving $20 billion of his wealth into the endowment of the Bill and Melinda Gates Foundation, which is ramping up its spending in the face of global challenges, including the pandemic and the war in Ukraine, media reports said. 

The foundation, one of the world’s largest philanthropies, plans to increase its payouts by 50 per cent over pre-pandemic levels, from nearly $6 billion to $9 billion each year by 2026. The foundation is primarily focused on charitable giving that’s aimed at improving global health, gender equality and education, among other issues, CNN reported.

The Microsoft co-founder and his ex-wife, Melinda French Gates, have both pledged to donate the vast majority of their wealth to the foundation they established together 20 years ago, as well as to other philanthropic endeavours.

The couple announced their divorce in May 2021, saying they would work together as co-chairs under a two-year trial period. At the end of that trial, French Gates has the option to resign and receive a payout from her former husband, who would remain in charge of the foundation.

With an estimated net worth of around $ 114 billion, Bill Gates is currently the world’s fourth-richest person, according to Bloomberg’s Billionaire Index, with most of his wealth tied to Microsoft shares.

But he doesn’t intend to rank that high forever. “I will move down and eventually off of the list of the world’s richest people,” Gates wrote in a blog.

“I have an obligation to return my resources to society in ways that have the greatest impact for improving lives. I hope others in positions of great wealth and privilege will step up in this moment too,” he said, CNN reported. (IANS)

Consulate India In New York Organizes Roadshow On One-District-One-Product

The Consulate General of India in New York, in partnership with the Department of Promotion of Industry and Internal Trade (DPIIT) and Invest India, held a Roadshow on One-District-One-Product (ODOP) on July 12th, 2022. The show was attended by stakeholders from the food, hospitality, textiles and relevant business sectors.  

Consul General Shri Randhir Jaiwal gave the opening remarks, talking about the importance of the ODOP initiative and detailing the uniqueness of the products. From Araku coffee, with its distinctive texture, flavour and aroma, to the SIMFED turmeric from the organic state of Sikkim, he talked about the individuality and exclusivity of the items at display.

Joint Secretary from DPIIT, Ms. Manmeet Nanda familiarised the audience with the ODOP initiative and its vision. She elaborated that the whole idea of the initiative is to showcase unique products from different district of India, and that this stems from the mandate of Aatmanirbhar Bharat, focusing on a resilient India that is recognized as a brand globally. Expanding on the same, she talked about the vision of promoting sustainable trade along with creating a direct market link between the makers and buyers of these unique products. 

Explaining the progress that the initiative has made thus far, Ms. Nanda highlighted that more than 700 products with a unique quality and a large export potential have been identified till date. Each product tells a story – a story of creation, craftsmanship, tradition, custom, and people. Today, India’s unique products have ties all over the world. Farmers in Jammu and Kashmir sell walnuts to distant countries like Europe, and international brands sell Indian Pashmina stoles.

Representatives of Invest India took forward the discourse and emphasized the four pillars of the ODOP initiative – ecommerce, marketing, licensing, and selling and trade.

Different products from different parts of the country were showcased, ranging from cardamom tea, millet pasta, saffron, ginger flakes and more. From the north, the range extended from walnut wood carvings to Basohli paintings. From the state of Rajasthan, items of blue pottery were displayed. From the North-East, the variety consisted of coffee, jewellery, and special silks such as Eri Silk and some non-violent silk products. The non-violent silk items are so called as their production does not involve harming of silk worms.

Members of the diaspora were urged to promote products from their districts and adopt the vision of the ODOP scheme.  They were urged to promote ODOP products through gift giving, socially as well as officially.  Earlier, the Consulate had organized a display of ODOP products at Times Square during International Day of Yoga celebrations on 21 June 2022.

Does Immigration Help Developing Countries?

Many talented brains from developing nations like India, the Philippines, Sri Lanka, Bangladesh, and Pakistan have been immigrating to economically progressive and highly developed nations for many years.

They migrate in search of a good quality of life, world-class education for their children, and social security perks, including disability and maternity benefits, unemployment allowance, employment insurance, and other attractive benefits.

This is primarily why many choose to become permanent residents of developed nations such as Canada, the USA, the UK, Australia, and New Zealand. But the youth and skilled professionals who have moved to these nations have also brought in foreign remittances and a good deal of foreign exchange that helps boost the economy and development of a country that is still wanting and in its development stage.

Contributing back home

Many immigrants with well-paying jobs in these overseas nations help their relatives, parents, and near and dear ones by sending them money for assistance. Even students who study in developed nations return home with great knowledge and expertise. They even impart their expertise and aid in medicine, engineering, technology, and other professions.

Immigrants in other nations make it up to their home nations by keeping the foreign remittances flowing. Many of these remittances help ease the constraints of credit in rural areas. It helps accelerate human capital with improved health and educational facilities besides a good lifestyle. Many immigrants who return to their nations build hotels, hospitals, schools, and places of public worship or institution.

In many cases, they make significant donations to charities, which greatly help uplift the poor and marginal areas back in their home countries. Because of their contribution, many needy and underprivileged people find a vehicle and means to make their dreams come true. Immigration has been an excellent life-changer for many people who cannot find adequate help, but through the financial assistance from these immigrants, they find a way to live the life they deserve. (IANS)

US Inflation Hits 40-Year-High, At 9.1% In June

U.S. inflation surged to a new four-decade high in June because of rising prices for gas, food and rent, squeezing household budgets and pressuring the Federal Reserve to raise interest rates aggressively — trends that raise the risk of a recession.

The government’s consumer price index soared 9.1% over the past year, the biggest yearly increase since 1981, with nearly half of the increase due to higher energy costs. 

Lower-income and Black and Hispanic American have been hit especially hard, since a disproportionate share of their income goes toward essentials such as transportation, housing and food. But with the cost of many goods and services rising faster than average incomes, a vast majority of Americans are feeling the pinch in their daily routines.

For 72-year-old Marcia Freeman, who is retired and lives off of a pension, there is no escape from rising expenses.

“Everything goes up, including cheaper items like store brands,” said Freeman, who visited a food bank near Atlanta this week to try and gain control of her grocery costs. Grocery prices have jumped 12% in the past year, the steepest climb since 1979.

Accelerating inflation is a vexing problem for the Federal Reserve, too. The Fed is already engaged in the fastest series of interest rate hikes in three decades, which it hopes will cool inflation by tamping down borrowing and spending by consumers and businesses.

The U.S. economy shrank in the first three months of the year, and many analysts believe the trend continued in the second quarter.

“The Fed’s rate hikes are doing what they are supposed to do, which is kill off demand,” said Megan Greene, global chief economist at the Kroll Institute. “The trick is if they kill off too much and we get a recession.” 

The likelihood of larger rate hikes this year pushed stock indexes lower in afternoon trading. The central bank is expected to raise its key short-term rate later this month by a hefty three-quarters of a point, as it did last month.

As consumers’ confidence in the economy declines, so have President Joe Biden’s approval ratings, posing a major political threat to Democrats in the November congressional elections. Forty percent of adults said in a June AP-NORC poll that they thought tackling inflation should be a top government priority this year, up from just 14% who said so in December.

After years of low prices, a swift rebound from the 2020 pandemic recession — combined with supply-chain snags — ignited inflation.

Consumers unleashed a wave of pent-up spending, spurred by vast federal aid, ultra-low borrowing costs and savings they had built up while hunkering down. As home-bound Americans spent heavily on furniture, appliances and exercise equipment, factories and shipping companies struggled to keep up and prices for goods soared. Russia’s war against Ukraine further magnified energy and food prices.

In recent months, as COVID fears have receded, consumer spending has gradually shifted away from goods and toward services. Yet rather than pulling down inflation by reducing goods prices, the cost of furniture, cars, and other items has kept rising, while restaurant costs, rents and other services are also getting more expensive.

The year-over-year leap in consumer prices last month followed an 8.6% annual jump in May. From May to June, prices rose 1.3%, following a 1% increase from April to May.

Fuelled by increase in the prices of oil, shelter and food, the inflation rate in the US rose to 9.1 per cent in June. The inflation rate rise was the largest 12-month increase since the period ending November 1981.

The US Bureau of Labour Statistics said: “Over the last 12 months, the all items index increased 9.1 percent before seasonal adjustment.”

“The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.3 per cent in June on a seasonally adjusted basis after rising 1.0 per cent in May,” it said.

According to the Bureau, the increase was broad-based, with the indexes for gasoline, shelter, and food being the largest contributors.

The energy index rose 7.5 per cent over the month and contributed nearly half of the all items increase, with the gasoline index rising 11.2 per cent and the other major component indexes also rising.

The food index rose 1.0 percent in June, as did the food at home index.

The all items – less food and energy – index rose 5.9 per cent over the last 12 months. The energy index rose 41.6 percent over the last year, the largest 12-month increase since the period ending April 1980.

The food index increased 10.4 per cent for the 12-months ending June, the largest 12-month increase since the period ending February 1981. (IANS)

280,000 Green Cards Up For Grabs Before September Deadline

The United States Citizenship and Immigration Services (USCIS) is racing against time to issue 280,000 green cards before the fiscal year ends on September 30.

While closures and limited operations at US embassies and consular offices through the pandemic led to high numbers of available employment-based green cards, as of mid-June 2022, USCIS and the US Department of State (DOS) have used significantly more visas than at the same point in FY 2021. USCIS alone using more than twice as many visas on a weekly basis than it was at this point in FY 2021.

Through May 31, 2022, the two agencies have combined to use 149,733 employment-based immigrant visas. “We remain committed to taking every viable policy and procedural action to maximize our use of all available visas by the end of the fiscal year,” the USCIS said in a statement.

Data from the US visa office shows that the US government had 66,781 unused employment-based green cards in the 2021 fiscal year, even as 1.4 million immigrants are queued up for it. A majority of these are Indians, who have been stuck in the green card backlog for years.

“We remain committed to taking every viable policy and procedural action to maximize our use of all available visas by the end of the fiscal year,” the USCIS said in a statement.

Data from the US visa office shows that the US government had 66,781 unused employment-based green cards in the 2021 fiscal year, even as 1.4 million immigrants are queued up for it. A majority of these are Indians, who have been stuck in the green card backlog for years.

USCIS eventually issued 180,000 green cards last year—more than a typical year but still falling short of the total available. The processing time for employer sponsored green cards crossed the three-year wait time in 2022.

Top Billionaires Lose $1.4 Trillion In Worst Half Of Year 2022

With policy makers now raising interest rates to combat elevated inflation, some of the highest-flying shares — and the billionaires who own them — are losing their combined wealth due to economic factors that has impacted global economies around the world. 

Elon Musk’s fortune plunged almost $62 billion. Jeff Bezos saw his wealth tumble by about $63 billion. Mark Zuckerberg’s net worth was slashed by more than half.

All told, the world’s 500 richest people lost $1.4 trillion in the first half of 2022, a dizzying decline that marks the steepest six-month drop ever for the global billionaire class.

It’s a sharp departure from the previous two years, when the fortunes of the ultra-rich swelled as governments and central banks unleashed unprecedented stimulus measures in the wake of the Covid-19 pandemic, juicing the value of everything from tech companies to cryptocurrencies.

With policy makers now raising interest rates to combat elevated inflation, some of the highest-flying shares — and the billionaires who own them — are losing altitude fast. Tesla Inc. had its worst quarter ever in the three months through June, while Amazon.com Inc. plummeted by the most since the dot-com bubble burst.

Though the losses are piling up for the world’s richest people, it only represents a modest move toward narrowing wealth inequality. Musk, Tesla’s co-founder, still has the biggest fortune on the planet, at $208.5 billion, while Amazon’s Bezos is second with a $129.6 billion net worth, according to the Bloomberg Billionaires Index.

Bernard Arnault, France’s richest person, ranks third with a $128.7 billion fortune, followed by Bill Gates with $114.8 billion, according to the Bloomberg index. They’re the only four that are worth more than $100 billion — at the start of the year, 10 people worldwide exceeded that amount, including Zuckerberg, who is now 17th on the wealth list with $60 billion.

Changpeng Zhao, the crypto pioneer who debuted on the Bloomberg Billionaires Index in January with an estimated fortune of $96 billion, has seen his wealth tumble by almost $80 billion this year amid the turmoil in digital assets.

Still, the billionaire class has amassed so much wealth in recent years that not only can the vast majority withstand the worst first half since 1970 for the S&P 500 Index, but they’re likely looking for bargains, said Thorne Perkin, president of Papamarkou Wellner Asset Management.

“Often their mindset is a bit more contrarian,” Perkin said. “A lot of our clients look for opportunities when there’s trouble in the streets.” That held true in the first half of the year in some of the most distressed corners of the global financial markets.

Vladimir Potanin, Russia’s wealthiest man with a $35.2 billion fortune, acquired Societe Generale SA’s entire position in Rosbank PJSC earlier this year amid the fallout from Vladimir Putin’s invasion of Ukraine. He also bought out sanctioned Russian mogul Oleg Tinkov’s stake in a digital bank for a fraction of what it was once worth.

Sam Bankman-Fried, chief executive officer of crypto exchange FTX, bought a 7.6% stake in Robinhood Markets Inc. in early May after the app-based brokerage’s share price tumbled 77% from its hotly anticipated initial public offering last July. The 30-year-old billionaire has also been acting as a lender of last resort for some troubled crypto companies.

The most high-profile buyout of all belonged to Musk, who reached a $44 billion deal to buy Twitter Inc. He offered to pay $54.20 a share; the social-media company’s stock traded at $37.44 at 10:25 a.m. in New York. The world’s richest man said in an interview with Bloomberg News Editor-in-Chief John Micklethwait last month that there are “a few unresolved matters” before the transaction can be completed. “There’s a limit to what I can say publicly,” he said. “It is somewhat of a sensitive matter.”

How Much Health Insurers Pay For Almost Everything Is About To Go Public

Consumers, employers and just about everyone else interested in health care prices will soon get an unprecedented look at what insurers pay for care, perhaps helping answer a question that has long dogged those who buy insurance: Are we getting the best deal we can?

Starting July 1, health insurers and self-insured employers must post on websites just about every price they’ve negotiated with providers for health care services, item by item. About the only exclusion is the prices paid for prescription drugs, except those administered in hospitals or doctors’ offices.

The federally required data release could affect future prices or even how employers contract for health care. Many will see for the first time how well their insurers are doing compared with others.

The new rules are far broader than those that went into effect last year requiring hospitals to post their negotiated rates for the public to see. Now insurers must post the amounts paid for “every physician in network, every hospital, every surgery center, every nursing facility,” said Jeffrey Leibach, a partner at the consulting firm Guidehouse.

“When you start doing the math, you’re talking trillions of records,” he said. The fines the federal government could impose for noncompliance are also heftier than the penalties that hospitals face.

Federal officials learned from the hospital experience and gave insurers more direction on what was expected, said Leibach. Insurers or self-insured employers could be fined as much as $100 a day for each violation and each affected enrollee if they fail to provide the data. “Get your calculator out: All of a sudden you are in the millions pretty fast,” Leibach said.

Determined consumers, especially those with high-deductible health plans, may try to dig in right away and use the data to try comparing what they will have to pay at different hospitals, clinics, or doctor offices for specific services.

But each database’s enormous size may mean that most people “will find it very hard to use the data in a nuanced way,” said Katherine Baicker, dean of the University of Chicago Harris School of Public Policy.

At least at first, Entrepreneurs are expected to quickly translate the information into more user-friendly formats so it can be incorporated into new or existing services that estimate costs for patients. And starting Jan. 1, the rules require insurers to provide online tools that will help people get upfront cost estimates for about 500 so-called “shoppable” services, meaning medical care they can schedule ahead of time.

Once those things happen, “you’ll at least have the options in front of you,” said Chris Severn, CEO of Turquoise Health, an online company that has posted price information made available under the rules for hospitals, although many hospitals have yet to comply.

With the addition of the insurers’ data, sites like his will be able to drill down further into cost variation from one place to another or among insurers.

“If you’re going to get an X-ray, you will be able to see that you can do it for $250 at this hospital, $75 at the imaging center down the road, or your specialist can do it in office for $25,” he said.

Everyone will know everyone else’s business: for example, how much insurers Aetna and Humana pay the same surgery center for a knee replacement. The requirements stem from the Affordable Care Act and a 2019 executive order by then-President Donald Trump.

“These plans are supposed to be acting on behalf of employers in negotiating good rates, and the little insight we have on that shows it has not happened,” said Elizabeth Mitchell, president and CEO of the Purchaser Business Group on Health, an affiliation of employers who offer job-based health benefits to workers. “I do believe the dynamics are going to change.”

Other observers are more circumspect.

“Maybe at best this will reduce the wide variance of prices out there,” said Zack Cooper, director of health policy at the Yale University Institution for Social and Policy Studies. “But it won’t be unleashing a consumer revolution.”

Still, the biggest value of the July data release may well be to shed light on how successful insurers have been at negotiating prices. It comes on the heels of research that has shown tremendous variation in what is paid for health care. A recent study by the Rand Corp., for example, shows that employers that offer job-based insurance plans paid, on average, 224% more than Medicare for the same services.

Tens of thousands of employers who buy insurance coverage for their workers will get this more-complete pricing picture — and may not like what they see.

“What we’re learning from the hospital data is that insurers are really bad at negotiating,” said Gerard Anderson, a professor in the department of health policy at the Johns Hopkins Bloomberg School of Public Health, citing research that found that negotiated rates for hospital care can be higher than what the facilities accept from patients who are not using insurance and are paying cash.

That could add to the frustration that Mitchell and others say employers have with the current health insurance system. More might try to contract with providers directly, only using insurance companies for claims processing. Other employers may bring their insurers back to the bargaining table.

“For the first time, an employer will be able to go to an insurance company and say, ‘You have not negotiated a good-enough deal, and we know that because we can see the same provider has negotiated a better deal with another company,'” said James Gelfand, president of the ERISA Industry Committee, a trade group of self-insured employers.

If that happens, he added, “patients will be able to save money.” That’s not necessarily a given, however.

Because this kind of public release of pricing data hasn’t been tried widely in health care before, how it will affect future spending remains uncertain. If insurers are pushed back to the bargaining table or providers see where they stand relative to their peers, prices could drop. However, some providers could raise their prices if they see they are charging less than their peers.

“Downward pressure may not be a given,” said Kelley Schultz, vice president of commercial policy for AHIP, the industry’s trade lobby.

Baicker, of the University of Chicago, said that even after the data is out, rates will continue to be heavily influenced by local conditions, such as the size of an insurer or employer — providers often give bigger discounts, for example, to the insurers or self-insured employers that can send them the most patients. The number of hospitals in a region also matters — if an area has only one, for instance, that usually means the facility can demand higher rates.

Another unknown: Will insurers meet the deadline and provide usable data?

Schultz, at AHIP, said the industry is well on the way, partly because the original deadline was extended by six months. She expects insurers to do better than the hospital industry. “We saw a lot of hospitals that just decided not to post files or make them difficult to find,” she said.

So far, more than 300 noncompliant hospitals have received warning letters from the government. But they could face $300-a-day fines for failing to comply, which is less than what insurers potentially face, although the federal government has recently upped the ante to up to $5,500 a day for the largest facilities.

Even after the pricing data is public, “I don’t think things will change overnight,” said Leibach. “Patients are still going to make care decisions based on their doctors and referrals, a lot of reasons other than price.”

(This story was produced by The Hill in partnership with Kaiser Health News. KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. It is an editorially independent operating program of Kaiser Family Foundation).

Dow Tumbles 876 Points And Stocks Enter Bear Market On Worries Of Drastic Rate Hikes

US stocks have plunged into a bear market as Wall Street investors grew increasingly nervous about the prospect of even harsher medicine from the Fed to take the sting out of inflation.

The Dow (INDU) sank 876 points or 2.8%. The Nasdaq was down by 4.7% and has tumbled more than 10% in the past two trading sessions.

The broader S&P 500 fell 3.9%. That index is now more than 20% below its all-time high set in January, putting stocks in a bear-market.

Recession fears mounted after Friday’s miserable Consumer Price Index report showed US inflation was significantly higher than economists had expected last month. That could make the Federal Reserve’s inflation-control efforts more difficult.

After raising rates by a half point in May — an action the Fed hadn’t taken since 2000 — Chair Jerome Powell pledged more of the same until the central bank was satisfied that inflation was under control. At that point, the Fed would resume standard quarter-point hikes, he said.

But after May’s hotter-than-expected inflation report, Wall Street is increasingly calling for tougher action from the Fed to keep prices under control. Jefferies joined Barclays on Monday in predicting that the Federal Reserve would hike rates by three-quarters of a percentage point, an action the Fed hasn’t taken since 1994.

“After holding their breath for nearly a week awaiting the US CPI report for May, investors exhaled in exasperation as inflation came in hotter than expected,” Sam Stovall, chief investment strategist at CFRA, said in a note to clients Monday morning.

Stovall said the risk of larger hikes dragged the markets lower Monday.

Investors fear two outcomes, neither of them good: Higher rates mean bigger borrowing costs for businesses, which can eat into their bottom lines. And overly zealous action from the Fed could unintentionally plunge the US economy into a recession, especially if businesses start laying off workers and the red-hot housing market crumbles.

There’s no sign that the job and housing markets are in danger of collapse, although both are cooling off somewhat.

In an interview with CNN’s Fareed Zakaria Sunday, former Fed Chair Ben Bernanke said a US recession remains possible. But Bernanke said he had faith that Powell and the Fed could achieve a so-called soft landing, the elusive outcome in which the central bank can cool the economy down to get inflation under control without slowing it down so much that it enters a recession.

“Economists are very bad at predicting recessions, but I think the Fed has a decent chance — a reasonable chance — of achieving what Powell calls a soft-ish landing, either no recession or a very mild recession to bring inflation down,” Bernanke said.

Analysts appeared to move beyond a “buy the dip” mentality on Monday, signaling that they don’t see markets recovering quickly.

“Valuations aren’t much cheaper given rising interest rates and a weaker earnings outlook, in our view,” wrote strategists at BlackRock in a Monday notes. “A higher path of policy rates justifies lower equity prices. Plus, margin pressures are a risk to earnings.”

BlackRock will remain neutral on stocks for the next six- to 12-months, the strategists said.

Bears and bulls

The S&P 500 closed in a bear market, so the bull run that started on March 23, 2020 has come to an end. But, because of the tricky way these things are measured, the bear market technically began on January 3, when the S&P 500 hit its all-time high.

That means the latest bull market lasted just over 21 months — the shortest on record, according to Howard Silverblatt, S&P Dow Jones Indices senior index analyst. Over the past century, bull markets have lasted an average of about 60 months.

The shortest bull market followed the shortest bear market, one that lasted just over a month — from February 19 to March 23, 2020. Bear markets historically last an average of 19 months, according to Silverblatt.

Stocks briefly fell into a bear market on May 20, although a late-day rally rescued the market from closing below that threshold for the first time since the early days of the pandemic.

The tech-heavy Nasdaq has been in a bear market for some time and is now more than 32% below its all-time high set in November 2021. The Dow is still some way from a bear market. It has fallen about 16% from the all-time high it reached on the last day of 2021.

Gasoline Price Exceeds $5 Per Gallon In Most States

The average U.S. price of regular-grade gasoline spiked 39 cents over the past three weeks to $5.10 per gallon, media reports here suggested. The average price at the pump is $1.97 higher than it was one year ago.

Nationwide, the highest average price for regular-grade gas is in the San Francisco Bay Area, at $6.55 per gallon. The lowest average is in Baton Rouge, Louisiana, at $4.43 per gallon. According to the survey, the average price of diesel rose 20 cents over three weeks, to $5.86 a gallon.

Industry analyst Trilby Lundberg of the Lundberg Survey said Sunday that the price jump comes amid higher crude oil costs and tight gasoline supplies.

Skyrocketing gas prices and the high inflation rate, which is 40 year high, are a glaring problem for the White House with no clear, immediate solution, presenting a major political challenge for Biden and Democrats going into the midterms. The Labor Department’s consumer price index rose 1 percent last month alone and 8.6 percent in the 12-month stretch ending in May.

Eighty-five percent of voters said they think inflation is a very serious or somewhat serious problem, according to an Economist-YouGov poll from earlier this month. In the same poll, 44 percent of respondents said Biden has “a lot” of responsibility for the inflation rate and 31 percent said he has “some.”

Energy Secretary Jennifer Granholm told CBS News this week that Americans should brace for a rough summer, with a top energy agency predicting fuel prices may not come down to less than $4 per gallon until the fall or winter.

“There will be some relief on the horizon, but during the summer driving season, it is going to be rough, no doubt about it, because we have such a demand and supply mismatch on the global market for oil,” Granholm said.

The president and his administration have pointed to steps they’ve taken in recent months to try to pump the brakes on rising gas prices.

Biden has ordered the release of millions of barrels of oil from the Strategic Petroleum Reserve to boost supply, pushed for nations in the Middle East to boost production, lifted restrictions on the sale of fuel with higher ethanol content, and promoted renewable energy sources such as electric vehicles and solar power.

But the reality, as even some Biden administration officials acknowledge, is the president has little sway over day-to-day gas prices, which are often at the mercy of global supply chains and have been impacted by the Russian invasion of Ukraine.

“This is, in large part, caused by [Russian President Vladimir] Putin’s aggression,” Commerce Secretary Gina Raimondo said on CNN this week. “Since Putin moved troops to the border of Ukraine, gas prices have gone up over $1.40 a gallon, and the president is asking for Congress and others for potential ideas. But, as you say, the reality is that there isn’t very much more to be done.”

Republican strategist Doug Heye argued the Biden administration has had a lackluster response to inflation that has contributed to the hit his approval rating has taken and the low marks he has received on the economy.

“There seems to be, on some of these issues, just a shrugging of the shoulders, and that’s why you see, overwhelmingly, Biden’s handling of the economy is unpopular,” he said. “Obviously what’s happened in Ukraine has caused a spike, and there’s nothing wrong with talking about that, but that seems to be the entire explanation when inflation has gone up every month that Biden has been president.”

Biden has stressed that he is sympathetic to the impact of high inflation on American families. “I understand Americans are anxious, and they’re anxious for good reason,” he said in remarks at the Port of Los Angeles. “Make no mistake about it: I understand inflation is a real challenge to American families,” he added. “Today’s inflation report confirmed what Americans already know: Putin’s price hike is hitting America hard. Gas prices at the pump, energy and food prices account for half of the monthly price increases since May.”

He called on Congress to pass legislation to cut shipping costs and the costs of energy bills and prescription drugs as well as tax reform so big corporations pay more. Part of the challenge for the White House, however, is that many Americans don’t realize Biden doesn’t control gas prices, said Matt Bennett, a strategist with centrist think tank Third Way.

“I think he needs to get caught trying to do everything possible. Haul the CEOs of the oil companies in to the White House and demand that they tell him exactly what they need to get production up in the short term,” Bennett said.

The White House said it was shifting gears toward a monthlong campaign in June to talk up the economy and to show the White House is prioritizing inflation while pushing the positives it has delivered on the economy.Biden reiterated that the U.S. is dealing with inflation from a position of strength, touting again the low unemployment rate.

Democratic strategist Antjuan Seawright argued that the president’s focus on the positives of the economy will resonate with voters in the midterm elections this fall. “From a messaging standpoint, I think [Democrats] have to demonstrate district by district, race by race, what efforts we have done to save the economy,” Seawright said. “Make sure we tell the story and not let the story be told about us.”

Warren Buffet Warns Of A 50% Fall In Stock Market Buffet Told Investors That They Should Be Prepared For A 50 Per Cent Fall In The Shares

Veteran investor Warren Buffett has tremendous experience in the stock market that makes everyone trust his forecasts. Not only this, he has earned a lot of wealth from the stock market. Now amidst the ongoing volatility in the stock market, he has asked to be prepared for a fall of up to 50 per cent in the shares.

Warren Buffett has shared a video on Instagram. In this video he is giving advice to the investors investing in the stock market. He told investors that they should be prepared for a 50 per cent fall in the shares. This video has been shared on Instagram with the handle Warret Buffet Videos.

He said that when Berkshire’s stock fell, there was nothing wrong with the company. He said that the mind of the investor should be right. Otherwise, your life will be spent in buying and selling shares at the wrong time and you will continue to cry for loss. Investors take decisions on the advice of others when prices fluctuate.

They say that if you cannot keep investing in a stock for a long time, then you should not buy it. He says that just as you keep the farm with you for a long period, in the same way you need to be financially and psychologically prepared to hold the shares. Buffett had also said during an interview that you should invest in only those companies, which he understands. They should expect that the company’s shares will give good returns in the long run.

Warren Buffett takes the help of three rules to buy shares. He says that the first rule is that the company should have a good income on the amount invested in the business. Second, the management of the company should be in the hands of honest and skilled managers. Third the company’s share price should be correct.

A New Billionaire Has Been Minted Almost Daily During The Pandemic

The Covid-19 pandemic has been good for the wallets of the wealthy. Some 573 people have joined the billionaire ranks since 2020, bringing the worldwide total to 2,668, according to an analysis released by Oxfam on Sunday. That means a new billionaire was minted about every 30 hours, on average, so far during the pandemic.

The report, which draws on data compiled by Forbes, looks at the rise of inequality over the past two years. It is timed to coincide with the kickoff of the annual World Economic Forum meeting in Davos, Switzerland, a gathering of some of the wealthiest people and world leaders.

Billionaires have seen their total net worth soar by $3.8 trillion, or 42%, to $12.7 trillion during the pandemic. A large part of the increase has been fueled by strong gains in the stock markets, which was aided by governments injecting money into the global economy to soften the financial blow of the coronavirus.

Much of the jump in wealth came in the first year of the pandemic. It then plateaued and has since dropped a bit, said Max Lawson, head of inequality policy at Oxfam.

At the same time, Covid-19, growing inequality and rising food prices could push as many as 263 million people into extreme poverty this year, reversing decades of progress, Oxfam said in a report released last month. “I’ve never seen such a dramatic growth in poverty and growth in wealth at the same moment in history,” Lawson said. “It’s going to hurt a lot of people.”

Benefiting from high prices

Consumers around the world are contending with the soaring cost of energy and food, but corporations in these industries and their leaders are benefiting from the rise in prices, Oxfam said.

Billionaires in the food and agribusiness sector have seen their total wealth increase by $382 billion, or 45%, over the past two years, after adjusting for inflation. Some 62 food billionaires were created since 2020.

Meanwhile, the net worth of their peers in the oil, gas and coal sectors jumped by $53 billion, or 24%, since 2020, after adjusting for inflation.

Davos is back and the world has changed. Have the global elite noticed?

Forty new pandemic billionaires were created in the pharmaceutical industry, which has been at the forefront of the battle against Covid-19 and the beneficiary of billions in public funding.

The tech sector has spawned many billionaires, including seven of the 10 world’s richest people, such as Telsa’s Elon Musk, Amazon’s Jeff Bezos and Microsoft’s Bill Gates. These men increased their wealth by $436 billion to $934 billion over the past two years, after adjusting for inflation.

Tax the rich

To counter the meteoric growth in inequality and help those struggling with the rise in prices, Oxfam is pushing governments to tax the wealthy and corporations.

It is calling for a temporary 90% tax on excess corporate profits, as well as a one-time tax on billionaires’ wealth.

The group would also like to levy a permanent wealth tax on the super-rich. It suggests a 2% tax on assets greater than $5 million, rising to 5% for net worth above $1 billion. This could raise $2.5 trillion worldwide.

Wealth taxes, however, have not been embraced by many governments. Efforts to levy taxes on the net worth of the richest Americans have failed to advance in Congress in recent years.

Fighting Inflation Excuse For Class Warfare

A class war is being waged in the name of fighting inflation. All too many central bankers are raising interest rates at the expense of working people’s families, supposedly to check price increases.

Forced to cope with rising credit costs, people are spending less, thus slowing the economy. But it does not have to be so. There are much less onerous alternative approaches to tackle inflation and other contemporary economic ills.

Short-term pain for long-term gain?
Central bankers are agreed inflation is now their biggest challenge, but also admit having no control over factors underlying the current inflationary surge. Many are increasingly alarmed by a possible “double-whammy” of inflation and recession.

Nonetheless, they defend raising interest rates as necessary “preemptive strikes”. These supposedly prevent “second-round effects” of workers demanding more wages to cope with rising living costs, triggering “wage-price spirals”.

In central bank jargon, such “forward-looking” measures convey clear messages “anchoring inflationary expectations”, thus enhancing central bank “credibility” in fighting inflation.

They insist the resulting job and output losses are only short-term – temporary sacrifices for long-term prosperity. Remember: central bankers are never punished for causing recessions, no matter how deep, protracted or painful.

But raising interest rates only makes recessions worse, especially when not caused by surging demand. The latest inflationary surge is clearly due to supply disruptions because of the pandemic, war and sanctions.

Raising interest rates only reduces spending and economic activity without mitigating ‘imported’ inflation, e.g., rising food and fuel prices. Recessions will further disrupt supplies, aggravating inflation and worsening stagflation.

Wage-price spirals?
Some central bankers claim recent instances of wage increases signal “de-anchored” inflationary expectations, and threaten ‘wage-price spirals’. But this paranoia ignores changed industrial relations and pandemic effects on workers.

With real wages stagnant for decades, the ‘wage-price spiral’ threat is grossly exaggerated. Over recent decades, most workers have lost bargaining power with deregulation, outsourcing, globalization and labour-saving technologies. Hence, labour shares of national income have declined in most countries since the 1980s.

Labour market recovery, even tightening in some sectors, obscures adverse overall pandemic impacts on workers. Meanwhile, millions of workers have gone into informal self-employment – now celebrated as ‘gig work’ – increasing their vulnerability.

Pandemic infections, deaths, mental health, education and other impacts, including migrant worker restrictions, have all hurt many. Contagion has especially hurt vulnerable workers, including youth, migrants and women.

Workers’ share of national income, 1970-2015

Ideological central bankers
Economic policies by supposedly independent and knowledgeable technocrats are presumed to be better. But such naïve faith ignores ostensibly academic, ideological beliefs.

Typically biased, albeit in unstated ways, policy choices inevitably support some interests over – even against – others. Thus, for example, an anti-inflation policy emphasis favours financial asset owners.

Politicians like the notion of central bank independence. It enables them to conveniently blame central banks for inflation and other ills – even “sleeping at the wheel” – and for unpopular policy responses.

Of course, central bankers deny their own role and responsibility, instead blaming other economic policies, especially fiscal measures. But politicians blaming central bankers after empowering them is simply shirking responsibility.

In the rich West, governments long bent on fiscal austerity left the heavy lifting for recovery after the 2008-2009 global financial crisis (GFC) to central bankers. Their ‘unconventional monetary policies’ involved keeping policy interest rates very low, enabling corporate shenanigans and zombie business longevity.

This enabled unprecedented increases in most debt, including private credit for speculation and sustaining ‘zombie’ businesses. Hence, recent monetary tightening – including raising interest rates – will trigger more insolvencies and recessions.

German social market economy
Inflation and policy responses inevitably involve social conflicts over economic distribution. In Germany’s ‘free collective bargaining’, trade unions and business associations engage in collective bargaining without state interference, fostering cooperative relations between workers and employers.

The German Collective Bargaining Act does not oblige ‘social partners’ to enter into negotiations. The timing and frequency of such negotiations are also left to them. Such flexible arrangements are said to have helped SMEs.

Although Germany’s ‘social market economy’ has no national tripartite social dialogue institution, labour unions, business associations and government did not hesitate to democratically debate crisis measures and policy responses to stabilize the economy and safeguard employment, e.g., during the GFC.

Dialogue down under
A similar ‘social dialogue’ approach was developed by Australian Labor Prime Minister Bob Hawke from 1983. This contrasted with the more confrontational approaches pursued in Margaret Thatcher’s UK and Ronald Reagan’s USA – where punishing interest rates inflicted long recessions.

Although Hawke had been a successful trade union leader, he began by convening a national summit of workers, businesses and other stakeholders. The resulting Prices and Incomes Accord between the government and unions moderated wage demands in return for ‘social wage’ improvements.

This consisted of better public health provisioning, pension and unemployment benefit improvements, tax cuts and ‘superannuation’ – involving required employees’ income shares and matching employer contributions to a workers’ retirement fund.

Although business groups were not formally party to the Accord, Hawke brought big businesses into other new initiatives such as the Economic Planning Advisory Council. This consensual approach helped reduce both unemployment and inflation.

Such consultations have also enabled difficult reforms – including floating exchange rates and reducing import tariffs. They also contributed to the developed world’s longest uninterrupted economic growth streak – without a recession for nearly three decades, ending in 2020 with the pandemic.

Social partnerships
A variety of such approaches exist. For example, Norway’s kombiniert oppgjior, from 1976, involved not only industrial wages, but also taxes, salaries, pensions, food prices, child support payments, farm support prices, and more.

‘Social partnerships’ have also been important in Austria and Sweden. A series of political understandings – or ‘bargains’ – between successive governments and major interest groups enabled national wage agreements from 1952 until the mid-1970s.

Consensual approaches undoubtedly underpinned post-Second World War reconstruction and progress, of the so-called Keynesian ‘Golden Age’. But it is also claimed they have created rigidities inimical to further progress, especially with rapid technological change.

Economic liberalization in response has involved deregulation to achieve more market flexibilities. But this approach has also produced more economic insecurity, inequalities and crises, besides stagnating productivity.

Such changes have also undermined democratic states, and enabled more authoritarian, even ethno-populist regimes. Meanwhile, rising inequalities and more frequent recessions have strained social trust, jeopardizing security and progress.

Policymakers should consult all major stakeholders to develop appropriate policies involving fair burden sharing. The real need then is to design alternative policy tools through social dialogue and complementary arrangements to address economic challenges in more equitably cooperative ways.

Rise of the Super Rich & Fall of the World’s Poor

Michael Bloomberg, the three-term Mayor of New York city and a billionaire philanthropist, was once quoted as saying that by the time he dies, he would have given away all his wealth to charity – so that his cheque to the funeral undertaker will bounce for lack of funds in his bank account.

Sounds altruistic – even as the number of billionaires keep rising while the poorest of the world’s poor keep multiplying.

The latest brief by Oxfam International, titled “Profiting from Pain” and released May 23, shows that 573 people became new billionaires during the two-and-a half-year Covid 19 pandemic —while the world’s poverty stricken continued to increase.

“We expect this year that 263 million more people will crash into extreme poverty, at a rate of a million people every 33 hours,” Oxfam said.

Billionaires’ wealth has risen more in the first 24 months of COVID-19 than in 23 years combined. The total wealth of the world’s billionaires is now equivalent to 13.9 percent of global GDP. This is a three-fold increase (up from 4.4 percent) in 2000, according to the study.

Asked about the philanthropic gestures, Gabriela Bucher, Executive Director of Oxfam International, told IPS wealthy individuals who use their money to help others should be congratulated.

“But charitable giving is no substitute for wealthy people and companies paying their fair share of tax or ensuring their workers are paid a decent wage. And it does not justify them using their power and connections to lobby for unfair advantages over others,” she declared.

Oxfam’s new research also reveals that corporations in the energy, food and pharmaceutical sectors —where monopolies are especially common— are posting record-high profits, even as wages have barely budged and workers struggle with decades-high prices amid COVID-19.

The fortunes of food and energy billionaires have risen by $453 billion in the last two years, equivalent to $1 billion every two days, says Oxfam.

Five of the largest energy companies (BP, Shell, Total Energies, Exxon and Chevron) are together making $2,600 profit every second, and there are now 62 new food billionaires.

Currently, the world’s total population is around 7.8 billion, and according to the UN, more than 736 million people live below the international poverty line.

A World Bank report last year said extreme poverty is set to rise, for the first time in more than two decades, and the impact of the spreading virus is expected to push up to 115 million more people into poverty, while the pandemic is compounding the forces of conflict and climate change, that has already been slowing poverty reduction.

By 2021, as many as 150 million more people could be living in extreme poverty.

Yasmeen Hassan, Global Executive Director at Equality Now, told IPS Oxfam’s report demonstrates systemic failings in the discriminatory nature of countries’ economies and underscores the urgent need for financial systems to be restructured so that they benefit the 99%, not the 1%.

“As with any crisis, Equality Now foresaw that gender would influence how individuals and communities experienced the pandemic, but even we were shocked at how exceptionally and intensely pre-existing inequalities and sex-based discrimination has been exacerbated”, she said.

While billionaires — the vast majority of whom are men — continue to amass vast sums of wealth, women around the world remain trapped in poverty. Wealthy elites are profiting off women’s labor, much of which is underappreciated, underpaid, and uncompensated, she pointed out.

“Economic hardship and inadequate policy responses to the pandemic have eroded many of the hard-won gains that have been achieved over recent years for women and girls. From increases in child marriage, sexual exploitation and human trafficking, to landlords demanding sex from female tenants who have lost their job, and domestic workers trapped inside with abusive employers, women and girls around the world have borne the brunt of the pandemic,” Hassan declared.

The Oxfam study has been released to coincide with the World Economic Forum’s (WEF) annual meeting—which includes the presence of the rich and the superrich—taking place in Davos-Klosters, Switzerland from 22-26 May. The meeting, whose theme is ‘Working Together, Restoring Trust’, will be the first global in-person leadership event since the outbreak of the COVID-19 pandemic in early 2020

“Billionaires are arriving in Davos to celebrate an incredible surge in their fortunes. The pandemic, and now the steep increases in food and energy prices have, simply put, been a bonanza for them. Meanwhile, decades of progress on extreme poverty are now in reverse and millions of people are facing impossible rises in the cost of simply staying alive,” said Oxfam’s Bucher.

She said billionaires’ fortunes have not increased because they are now smarter or working harder. But it is really the workers who are working harder, for less pay and in worse conditions.

The super-rich, she argued, have rigged the system with impunity for decades and they are now reaping the benefits. They have seized a shocking amount of the world’s wealth as a result of privatization and monopolies, gutting regulation and workers’ rights while stashing their cash in tax havens — all with the complicity of governments.”

“Meanwhile, millions of others are skipping meals, turning off the heating, falling behind on bills and wondering what they can possibly do next to survive. Across East Africa, one person is likely dying every minute from hunger. This grotesque inequality is breaking the bonds that hold us together as humanity. It is divisive, corrosive and dangerous. This is inequality that literally kills.”

Elaborating further, Hassan of Equality Now said women are more likely to be informally employed, low-wage earners, and this disadvantaged position has resulted in higher rates of women losing their jobs, particularly in sectors that were not prioritized in government relief packages.

“Women are also more likely to be primary caretaker and many have had to absorb increases in unpaid duties while schools and nurseries shut down. As a consequence, some women have been forced out of jobs as they found it impossible to juggle full-time work while also providing full-time childcare. This loss of income has been especially catastrophic for women in poverty and has made them more vulnerable to a range of human rights violations.”

She said world leaders must stop pursuing policy agendas that benefit the rich and hurt the poor.

“Instead, we urgently need a committed and coordinated response from governments and policymakers to reduce inequality and poverty, and address discrimination that is holding women and girls back while allowing the super-rich to get richer still,” she added.

The Oxfam study also says the pandemic has created 40 new pharma billionaires.

Pharmaceutical corporations like Moderna and Pfizer are making $1,000 profit every second just from their monopoly control of the COVID-19 vaccine, despite its development having been supported by billions of dollars in public investments.

“They are charging governments up to 24 times more than the potential cost of generic production. 87 percent of people in low-income countries have still not been fully vaccinated.”

“The extremely rich and powerful are profiting from pain and suffering. This is unconscionable. Some have grown rich by denying billions of people access to vaccines, others by exploiting rising food and energy prices. They are paying out massive bonuses and dividends while paying as little tax as possible. This rising wealth and rising poverty are two sides of the same coin, proof that our economic system is functioning exactly how the rich and powerful designed it to do,” said Bucher.

Oxfam recommends that governments urgently:

–·Introduce one-off solidarity taxes on billionaires’ pandemic windfalls to fund support for people facing rising food and energy costs and a fair and sustainable recovery from COVID-19. Argentina adopted a one-off special levy dubbed the ‘millionaire’s tax’ and is now considering introducing a windfall tax on energy profits as well as a tax on undeclared assets held overseas to repay IMF debt. The super-rich have stashed nearly $8 trillion in tax havens.

  • — End crisis profiteering by introducing a temporary excess profit tax of 90 percent to capture the windfall profits of big corporations across all industries. Oxfam estimated that such a tax on just 32 super-profitable multinational companies could have generated $104 billion in revenue in 2020.

— Introduce permanent wealth taxes to rein in extreme wealth and monopoly power, as well as the outsized carbon emissions of the super-rich. An annual wealth tax on millionaires starting at just 2 percent, and 5 percent on billionaires, could generate $2.52 trillion a year —enough to lift 2.3 billion people out of poverty, make enough vaccines for the world, and deliver universal healthcare and social protection for everyone living in low- and lower middle-income countries.

Indian Rupee Falls To The Lowest

The Indian rupee extended its losses and touched an all-time low of 77.42 against the US dollar in early trade on Monday, May 10th.

The Indian currency is weighed by the strength of the American currency in the overseas market and continued foreign fund outflows. Further, rupee slipped on surge in crude oil prices

Foreign institutional investors were net sellers in the capital market on Friday, as they offloaded shares worth Rs 5,517.08 crore, as per stock exchange data. They have been selling equities constantly in the recent months.

Rupee has been under-pressure after global central banks started normalising policy and last week RBI too started raising key interest rates.

On Friday, the rupee had slumped 55 paise to close at 76.90 against the US dollar.

“Local units are also hit by haven dollar flows, higher global rates due to rising inflation and risk-off sentiments. Weakness in Chinese yuan, which fell to its weakest level since November 2020, also weighing on regional currencies,” said Dilip Parmar, Retail Research Analyst at HDFC Securities.

So far this year, foreign institutions have withdrawn a total of nearly $19 billion from domestic equities and debt markets, Parmar said.

Parmar sees near term depreciation in rupee could continue for a few more days with lower side limited in the range of 77.70 to 78. In the event of unwinding, the rupee could see levels of 77 to 76.70.

According to Sugandha Sachdeva, VP-Commodity and Currency Research at Religare Broking, the Indian rupee has plummeted to record lows amid the deteriorating risk sentiments and the unrelenting spree of overseas outflows from the domestic equities.

Besides, an unabated rise in the dollar index towards a two-decade high, soaring US treasury yields and crude prices, all of them have worked their way to push the domestic currency on a downward trajectory, Sachdeva told IANS.

“Markets are concerned about the spiralling inflation and prospects of an aggressive tightening path that continues to threaten the growth outlook, leading to safe-haven flows in the greenback.”

Also, hardening crude oil prices as the EU is moving ahead to impose an embargo on Russian oil are roiling the sentiments, leading to worries about the widening current account deficit and exacerbating the pressure on the domestic currency.

Going ahead, as the Indian rupee has breached the previous all-time lows of the 77.14-mark, it seems poised to witness further depreciation towards the 78-mark in the near term.

Sachdeva, however, anticipates that RBI will intervene around the 78-mark to curb excessive depreciation in the Indian currency.

According to experts, this depreciation is caused by the strength of the American currency in the overseas market and continuous foreign fund outflows from the Indian market. Some also attribute the fall of the rupee to rising crude oil prices globally due to the Russia-Ukraine crisis and the COVID induced lockdown in Shanghai.

India’s Pharma Exports Rise 103% In 8 Years

India’s pharma exports have witnessed a growth of 103 per cent since 2013-14 from Rs 90,415 crore to Rs 1,83,422 crore in 2021-22. The exports achieved in 2021-22 is the Pharma Sector’s best export performance ever and is a remarkable growth with exports growing by almost USD 10 billion in eight years, said Ministry of Commerce & Industry in a statement on Sunday.

Highlighting the achievement in a tweet, the Union Minister of Commerce and Industry Piyush Goyal said: “India’s booming drugs & pharmaceuticals exports more than double in 2021-22 compared to 2013-14. Under the active leadership of PM @NarendraModi ji, India is serving as ‘Pharmacy of the World”.

The pharma exports in 2021-22 sustained a positive growth despite the global trade disruptions and drop in demand for COVID related medicines. The trade balance continues to be in India’s favour, with a surplus of USD 15175.81 Million, said the ministry.

India ranks third worldwide for production by volume and 14th by value. Indian pharma companies have made global mark with 60 per cent of the world’s vaccines and 20 per cent of generic medicines coming from India.

The share of pharmaceutical and drugs in India’s global exports is 5.92 per cent. The formulations and biologicals continue to account for a major share of 73.31 per cent in total exports, followed by Bulk drugs and drug intermediates with exports of USD 4437.64 million. India’s top five pharma export destinations are the US, UK, South Africa, Russia and Nigeria. (IANS)

US Economy Shrinks By 1.4% In 2022 Amid Omicron Surge

The US economy shrank at an annual rate of 1.4 per cent in the first quarter as effects of the Omicron surge start to show up, the US Commerce Department reported.

The latest data marks the economy’s first contraction since the Covid-19 pandemic impacted the country in early 2020, Xinhua news agency reported.

“In the first quarter, an increase in Covid-19 cases related to the Omicron variant resulted in continued restrictions and disruptions in the operations of establishments in some parts of the country,” the department’s Bureau of Economic Analysis (BEA) said in an “advance” estimate.

The BEA noted that government assistance payments in the form of forgivable loans to businesses, grants to state and local governments, and social benefits to households “all decreased as provisions of several federal programs expired or tapered off”.

The decrease in real gross domestic product reflected declines in private inventory investment, exports, federal government spending, and state and local government spending, while imports — a subtraction in the calculation of GDP, increased, the report showed.

Personal consumption expenditures, non-residential fixed investment and residential fixed investment increased, it added.

The US economy contracted in the first quarter as inflation remained elevated at levels not seen in four decades.

The March consumer price index surged 8.5 per cent from a year earlier, the largest 12-month increase since the period ending December 1981, according to data from the Labour Department. That compared with a 7.9 per cent year-on-year gain in February.

Since the March policy meeting, a flurry of comments from US Federal Reserve officials indicated that the urgency for rate hikes is growing, and the central bank is prepared to take more aggressive actions going forward.

Diane Swonk, Chief Economist at major accounting firm Grant Thornton, noted in a recent analysis that as the Fed moves forward with more aggressive rate hikes to combat surging inflation, “what was the strongest and fastest recovery on record may soon be among the shortest.”

Even Fed Chairman Jerome Powell, who argued that soft, or at least softish landings have been relatively common in the US monetary history, noted that no one expects that bringing about a soft landing will be straightforward or easy in the current context. “It’s going to be very challenging,” Powell said.

Former US Treasury Secretary, Lawrence Summers also pointed out that in the past decades, when inflation was above 4 per cent and unemployment was below 4 per cent, the US economy usually fell into recession within two years, which means the Fed’s task would be very difficult.

“A growth recession is likely; unemployment will rise,” Swonk said, adding, “Those waiting for a recession to hire workers may find themselves without the jobs they had hoped to fill.”

Toyota To Invest $ 624 Million In India

Toyota Group plans to invest 48 billion Indian rupees ($624 million) to make electric vehicle components in India, as the Japanese carmaker works toward carbon neutrality by 2050.

Toyota Kirloskar Motor and Toyota Kirloskar Auto Parts signed a memorandum of understanding with the southern state of Karnataka to invest 41 billion Indian rupees, the group said in a statement Saturday. The rest will come from Toyota Industries Engine India.

Toyota is aligning its own green targets with India’s ambitions of becoming a manufacturing hub though the switch to clean transport in the South Asian nation is slower than other countries such as China and the U.S. Expensive price tags, lack of options in electric models and insufficient charging stations have led to sluggish adoption of battery vehicles in India.

“From a direct employment point of view, we are looking at around 3,500 new jobs,” Toyota Kirloskar executive vice president Vikram Gulati told the Press Trust of India in an interview. “As the supply chain system builds, we expect much more to come in later.”

He added that the company would be moving toward a new area of technology — electrified powertrain parts — with production set to start in the “very near-term.”

Indian automakers could generate $20 billion in revenue from electric vehicles between now and fiscal year 2026, according to forecast by Crisil. By 2040, 53% of new automobile sales in India will be electric, compared with 77% in China, according to BloombergNEF.

Gautam Adani Is World’s 5th Richest Person

Gautam Adani, the Indian infrastructure mogul, became the richest Asian billionaire in history earlier this month–and he’s kept on climbing, reported Forbes magazine.

“Adani has now passed Warren Buffett to become the 5th richest person in the world,” said Forbes, estimating that the 59-year-old Adani has a net worth of $123.7 billion, as of Friday’s market close, edging out the $121.7 billion fortune of Buffett, who is 91.

Worth $8.9 billion just two years ago, Adani’s fortune spiked to an estimated $50.5 billion in March 2021 because of his skyrocketing share prices–then nearly doubled by March 2022, to an estimated $90 billion, as Adani Group stocks rose even further, according to Forbes.

“Adani’s estimated $123.7 billion net worth makes him the richest person in India, $19 billion wealthier than the country’s number 2, Mukesh Ambani (who’s worth an estimated $104.7 billion). He surpasses Buffett as shares of the famed investor’s Berkshire Hathaway dropped by 2% on Friday amid a broad drop in the U.S. stock market,” said Forbes.

There are now only four people on the planet richer than Adani, according to Forbes’ real-time billionaire tracker: Microsoft cofounder Bill Gates (worth an estimated $130.2 billion), French luxury goods king Bernard Arnault ($167.9 billion), Amazon founder Jeff Bezos ($170.2 billion) and Tesla and SpaceX chief Elon Musk ($269.7 billion), according to Forbes.

World today has 2,668 billionaires, including 236 newcomers—far fewer than last year’s 493

Forbes’ 36th annual World’s Billionaires List, released earlier this month, reveals 2,668 billionaires, including 236 newcomers—far fewer than last year’s 493.

Elon Musk tops the World’s Billionaires ranking for the first time ever, with an estimated net worth of $219 billion. Altogether the total net worth of the world’s billionaires is $12.7 trillion, down from last year’s $13.1 trillion.

Following last year’s record-breaking number of billionaires, the past 12 months have proven to be more volatile. The number of billionaires fell to 2,668, down from 2,755 last year. A total of 329 people dropped off the list this year—the most in a single year since the 2009 financial crisis.

“The tumultuous stock market contributed to sharp declines in the fortunes of many of the world’s richest,” said Kerry A. Dolan, Assistant Managing Editor of Wealth, Forbes. “Still, more than 1,000 billionaires got wealthier over the past year. The top 20 richest alone are worth a combined $2 trillion, up from $1.8 trillion in 2021.”

Key facts for the 2022 World’s Billionaires list:

  • Top Five: Tesla’s Elon Musk tops the list, unseating Amazon founder Jeff Bezos, who drops to the No. 2 spot after spending the past four years as the richest person in the world. Bernard Arnault of LVMH remains at No. 3, followed by Bill Gates at No. 4. Rounding out the top five is Warren Buffett, who rejoins the top five after falling to No. 6 last year.
  • Newcomers: Among the list of notable newcomers are Lord of the Rings director Peter Jackson(No.1929); OpenSea founders Devin Finzer and Alex Atallah (Nos. 1397); social media and e-commerce tycoon Miranda Qu (No. 1645) and pop star and cosmetics mogul Rihanna (No. 1729).
  • Self-Made: Of the total 2,668 people on the 2022 ranking, 1,891 are self-made billionaires, who founded or cofounded a company or established their own fortune (as opposed to inheriting it).
  • Women: There are 327 women billionaires, including 16 who share a fortune with a spouse, child or sibling, down from 328 in 2021.
  • Globally: Regionally, Asia-Pacific boasts the most billionaires, with 1,088, followed by the United States, with 735, and Europe, with 592.
  • Drop-offs: The war in Ukraine, a Chinese tech crackdown and slipping stock prices pushed 329 people off the World’s Billionaires list this year, including 169 one-hit wonders who were part of last year’s record 493 newcomers.

To view the full list, visit www.forbes.com/billionaires.

The 2022 Billionaires issue features five consecutive covers, including:

  • Igor Bukhman: When Vladimir Putin invaded Ukraine, Igor Bukhman, the Russia-born billionaire founder of gaming company Playrix, found himself with thousands of employees divided by the frontlines. His internal battlefield offers lessons for us all.
  • Ken Griffin: War in Europe. The China-Russia alliance. De-dollarization. Ken Griffin, Wall Street’s billionaire kingpin, is making the best out of the worst of times.
  • Tope Awotona: Awotona built Calendly out of frustration. Now the scheduling app is worth $3 billion—and the subject of a heated Twitter spat among Silicon Valley elite.
  • Ryan Breslow: Bolt cofounder Ryan Breslow has boosted the value of his fintech to the moon by promising an Amazon-style checkout to millions of online retailers. Now the new billionaire is making a lot of noise—and some powerful enemies—challenging the tech industry’s culture and ethics.
  • Falguni Nayar: A decade ago, when she was 49, Nayar left behind her investment banking career to launch beauty-and-fashion retailer Nykaa. She took it public in November and is now India’s richest self-made woman. Nykaa, which means “one in the spotlight,” currently sells more than 4,000 brands online and in its 102 stores.

The Forbes World’s Billionaires list is a snapshot of wealth using stock prices and currency exchange rates from March 11, 2022.

US Home Prices Rose By 20% In One Year

Prices rose 19.8% year-over-year in February, an even higher rate than the 19.2% growth seen in January, according to the S&P CoreLogic Case-Shiller US National Home Price Index.

Phoenix, Tampa and Miami reported the highest year-over-year gains among the 20 US cities tracked by the index. Phoenix led the way for the 33rd consecutive month with home prices rising 32.9% from the year before. It was followed by Tampa and Miami, which saw 32.6% and 29.7% gains, respectively.

All 20 cities reported price increases in the year ending February 2022. In January, 16 cities saw year-over-year growth. Prices were strongest in the South and Southeast, but every region continued to show big gains.

“US home prices continued to advance at a very rapid pace in February,” said Craig J. Lazzara, managing director at S&P Dow Jones Indices. “That level of price growth suggests broad strength in the housing market, which is exactly what we continue to observe.”

Although Lazarra noted that rising inflation, further interest rate hikes by the Federal Reserve and rising mortgage rates may soon take the momentum out of the housing market.

The imbalance between strong demand from prospective buyers and insufficient supply of available homes has also been pushing home prices higher, said George Ratiu, manager of economic research for Realtor.com

“Today’s S&P Case-Shiller Index highlights a housing market experiencing a renewed sense of urgency in February, as buyers worked through a small number of homes for sale in an effort to get ahead of surging mortgage rates,” he said.

While inventory has increased a bit since February, according to the National Association of Realtors, there are several other changes that have taken place since then, too.

Real estate markets have seen supply-chain disruptions from the war in Ukraine. Mortgage rates have also been rising fast, climbing above 5% for the first time since 2010. In addition, a strong labor market is driving wages and inflation higher, he said.

“For buyers, the jumps in prices and mortgage rates translated into sticker shock,” said Ratiu.

For a median-priced home financed with a 30-year loan, the monthly payment is $550 higher than a year ago, he said.

But with more inventory expected to come onto the market this spring and rising mortgage rates, housing analysts are expecting to see a cool-off in demand.

“Many buyers are deciding to take a step back and re-evaluate their budgets and timelines,” said Ratiu.

Bitcoin Miners Seek Ways To Dump Fossil Fuels

For the past year a company that “mines” cryptocurrency had what seemed the ideal location for its thousands of power-thirsty computers working around the clock to verify bitcoin transactions: the grounds of a coal-fired power plant in rural Montana.

But with the cryptocurrency industry under increasing pressure to rein in the environmental impact of its massive electricity consumption, Marathon Digital Holdings made the decision to pack up its computers, called miners, and relocate them to a wind farm in Texas.

“For us, it just came down to the fact that we don’t want to be operating on fossil fuels,” said company CEO Fred Thiel.

In the world of bitcoin mining, access to cheap and reliable electricity is everything. But many economists and environmentalists have warned that as the still widely misunderstood digital currency grows in price — and with it popularity — the process of mining that is central to its existence and value is becoming increasingly energy intensive and potentially unsustainable.

The Hardin Generating Station, a coal-fired power plant that is also home to the cryptocurrency “mining” operation Big Horn Data Hub, is seen on April 20, 2022, in Hardin, Mont. Energy from burning coal is used to power thousands of computers that are kept on site to produce the digital currency known as bitcoins. (AP Photo/Matthew Brown)

Bitcoin was was created in 2009 as a new way of paying for things that would not be subject to central banks or government oversight. While it has yet to widely catch on as a method of payment, it has seen its popularity as a speculative investment surge despite volatility that can cause its price to swing wildly. In March 2020, one bitcoin was worth just over $5,000. That surged to a record of more than $67,000 in November 2021 before falling to just over $35,000 in January.

Central to bitcoin’s technology is the process through which transactions are verified and then recorded on what’s known as the blockchain. Computers connected to the bitcoin network race to solve complex mathematical calculations that verify the transactions, with the winner earning newly minted bitcoins as a reward. Currently, when a machine solves the puzzle, its owner is rewarded with 6.25 bitcoins — worth about $260,000 total. The system is calibrated to release 6.25 bitcoins every 10 minutes.

When bitcoin was first invented it was possible to solve the puzzles using a regular home computer, but the technology was designed so problems become harder to solve as more miners work on them. Those mining today use specialized machines that have no monitors and look more like a high-tech fan than a traditional computer. The amount of energy used by computers to solve the puzzles grows as more computers join the effort and puzzles are made more difficult.

Marathon Digital, for example, currently has about 37,000 miners, but hopes to have 199,000 online by early next year, the company said.

Determining how much energy the industry uses is difficult because not all mining companies report their use and some operations are mobile, moving storage containers full of miners around the country chasing low-cost power.

The Cambridge Bitcoin Electricity Consumption Index estimates bitcoin mining used about 109 terrawatt hours of electricity over the past year — close to the amount used in Virginia in 2020, according to the U.S. Energy Information Center. The current usage rate would work out to 143 TWh over a full year, or about the amount used by Ohio or New York state in 2020.

Cambridge’s estimate does not include energy used to mine other cryptocurrencies.

A key moment in the debate over bitcoin’s energy use came last spring, when just weeks after Tesla Motors said it was buying $1.5 billion in bitcoin and would also accept the digital currency as payment for electric vehicles, CEO Elon Musk joined critics in calling out the industry’s energy use and said the company would no longer be taking it as payment.

Some want the government to step in with regulation. In New York, Gov. Kathy Hochul is being pressured to declare a moratorium on the so-called proof-of-work mining method — the one bitcoin uses — and to deny an air quality permit for a project at a retrofitted coal-fired power plant that runs on natural gas.

A New York State judge recently ruled the project would not impact the air or water of nearby Seneca Lake. “Repowering or expanding coal and gas plants to make fake money in the middle of a climate crisis is literally insane,” Yvonne Taylor, vice president of Seneca Lake Guardians, said in a statement.

Anne Hedges with the Montana Environmental Information Center said that before Marathon Digital showed up, environmental groups had expected the coal-fired power plant in Hardin, Montana, to close.

“It was a death watch,” Hedges said. “We were getting their quarterly reports. We were looking at how much they were operating. We were seeing it continue to decline year after year — and last year that totally changed. It would have gone out of existence but for bitcoin.”

The cryptocurrency industry “needs to find a way to reduce its energy demand,” and needs to be regulated, Hedges said. “That’s all there is to it. This is unsustainable.”

Some say the solution is to switch from proof-of-work verification to proof-of-stake verification, which is already used by some cryptocurrencies. With proof of stake, verification of digital currency transfers is assigned to computers, rather than having them compete. People or groups that stake more of their cryptocurrency are more likely to get the work — and the reward.

While the method uses far less electricity, some critics argue proof-of-stake blockchains are less secure. Some companies in the industry acknowledge there is a problem and are committing to achieving net-zero emissions — adding no greenhouse gases to the atmosphere — from the electricity they use by 2030 by signing onto a Crypto Climate Accord, modeled after the Paris Climate Agreement.

“All crypto communities should work together, with urgency, to ensure crypto does not further exacerbate global warming, but instead becomes a net positive contributor to the vital transition to a low carbon global economy,” the accord states.

Marathon Digital is one of several companies pinning its hopes on tapping into excess renewable energy from solar and wind farms in Texas. Earlier this month the companies Blockstream Mining and Block, formerly Square, announced they were breaking ground in Texas on a small, off-the-grid mining facility using Tesla solar panels and batteries.

“This is a step to proving our thesis that bitcoin mining can fund zero-emission power infrastructure,” said Adam Back, CEO and co-founder of Blockstream.

Companies argue that cryptocurrency mining can provide an economic incentive to build more renewable energy projects and help stabilize power grids. Miners give renewable energy generators a guaranteed customer, making it easier for the projects to get financing and generate power at their full capacity.

The mining companies are able to contract for lower-priced energy because “all the energy they use can be shut off and given back to the grid at a moment’s notice,” said Thiel.

In Pennsylvania, Stronghold Digital is cleaning up hundreds of years of coal waste by burning it to create what the state classifies as renewable energy that can be sent to the grid or used in bitcoin mining, depending on power demands.

Pennsylvania’s Department of Environmental Protection is a partner in the work, which uses relatively new technology to burn the waste coal more efficiently and with fewer emissions. Left alone, piles of waste coal can catch fire and burn for years, releasing greenhouse gases. When wet, the waste coal leaches acid into area waterways.

After using the coal waste to generate electricity, what’s left is “toxicity-free fly ash,” which is registered by the state as a clean fertilizer, Stronghold Digital spokesperson Naomi Harrington said.

As Marathon Digital gradually moves its 30,000 miners out of Montana, it’s leaving behind tens of millions of dollars in mining infrastructure behind.

Just because Marathon doesn’t want to use coal-fired power anymore doesn’t mean there won’t be another bitcoin miner to take its place. Thiel said he assumes the power plant owners will find a company to do just that. “No reason not to,” he said.

Time For A Higher Poverty Line In India

The time has come for India to raise its poverty line from the existing extreme poverty line of $1.90 per person per day to the lower-middle income (LMI) poverty line of $3.20, a level some 68 percent higher. This may seem odd to aspire to in what is not even the first post-pandemic year, but that is the main message coming out of our recent IMF working paper “Pandemic, Poverty and Inequality: Evidence from India.”

No one should be surprised at this need for a higher poverty line. Per capita GDP growth in India averaged 3.5 percent per annum for twenty years from 1983 to 2003. In 2004, the official poverty line was raised by 18 percent, when the head count ratio (HCR) was 27.5 percent. Rapid growth (5.3 percent per annum) and an improved method of measurement of consumption (the modified mixed recall period (MMRP) rather than the Uniform Recall Period (URP)), resulted in the HCR reaching the low teens in 2011-12.

The poverty line should have been raised then, as Bhalla (2010) argued. Most countries change from the concept of absolute poverty to relative poverty as they get richer, and India should too. Relative poverty—subject to minor debate—is mostly chosen to mean an HCR level of around a quarter or a third of the population. Hence, the$1.90 poverty line was already too low in 2011-12 and is extremely low today.

The HCR of the $1.90 poverty line (Figure 1) has shown a steep decline since 2004—from approximately a third of the population in 2004 to less than 1.5 percent in 2019. These numbers are lower than those shown in the World Bank’s Povcal database, the most commonly used source, because Povcal does not correct for the misleading uniform recall period used or for the provision of food subsidies.

Figure 1. The poverty rate in India steeply declined starting in 2004

Source: NSS 2011-12 MMRP data; Private Final Consumption Expenditure (PFCE)  growth rates for estimates of monthly per capita consumption; authors’ calculations.

By our estimates, in the pre-pandemic year 2019, extreme poverty was already below 1 percent and despite the significant economic recession in India in 2020, we believe that the impact on poverty was small. This is because we estimate poverty (HCR) after incorporating the benefits of in-kind food (wheat and rice) subsidies for approximately 800 million individuals (75 percent of rural and 50 percent of urban residents). This food subsidy was not small and rose to close to 14 percent of the poverty line for the average subsidy recipient (Figure 2) in 2020. This was enough to contain any rise in poverty even in the pandemic year 2020.

Figure 2. Food subsidies contained any increases in poverty

Source: NSS 2011-12 MMRP data; Private Final Consumption Expenditure (PFCE)  growth rates for estimates of monthly per capita consumption; Indian poverty line very close to PPP $1.9 per capita per month; authors’ calculations.

A notable feature of the pandemic response was the provision of a free extra 5 kilograms of wheat or rice per person per month via the Pradhan Mantri Garib Kalyan Yojana (PMGKY) program plus 1 kg of pulses. This was in addition to the existing food transfers of 5 kg per capita per month of wheat or rice at subsidized prices. Total subsidized food grain in 2020 therefore amounted to 10 kg, which is the average per capita level of food (wheat and rice) consumption by Indian citizens for the last three decades.

The additional food subsidy was a pandemic-centric response. We would conjecture that a cross-country comparative study could show that this policy response was possibly the most effective in the world. Hence, the Indian experience can provide lessons for individual countries, and multilateral agencies concerned with effective redistribution of income.

Poverty measurement) in India was in 2011-12. The following survey conducted in 2017-18 generated results that have not been officially released, on the grounds that the data were not of acceptable quality. Our paper has an extensive discussion on the validity of the evidence regarding this controversial decision where we conclude that the data is indeed unreliable and of extremely questionable quality and hence should not be released. A very recent World Bank April 2022 study by Edochie et. al. suggests support for our conclusion and inference.

Our paper presents a consistent time series of poverty and (real) inequality in India for each of the years 2004-2020. Our estimate of real inequality (Figure 3) shows that consumption inequality has also declined, and in 2020 is very close to the lowest historical level of 0.28. Poverty and inequality trends can be emotive, controversial, and confusing. Consumption inequality is lower than income inequality, which itself is lower than wealth inequality. And each can show different trends. The levels and trends are different, and intermingled use should carry a warning about this when discussing “inequality.”

Our results are different than most of the commentary and analysis of poverty in India. All the estimates are made in the absence of an official survey post-2011-12. A large part of the explanation for the difference in results is because of differences in definition. Our paper makes a strong case for the acceptance of the official consumption definition (accepted by most countries and also recommended by the World Bank); it should be measured according to the classification of consumption according to the nature of the good or service consumed. This is the MMRP method for obtaining consumption expenditures.

The Indian government has officially adopted this method, and the above mentioned “ill-fated” 2017-18 survey was the first time when the National Statistical Organization exclusively measured consumption (and poverty) according to the MMRP definition.

However, many studies continue to rely on the now obsolete uniform reference period (URP or 30-day recall for all items) method. For example, a very recent World Bank study estimated the HCR to be around 10 percent in 2019; it uses the outdated (URP) definition of consumption and does not adjust for food subsidies. Incidentally, both in 2009-10 and 2011-12, the URP and MMRP poverty estimates diverged by approximately 10 percentage points, as did their respective estimates of mean consumption.

Thus, given the approximate magnitude of definition differences observed both in 2009-10 and 2011-12 and making the necessary adjustment for food subsidies, the World Bank poverty estimate for 2019 is likely to be very close to our estimate.

Inclusive growth is a very relevant policy goal for all economies. With the pandemic ebbing and the IMF’s expected growth for India rebounding very strongly for three successive years from 2021-23, Indian policymakers will soon be confronted with a policy choice—how long should they keep the extra PMGKY subsidy? This query is part of a huge success story of poverty decline. Additionally, another query pertains to whether policies should move toward targeted cash transfers instead of subsidized food grains.

In the past, the key argument in support of a policy shift to cash transfers was to reduce leakages, but our results indicate that leakages have substantially been reduced over the last decade even in the in-kind food transfer scheme. In fact, the recent food transfer program was a very successful intervention, especially during the pandemic when supply chains were breaking down and there was heightened uncertainty. Under normal circumstances, cash transfers are likely to be more efficient, and they retain broadly the same allocative outcomes as food transfers. The debate therefore now should be on the efficiency trade-offs associated with use of either in-kind or cash transfers as the key instrument of poverty alleviation.

These debates are significant given the improvement in targeting of transfers and are consistent with the objective of building a modern social security architecture in developing countries.

Accumulating all the evidence, the strong conclusion from our work is that Indian policy has effectively delivered both growth and inclusion, and in a fundamental sense has faithfully followed the Rawlsian maximin principle—maximizing the welfare of the poorest.

Biden Admn. To Decide On Student Loans In Months

White House press secretary Jen Psaki said last week that President Biden’s use of executive action to cancel some federal student loan debt is “still on the table” and that a “decision” could be made in the coming months.

Psaki made the comments during an appearance on “Pod Save America” after being pressed about past comments by White House chief of staff Ron Klain. “Yes, still on the table, still on the table,” Psaki could be heard saying to apparent cheers from the audience attending the live podcast, which was released by the platform on Friday. She then pointed to the Aug. 31 deadline for when the freeze on student loan debt payments and interest accrual is set to lapse, saying: “We have to then decide whether it’s extended.”

“Nobody’s had to pay a dollar, a cent, anything in student loans since Joe Biden has been president,” Psaki said. “And if that can help people ease the burden of costs in other parts of their lives, that’s an important thing to consider. That’s a big part of the consideration.”

Between now and the end of August, Psaki said the moratorium is “either going to be extended or we’re going to make a decision, as Ron referenced, about canceling student debt.”

White House press secretary Jen Psaki on Friday said President Biden’s use of executive action to cancel some federal student loan debt is “still on the table” and that a “decision” could be made in the coming months.

Between now and the end of August, Psaki said the current moratorium on student loan payments is “either going to be extended or we’re going to make a decision, as [White House chief of staff Ron Klain] referenced, about canceling student debt.”

Biden last extended the pause earlier this month amid mounting pressure from advocates, borrowers and members of his own party to provide further relief.

Biden during his campaign called for federal student loan debt cancellation, and supported forgiveness of at least $10,000 per borrower. However, some top Democrats have pushed for him to go beyond that, canceling up to $50,000 per borrower or wiping out federal student loan debt entirely.

The White House called on Congress to send legislation canceling debt to Biden’s desk, but Democrats are not optimistic about their chances of doing so in the 50-50 Senate given staunch GOP opposition. Sixty votes would be needed to overcome procedural hurdles.

The background: The current pause on federal student loan payments was first implemented under the Trump administration at the outset of the coronavirus pandemic. It has since been extended six times.

Biden last extended the pause earlier this month amid mounting pressure from advocates, borrowers and members of his own party to provide further relief.

World Bank Cuts India, South Asia Growth Forecast On Ukraine Crisis

Indian Prime Minister Narendra Modi speaks during the inauguration of the Samsung Electronics smartphone manufacturing facility in Noida, India, July 9, 2018. REUTERS/Adnan Abidi

NEW DELHI – The World Bank cut its economic growth forecast for India and the whole South Asian region on Wednesday, citing worsening supply bottlenecks and rising inflation risks caused by the Ukraine crisis.

The international lender lowered its growth estimate for India, the region’s largest economy, to 8% from 8.7% for the current fiscal year to March, 2023 and cut by a full percentage point the growth outlook for South Asia, excluding Afghanistan, to 6.6%.

In India, household consumption will be constrained by the incomplete recovery of the labour market from the pandemic and inflationary pressures, the bank said.

“High oil and food prices caused by the war in Ukraine will have a strong negative impact on peoples’ real incomes,” Hartwig Schafer, World Bank Vice President for South Asia, said in a statement.

The World Bank raised its growth forecast for Pakistan, the region’s second-largest economy, for the current year ending in June, to 4.3% from 3.4% and kept next year’s growth outlook unchanged at 4%.

The region’s dependence on energy imports meant high crude prices forced its economies to pivot their monetary policies to focus on inflation rather than reviving economic growth after nearly two years of pandemic restrictions.

The World Bank slashed this year’s growth forecast for Maldives to 7.6% from 11%, citing its large imports of fossil fuels and a slump in tourism arrivals from Russia and Ukraine.

It raised crisis-hit Sri Lanka’s 2022 growth forecast to 2.4% from 2.1% but warned the island’s outlook was highly uncertain due to fiscal and external imbalances.

Sri Lanka’s central bank said on Tuesday it had become “challenging and impossible” to repay external debt, as it tries to use its dwindling foreign exchange reserves to import essentials like fuel.

Recession Fears Rise As Fed Fights Inflation

As Americans feel the squeeze of rising inflation, fears are growing that a recession is around the corner.  The U.S. economy is running hot as a record stretch of job growth, steady consumer demand and intense demand for labor has helped fuel the highest inflation rate in 40 years.

While the economy has recovered far quicker than many economists expected, the speed of the rebound is putting pressure on the Federal Reserve to take more significant action to help slow price growth.

Wendy Edelberg, director of The Hamilton Project and a senior economic studies fellow at the left-leaning Brookings Institution, said the economy has been “revving” given the amount of fiscal stimulus that has been poured into the system to keep it afloat during the coronavirus pandemic.

But in order to combat the skyrocketing inflation, Edelberg and other economists say a slowdown is vital.

“So, now the question is, how smoothly does that slowdown happen?” Edelberg said. “And slowdowns can be painful. So, there’s absolutely a risk of a recession.”

The Fed’s primary tool for keeping prices stable and the job market strong is adjusting the federal funds rate. When the Fed raises or cuts its baseline interest rate range, borrowing costs for home loans, credit cards and other lending products typically move in the same direction.

When interest rates rise, consumer and business spending tends to decrease as the costs of borrowing money increase. Higher interest rates also incentivize saving, which means less immediate spending in the economy.

After slashing rates to near-zero levels amid the onset of the pandemic, the Fed in March launched a series of interest rate hikes meant to bring down soaring inflation.

The Fed hopes higher borrowing costs will slow down the economy enough to curb price growth without halting the recovery.

“Our goal is to restore price stability while fostering another long expansion and sustaining a strong labor market,” Fed Chair Jerome Powell said last month, adding the bank is aiming for the economy to achieve a “soft landing, with inflation coming down and unemployment holding steady.”

Powell, other Fed officials and some economists believe the U.S. economy is strong enough to withstand rising interest rates without falling into recession or losing jobs. The U.S. gained nearly 1.7 million jobs over the first three months of the year, consumer spending has remained strong and there are roughly two open jobs for every unemployed jobseeker.

Those confident in the Fed’s handle on inflation believe the bank can stanch inflation while only reducing job openings and the intense need for workers, rather than slowing the economy into layoffs.

Even so, the Fed is facing serious turbulence as it attempts to steer the recovery to a sustainable pace.  The war in Ukraine, the sanctions imposed on Russia and Moscow’s response has fueled rapid price increases for oil, gasoline, food, key minerals and other essential consumer goods already hit by inflation. COVID-19 shutdowns in China have also jammed up supply chains, which were already overwhelmed by consumer demand.

Dana M. Peterson, chief economist at The Conference Board, said Fed rate hikes could help reduce consumer demand for goods and services, pent-up savings, rising wages and housing market heat, but can’t do anything about supply chain dysfunction, COVID-19 shutdowns and the war.

“The supply side drivers of inflation, which includes the supply chain disruptions and also higher global commodity prices, the Fed can do very little about. Nonetheless, the Fed is going to be raising interest rates,” Peterson said during a Thursday briefing with reporters.

“I don’t know how confident the Fed is about anything, but certainly I think they’ve abandoned expectations that there’s going to be kind of a natural solution to inflation.”

Economists warn more must be done to tighten monetary policy to cool the economy, which could still mean pain in the months ahead for more Americans’ finances.

“As you slow the economy down, inflation will fall,” Ray Fair, an economics professor at Yale University, said, adding that’s how the Fed can help lower inflation. “But the cost of that, of course, is slower output growth and higher unemployment.”

And Fair, director emeritus at the National Bureau of Economic Research (NBER), said his own research suggests the Fed has “got to do quite a bit” of intervention to slow the economy.

“They’ve got to raise the interest rate, for example, more than just two percentage points, if they expect to get much lowering of inflation,” Fair said. The Fed funds rate is currently at a range of 0.25 to 0.5 percent and bank officials expect to raise it to roughly 2 percent by the end of the year.

Some economists fear inflation may be rising too quickly for the Fed to curb without raising rates so high, it halts economic growth.

In March, consumer prices shot up 1.2 percent, according to data released by the Labor Department this week. The data also found those prices had risen to 8.5 percent in the past year alone, marking the highest yearly increase in roughly four decades.

Americans saw prices go up in a variety of areas, ranging from food to gasoline and transportation, as the Ukraine-Russian war helped exacerbate the nation’s ongoing inflation problem.

Fair, whose bureau is often looked to for measuring recessions, said the NBER’s defines such an event as roughly, but not completely, “two successive quarters of negative real growth in GDP.”

Recent weeks have seen reports of institutions like Bank of America warning of recession shocks. A recent survey by The Wall Street Journal found more economists are also changing their tune on chances of a recession, finding forecasters “on average put the probability of the economy being in recession sometime in the next 12 months at 28 percent,” compared to 18 percent in January.

In an interview, Desmond Lachman, a senior fellow for the right-leaning American Enterprise Institute, said he feels a recession is likely.

“In order for [the Fed] to get the inflation out of the system, they’re going to have to tighten policy and that’s going to produce a recession,” Lachman said.

But others believe the Fed may have to contend that higher inflation could be around for a little while longer, as the central bank proceeds in slowing down the economy.

“They’re also going to have to recognize that they may not get back to a 3 percent or 2 percent (annual inflation) target anytime soon,” Peterson said, arguing such an attempt “would essentially drive the US economy into recession.”

Mortgage Rates Hit 5 Percent, Ushering In New Economic Uncertainty

Mortgage rates swelled above 5 percent for the first time in more than a decade — an unexpectedly rapid ascent that has begun to temper the U.S. housing boom and could usher new uncertainty into an economy dogged by soaring inflation.

The 30-year fixed-rate mortgage, the most popular home loan product, hit the threshold just five weeks after surpassing 4 percent, according to Freddie Mac data released Thursday. The average has not been this high since February 2011.

The run-up comes as the Federal Reserve has launched a major initiative to rein in the highest inflation in 40 years. Fed officials are betting that higher interest rates will slash inflation and recalibrate the job market. But their plan also rests on the assumption that higher rates will cool demand for housing, especially while homes themselves are in such short supply.

Low rates fueled the revival of the U.S. housing market after the Great Recession and have helped drive home prices to record levels. But after two years of hovering at historical lows, rates have been on a tear: In January, the 30-year fixed average was 3.22 percent. It was 3.04 percent a year ago. And while mortgage rates had been expected to rise, they’ve done so more quickly than many economists predicted.

“I’m not surprised that rates have hit 5 percent, but I am surprised that everyone else is surprised,” Curtis Wood, founder and chief executive of Bee, a mobile mortgage app, said via email. “If you look at historical action by the Fed in a high-rate environment and compare that to what the Fed is doing today, the Fed is underreacting to the reality of inflation in the economy.

“I’m surprised that rates aren’t at 6 percent right now,” he added, “and wouldn’t be shocked if they’re at 7 percent by end of year.”

Consumers have been absorbing higher prices in nearly every facet of their lives, with essentials such as food and gasoline spiking 8.8 percent and 48 percent, respectively, compared with last year. But higher mortgage rates can significantly limit what they can buy, or price them out altogether.

Several months ago, a home buyer would be looking to pay $1,347 a month on a $300,000 loan at 3.5 percent interest. But if the buyer had waited until this week, the same loan at 5 percent would tack on $263, bringing the monthly payment to $1,610.

The Federal Reserve’s efforts to tame inflation are driving the rise in rates. Although the Fed does not set mortgage rates, it does influence them. The central bank took its first steps toward bringing down inflation in March when it raised its benchmark rate for the first time since 2018. In addition to the federal funds rate hike, the Fed is soon to begin the process of reducing its balance sheet.

The Federal Reserve holds about $2.74 trillion in mortgage-backed securities. It indicated it will reveal its plans for reducing its holdings at its May meeting. The more aggressively the Fed sells those bonds, the faster mortgage rates are likely to rise.

The cost of housing doesn’t only weigh on buyers and sellers. It also has proved to be a major complication for the economic recovery, and potentially jeopardizes policymakers’ ability to rein in soaring inflation.

Inflation is rising at the fastest pace in 40 years, with prices climbing 8.5 percent in March compared with the year before. Shelter is a major part — roughly one third — of the basket of goods and services used to calculate inflation, or what’s known as the consumer price index. That means that if housing costs don’t meaningfully turn around soon, it will be that much harder for overall inflation to simmer down to more normal levels.

Shelter costs also stand apart from other categories, such as gas, food or plane tickets, that may be more susceptible to forces like the ongoing coronavirus pandemic, supply chain disruptions or a war. (Courtesy: https://www.msn.com/en-us/money/realestate/mortgage-rates-hit-5-percent-ushering-in-new-economic-uncertainty/ar-AAWe1XQ)

Inflation Has Risen Around The World, But The U.S. Has Seen One Of The Biggest Increases

Americans who have been to the grocery store lately or started their holiday shopping may have noticed that consumer prices have spiked. The annual rate of inflation in the United States hit 6.2% in October 2021, the highest in more than three decades, as measured by the Consumer Price Index (CPI). Other inflation metrics also have shown significant increases in recent months, though not to the same extent as the CPI.

Understanding why the rate of inflation has risen so quickly could help clarify how long the surge might last – and what, if anything, policymakers should do about it. The recent acceleration in the rate of inflation appears to be fundamentally different from other inflationary periods that were more closely tied to the regular business cycle. Explanations for the current phenomenon proffered to date include continuing disruptions in global supply chains amid the coronavirus pandemic; turmoil in the labor markets; the fact that today’s prices are being measured against prices during last year’s COVID-19-induced shutdowns; and strong consumer demand after local economies were reopened.

How we did this

At least one thing is clear: A resurgent inflation rate is by no means solely a U.S. concern. A Pew Research Center analysis of data from 46 nations finds that the third-quarter 2021 inflation rate was higher in most of them (39) than in the pre-pandemic third quarter of 2019. In 16 of these countries, including the U.S., the inflation rate was more than 2 percentage points higher last quarter than in the same period of 2019. (For this analysis, we used data from the Organization for Economic Cooperation and Development, a group of mostly highly developed, democratic countries. The data covers the 38 OECD member nations, plus eight other economically significant countries.)

At 5.3%, the U.S. had the eighth-highest annual inflation rate in the third quarter of 2021 among the 46 countries examined, narrowly edging out Poland. The increase in the U.S. inflation rate – 3.58 percentage points between the third quarter of 2019 and the third quarter of 2021 – was the third highest in the study group, behind only Brazil and Turkey, both of which have substantially higher inflation rates in general than the U.S. does.

Regardless of the absolute level of inflation in each country, many show variations on the same pattern: relatively low inflation before the COVID-19 pandemic struck in the first quarter of 2020; flat or falling inflation for the rest of that year and into 2021, as many governments sharply curtailed most economic activity; and rising inflation in the second and third quarters of this year, as the world struggled to get back to something approaching normal.

For most countries in this analysis, 2021 has marked a sharp break from what had been an unusually long period of low-to-moderate inflation. In fact, during the decade leading up to the pandemic, 34 of the 46 countries in the analysis averaged changes in inflation rates of 2.6% or lower. In 27 of these countries, inflation rates averaged less than 2%. The biggest exception was Argentina, whose economy has been plagued by high inflation and other ills for decades. The OECD has no data on Argentine inflation rates before 2018, but in the 2018-19 period it averaged 44.4%.

At the other end of the spectrum is Japan, which has struggled against persistently low inflation and periodic deflation, or falling prices, for more than two decades, mostly without success. In the first quarter of 2020, Japan’s inflation rate was running at an anemic 0.7%. It slid into deflationary territory in the last quarter of 2020 and has remained there since: Consumer prices in the third quarter of this year were 0.2% below their level in the third quarter of 2020.

A few other countries have departed from the general dip-and-surge pattern. In Iceland and Russia, for instance, inflation has risen steadily throughout the pandemic, not just in more recent months.

In Indonesia, inflation fell early on and has remained at low levels. In Mexico, the inflation rate fell slightly during the 2020 lockdown period but returned quickly, hitting 5.8% in the third quarter of 2021, the highest level since the fourth quarter of 2017. And in Saudi Arabia, the pattern was reversed: The inflation rate surged during the height of the pandemic but fell sharply in the most recent quarter, to just 0.4%.

Sundar Pichai Announces $9.5 Bn For New Offices, Data Centres In US

Alphabet and Google CEO Sundar Pichai on Wednesday announced to invest approximately $9.5 billion for new offices and data centres in the US this year, creating 12,000 new full-time jobs and thousands more among local suppliers, partners and communities.

Pichai said that Google helped provide $617 billion in economic activity for millions of American businesses, nonprofits, creators, developers and publishers last year.

“In addition, the Android app economy helped create nearly two million jobs last year, and YouTube’s creative ecosystem supported 394,000 jobs in 2020,” he informed.

In the past five years, Google has invested more than $37 billion in its offices and data centres in 26 US states, creating over 40,000 full-time jobs.

“That’s in addition to the more than $40 billion in research and development the company invested in 2020 and 2021,” said the company.

Pichai said that while it might seem counterintuitive to step up investment in physical offices even as the world embraces more flexibility in how we work.

“Yet we believe it’s more important than ever to invest in our campuses and that doing so will make for better products, a greater quality of life for our employees, and stronger communities,” the Google CEO noted.

At the same time, the investments in data centres “will continue to power the digital tools and services that help people and businesses thrive”.

“As we work towards running our offices and data centres on carbon-free energy 24/7 by 2030, we’re aiming to set new standards for green building design”.

In California, Google will continue to invest in offices and support affordable housing initiatives in the Bay Area as part of its $1 billion housing commitment. (IANS)

China Debt Traps in the New Cold War

As China increases lending to other developing countries, ‘debt trap’ charges are growing quickly. As it greatly augments financing for development while other sources continue to decline, condemnation of China’s loans is being weaponized in the new Cold War.

Debt-trap diplomacy?
The catchy term ‘debt-trap diplomacy’ was coined by Indian geo-strategist Brahma Chellaney in 2017. According to him, China lends to extract economic or political concessions when a debtor country is unable to meet payment obligations. Thus, it overwhelms poor countries with loans, to eventually make them subservient.

Unsurprisingly, his catchphrase has been popularized to demonize China. Harvard’s Belfer Center has obligingly elaborated on the rising Asian power’s nefarious geostrategic interests. Meanwhile, as with so much else, the Biden administration continues related Trump policies.

But even Western researchers generally wary of China dispute the new narrative. A London Chatham House study concluded it is simply wrong – flawed, with scant supporting evidence.

Studying China’s loan arrangements for 13,427 projects in 165 countries over 18 years, AidData – at the US-based Global Research Institute – could not find a single instance of China seizing a foreign asset following loan default.

China has been the ‘new kid on the block’ of development financing for more than a decade. Its growing loans have helped fill the yawning gap left by the decline and increasing private business orientation of financing by the global North.

Instead of tied aid pushing exports, as before, it now shamelessly promotes foreign direct investment from donor nations. Unless disbursed via multilateral institutions, China’s increased lending to support businesses abroad has not really helped developing countries cope with renewed ‘tied’ concessional aid.

Grand ‘debt trap diplomacy’ narratives make for great propaganda, but obscure debt flows’ actual impacts. Most Chinese lending is for infrastructure and productive investment projects, not donor-determined ‘policy loans’. Some countries ‘over-borrow’, but most do not. Deals can turn sour, but most apparently don’t.

While leaving less room for discretionary abuse in implementation, project lending typically puts borrowers at a disadvantage. This is largely due to the terms of sought-after foreign investment and financing, regardless of source. Hence, the outcomes of most such borrowing – not just from China – vary.

Sri Lanka
Sri Lanka’s Hambantota Port is the most frequently mentioned China debt trap case. The typical media account presumes it lent money to build the port expecting Sri Lanka to get into debt distress. China then supposedly seized it – in exchange for providing debt relief – enabling use by its navy.

But independent studies have debunked this version. Last year, The Atlantic insisted, ‘The Chinese “Debt Trap” Is a Myth’. The subtitle elaborated, “The narrative wrongfully portrays both Beijing and the developing countries it deals with”.

It elaborated: “Our research shows that Chinese banks are willing to restructure the terms of existing loans and have never actually seized an asset from any country, much less the port of Hambantota”.

The project was initiated by then President Mahindra Rajapaksa – not China or its bankers. Feasibility studies by the Canadian International Development Agency and the Danish engineering firm Rambol found it viable. The Chinese Harbour Group construction firm only got involved after the US and India both refused Sri Lankan loan requests.

Sri Lanka’s later debt crisis has been due to its structural economic weaknesses and foreign debt composition. The Chatham House report blamed it on excessive borrowing from Western-dominated capital markets – not Chinese banks.

Even the influential US Foreign Policy journal does not blame Sri Lanka’s undoubted economic difficulties on Chinese debt traps. Instead, “Sri Lanka has not successfully or responsibly updated its debt management strategies to reflect the loss of development aid that it had become accustomed to for decades”.

As the US Fed tapered ‘quantitative easing’, borrowing costs – due to Sri Lanka’s persistent balance of payment problems – rose, forcing it to seek International Monetary Fund help. Some argue borrowing even more from China is the best option available to the island republic.

To set the record straight, there was no debt-for-asset swap after Sri Lanka could no longer service its foreign debt. Instead, a Chinese state-owned enterprise leased the port for US$1.1 billion. Sri Lanka has thus boosted its foreign reserves and paid down its debt to other – mainly Western – creditors.

Also, Chinese navy vessels cannot use the port – home to Sri Lanka’s own southern naval command. “In short, the Hambantota Port case shows little evidence of Chinese strategy, but lots of evidence for poor governance on the recipient side”.

Malaysia
China has also been accused by the media of seeking influence over the Straits of Malacca, through which some 80% of its oil imports pass. Debt-trap proponents claim Beijing therefore inflated lending for Malaysia’s controversial East Coast Rail Link (ECRL).

The Chatham House report notes, “The real issue here is not one of geopolitics, but rather – as in Sri Lanka – the recipient government’s efforts to harness Chinese investment and development financing to advance domestic political agendas, reflecting both need and greed”.

ECRL was initiated by convicted former Malaysian prime minister Najib Razak. Ostensibly to develop the less developed East Coast of Peninsular Malaysia as part of China’s Belt and Road Initiative, it rejected other less costly, but much needed options.

Borrowings are far more than needed – probably for nefarious purposes. Loan terms were structured to delay repayment – to Najib’s political advantage by ‘passing the buck’ to later generations. But such abuse is by the borrower – not the lender – unless Chinese official connivance is involved.

Non-alignment for our times
There is undoubtedly much room for improving development finance, especially to achieve more sustainable development. Instead of mainly lending to the US, as before, China’s growing role can still be improved. To begin, all involved should respect the United Nations’ principles on responsible sovereign lending and borrowing.

After more than half a century of Western donors’ largely betrayed promises, China’s development finance has significantly improved ‘South-South cooperation’. Meanwhile, sustainable development finance needs – compounded by global warming, the pandemic and Ukraine war – have increased.

After decades of the West denying China commensurate voice in decision making, even under rules it made, its role on the world stage has grown. But instead of working together for the benefit of all, rich countries seem intent on demonizing it. Unsurprisingly, most developing country governments seem undeterred.

As the new Cold War and the scope of economic sanctions spread, collateral damage is undermining development finance and developing countries. To cope with the new situation, developing countries need to consider building a new non-aligned movement for our dark times.

Gautam Adani Now 6th Richest Person In World $20.6 Billion Richer Than Mukesh Ambani Of Reliance

Gautam Adani, founder and chairman of the Adani group, a conglomerate with businesses in sectors such as energy, ports, mining, edible oil and so on, with a net worth of $118 billion is now the world’s sixth-richest person, driven by a meteoric rise in the value of Adani group’s listed stocks. The 59-year-old mogul has overtaken Google’s famed founders Larry Page and Sergey Brin, according to the Bloomberg Billionaires Index.

It is important to note here in this context that Adani’s net worth soared by $8.57 billion, or about Rs 65,091 crore, due to a rise in the share prices of Adani Green Energy, Adani Enterprises, Adani Gas and Adani Transmission on Monday. While India’s benchmark indices ended the day in the red on Monday, shares of Adani Group surged up to 16 per cent.

Adani Green Energy breaks into list of top 10 most valued firms on BSE, replaces Bharti Airtel

With an almost $41.6 billion jump in his personal fortune, Gautam Adani is the world’s biggest wealth-gainer this year. Meanwhile, Reliance Industries (RIL)— India’s most valuable company—chairman Mukesh Ambani’s total wealth now stands at $97.4 billion, and he is now the 11th richest in the world, as per the latest Bloomberg billionaire ranking. So far this year, his personal wealth has increased by $7.45 billion. If we go by the Bloomberg wealth index, Adani is $20.6 billion ahead of Ambani at present, and it could be tough for the RIL boss to catch up very quickly.

The moot question is: What’s made Adani so rich, so fast? The tycoon is pushing into clean energy, airports and power plants. The mega stock market gainer that catapulted Adani to the top position is Adani Green Energy. Shares of the company soared 16.25 per cent to settle at Rs 2,701.55 apiece on BSE on Monday. It entered the list of top-10 valued companies as its market valuation zoomed over Rs 4.22 lakh crore.

For the last 14 years, Ambani has been the leader of India’s wealthiest list. The oil-to-telecom conglomerate boss was briefly dethroned by pharmaceutical tycoon Dilip Sangavi a few years ago but grabbed the top position.

Last week, Adani had reached a net worth of $100 billion as he became the new member of the centibillionaires club. Worth mentioning here is that Amazon founder Jeff Bezos (currently have a net worth of $176 billion) was the first to hit the $100 billion milestone in 2017 since Microsoft. co-founder Bill Gates back in 1999 for a brief period.

Tesla chief executive Musk, now the world’s richest person with a fortune of $249 billion, joined the elite club in 2020.

Meanwhile, in the last 10 years, while Ambani’s wealth has grown 400 per cent, Adani has seen a 1,830 per cent jump, as per the 2022 M3M Hurun Global Rich List.

India’s Apex Court Upholds BJP Govt’s Foreign Contribution Regulation Act

The Supreme Court on Friday, April 8th affirmed the validity of the Foreign Contribution (Regulation) Amendment (FCRA) Act, 2020, which imposes new conditions on the receipt and use of funds by NGOs.

A bench headed by Justice A.M. Khanwilkar upheld the 2020 amendments made to the FCRA Act, 2010. The detailed judgment in the case will be uploaded on the top court website later in the day.

The Centre had told the Supreme Court that there exists no fundamental right to receive unbridled foreign contributions without any regulation, while defending the amendments made in 2020 to the Foreign Contribution (Regulation) Act.

The MHA emphasized that FCRA aim was to ensure foreign contribution does not adversely impinge upon the functioning of parliamentary institutions, political associations, and academic, and other voluntary organisations as well as individuals in India.

The petitioners had challenged the amendments, which included newly added sections 12 and 17, which state that the foreign contributions must be deposited in the FCRA account created in the specified branch of the scheduled bank, which was later notified as State Bank of India, New Delhi branch.

The petitioners claimed the amendments were arbitrary and stringent, which made the functioning of NGOs extremely difficult.

The Ministry of Home Affairs (MHA) in a 355-page affidavit filed in the Supreme Court, said Parliament has enacted the Foreign Contribution (Regulation) Act, laying down a clear legislative policy of strict controls over foreign contributions for certain activities in the country.

The MHA said the “legislation has also prohibited acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to the national interest and for matters connected therewith or incidental thereto”. The affidavit was settled by Solicitor General of India Tushar Mehta, who was assisted by advocate Kanu Agrawal.

Petitioners in the matter were — Noel Harper and Nigel Mills of Share and Care Foundation in Andhra Pradesh and Joseph Lizy and Annamma Joachim of National Workers Welfare Trust in Telangana.

British Chancellor Rishi Sunak Seeks Inquiry Into Wife Akshata Murty’s Tax Leak

Rishi Sunak of the United Kingdom, an embattled British Conservative party Chancellor of the exchequer, has defended his Indian wife Akshata Murthy, daughter of Narayana Murthy, one of the founders of software giant Infosys, against charges of avoiding paying taxes in Britain.

Sunak, who is of East African-Indian origin, told media that reports about her non-domicile status are ‘unpleasant smears’. A non-dom in the United Kingdom does not have to pay tax on her overseas income. The BBC estimated “she would have avoided 2.1 million pounds a year in UK tax”.

This, while not unlawful, is embarrassing for Sunak, under whom comes Her Majesty’s Revenue and Customs (HMRC). “To smear my wife to get at me is awful,” Sunak insisted.

Murthy is said to own a 0.9 per cent stake in Infosys, which has been calculated as being worth 500 million pounds. Annual dividends from this holding is estimated to be 11.6 million pounds. On Thursday, it emerged she pays just 30,000 pounds a year in the UK on the British income.

Rishi Sunak is now demanding a Whitehall inquiry to find out who leaked details about his wife Akshata Murty’s tax arrangements. Murty has said she will pay UK taxes on her overseas income, following a row over her non-domicile status, the BBC reported.

Downing Street has rejected newspaper reports that its staff leaked damaging stories about Sunak to the media. It has been a bruising week for the Chancellor, and now he has asked senior civil servants for a full investigation to establish who divulged his wife’s tax status.

His allies say very few people had access to the personal information, which Sunak declared to Whitehall officials when he became a minister in 2018, the BBC reported.

Some Conservative MPs say he was naive to think the details would remain private, and that he should have predicted that the tax arrangements would be criticised as inappropriate, despite being legal. Sunak’s team has dismissed suggestions of a rift with Downing Street and say the prime minister has been “incredibly supportive”.

The opposition Labor party said it would be “breath-taking hypocrisy” if the Chancellor’s wife had reduced her tax bill as he raised taxes for millions of workers — referring to the rise in National Insurance contributions imposed in last month’s budget by Sunak.

Opposition Labor Party MP Louise Haigh said: “I think the question many people will be asking is whether it was ethical and whether it was right that the Chancellor of the Exchequer, whilst piling on 15 separate tax rises to the British public, was benefiting from a tax scheme that allowed his household to pay significantly less to the tune of potentially tens of millions of pounds.”

The Chancellor’s brand, vigorously promoted since he came to office, has been damaged, with some members of the ruling Conservative Party questioning his judgement. Opposition MPs have said Sunak’s family is benefiting at a time when he is putting up taxes for millions of others, the BBC reported.

However, a section of British newspapers has claimed that Prime Minister Boris Johnson’s office is leaking damaging material about Sunak to media. 10 Downing Street described the allegations as “categorically untrue” and “baseless”.

On Thursday, the pro-Johnson Daily Mail ran a headline, which read: “Collapsed fitness chain backed by Rishi Sunak’s non-dom wife was paid up to 650,000 pounds in furlough cash – while her billionaire father’s IT firm claimed Covid handout for hundreds of UK staff”.

Earlier, the attack against Sunak ranged from he being the richest member of Parliament with a net worth of 200 million pounds, to Infosys operating in Russia, which western corporate houses are restrained from doing after the West’s sanctions against the Russian Federation following its invasion of Ukraine.

While Sunak may have built a slight fortune as an investment banker, his background is upper middle class, his father being a general practitioner and mother an owner of a chemist’s shop.

The allegation about Infosys was ridiculous as an Indian company is under no obligation to copy its western counterparts, since the government of India maintains normal economic ties with Moscow.

From December 2021 until before the Russia-Ukraine conflict — when Johnson’s continuity as head of government looked untenable, because of a series of scandals associated with him — it was widely being speculated in British print media as well as in Conservative circles that Sunak was a front-runner to succeed Johnson.

It was also pointed out at that point that while other cabinet colleagues were strenuously defending Johnson against the barrage of demands for him to step down, Sunak was lukewarm in doing so, which was interpreted as ‘ambition’.

Sunak became popular when the British government was significantly generous in protecting the livelihoods during the Covid-19 crisis. But having borrowed money to extend such assistance, it was inevitable that he would have to raise taxes to repay the debt. However, given the cost of living crisis that had descended on Britons because of inflation, the Chancellor’s recent budget has been condemned as uncaring.

In Britain, a budget is identified in particular with the Chancellor, although the intelligentsia is aware its contents have the prior approval of the Prime Minister. With Johnson not saying much to protect Sunak against the onslaught unleashed against him on his proposals or lack of them, an impression has grown that the latter is being thrown under a bus.

Rising Oil Prices To Keep Indian Rupee On A Slippery Slope

High crude oil prices combined with fears of rising inflation are expected to keep the Indian rupee under pressure, next week. Lately, the Brent crude oil price has remained elevated due to the Russian-Ukrainian war. The price has hovered in the range of $100-$110 in the last few weeks.

“Rupee has been under pressure due to rising US bond yields, inflation and high crude oil prices,” said Sajal Gupta Head Fx & Rates Edelweiss.

“These circumstances are going to be tough for the Indian rupee to appreciate. Expect rupee to trade between 75.50 and 76.25 in the next week.” Last week, the rupee closed at 75.90 to a greenback.

“Next week is a relatively shorter week but market participants will be keeping an eye on the inflation and industrial production number to gauge a view for the currency,” said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.

“Expectation is that inflation could remain elevated following the recent rise in energy and food prices. On the other hand, industrial production could grow at a slower pace in January and could further weigh on the currency.”

The Central Statistics Office (CSO) is slated to release the macro-economic data points of Index of Industrial Production (IIP), Consumer Price Index (CPI) on March 12.

On the other hand, expectations of India Inc’s healthy Q4FY22 results season should attract fresh equity focused foreign funds which might cub any sharp weakness in the Indian rupee versus the US dollar.

“Dollar index have surged past week and it is now trading near crucial psychological mark of 100,” said Devarsh Vakil, Deputy Head of Retail Research, HDFC Securities.

“Rupee is likely to consolidate next week on back of improving sentiments for equity markets. In near term, spot USD INR expected to trade in the range of 76.20 to 75.70. with bias towards appreciation.”

$40 Billion Borrowed By US Consumers in February Alone

Americans got into a lot more debt in February this year as rampant inflation kept up the pressure, the Federal Reserve’s consumer credit report showed last week. Debt levels jumped by nearly $42 billion to a total of almost $4.5 trillion. That’s an annual increase of 11.3%, seasonally adjusted, far outperforming economists’ expectations and setting a new high. In January, total credit had grown only 2.4%.

The Fed’s historical consumer credit data goes back to the early 1940s. Revolving credit, which includes credit cards, jumped by 20.7% to about $1.1 trillion. The category increased by only 4% in the prior month.

Nonrevolving credit, such as student or car loans, grew by 8.4% to $3.4 trillion, also outpacing a smaller January gain.

Americans have been challenged with a rapid pace of price increases everywhere, from the grocery store to the gas station. Year-over-year inflation has increased at a pace not seen in 40 years.

Consumer spending has kept up the pace so far, but it is not immediately clear whether that’s because people are paying more for the same items that got more expensive or are actually buying more goods and services.

In late February, Russia’s invasion of Ukraine jolted global energy markets and boosted the price of gasoline. With prices at the pump rising higher in March, credit card spending is unlikely to have gone down after the February jump.

Biden’s Order To Release Oil From Strategic Petroleum Reserve To Reduce Gas Prices ‘Fairly Significantly’

US President Joe Biden announced last week that his administration will release 1 million barrels of oil per day for the next six months from its strategic reserve in an effort a bid to control energy prices that have spiked after the United States and allies imposed steep sanctions on Russia over its invasion of Ukraine. The releasing of over 180 million barrels from the US Strategic Petroleum Reserve is the “largest” release from national reserve in the country’s history, Biden said in a speech from the Eisenhower Executive Office Building on Thursday.

The president said it was not known how much gasoline prices could decline as a result of his move, but he suggested it might be “anything from 10 cents to 35 cents a gallon.” Gas is averaging about $4.23 a gallon, compared with $2.87 a year ago, according to AAA.

“As Russian oil comes off the global market, supply of oil drops and prices are rising,” he said, acknowledging the US energy embargo on Russia would “come with a cost”.

“The bottom line is if we want lower gas prices we need to have more oil supply right now,” Biden said. “This is a moment of consequence and peril for the world, and pain at the pump for American families.”

The president also wants Congress to impose financial penalties on oil and gas companies that lease public lands but are not producing. He said he will invoke the Defense Production Act to encourage the mining of critical minerals for batteries in electric vehicles, part of a broader push to shift toward cleaner energy sources and reduce the use of fossil fuels. The actions show that oil remains a vulnerability for the U.S. Higher prices have hurt Biden’s approval domestically and added billions of oil-export dollars to the Russian government as it wages war on Ukraine.

Tapping the stockpile would create pressures that could reduce oil prices, though Biden has twice ordered releases from the reserves without causing a meaningful shift in oil markets. Biden said Thursday he expects gasoline prices could drop “fairly significantly.”

Part of Biden’s concern is that high prices have not so far coaxed a meaningful jump in oil production. The planned release is a way to increase supplies as a bridge until oil companies ramp up their own production, with administration officials estimating that domestic production will grow by 1 million barrels daily this year and an additional 700,000 barrels daily in 2023.

The markets reacted quickly with crude oil prices dropping about 6% in Thursday trading to roughly $101 a barrel. Still, oil is up from roughly $60 a year ago, with supplies failing to keep up with demand as the world economy has begun to rebound from the coronavirus pandemic. That inflationary problem was compounded by Russian President Vladimir Putin’s invasion of Ukraine, which created new uncertainties about oil and natural gas supplies and led to retaliatory sanctions from the U.S. and its allies.

Stewart Glickman, an oil analyst for CFRA Research, said the release would bring short-term relief on prices and would be akin to “taking some Advil for a headache.” But markets would ultimately look to see whether, after the releases stop, the underlying problems that led to Biden’s decisions remain.

“The root cause of the headache is probably still going to be there after the medicine wears off,” Glickman said. Biden has been in talks with allies and partners to join in additional releases of oil, such that the world market will get more than the 180 million barrels total being pledged by the U.S.

Americans on average use about 21 million barrels of oil daily, with about 40% of that devoted to gasoline, according to the U.S. Energy Information Administration. That total accounts for about one-fifth of total global consumption of oil.

Domestic oil production is equal to more than half of U.S. usage, but high prices have not led companies to return to their pre-pandemic levels of output. The U.S. is producing on average 11.7 million barrels daily, down from 13 million barrels in early 2020.

“Look, the action I’m calling for will make a real difference over time. But the truth is it takes months, not days, for companies to increase production,” he said on Thursday. In his address, Biden also highlighted the importance of US energy independence and called for a transition to clean energy.

“Ultimately, we and the whole world need to reduce our dependence on fossil fuels altogether. We need to choose long-term security over energy and climate vulnerability,” he said. Biden, who faces with mounting pressure to address a surging inflation ahead of the midterm elections, blamed the Covid-19 pandemic and Russia’s military action for rising gas prices.

Republican lawmakers have said the problem results from the administration being hostile to oil permits and the construction of new pipelines such as the Keystone XL. Democrats say the country needs to move to renewable energy such as wind and solar that could reduce the dependence on fossil fuels and Putin’s leverage.

Sen. Steve Daines, R-Mont., blasted Biden’s action to tap the reserve without first taking steps to increase American energy production, calling it “a Band-Aid on a bullet wound.″ Daines called Biden’s actions “desperate moves″ that avoid what he called the real solution: ”investing in American energy production,″ and getting “oil and gas leases going again.”

The administration says increasing oil output is a gradual process and the release would provide time to ramp up production. It also wants to incentivize greater production by putting fees on unused leases on government lands, something that would require congressional approval.

Oil producers have been more focused on meeting the needs of investors than consumers, according to a survey released last week by the Dallas Federal Reserve.

About 59% of the executives surveyed said investor pressure to preserve “capital discipline” amid high prices was the reason they weren’t pumping more, while fewer than 10% blamed government regulation.

In his remarks last week, Biden tried to shame oil companies that he said are focused on profits instead of putting out more barrels, saying that adding to the oil supply was a patriotic obligation.

“This is not the time to sit on record profits: It’s time to step up for the good of your country,” the president said.

The steady release from the reserves would be a meaningful sum and come near to closing the domestic production gap relative to February 2020, before the coronavirus caused a steep decline in oil output.

Still, the politics of oil are complicated with industry advocates and environmentalists both criticizing the planned release. Groups such as the American Petroleum Institute want to make drilling easier, while environmental organizations say energy companies should be forced to pay a special tax on windfall profits instead.

The administration in November announced the release of 50 million barrels from the strategic reserve in coordination with other countries. And after the Russia-Ukraine war began, the U.S. and 30 other countries agreed to an additional release of 60 million barrels from reserves, with half of the total coming from the U.S.

According to the Department of Energy, which manages it, more than 568 million barrels of oil were held in the reserve as of March 25. After the release, the government would begin to replenish the reserve once prices have sufficiently fallen.

Among 108,000 New Immigrants To Canada, Indians Top The List

Canada, which plans to admit a record 432,000 new immigrants in 2022, is on target to hit this mark as the country welcomed 108,000 newcomers in the first three months of the year.

“Canada is proud to be a destination of choice for so many people around the world, and we will continue to work hard to provide the best experience possible for them,” said Sean Fraser, Minister of Immigration, Refugees and Citizenship, releasing the figures for the first quarter on Thursday.

Though there is no country-wise break-up of the numbers, Indians are the top immigrant group to take up residence in Canada this year.

In 2021, nearly 100,000 Indians became permanent residents of Canada as the country admitted a record 405,000 new immigrants in its history.

During 2021-2022, over 210,000 permanent residents also acquired Canadian citizenship.

As per figures released by Immigration, Refugees and Citizenship Canada (IRCC), it also issued 450,000 study permit applications.

As per figures released by Immigration, Refugees and Citizenship Canada (IRCC), it also issued 450,000 study permit applications. As of December 31, 2021, of the approximately 622,000 foreign students in Canada, Indians number as high as 217,410.

The Indian Parliament was informed that as of March 20, this year, a total of 1,33,135 Indian students have already gone abroad for higher studies. There are over 622,000 foreign students in Canada, with Indians numbering 217,410 as of December 31, 2021.

Canada is steadily becoming a popular destination among Indians looking to migrate abroad, for studying or work. According to a study by the National Foundation for American Policy (NFAP), the number of Indians who became permanent residents of Canada increased by 115% in the last four to five years.

In fact, NFAP data shows that America is no longer the dream destination for most Indians, Canada is taking its place. The number of Indian students doing post-graduation in science and engineering studies at US universities declined by nearly 40% between the 2016-17 and 2019-20 academic years, while it increased by nearly 182% in Canada between 2016 and 2019.

In Canada, it is easier for international students to obtain temporary visas and permanent residence after graduating than it is in the United States. Canada’s post-graduation work permit (PGWP) is commonly seen as the first major step towards obtaining permanent resident status.

Open Work Permit is another immigration pathway that lets one go to Canada without a Labour Market Impact Assessment (LMIA) or an offer letter from an employer who has paid the compliance fee. The permit allows one to work for any organisation in Canada as long as it has not been marked ineligible by the government.

Canada’s acute labour shortage became a serious concern during the pandemic after which it announced major plans to overcome the problem by setting a target of admitting more than 1.3 million immigrants over three years.

“Common Prosperity” By President XI A Defining Theme Of Chinese Politics

Introduced by Chinese President Xi Jinping at the beginning of 2021, “common prosperity” has become a defining theme of Chinese politics today, serving to set critical priorities for Beijing across economic, environmental, and social policy, at both the national and local levels. Focused largely on alleviating systemic inequalities, the common prosperity campaign has been described as a transformational new path for China’s development. Despite the central importance of common prosperity to the direction of Chinese policymaking, clarity on the concept remains limited outside of China.

What exactly does common prosperity mean in practice, and what are the intentions and motivations of the political campaign being waged in its name? Where is the campaign headed, and will it be able to accomplish its goals? And, in particular, what will common prosperity mean for international non-profits and philanthropic organizations working in or with China on those areas central to the campaign?

China’s Common Prosperity Program: Causes, Challenges, and Implications,” a new paper by Asia Society Policy Institute (ASPI) Senior Fellow Guoguang Wu, examines these questions in detail. The paper finds that common prosperity is derived from a complex number of motivations, including reducing pressing inequalities, but also key political goals of interest to the Chinese party-state.

Global Jobs Attract Indian Students To Foreign Varsities

Foreign universities, technical institutes and B-schools not only provide world class education to students, but also prepare them for high-paying global jobs which the Indian youth see as an easy way to fast-tract their career growth.

While countries like Russia, China and Australia are a popular choice for technical courses among the Indian students, a large number of them have also turned to universities in the US, the UK and Canada for programmes that will fetch them work permit for global technical jobs.

According to Canada’s Immigration Refugee and Citizenship data, the number of Indian students studying in the country has increased by a whopping 350 per cent between the 2015-16 and 2019-20 academic years.

As per data by the UK’s Higher Education Statistics Agency (HESA), the number of Indian students enrolling to universities every year has increased by 220 per cent. However, the percentage of Indian students in the US has declined by 9 per cent between 2015-16 and 2019-20.

Canada’s Post-Graduation Work Permit Program (PGWPP), America’s Optional Training Program (OPT) and Britain’s New Graduate Pathway (GR) offer opportunities for good placements after postgraduation which are a major attraction among Indian students to advance their career.

Notably, Indian applicants have an excellent track record in approval rates for work permits abroad. In Canada, there has been an approval rate of over 95 per cent for the PGWPP in the past five years.

International education expert Karunn Kandoi told IANS that the US, the UK and Canada are the most popular destinations for Indian students for studying Science, Technology, Engineering and Mathematics (STEM) or business management programmes.

“While 44 per cent of Indian students in the UK and 37 per cent in Canada have opted for business studies, the US is the first choice to study STEM courses. In 2020-21, 78 per cent of Indians studied STEM programmes in the US. It was the third highest rate among the top 25 countries to study,” he said.

According to a former professor of Delhi University, D. Sharma, universities in the US, Canada and Australia are not only providing modern education and global culture to its students but also excellent employment opportunities.

He also pointed out: “India has been leading the way in global talent development over the past 10 years and the trend of studying abroad remains more relevant than ever in the past two years, despite the constraints caused by the pandemic.”

An Indian student from a reputed B-school in Canada, Bhaskar Sharma, said: “Getting a permanent residency here is also a big goal for many Indian students after admission to an international university. Students sometimes also find it easier to achieve their goals abroad on the basis of their merit, especially when there is a need for special kind of technical knowledge in one field.

“For example, Canada’s health sciences and skilled trades are facing a significant labour shortage, while in the UK, the information and communications sector has the highest vacancy rate at 5.5 per cent.”

Indian students are also now turning to foreign countries to study medicine. However recently, due to the Russia-Ukraine war, around 18,000 students had to return to the country before the completion of their course.

Pawan Chaudhary, President of India’s Medical Technology Association, said: “Due to the Russia-Ukraine war, Indian students will find options to complete MBBS in any other countries such as Bangladesh, Nepal, Spain, Germany, Kyrgyzstan and the UK, where the cost of the course is low.”

The Impact Of Economic War On Putin Led Russia How Sanctions On Russia Will Upend The Global Order

The Russian-Ukrainian war of 2022 is not just a major geopolitical event but also a geoeconomic turning point. Western sanctions are the toughest measures ever imposed against a state of Russia’s size and power.

In the space of less than three weeks, the United States and its allies have cut major Russian banks off from the global financial system; blocked the export of high-tech components in unison with Asian allies; seized the overseas assets of hundreds of wealthy oligarchs; revoked trade treaties with Moscow; banned Russian airlines from North Atlantic airspace: restricted Russian oil sales to the United States and United Kingdom; blocked all foreign investment in the Russian economy from their jurisdiction; and frozen $403 billion out of the $630 billion in foreign assets of the Central Bank of Russia.

The overall effect has been unprecedented, and a few weeks ago would have seemed unimaginable even to most experts: in all but its most vital products, the world’s eleventh-largest economy has now been decoupled from twenty-first-century globalization.

How will these historic measures play out? Economic sanctions rarely succeed at achieving their goals. Western policymakers frequently assume that failures stem from weaknesses in sanctions design.

Indeed, sanctions can be plagued by loopholes, lack of political will to implement them, or insufficient diplomatic agreement concerning enforcement. The implicit assumption is that stronger sanctions stand a better chance of succeeding.

Yet the Western economic containment of Russia is different. This is an unprecedented campaign to isolate a G-20 economy with a large hydrocarbon sector, a sophisticated military-industrial complex, and a diversified basket of commodity exports. As a result, Western sanctions face a different kind of problem.

The sanctions, in this case, could fail not because of their weakness but because of their great and unpredictable strength. Having grown accustomed to using sanctions against smaller countries at low cost, Western policymakers have only limited experience and understanding of the effects of truly severe measures against a major, globally connected economy. Existing fragilities in the world’s economic and financial structure mean that such sanctions have the potential to cause grave political and material fallout.

THE REAL SHOCK AND AWE

Just how severe the current sanctions against Russia are can be seen from their effects across the world. The immediate shock to the Russian economy is the most obvious. Economists expect Russian GDP to contract by at least 9–15 percent this year, but the damage could well become much more severe.

The ruble has fallen more than a third since the beginning of January. An exodus of skilled Russian professionals is underway, while the capacity to import consumer goods and valuable technology has fallen drastically. As Russian political scientist Ilya Matveev has put it, “30 years of economic development thrown into the bin.”

The ramifications of the Western sanctions go far beyond these effects on Russia itself. There are at least four different kinds of broader effects: spillover effects into adjacent countries and markets; multiplier effects through private-sector divestment; escalation effects in the form of Russian responses; and systemic effects on the global economy.

Spillover effects have already caused turmoil in international commodities markets. A generalized panic erupted among traders after the second Western sanctions package—including the SWIFT cutoff and the freezing of central bank reserves—was announced on February 26.

Prices of crude oil, natural gas, wheat, copper, nickel, aluminum, fertilizers, and gold have soared. Because the war has closed Ukrainian ports and international firms are shunning Russian commodity exports, a grain and metals shortage now looms over the global economy.

Although oil prices have since dropped in anticipation of additional output from Gulf producers, the price shock to energy and commodities across the board will push global inflation higher. African and Asian countries reliant on food and energy imports are already experiencing difficulties.

Economists expect Russian GDP to contract by at least 9 to 15 percent this year.

Central Asia’s economies are also caught up in the sanctions shock. These former Soviet states are strongly connected to the Russian economy through trade and outward labor migration. The collapse of the ruble has caused serious financial distress in the region.

Kazakhstan has imposed exchange controls after the tenge, its currency, fell by 20 percent in the wake of the Western sanctions against Moscow; Tajikistan’s somoni has undergone a similarly steep depreciation. Russia’s impending impoverishment will force millions of Central Asian migrant workers to seek employment elsewhere and dry up the flow of remittances to their home countries.

The impact of the sanctions goes beyond decisions taken by G-7 and EU governments. The official sanctions packages have had a catalyzing effect on international businesses operating in Russia. Virtually overnight, Russia’s impending isolation has set in motion a massive corporate flight.

In what amounts to a vast private sector boycott, hundreds of major Western firms in the technology, oil and gas, aerospace, car, manufacturing, consumer goods, food and beverage, accounting and financial, and transport industries are pulling out of the country.

It is noteworthy that these departures are in many cases not required by sanctions. Instead, they are driven by moral condemnation, reputational concerns, and outright panic. As a result, the business retreat is deepening the economic shock to Russia by multiplying the negative economic effects of official state sanctions.

The Russian government has responded to the sanctions in several ways. It has undertaken emergency stabilization policies to protect foreign exchange earnings and shore up the ruble. Foreign portfolio capital is being locked into the country.

While the stock market has remained closed, the assets of many Western firms that have departed may soon face confiscation. The Ministry of Economic Development has prepared a law that grants the Russian state six months to take over businesses in case of an “ungrounded” liquidation or bankruptcy.

The potential nationalization of Western capital is not the only escalatory effect of the sanctions. On March 9, Putin signed an order restricting Russian commodity exports. Although the full array of items to be withheld under the ban is not yet clear, the threat of its use will continue to hang over international trade.

Russian restrictions on fertilizer exports imposed in early February have already put pressure on global food production. Russia could retaliate by restricting exports of important minerals such as nickel, palladium, and industrial sapphires. These are crucial inputs for the production of electrical batteries, catalytic converters, phones, ball bearings, light tubes, and microchips.

In the globalized assemblage system, even small changes in materials prices can massively raise the production costs faced by final users downstream in the production chain. A Russian embargo or large export reduction of palladium, nickel, or sapphires would hit car and semiconductor manufacturers, a $3.4 trillion global industry.

If the economic war between the West and Russia continues further into 2022 at this intensity, it is very possible that the world will slide into a sanctions-induced recession.

MANAGING THE FALLOUT

The combination of spillover effects, negative multiplier effects, and escalation effects means that the sanctions against Russia will have an effect on the world economy like few previous sanctions regimes in history. Why was this great upheaval not anticipated?

One reason is that over the last few decades, U.S. policymakers have usually deployed sanctions against economies that were sufficiently modest in size for any significant adverse effects to be contained. The degree of integration into the world economy of North Korea, Syria, Venezuela, Myanmar, and Belarus was relatively modest and one-dimensional. Only the rollout of U.S. sanctions against Iran required special care to avoid upsetting the oil market.

In general, however, the assumption held that sanctions use was economically almost costless to the United States. This has meant that the macroeconomic and macrofinancial consequences of global sanctions are insufficiently understood.

To better grasp the choices to be made in the current economic sanctions against Russia, it is instructive to examine sanctions use in the 1930s, when democracies similarly attempted to use them to stop the aggression of large-sized autocratic economies such as Fascist Italy, imperial Japan, and Nazi Germany.

The crucial backdrop to these efforts was the Great Depression, which had weakened economies and inflamed nationalism around the world. When Italian dictator Benito Mussolini invaded Ethiopia in October 1935, the League of Nations implemented an international sanctions regime enforced by 52 countries. It was an impressive united response, similar to that on display in reaction to Russia’s invasion of Ukraine.

But the league sanctions came with real tradeoffs. Economic containment of Fascist Italy limited democracies’ ability to use sanctions against an aggressor who was more threatening still: Adolf Hitler.

As a major engine of export demand for smaller European economies, Germany was too large an economy to be isolated without severe commercial loss to the whole of Europe. Amid the fragile recovery from the Depression, simultaneously placing sanctions on both Italy and Germany—then the fourth- and seventh-largest economies in the world—was too costly for most democracies.

Hitler exploited this fear of overstretch and the international focus on Ethiopia by moving German troops into the demilitarized Rhineland in March 1936, advancing further toward war. German officials were aware of their commercial power, which they used to maneuver central European and Balkan economies into their political orbit.

The result was the creation of a continental, river-based bloc of vassal economies whose trade with Germany was harder for Western states to block with sanctions or a naval blockade.

The sanctions dilemmas of the 1930s show that aggressors should be confronted when they disrupt the international order. But it equally drives home the fact that the viability of sanctions, and the chances of their success, are always dependent on the global economic situation.

In unstable commercial and financial conditions, it will be necessary to prioritize among competing objectives and prepare thoroughly for unintended effects of all kinds. Using sanctions against very large economies will simply not be possible without compensatory policies that support the sanctioners’ economies and the rest of the world.

More intensive sanctions will inflict further damage to the world economy.

The Biden administration is aware of this problem, but its actions so far are inadequate to the scale of the problem. Washington has attempted to reduce strains in the oil market by a partial reconciliation with Iran and Venezuela.

Countering the spillover effects of sanctions against one leading petrostate may now require lifting sanctions on two smaller petrostates. But this oil diplomacy is insufficient to meet the challenge posed by the Russia sanctions, the effects of which are aggravating preexisting economic woes.

Supply chain issues and pandemic-era bottlenecks in global transport and production networks predated the war in Ukraine. The unprecedented use of sanctions in these already troubled conditions has made an already difficult situation worse.

The problem of managing the fallout of economic war is greater still in Europe. This is not only because the European Union has much stronger trade and energy links with Russia. It is also the result of the political economy of the eurozone as it has taken shape over the last two decades: with the exception of France, most of its economies follow a heavily trade-reliant, export-focused growth strategy.

This economic model requires foreign demand for exports while repressing wages and domestic demand. It is a structure that is very ill suited to the prolonged imposition of trade-reducing sanctions. Increasing EU-wide renewable energy investment and expanding public control in the energy sector, as French President Emmanuel Macron has announced, is one way to absorb this shock.

But there is also a need for income-boosting measures for consumer goods and price-dampening interventions in producer goods markets, from strategic reserve management to the excess profits taxes that are being rolled out in Spain and Italy.

Then there are the consequences of sanctions cause for the world economy at large, especially in the “global South.” Addressing these problems will pose a major macroeconomic challenge. It is therefore imperative for the G-7, the European Union, and the United States’ Asian partners to launch bold and coordinated action to stabilize global markets.

This can be done through targeted investment to clear up supply bottlenecks, generous international grants and loans to developing countries struggling to secure adequate food and energy supplies, and large-scale government funding for renewable energy capacity.

It will also have to involve subsidies, and perhaps even rationing and price controls, to protect the poorest from the destructive effects of surging food, energy, and commodity prices.

Such state intervention is the price to be paid for engaging in economic war. Inflicting material damage at the scale levelled against Russia simply cannot be pursued without an international policymaking shift that extends economic support to those affected by sanctions. Unless the material well-being of households is protected, political support for sanctions will crumble over time.

THE NEW INTERVENTIONISTS

Western policymakers thus face a serious decision. They must decide whether to uphold sanctions against Russia at their current strength or to impose further economic punishment on Putin. If the goal of the sanctions is to exert maximum pressure on Russia with minimal disruption to their own economies—and thus a manageable risk of domestic political backlash—then current levels of pressure may be the most that is politically feasible now.

At the moment, simply maintaining existing sanctions will require active compensatory policies. For Europe especially, neither laissez-faire economic policies nor fiscal fragmentation will be sustainable if the economic war persists. But if the West decides to step up the economic pressure on Russia further still, far-reaching economic interventions will become an absolute necessity.

More intensive sanctions will inflict further damage, not just to the sanctioners themselves but to the world economy at large. No matter how strong and justified the West’s resolve to stop Putin’s aggression is, policymakers must accept the material reality that an all-out economic offensive will introduce considerable new strains into the world economy.

An intensification of sanctions will cause a cascade of material shocks that will demand far-reaching stabilization efforts.And even with such rescue measures, the economic damage may well be serious, and the risks of strategic escalation willremain high.

For all these reasons, it remains vital to pursue diplomatic and economic paths that can end the conflict. Whatever the results of the war, the economic offensive against Russia has already exposed one important new reality: the era of costless, risk-free, and predictable sanctions is well and truly over.

Elon Musk Could Become World’s First Trillionaire In 2024

Tesla and SpaceX CEO Elon Musk could become the first person to ever accumulate a $1 trillion net worth, and it could happen as soon as 2024, says a new report.

Musk is currently said to be the richest person in the world, overtaking former Amazon CEO Jeff Bezos last year to claim the title, reports Teslarati.

While Musk has stated many times that material possessions are not a concern of his, eventually selling nearly all of his personal properties as proof, a new study from Tipalti Approve suggests he could become the first person to ever accumulate a $1 trillion net worth.

Musk’s net worth, according to Forbes’ Real Time Billionaires list, sits at over $260 billion, nearly $70 billion more than Bezos’ current estimation of about $190 billion.

His wealth skyrocketed over the past few years thanks to his majority ownership of Tesla, which increased in value substantially since 2020. SpaceX also has helped Musk’s net worth skyrocket and could catalyze even more growth in the next two years.

“Since 2017, Musk’s fortune has shown an annual average increase of 129 per cent, which could potentially see him enter the trillion-dollar club in just two short years, achieving a net worth of $1.38 trillion by 2024 at age 52,” Tipalti Approve, who conducted the study, said in their report.

“SpaceX generates massive incomes by charging governmental and commercial clients to send various things into space, including satellites, ISS supplies, and people,” it added.

Other billionaires are also expected to hit the trillion-dollar range, but not before Musk, the report said.

Zhang Yiming, TikTok’s founder, is projected to reach a $1 trillion net worth by 2026 at 42 years old, making him the youngest trillionaire. Bezos may not hit the threshold until 2030. Bezos broke ground in the net worth realm by reaching $100 billion before any other entrepreneur in the world.

Ukraine Incursion, World Stagflation

Finger pointing in the blame game over Russia’s Ukraine incursion obscures the damage it is doing on many fronts. Meanwhile, billions struggle to cope with worsening living standards, exacerbated by the pandemic and more.

Losing sight in the fog of war

US Secretary of State Anthony Blinken insists, “the Russian people will suffer the consequences of their leaders’ choices”. Western leaders and media seem to believe their unprecedentedcrushing sanctions” will have a “chilling effect” on Russia.

With sanctions intended to strangle Russia’s economy, the US and its allies somehow hope to increase domestic pressure on Russian President Vladimir Putin to retreat from Ukraine. The West wants to choke Russia by cutting its revenue streams, e.g., from oil and gas sales to Europe.

Already, the rouble has been hammered by preventing Russia’s central bank from accessing its US$643bn in foreign currency reserves, and barring Russian banks from using the US-run global payments transfer system, SWIFT.

Withdrawal of major Western transnational companies – such as Shell, McDonald’s and Apple – will undoubtedly hurt many Russians – not only oligarchs, their ostensible target.

Thus, Blinken’s claim that “The economic costs that we’ve been forced to impose on Russia are not aimed at you [ordinary Russians]” may well ring hollow to them. They will get little comfort from knowing, “They are aimed at compelling your government to stop its actions, to stop its aggression”.

As The New York Times notes, “sanctions have a poor record of persuading governments to change their behavior”. US sanctions against Cuba over six decades have undoubtedly hurt its economy and people.

But – as in Iran, North Korea, Syria and Venezuela – it has failed to achieve its supposed objectives. Clearly, “If the goal of sanctions is to compel Mr. Putin to halt his war, then the end point seems far-off.”

Russia, major commodity exporter

Undoubtedly, Russia no longer has the industrial and technological edges it once had. Following Yeltsin era reforms in the early 1990s, its economy shrank by half – lowering Russian life expectancy more than anywhere else in the last six millennia!

Russia has become a major primary commodity producer – not unlike many developing countries and the former settler colonies of North America and Australasia. It is now a major exporter of crude oil and natural gas.

It is also the largest exporter of palladium and wheat, and among the world’s biggest suppliers of fertilizers using potash and nitrogen. On 4 March, Moscow suspended fertilizer exports, citing “sabotage” by “foreign logistics companies”.

Farmers and consumers will suffer as yields drop by up to half. Sudden massive supply disruptions will thus have serious ramifications for the world economy – now more interdependent than ever, due to earlier globalization.

Sanctions’ inflation boomerang

International Monetary Fund Managing Director Kristalina Georgieva has ominously warned of the Ukraine crisis’ economic fallouts. She cautions wide-ranging sanctions on Russia will worsen inflation and further slow growth.

No country is immune, including those imposing sanctions. But the worst hit are poor countries, particularly in Africa, already struggling with rising fuel and food prices.

For Georgieva, more inflation – due to Russian sanctions – is the greatest threat to the world economy. “The surging prices for energy and other commodities – corn, metals, inputs for fertilizers, semiconductors – coming on top of already high inflation” are of grave concern to the world.

Russia and Ukraine export more than a quarter of the world’s wheat while Ukraine is also a major corn exporter. Supply chain shocks and disruptions could add between 0.2% to 0.4% to ‘headline inflation’ – which includes both food and fuel prices – in developed economies over the coming months.

US petrol prices jumped to a 17-year high in the first week of March. The costs of other necessities, especially food, are rising as well. US Treasury Secretary Janet Yellen has acknowledged that the sanctions are worsening US inflation.

The European Union (EU) gets 40% of its natural gas from Russia. Finding alternative supplies will be neither easy nor cheap. The EU is Russia’s largest trading partner, accounting for 37% of global trade in 2020. Thus, sanctions may well hurt Europe more than Russia – like cutting one’s nose to spite one’s face.

The European Central Bank now expects stagflation – economic stagnation with inflation, and presumably, rising unemployment. It has already slashed its growth forecast for 2022 from 4.2% to 3.7%. Inflation is expected to hit a record 5.1% – way above its previous 3.2% forecast!

Developing countries worse victims
Global food prices are already at record highs, with the Food Price Index (FPI) of the Food and Agricultural Organization up more than 40% over the past two years.

The FPI hit an all-time high in February – largely due to bad weather and rising energy and fertilizer costs. By February 2022, the Agricultural Commodity Price Index was 35% higher, while maize and wheat prices were 26% and 23% more than in January 2021.

Besides shortages and rising production costs – due to surging fuel and fertilizer prices – speculation may also push food prices up – as in 2007-2008.

Signs of such speculation are already visible. Chicago Board of Trade wheat future prices rose 40% in early March – its largest weekly increase since 1959!

Rising food prices impact people in low- and middle-income countries more as they spend much larger shares of their incomes on food than in high-income countries. The main food insecurity measure has doubled in the past two years, with 45 million people close to starvation, even before the Ukraine crisis.

Countries in Africa and Asia rely much more on Russian and Ukrainian grain. The World Bank has warned, “There will be important ramifications for the Middle East, for Africa, North Africa and sub-Saharan Africa, in particular”, where many were already food insecure before the incursion.

The Ukraine crisis will be devastating for countries struggling to cope with the pandemic. Unable to access enough vaccines or mount adequate responses, they already lag behind rich countries. The latest food and fuel price hikes will also worsen balance-of-payments problems and domestic inflationary pressures.

No to war!

The African proverb, “When two elephants fight, all grass gets trampled”, sums up the world situation well. The US and its allies seem intent to ‘strangle Russia’ at all costs, regardless of the massive collateral damage to others.

This international crisis comes after multilateralism has been undermined for decades. Hopes for reduced international hostilities, after President Biden’s election, have evaporated as US foreign policy double standards become more apparent.

Russia has little support for its aggressive violation of international law and norms. Despite decades of deliberate NATO provocations, even after the Soviet Union ended, Putin has lost international sympathy with his aggression in Ukraine.

But there is no widespread support for NATO or the West. Following the vaccine apartheid and climate finance fiascos, the poorer, ‘darker nations’ have become more cynical of Western hypocrisy as its racism becomes more brazen.

59 Percent Of Indian Billionaires Are Self-Made

Fifty-nine percent of Indian billionaires are self-made, according to a new report.

“We are happy to be associated with Hurun India for the launch of the M3M Hurun Global Rich List 2022, curated with an in-depth market research which demonstrates that Indian businesses are one of the fastest value creators,” said Pankaj Bansal, Director, M3M India, on the M3M Hurun Global Rich List 2022.

Over the last few years, wealth creation by India Inc. has catapulted the economic growth in the country.

Interestingly, 59 per cent of the country’s billionaires are self-made, thus indicating that the new-generation entrepreneurs are financially-wise, asset-rich and investment-vibrant. Also, gender inclusivity and equality has been a noticeable theme with women outranking men across industries, said Bansal.

“Having said this, it is also true that the rich have invested in philanthropy and have played a significant role in the social and economic growth in India, particularly focusing on nutrition, education and women empowerment,” he said.

As Andrew Carnegie, one of the greatest philanthropists, said, “Ninety per cent of all millionaires become so through owning real-estate.”

“The real estate sector is ranked third amongst major sector in India and is also the second largest in terms of employment generation, and it particularly delivers in short-term and long-term employment creation. This sector is also looking forward to contribute 13 per cent in India’s GDP by 2025 and reach a market size of $1 trillion by 2030.

“No wonder, it contributed 8.1 per cent to the overall list of billionaires and possesses a concentration of 275 billionaires, which I am certain will see a significant jump in the next 5 years owing to unmet housing demands generated by urbanisation and modernisation of towns,” Bansal said.

“We are hopeful that the year 2022 will ignite the economic buoyancy in the country and will enable us to match steps with our global counterparts. Particularly, when India is gaining momentum in startups and unicorns, and has become 3rd largest ecosystem in the world, only after US and China,” he added.

Inflation, War Push Stress To Alarming Levels At Two-Year COVID-19 Anniversary

Newswise — Two years after the World Health Organization declared COVID-19 a global pandemic, inflation, money issues and the war in Ukraine have pushed U.S. stress to alarming levels, according to polls conducted for the American Psychological Association.

A late-breaking poll, fielded March 1–3 by The Harris Poll on behalf of APA, revealed striking findings, with more adults rating inflation and issues related to the invasion of Ukraine as stressors than any other issue asked about in the 15-year history of the Stress in AmericaTM poll. This comes on top of money stress at the highest recorded level since 2015, according to a broader Stress in America poll fielded last month.

Top sources of stress were the rise in prices of everyday items due to inflation (e.g., gas prices, energy bills, grocery costs, etc.) (cited by 87%), followed by supply chain issues (81%), global uncertainty (81%), Russia’s invasion of Ukraine (80%) and potential retaliation from Russia (e.g., in the form of cyberattacks or nuclear threats) (80%).

These stressors are coming at a time when the nation is still struggling to deal with the prolonged pandemic and its effects on our daily lives, with close to two-thirds of adults (63%) saying their life has been forever changed by the COVID-19 pandemic. While a majority (51%) reported this change as neither positive nor negative — simply different — the long-lasting implications of the pandemic are clear. The survey also revealed continued hardships for vulnerable populations, concerns for children’s development among parents and entrenched, unhealthy coping habits.

“The number of people who say they’re significantly stressed about these most recent events is stunning relative to what we’ve seen since we began the survey in 2007,” said Arthur C. Evans Jr., PhD, APA’s chief executive officer. “Americans have been doing their best to persevere over these past two tumultuous years, but these data suggest that we’re now reaching unprecedented levels of stress that will challenge our ability to cope.”

A year ago, APA’s first pandemic anniversary survey found COVID-19-related stress was associated with unhealthy weight changes and increased drinking. The most recent survey confirmed that these unhealthy behaviors have persisted, suggesting that coping mechanisms have become entrenched — and that mental and physical health may be on a continuing decline for many as a result. Close to half of adults (47%) said they have been less active than they wanted to be since the pandemic started, and close to three in five (58%) reported experiencing undesired weight changes.

Among those who gained more weight than they wanted, the average amount of weight gained was 26 pounds, with a median of 15 pounds. On the other hand, the average amount of weight lost among those who lost more than they wanted to was 27 pounds, with a median of 15 pounds. More than one in five Americans (23%) said they have been drinking more alcohol during the COVID-19 pandemic, with those who have been drinking more consuming an average of 10 drinks per week (and a median of six drinks per week) compared with an average of two drinks (and a median of one drink) per week among those who did not report drinking more.

Adults also reported separation and conflict as causes for straining and/or ending of relationships. Half of adults (51%, particularly essential workers at 61%) said they have loved ones they have not been able to see in person in the past two years as a result of the COVID-19 pandemic. Strikingly, more than half of all U.S. adults (58%) reported experiencing a relationship strain or end as a result of conflicts related to the COVID-19 pandemic, including canceling events or gatherings due to COVID-19 concerns (29%); difference of opinion over some aspect of vaccines (25%); different views of the pandemic overall (25%); and difference of opinion over mask-wearing (24%).

Strained social relationships and reduced social support during the pandemic make coping with stress more difficult. In fact, more than half of respondents (56%) said that they could have used more emotional support than they received since the pandemic started. “We know from decades of research that healthy and supportive relationships are key to promoting resilience and building people’s mental wellness,” said Evans. “Particularly during periods of prolonged stress, it’s important that we facilitate opportunities for social connection and support.”

The majority of parents reported concerns regarding child(ren)’s development, including social life or development (73%), academic development (71%) and emotional health or development (71%). More than two-thirds of parents reported concern about the pandemic’s impact on their child’s cognitive development (68%) and their physical health/development (68%).

“Living through historic threats like these often has a lasting, traumatic impact on generations,” said Evans. “As a society, it’s important that we ensure access to evidence-based treatments and that we provide help to everyone who needs it. This means not only connecting those in distress with effective and efficient clinical care, but also mitigating risk for those more likely to experience challenges and engaging in prevention for those who are relatively healthy.”

More information on the findings and how to handle stress and trauma related to Ukraine is available at www.stressinamerica.org. APA psychologists are available for media interviews to discuss these findings and provide science-based recommendations on how to address this mental health crisis.

METHODOLOGY

The 2022 Pandemic Anniversary Survey was conducted online within the United States by The Harris Poll on behalf of the American Psychological Association between Feb. 7–14, 2022, among 3,012 adults age 18+ who reside in the U.S. Interviews were conducted in English and Spanish. Data were weighted to reflect proportions in the population based on the 2021 Current Population Survey (CPS) by the U.S. Census Bureau.

Weighting variables included age by gender, race/ethnicity, education, region, household income, and time spent online. Latino adults were also weighted for acculturation, taking into account respondents’ household language as well as their ability to read and speak in English and Spanish. Country of origin (U.S./non-U.S.) was also included for Latino and Asian subgroups.

Weighting variables for Gen Z adults (ages 18 to 25) included education, age by gender, race/ethnicity, region, household income, and size of household, based on the 2021 CPS. Propensity score weighting was used to adjust for respondents’ propensity to be online. Respondents for this survey were selected from among those who have agreed to participate in Harris’ surveys. The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data is accurate to within + 2.9 percentage points using a 95% confidence level.

This credible interval will be wider among subsets of the surveyed population of interest. All sample surveys and polls, whether or not they use probability sampling, are subject to other multiple sources of error, which are most often not possible to quantify or estimate, including but not limited to coverage error, error associated with nonresponse, error associated with question wording and response options, and post-survey weighting and adjustments.

The March late-breaking survey was conducted online within the United States between March 1–3, 2022, among 2,051 adults (age 18 and over) by The Harris Poll on behalf of the American Psychological Association via its Harris On Demand omnibus product. Data were weighted where necessary by age, gender, race/ethnicity, region, education, marital status, household size, household income, and propensity to be online, to bring them in line with their actual proportions in the population. The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data is accurate to within + 2.8 percentage points using a 95% confidence level.

US Economy Adds 678,000 Jobs In February, Unemployment Dips To 3.8%

The U.S. added 678,000 jobs and the unemployment rate dropped to 3.8 percent in February, according to data released Friday by the Labor Department.

Unprecedented demand for workers and resilient consumer spending helped power another strong month of job growth in February. Economists expected the U.S. to add roughly 400,000 jobs last month, far less than the actual haul in the February jobs report, and push the jobless rate to 3.9 percent.

“If we see more numbers like this moving forward, we can be optimistic about this year. Employment is growing at a strong rate and joblessness is getting closer and closer to pre-pandemic levels,” said Nick Bunker, economic research director at Indeed.

“In these uncertain times, we cannot take anything for granted. But if the recovery can keep up its current tempo, several key indicators of labor market health will hit pre-pandemic levels this summer,” he said.

The Bureau of Labor Statistics (BLS) said the U.S. saw “widespread” job growth in February led by a surge in service sector hiring — a promising sign for industries still recovering from the onset of the pandemic.

Leisure and hospitality employment rose by 179,000 jobs in February, led by a gain of 124,000 jobs in restaurants and bars. Professional and business services added 95,000 jobs, the health care sector added 64,000 jobs and construction employment rose by 60,000 after staying flat in January.

Transportation and warehousing employment rose by 48,000 in February, and retail trade employment rose by 37,000.

The BLS also revised the December and January job gains up by a combined 92,000 jobs.

While the labor force participation rate stayed flat, the February jobs report showed other signals of labor shortages easing and more Americans returning to the workforce.

Average hourly earnings rose 5.1 percent over the past 12 months, down from 5.7 percent in January. Wages have risen sharply as employers struggled to fill a record number of job openings from a smaller pool of workers than before the pandemic.

The number of Americans who said they could not look for a job because of the pandemic — who are not counted as unemployed — fell from 1.8 million in January to 1.2 million last month. The number of people who lost hours at work because of a pandemic-related shutdown also sunk from 6 million in January to 4.2 million in February.

“With the Omicron wave receding rapidly, the labor market has unlocked faster jobs growth. Additionally, employer demand for workers exceeds labor supply significantly, which is likely to keep jobs growth healthy even if demand slows amid disruptions from the war in Ukraine and rising interest rates in coming months,” said Daniel Zhao, senior economist at Glassdoor.

While the U.S. labor market held strong in February, economists are concerned about the potential fallout of the war in Ukraine and the sanctions imposed on Russia in response. A surge in oil prices, steep drop in economic activity or retaliation from Russia could dent the U.S. economy and risk stoking inflation even higher after hitting the highest annual rate in 40 years.

The jobs report will keep the Federal Reserve on track to raise interest rates in March to help cool inflation and tame what Fed Chairman Jerome Powell on Thursday called an “overheated” labor market. Even so, Powell said the deep uncertainty driven by the war could still force the Fed to adjust the pace of future rate hikes.

“The war in Ukraine reemphasizes the risk of inflation in the economic recovery, especially as price increases are concentrated in areas that the Federal Reserve may not have much control over,” Zhao wrote.

“Ultimately, however, today’s jobs report helps build confidence in the resilience of the recovery and its ability to continue driving jobs growth despite unanticipated headwinds.”

U.S. National Debt Skyrockets Past $30 TRILLION

The U.S. national debt has surpassed $30 trillion, the highest it’s ever been, as borrowing surged during the COVID-19 pandemic, according to data published by the Treasury Department on Tuesday.

National debt skyrocketed pandemic, but the nation reached the milestone much earlier than projected as a result of the trillions in federal spending being used to combat the pandemic, the New York Times reported.

‘Hitting the $30 trillion mark is clearly an important milestone in our dangerous fiscal trajectory,’ Michael Peterson, head of the Peter G. Peterson Foundation, told the Times.

‘For many years before Covid, America had an unsustainable structural fiscal path because the programs we’ve designed are not sufficiently funded by the revenue we take in,’ he added.

In January 2020, the Congressional Budget Office projected that the national debt would reach $30 trillion by the end of 2025. But it was reached much sooner due to the pandemic.

The $5 trillion used to combat the pandemic, which was used to fund jobless benefits, financial support for small businesses and stimulus payments, was financed with borrowed money, the Times reported.

The federal government now owes almost $8 trillion to foreign investors, led by Japan and China, which must be repaid with interest, according to CNN.

‘That means American taxpayers will be paying for the retirement of the people in China and Japan, who are our creditors,’ David Kelly, chief global strategist at JPMorgan Asset Management, explained to CNN Business.

The national debt has been skyrocketing since the Great Recession when the debt was $9.2 trillion in December 2007,  according to Treasury data.

But by the time, former President Donald Trump took office, the national debt stood at nearly $20 trillion, CNN reported.

‘Covid exacerbated the problem. We had an emergency situation that required trillions in spending,’ said Michael Peterson, CEO of the Peterson Foundation. ‘But the structural problems we face fiscally existed long before the pandemic.

The U.S. Is Considering A Radical Rethinking Of The Dollar For Today’s Digital World

Since its establishment as the country’s national currency, the dollar has undergone many updates and changes, but nothing compares to the proposal being debated today.

The U.S. is gingerly considering whether to adopt a digital version of its currency, one better suited for today’s increasingly cashless world, ushering in what could be one of the dollar’s most fundamental transformations.

In that scenario, the U.S. would not only mint the coins and print paper bills but also issue digital cash, or a central bank digital currency (CBDC), that would be stored in apps or “digital wallets” on our smartphones.

We could then use them to pay for things, just like we do with Venmo or Apple Pay, and no physical money would change hands.

It’s a vision of a cashless future that other countries are already embracing. China, for example, has unveiled the digital yuan on a trial basis. India this week said it would create a digital rupee.

Now the U.S. is weighing whether it wants to get into the game.

Last month, the Federal Reserve released a much-anticipated paper, laying out the advantages and disadvantages of a digital currency.

The Fed says it’s a first step, meant to kick-start an important conversation among policymakers and to gather feedback from average people to some of the country’s largest financial institutions.

So, how would it actually work?

Policymakers stress these are early days yet, and there is a lot that needs to be hammered out. All in all, the transactions conducted with digital dollars probably wouldn’t seem too different from existing private alternatives that allow us to pay for things by bringing our smartphones next to digital readers.

China, for example, allows digital yuan payments in the cities in which the country is piloting its digital currency, allowing citizens to make payments via an app set up by the government.

Reducing or eliminating fees is one clear benefit.

When you make a contactless payment today, it may seem immediate, but according to Chris Giancarlo, the former chairman of the Commodity Futures Trading Commission, a lot happens behind the scenes.

“My mobile device tells his mobile device to inform a whole series of banks, to confirm who I am, how much money is in my bank, that there is enough money to move from my bank to his bank,” he says.

And at each step of the way, there are transaction fees. In 2020, they added up to more than $110 billion, which was generally shouldered by businesses.

With a digital dollar, you could in theory eliminate those middlemen. If you wanted to buy a sandwich, for instance, you could transfer money from a digital wallet directly to a cashier.

It wouldn’t necessarily entirely eliminate nongovernment players. In China, for example, users who want to use the digital yuan can go to banks to add money to their digital wallets.

But just having digital dollars in circulation could put pressure on credit card companies and payment processors to lower fees to be competitive. That is, if enough people start using the Fed-run version.

In China, adoption of the e-renminbi has been slow given that private providers such as WeChat or Alipay are already pretty popular and entrenched.

Another argument for creating a digital dollar is to open up digital transactions to Americans who don’t have bank accounts. According to the Fed, more than 5% of U.S. households are “unbanked.”

Providing them with a digital wallet would allow people to participate in our increasingly cashless financial system.

It would also make it easier for the federal government to distribute benefits.. For example, having a digital dollar in place during the pandemic could have allowed the government to transfer relief payments directly into digital wallets.

What are the challenges?

Without question, one of the biggest issues is privacy. Because the Fed would implement and oversee the project, the central bank could accrue a vast amount of data, potentially giving it a lot more visibility into everyone’s financial life.

That could be useful to regulators who want to combat money laundering, for example, but it would also raise serious privacy concerns.

That makes it critical to sort out how much information the Fed would have, according to Raghuram Rajan, a professor of finance at The University of Chicago Booth School of Business and a former governor of the Reserve Bank of India.

“There will be legitimate questions about how much the government knows about each individual, and also, how much it can act to restrain activities by individuals,” he says.

Cybersecurity is another critical issue, especially given the uptick in hacks and heists at cryptocurrency exchanges.

To implement a digital dollar, the U.S. government would need to modernize the country’s financial infrastructure to stave off attacks.

A digital version of the Chinese yuan is displayed during a trade fair in Beijing in September. China is among a handful of countries that are experimenting with national digital currencies.

So what’s next?

Fed Chair Jerome Powell and his colleagues are moving ahead cautiously and methodically.

The Fed is in the process of soliciting feedback from the public after releasing its paper last month. And last week, the Federal Reserve Bank of Boston released preliminary results of its ongoing research into the technological challenges associated with implementing a digital currency in the U.S.

It would take five to 10 years to introduce a digital currency in the U.S., several experts say, but they argue policymakers can’t sit idly by.

There is concern that by moving slowly, the U.S. is letting other countries shape standards for national digital currencies, and the popularity of the dollar could be diminished.

After all, for decades, it has been the world’s primary reserve currency, meaning many countries hold their reserves in U.S. dollars.

But Powell has made it clear he’s in no hurry. Last year, a reporter asked the central banker whether he was worried the U.S. was falling behind countries like China.

“I think it’s more important to do this right than to do it fast,” he replied.

Oil Prices Hit $90 A Barrel For The First Time Since 2014

US oil prices jumped above $90 a barrel last week for the first time in more than seven years. The latest rally comes just a day after OPEC and its allies declined to aggressively ramp up production to cool off red-hot energy prices.

Crude jumped 2.2% to $90.15 a barrel in afternoon trading. That marks the first time US oil prices surpassed the $90 threshold on an intraday basis since October 2014.

Oil has surged by 37% since closing at a recent low of $65.57 a barrel on December 1 amid Omicron fears and the fallout from the US-led intervention into energy markets.

Last week, Brent crude, the world benchmark, closed above $90 a barrel for the first time since October 2014.

OPEC+, led by Saudi Arabia and Russia, announced Wednesday it will stick to its previously telegraphed plan to increase production by 400,000 barrels per day. That’s despite the fact that some on Wall Street suggested OPEC+ could boost production more substantially to meet demand.

“OPEC+ opted to hold its shortest meeting on record and rubber-stamped the 400 kb/d monthly increase, sticking with a hands-off the wheel management approach despite global inflationary fears,” RBC Capital Markets strategists wrote in a note to clients Thursday.

Indian Union Budget Reveals Importance Of Cryptocurrency

At last, it is a piece of surprising news that Digital currency is also being introduced in the Indian fiduciary system as part of yet another dream project of Digital India. The Finance Minister Nirmala Sitaraman and the  Governor of the Central Bank of India had elaborated on this. We have heard earlier that the Indian Government was also making a move to ban foreign digital currencies in the country. The Central Bank is in the process of making an official announcement soon on its development model of digital currency (CBDC). Nirmala Sitharaman has said that the Indian Digital Rupee will be launched using blockchain technology in the financial year 2022-23.

Anyway, the Supreme Court made a favorable ruling in favor of lifting the Reserve Bank’s ban on crypto use. This ruling created a new wave among Indian investors and led to a rapid rise in retail. At the same time, investors are optimistic about the central bank and the emergence of digital currencies.

Union Finance Minister Nirmala Sitharaman had announced in her budget speech that the distribution of digital currency would begin. But there are widespread doubts about what a digital rupee is. The announcement comes at a time when the central Government is considering a strong policy to curb the misuse of cryptocurrencies. At the Republican Economic Summit in November 2021, Rajeev Chandrasekhar, Electronics & IT, hinted at the introduction of an official digital currency.

 What is Digital Rupee?

The digital currency of the Reserve Bank of India will be based on blockchain technology, the technology behind Bitcoin, and other popular cryptocurrencies. According to the Finance Minister, this will pave a more efficient and cost-effective currency management system. However, the future of Bitcoin and other cryptocurrencies is unclear.

The RBI has already been keenly watching the performance of major economies worldwide and their respective central banks for CBDC schemes. As a result, the central bank has almost decided on the issue of official digital currency. While the Reserve Bank mentions the need for central banking digital currency (CBDC), it also makes it clear that the government is concerned about the risks surrounding other cryptocurrencies. Why has the government not yet officially banned such currencies? Why did the Supreme Court overturn the ban on banks operating cryptocurrencies? The questions are numerous.

As economists fear that cryptocurrency is one of the most widely used dangerous currencies globally, without any government control. It can also be described as a private currency and minting huge profits sometimes. All of these operate with the support of some unknown sovereign guarantees. No country provides any security. For example, a Rs.500 Indian currency note!. The Reserve Bank Governor guarantees on  500 currency note. Even if it is paper, the RBI pays for it. But governments do not ensure the value of digital currencies like Bitcoin.

However, we know that the value of crypto like Bitcoin is supported by complex programming. No one or any government can change it individually, and it involves multiple checks at multiple computer servers worldwide, related to its value. Therefore, the easiest way to understand digital currency  is to use a digital currency that can only be transferred from one person to another via the Internet on platforms like Coinbase.

However, the RBI is not the first financial institution in the world to make such a drastic move. Reports indicate that India is far behind its technological  derivatives  in terms of crypto controls. We were hearing that China has been working on this for so many  years;  supported by the Chinese Central Bank and government approval. The Chinese widely use digital currency for e-commerce portals, offline shops, and other outlets through smartphones.

However, there is a difference between CBDC and cryptocurrency as the latter has some basic features. Those features cannot be copied to digital currencies. Cryptocurrencies, by nature, operate on the basic principle of anonymity. The exciting part is that the details of the seller and the buyer cannot be tracked. But beware,  in the case of a digital currency released by the central bank will have a whole tracking system, just like a standard currency. This is the kind of digital currency used in China. This ensures that transactions will take place under the supervision of the government. Go ahead Digital India!

The Evolution Of Global Poverty, 1990-2030

The last 30 years have seen dramatic reductions in global poverty, spurred by strong catch-up growth in developing countries, especially in Asia. By 2015, some 729 million people, 10% of the population, lived under the $1.90 a day poverty line, greatly exceeding the Millennium Development Goal target of halving poverty. From 2012 to 2013, at the peak of global poverty reduction, the global poverty headcount fell by 130 million poor people.

This success story was dominated by China and India. In December 2020, China declared it had eliminated extreme poverty completely. India represents a more recent success story. Strong economic growth drove poverty rates down to 77 million, or 6% of the population, in 2019. India will, however, experience a short-term spike in poverty due to COVID-19, before resuming a strong downward path. By 2030, India is likely to essentially eliminate extreme poverty, with less than 5 million people living below the $1.90 line. By 2030, the only Asian countries that are unlikely to meet the goal of ending extreme poverty are Afghanistan, Papua New Guinea, and North Korea.

In other parts of the world, poverty trends are disappointing. In Latin America, poverty fell rapidly at the beginning of this century but has been rising since 2015, with no substantial reductions forecast by the end of this decade. In Africa, poverty has been rising steadily, thanks to rapid population growth and stagnant economic growth. Exacerbated by a pandemic-induced rise in poverty of 11%, African poverty shows little signs of decline through 2030.

These trends point to the emergence of a very different poverty landscape. Whereas in 1990, poverty was concentrated in low-income, Asian countries, today’s (and tomorrow’s) poverty is largely found in sub-Saharan Africa and fragile and conflict-affected states. By 2030, sub-Saharan African countries will account for 9 of the top 10 countries by poverty headcount. Sixty percent of the global poor will live in fragile and conflict-affected states. Many of the top poverty destinations in the next decade will fall into both of these categories: Nigeria, Democratic Republic of the Congo, Mozambique and Somalia. Global efforts to achieve the SDGs by 2030, including eliminating extreme poverty, will be complicated by the concentration of poverty in these fragile and hard-to-reach contexts.

By 2030, poverty will be associated not just with countries, but with specific places within countries. Middle-income countries will be home to almost half of the global poor, a dramatic shift from just 40 years earlier. Nigeria is now the global face of poverty, overtaking India as the top poverty destination in 2019. (While India temporarily regained its title due to COVID-19, which pushed many vulnerable Indians back below the poverty line, Nigeria will reclaim the top spot by 2022.) In 2015, Nigeria was home to 80 million poor people, or 11% of global poverty; by 2030, this number could grow to 18%, or 107 million.

Poverty numbers and trends have traditionally been reported on a country-by-country basis. However, today we see that low-income countries have significant corridors of prosperity, while middle-income countries can have large pockets of poverty. With advances in geospatial and sub-national data, there is a growing push to move from country-wide metrics to sub-national data, in order to better identify and target these poverty “hotspots.”

As Inflation Soars, A Look At What’s Inside The Consumer Price Index

After many years of historically low inflation, consumer prices in the United States continued their steep ascent last month. The Consumer Price Index, the most widely followed inflation gauge, increased 7.0% from December 2020 to December 2021 – its highest rate in nearly 40 years.

The CPI – or, to give it its full name, the Consumer Price Index for All Urban Consumers (CPI-U) – isn’t the government’s only measure of inflation. For that matter, it isn’t even the only version of the CPI. Pew Research Center analyses typically use the CPI’s Retroactive Series, especially when adjusting prices or dollar values over several years or decades, because that series adjusts the CPI for previous years to reflect current methodology. There’s also the Chained CPI, which is meant to reflect how consumers alter their buying patterns in response to changes in relative prices – for example, buying more chicken when beef becomes more expensive. The Chained CPI often (but not always) comes in a bit below the “regular” CPI-U: It rose 6.9% between December 2020 and December 2021.

But the CPI-U is the most widely cited inflation metric, so it’s worth popping the hood and looking inside to see how it works.

The Bureau of Labor Statistics (BLS), which is responsible for the CPI, starts by collecting price data for hundreds of discrete goods and services – the so-called “market basket” – from around 8,000 housing units and 23,000 retailers, service providers and online outlets in 75 urban areas around the country. Data on rents is gathered from some 50,000 landlords and tenants. The items sampled, and their weights in the overall index, are determined by the Consumer Expenditure Survey, which is carried out for BLS by the Census Bureau.

The BLS reports index weights for dozens of categories, subcategories and specific items in the CPI’s basket of goods and services. The biggest category by far is shelter, which accounts for nearly a third of the index. The single weightiest item, at about 22.3%, is “owner’s equivalent rent of primary residence” – essentially how much homeowners would have to pay if they were renting their homes. (The idea is to separate out shelter, the service provided by a house, from whatever value the house might have as an investment.)

While shelter costs carry the most weight in the CPI, they’ve not risen nearly as much as the index as a whole. In December, owner’s equivalent rent was up 3.8% compared with December 2020, and regular rent of primary residence was just 3.3% higher. The one big exception among shelter costs was lodging away from home, a category that mostly tracks hotel and motel room rates, where prices were 27.6% higher than a year earlier. However, that subcategory accounts for less than 1% (0.849%, to be precise) of the CPI.

The next-biggest category, food, accounts for just under 14% of the index. Groceries, or “food at home,” makes up a bit more than half of that category. Grocery prices were 6.5% higher than a year ago, which will come as no surprise to anyone who’s been to a supermarket lately. Meats, especially beef and pork, led the way, with prices for beef roasts and steaks more than 20% higher than a year ago, bacon up 18.6% and chicken parts up 11.5%. (On the other hand, prices for hot dogs and cheese both are down 0.6%.)

Eating out has gotten more expensive too. Prices for full-service meals and snacks consumed away from home were up 6.6% from December 2020, and limited-service meals and snacks were up 8%. School breakfasts and lunches were down by nearly two-thirds, perhaps because the U.S. Department of Agriculture has authorized free meals for all children in public schools this academic year.

Besides at the supermarket, consumers also feel the effects of inflation acutely at the fuel pump. Gasoline accounts for just 4% of the overall CPI, but prices for it have risen more than any other good or service in the CPI basket over the past year. Regular unleaded gasoline, for instance, is up 50.8% since December 2020. It should be noted that gas prices fell sharply in 2020, as demand plunged because much of the U.S. economy was shut down. As the economy reopened and demand came back, so did gas prices, though they’ve since risen 20% or more above pre-pandemic levels.

Energy goods and services, a category of which gasoline is a major component, accounts for roughly 7.5% of the overall CPI. Prices for fuels used for home heating and cooking also are sharply higher than a year ago: Fuel oil is up 41%, propane, kerosene and firewood are up 33.8%, and piped natural gas is up 24.1%.

Aside from motor fuels, the vehicles that burn them also loom relatively large in the CPI. New vehicles account for nearly 3.9% of the index; prices for new cars rose 12% from December 2020 to December 2021, and new trucks prices almost as much (11.6%). But the real movement was for used vehicles: Prices for used cars and trucks, which make up about 3.4% of the index, have soared 37.3% over the past 12 months. Why? The pandemic has disrupted and depressed production of new vehicles, while low interest rates have increased demand for cars and trucks. Buyers who couldn’t find the new vehicles they wanted have moved over to the used lot, increasing demand at the same time as the flow of pre-owned cars and trucks dwindled.

India’s Economy To Grow At 8.0-8.5% In 2022-23

The Economic Survey 2021-22 has projected the economy to grow at 8.0-8.5 per cent in 2022-23, thereby moderating the growth forecast from 9.2 per cent expansion for 2021-22 outlined by the National Statistical Office (NSO) in its first advance estimates of Gross Domestic Product (GDP).

Last year’s Survey had projected real GDP to record a 11 per cent growth in 2021-22, post a 7.3 per cent contraction in 2020-21. While this year’s growth comes on a low base year economic output, the expansion next year has to be seen from the recovery levels in economic output.

The Survey flags inflation as a concern while assessing the macroeconomic stability indicators and suggests that the Indian economy is “well- placed” to take on the challenges of 2022-23.

India’s Finance Minister Nirmala Sitharaman on January 31st tabled the Economic Survey 2021-22 in the Lok Sabha, the Lower House of India’s Parliament.

“Growth in 2022-23 will be supported by widespread vaccine coverage, gains from supply-side reforms and easing of regulations, robust export growth, and availability of fiscal space to ramp up capital spending. The year ahead is also well poised for a pick-up in private sector investment with the financial system in a good position to provide support to the revival of the economy,” it said.

The growth projection for the next year based on “the assumption that there will be no further debilitating pandemic related economic disruption, monsoon will be normal, withdrawal of global liquidity by major central banks will be broadly orderly and oil prices will be in the range of $70-$75/bbl,” the Survey said.

The Survey projection is comparable with the World Bank’s and Asian Development Bank’s latest forecasts of real GDP growth of 8.7 per cent and 7.5 per cent respectively for 2022-23. As per the IMF’s latest World Economic Outlook (WEO) growth projections released on 25th January, 2022, India’s real GDP is projected to grow at 9 per cent in both 2021-22 and 2022-23 and at 7.1 per cent in 2023-24. It stressed the need to watch up for imported inflation. India’s Consumer Price Index inflation stood at 5.6 per cent in December 2021 but wholesale price inflation, however, has been running in double-digits. “Although this is partly due to base effects that will even out, India does need to be wary of imported inflation, especially from elevated global energy prices,” it said.

Last year’s Economic Survey had pitched for an expansionary fiscal policy in 2021-22 to boost growth and advised the government towards significant privatisation of state-owned companies. A privatisation push and review of the banking sector asset quality was recommended in last year’s survey.

Setting the tone for the Union Budget 2022-23, to be presented on Tuesday, the Economic Survey 2021-22 tabled in the Parliament on Monday stressed on the need for the government to provide a buffer against stresses such as the uncertainty in the global environment, the cycle of liquidity withdrawal by major central banks, etc.

India’s economic growth in 2022-23 could spring a surprise: ASSOCHAM

Despite the Covid-19 pandemic, India’s economic growth in the upcoming financial year, i.e., 2022-23, can be surprising on the higher side, ASSOCHAM Secretary General said on Monday.

“While the 8-8.5 per cent GDP projections for FY23 are on the back of a high base of 9.2 per cent in the current financial year, ASSOCHAM is of the view that India’s economic growth can surprise us on the higher side.

“Even as the pandemic is still raging in most parts of the world, its latest variant is less damaging. Besides, with 75 per cent of eligible Indians fully vaccinated and the booster dose being rolled out, India would be far better prepared to take on the challenges,” ASSOCHAM Secretary General Deepak Sood said.

ASSOCHAM said it shares the prognosis of the Economic Survey that the Indian economy is well placed to take on the challenges of 2022-23, riding on the back of continuous reforms in supply side and safety nets to the vulnerable sections of the society.

Sood further said that the advance estimates suggest manufacturing to be growing by 12.5 per cent in the current fiscal while services would expand by 8.5 per cent.

“Traditionally, services grow at a faster face. Clearly, the Covid impact on contact intensive industries is reflecting even as manufacturing has been aided by supply side reforms. Once the impact of PLI scheme kicks in, we expect the manufacturing to be leading the growth for the foreseeable future,” Sood said, adding that robust performance in exports has also helped the manufacturing.

He further said that the Economic Survey is right in its assessment about the investment scenario, saying: “The private investment recovery is still at a nascent stage, though there are increased activities in the brownfield projects. Heavy lifting would still be needed by the government with capital expenditure, and we expect that in the Budget.”

The Survey has pointed out that the government has the fiscal capacity to maintain the support, and ramp up capital expenditure when required, ASSOCHAM said in a statement.

“Schemes like credit guarantee with 100 per cent guarantee for additional funding of Rs 4.5 lakh crore to MSMEs have provided critical relief to the sectors severely hit by the pandemic. More such measures are expected in the Budget,” it said.

“The Survey has re-emphasised the government’s asset monetisation and disinvestment agenda, which spells out bare minimum presence of government ownership even in the strategic sectors. Successful completion of Air India disinvestment should infuse confidence for the roadmap,” it added.

Gold Demand Globally Rose 10% In 2021

Global demand for gold increased 10 per cent in the calendar year 2021, led by improved economic growth and investors’ sentiment during the October-December quarter, the Word Gold Council said on Friday.

Gold demand jumped almost 50 per cent in the period, thereby hitting a 10-quarter high.

The total demand for the yellow metal was at 4,021 tonnes, excluding the “over the counter” figures.

“Demand for gold in the consumer-driven jewellery and technology sectors recovered throughout the year in line with economic growth and sentiment, while central bank buying also far outpaced that of 2020. Investment demand was mixed in an environment of opposing forces: high inflation competed with rising yields for investors’ attention,” the council added.

Jeweler fabrication staged a strong recovery in 2021 and it grew 67 per cent to 2,221 tonnes in 2021.

“This was in good part linked to Q4 demand, which – at 713 tonnes – saw the strongest quarterly jeweler consumption since Q2 2013,” the council said.

Global holdings of gold ETFs fell by 173 tonnes in 2021 in sharp contrast to 2020’s record 874 tones rise.

Bar and coin investment jumped 31 per cent to an eight-year high of 1,180 tones.

“Central banks accumulated 463 tonnes of gold in 2021, 82 per cent higher than the 2020 total and lifting global reserves to a near 30-year high. The pace of buying slowed in the second half, with a 22 per cent Y-o-Y decline in Q4.”

Further, gold used in technology rose nine per cent in 2021, to reach a three-year high of 330 tonnes. (IANS)

Number Of Indian Billionaires Grows To 142 In 2021 From 102

The number of Indian billionaires grew from 102 to 142, while 84 per cent of households in the country suffered a decline in their income in 2021, which was also a year marked by tremendous loss of life and livelihoods, according to non profit Oxfam India’s latest report published on Monday.

The report ‘Inequality Kills’ comes ahead of the World Economic Forum’s Davos Agenda.

It indicates that the collective wealth of India’s 100 richest people hit a record high of Rs 57.3 lakh crore in 2021.

In India, during the pandemic (since March 2020, through to November 30th, 2021) the wealth of billionaires increased from Rs 23.14 lakh crore to Rs 53.16 lakh crore.

More than 4.6 crore Indians, meanwhile, are estimated to have fallen into extreme poverty in 2020 (nearly half of the global new poor according to the United Nations).

The stark wealth inequality in India is a result of an economic system rigged in favour of the super-rich over the poor and marginalised, the report said

It advocates a one per cent surcharge on the richest 10 per cent of the Indian population to fund inequality combating measures such as higher investments in school education, universal healthcare, and social security benefits like maternity leaves, paid leaves and pension for all Indians.

“The ‘Inequality Kills’ briefing shows how deeply unequal our economic system is and how it fuels not only inequality but poverty as well. We urge the Government of India to commit to an economic system which creates a more equal and sustainable nation,” Amitabh Behar, CEO, Oxfam India said in a statement.

Further, Behar said that Oxfam’s global briefing points to the stark reality of inequality contributing to the death of at least 21,000 people each day, or one person every four seconds.

Moreover, the pandemic set gender parity back from 99 years to now 135 years. Women collectively lost Rs 59.11 lakh crore in earnings in 2020, with 1.3 crore fewer women in work now than in 2019, the report showed.

“It has never been so important to start righting the wrongs of this obscene inequality by targeting extreme wealth through taxation and getting that money back into the real economy to save lives,” Behar said.

“India can show the world that democratic systems are capable of wealth redistribution and inclusive growth where no one is left behind. India’s fight against inequality and poverty must be supported by the billionaires who made record profits in the country during the pandemic,” he suggested. (IANS)

Income Of Poorest Fifth India Plunged 53% In 5 Years; Those At Top Surged

In a trend unprecedented since economic liberalisation, the annual income of the poorest 20% of Indian households, constantly rising since 1995, plunged 53% in the pandemic year 2020-21 from their levels in 2015-16. In the same five-year period, the richest 20% saw their annual household income grow 39% reflecting the sharp contrast Covid’s economic impact has had on the bottom of the pyramid and the top.

This stark K-shaped recovery emerges in the latest round of ICE360 Survey 2021, conducted by People’s Research on India’s Consumer Economy (PRICE), a Mumbai- based think-tank.

The survey, between April and October 2021, covered 200,000 households in the first round and 42,000 households in the second round. It was spread over 120 towns and 800 villages across 100 districts.

While the pandemic brought economic activity to a standstill for at least two quarters in 2020-21 and resulted in a 7.3% contraction in GDP in 2020-21, the survey shows that the pandemic hit the urban poor most and eroded their household income.

Splitting the population across five categories based on income, the survey shows that while the poorest 20% (first quintile) witnessed the biggest erosion of 53%, the second lowest quintile (lower middle category), too, witnessed a decline in their household income of 32% in the same period. While the quantum of erosion reduced to 9% for those in the middle income category, the top two quintiles — upper middle (20%) and richest (20%)— saw their household income rise by 7% and 39% respectively.

The survey shows that the richest 20% of households have, on average, added more income per household and more pooled income as a group in the past five years than in any five-year period earlier since liberalisation. Exactly the opposite has happened for the poorest 20% of households — on average, they have never actually seen a decrease in household income since 1995. Yet, in 2021, in a huge knockout punch caused by Covid, they earned half as much as they did in 2016.

How disruptive this distress has been for those at the bottom of the pyramid is reinforced by the fact that in the previous 11-year period between 2005 and 2016, while the household income of the richest 20% grew by 34%, the poorest 20% saw their household income surge by 183% at an average annual growth rate of 9.9%.

Coming in the run-up to the Budget, the task for the Government is cut out.

“As the Finance Minister is finalising her budget proposals for 2022-23 to give shape to the roadmap for economic revival of the country,” said Rajesh Shukla, MD and CEO, PRICE, “we need a K-shaped policy too that addresses the two ends of the spectrum and a lot more thinking on how to build the bridge between the two.”

Opinion |P Chidambaram writes: No political price yet

This couldn’t be more timely. Said PRICE founder and one of the authors of the survey Rama Bijapurkar. “Or else, we are back to a tale of two Indias, a narrative we thought we were rapidly getting rid of. The good news is that we have built a far more efficient welfare state for the disbursal of benefit be it DBT or vaccination for all.”

The survey showed that while the richest 20% accounted for 50.2% of the total household income in 1995, their share has jumped to 56.3% in 2021. On the other hand, the share of the poorest 20% dropped from 5.9% to 3.3% in the same period.

As for India Inc, it has been in a better position to weather the disruption. The pandemic accelerated further formalisation of the economy with large companies benefitting at the cost of smaller ones. The survey also shows that while job losses were quite evident among Small and Medium Enterprises in the casual labour segment, large companies did not witness much of that.

Even among the poorest 20 per cent, those in urban areas got more impacted than their rural counterparts as the first wave of Covid and the lockdown led to stringent curbs on economic activity in urban areas. This resulted in job losses and loss of income for the casual labour, petty traders household workers.

Data shows that there has been a rise in the share of poor in cities. While 90 per cent of the poorest 20 per cent in 2016, lived in rural India, that number had dropped to 70 per cent in 2021. On the other hand the share of poorest 20 per cent in urban areas has gone up from around 10 per cent to 30 per cent now.

“The data reflects that the casual labour, petty trader, household workers among others in Tier 1 and Tier 2 cities got hit most by the pandemic. During the survey we also noticed that while in rural areas people in lower middle income category (Q2) have moved to middle income category (Q3), in the urban areas the shift has been downwards from Q3 to Q2. In fact, the rise in poverty level of urban poor has pulled down the household income of the entire category down,” said Shukla.

“The elephant in the room is investment,” said Bijapurkar. “Inspiring confidence through long-term policy stability and improving ease of doing business should make the tide rise again and sweep small business and individuals up along with it. Most big companies are doing well and don’t need more help but we need to work the economy for the bottom half.”

US Consumer Prices Rise At Fastest Rate In Nearly 40 Years

Prices in the US are rising at their fastest rate in almost 40 years, with inflation up 7% year-on-year in December. Strong demand and scarce supply for key items such as cars are driving the increases, which are putting pressure on policymakers to act.

The US central bank is expected to raise interest rates this year. The rise in borrowing costs is aimed at reducing demand by making purchases such as cars more expensive.

December’s increase marked the third month in a row that the US annual inflation rate has hovered above 6% – well north of policymakers’ 2% target. The last time the pace of inflation exceeded that level was 1982.

Housing costs were up 4.1% year-on-year, while the cost of groceries rose 6.5% – compared to a 1.5% annual average over the last 10 years.

Wednesday’s report from the Labor Department showed signs that some of the pressures may be easing. The cost of energy dropped 0.4% from November to December – its first decline since April. But over 12 months energy costs are up by nearly 30% and have returned to their upward trend in recent days.

“Overall, this is every bit as bad as we expected,” Paul Ashworth, chief economist at Capital Economics, said of the December inflation report.

Reacting to the latest report, President Joe Biden said that it “demonstrates that we are making progress in slowing the rate of price increases”.

He added that there is “more work to do” in the US and noted that “inflation is a global challenge, appearing in virtually every developed nation as it emerges from the pandemic economic slump”.

The price pressures occurring in the US have been seen to varying degrees around the world.

The Organisation for Economic Cooperation and Development, which represents more than 30 of the world’s largest economies, said this week that inflation among its members had hit its highest rate in 25 years in November.

Further rises

In the UK, inflation hit a 10-year high in November, while globally, prices are rising at their fastest pace since 2008, according to the World Bank.

While many countries are grappling with higher food and energy costs, the US has seen an unusually large pick-up in inflation.

That’s due in part to strong demand from households, whose spending got a boost from government coronavirus aid and shifted suddenly from things like travel to furniture during the pandemic.

Economists in the US were initially hopeful that the pressures would ease as the pandemic faded. But ongoing production snarls and the emergence of virus variants have made the price increases more persistent than expected.

“It’s proving more difficult than we had hoped to end the pandemic,” the head of America’s central bank, Jerome Powell, told Congress on Tuesday.

Sarah House, economist at Wells Fargo, said it is no longer likely that inflation will fade naturally as the pandemic abates, pointing to worker shortages and wages, which have also been rising – though not as fast as prices.

“Although the exceptional pace of goods inflation and momentum in shelter costs are still firmly rooted in the pandemic, the increasingly tight labour market and ensuing wage pressures will make it difficult for inflation to fall back on its own,” she said.

The issue has put pressure on the Biden administration, eroding consumer confidence despite other signs of a strong economy.

Mr Powell has pledged to keep inflation in check by raising interest rates. But on Tuesday he warned those moves would only go so far to address the problem if supply chain issues persist, pointing to risks from new shutdowns in China.

“Omicron, particularly if China sticks to a no-Covid policy, Omicron can really disrupt the supply chains again,” he said.

Official inflation figures from China on Thursday showed prices rose less than expected in November, with producer prices up 10.3% and consumer prices up 1.5%.

But that easing is not necessarily an indicator of what will happen elsewhere, said Gian Maria Milesi-Ferretti, senior fellow at the Brookings Institution, a Washington think tank.

“Indicators of what is happening [in China] to the labour market, to wage demands and to the supply bottlenecks that have pushed up some prices … those are more important indicators,” he said.

World Bank Downgrades 2022 Global Growth Forecast To 4.1%

The global economy is on track to grow by 4.1 per cent in 2022, down 0.2 percentage point from a previous projection, the World Bank Group said in its latest Global Economic Prospects release.

“The global recovery is set to decelerate markedly amid continued Covid-19 flare-ups, diminished policy support, and lingering supply bottlenecks,” the semiannual report added on Tuesday.

The global outlook is “clouded by various downside risks,” including renewed Covid-19 outbreaks due to new virus variants, the possibility of unanchored inflation expectations, and financial stress in a context of record-high debt levels, according to the report.

After rebounding to an estimated 5.5 per cent in 2021, global growth is expected to decelerate markedly to 4.1 per cent in 2022, the report noted. The latest projection for 2021 and 2022 is 0.2 percentage point lower than the June forecast, respectively.

The report also noted that the Covid-19 pandemic has raised global income inequality, partly reversing the decline that was achieved over the previous two decades, Xinhua news agency reported.

By 2023, annual output is expected to remain below the pre-pandemic trend in all emerging market and developing economy (EMDE) regions, in contrast to advanced economies, where the gap is projected to close.

Preliminary evidence suggests that the pandemic has also caused within-country income inequality to rise somewhat in EMDEs because of particularly severe job and income losses among lower-income population groups, according to the report.

“The world economy is simultaneously facing Covid-19, inflation, and policy uncertainty, with government spending and monetary policies in uncharted territory,” said World Bank Group President David Malpass.

Noting that rising inequality and security challenges are “particularly harmful” for developing countries, Malpass added that putting more countries on a favourable growth path requires concerted international action and a comprehensive set of national policy responses.

Eternalhealth Raises $10 Million Series A Funding After Initial $10 Million In Seed Financing

EternalHealth, the first new health plan to be approved in Massachusetts since 2013, announced today that it has raised another $10 million in Series A funding. This additional financing follows an initial $10 million in Seed and Pre-Series A investment by successful healthcare and tech entrepreneurs last summer.

John Sculley, former Apple CEO, is involved in the Series A funding round and believes in the mission of eternalHealth, which is founded by Pooja Ika, the first woman at the age of 24 to launch a new Medicare Advantage Health Plan in the United States.

“Around two decades ago, I decided I wanted to disrupt the healthcare industry by collaborating with entrepreneurs who believed in their mission,” said Sculley, former Apple CEO and an investors and shareholder in eternalHealth, “I truly believe we have a healthcare Moonshot with eternalHealth and I am excited to see how we can better the space together. I believe in Pooja’s mission and with the help of her team, she has been able to accomplish so much in one year.”

Ms. Ika said the Series A funding, which includes seed investors and additional successful technology and healthcare entrepreneurs, will be used to support the day-to-day operations, and help attract and retain membership, while most of the capital will be used as risk-based capital to support the company’s membership growth.

Typically, the launch of a new health plan takes two to three years and costs tens of millions of dollars, said Ms. Ika.

“At eternalHealth, we accomplished this historic goal within a year. The initial seed round helped us build a technology-powered infrastructure, optimize our operations, and hire a skilled team of 20 professionals,” added Ms. Ika. “Now, that we are operationally sound, we are actively trying to grow and increase our membership base. The goal has always been to build a sustainable business model, that is committed to doing things the right way.”

New insurers have raised hundreds of millions of dollars at the same stage Ms. Ika is at now, but Ms. Ika is very mindful about raising capital and said, “It is not because we cannot raise the capital, it is because we are being intentional with our use of capital. I strive to achieve the same results of some of my mentors who have started successful health plans across the country. Their advice to me was to get all of our regulatory approvals with as little capital as possible, and that is exactly what we did.”  Ms. Ika added that this is the first time ever that a health plan has been launched in the United States by a woman at 24 and not only that, but by a woman of color.

“Navigating through the healthcare system can be complicated, and insurance companies are not always the best at helping beneficiaries navigate through it,” said Ms. Ika. “eternalHealth is committed to empowering and educating our members so that they make informed decisions and take their care into their own hands. By educating our members, establishing collaborative relationships with the providers and health systems in our network, and using the latest technology and tools, we can deliver higher quality care at a lower cost to our members.”

eternalHealth believes that through their partnership with Red Sox legend David Ortiz, popularly known as Big Papi, Massachusetts residents will be able to connect Ortiz’s trustworthy and kind personality to eternalHealth’s commitment to offering high quality, affordable products, while acting as a trustworthy and transparent partner to its members.

Through its technology-driven, innovative platform, eternalHealth is looking to substantially reduce its administrative & operating costs (SG&A) across the entire enterprise. The cost savings will allow for more dollars to be allocated towards the total cost of care, while also passing down the savings to their members through its robust benefits to lead them in the healthy direction.

Once eternalHealth reaches the critical membership threshold, it will implement value-based contracting with providers, through which they will collaborate with providers and help them manage the overall quality of care for their patients through platform driven intelligence, improve the overall quality of life, and reduce healthcare costs. Ms. Ika says, “At eternalHealth, we believe we can really reduce healthcare costs by leveraging the right technology. That helps with member retention and satisfaction, which remains a key priority for eternalHealth. Just because it has not been done before, that does not mean it is impossible. eternalHealth strives to be a catalyst for change in a market that has seen little disruption.

About eternalHealth

Headquartered in Boston, eternalHealth provides high-quality care with low out-of-pocket costs to the residents of Massachusetts, while prioritizing preventive care and transparency. Founded, owned, and built by women, eternalHealth is a Medicare Advantage health plan that offers HMO and PPO products. For more information about our plans and services, please visit our website at www.eternalHealth.com

Democrats Look To Scale Back Biden Bill To Get It Passed

According to media reports, momentum is growing for narrowing the scope of President Biden’s social spending and climate package as Democrats seek a way to get the bill through the Senate with Sen. Joe Manchin’s (D-W.Va.) support.

Manchin effectively killed a much more wide-ranging bill, known as the Build Back Better Act, on Sunday by announcing his opposition, deeply disappointing and angering the White House and fellow congressional Democrats.

Days later, the pain still stings, but Democrats are actively seeking solutions that might find muster with the conservative West Virginia senator, whose vote is a necessity in the 50-50 Senate evenly divided between the two parties.

Democratic lawmakers, lobbyists and experts at think tanks believe Manchin might be won over if the bill is revised to include fewer programs for a longer period of time.

“That is the way forward here,” said Ben Ritz, director of the Center for Funding America’s Future at the Progressive Policy Institute, who has advocated for a bill with fewer items.  “Most of the party is starting to come around to that,” Ritz added. Some Democrats think their party made a mistake in going too large in the first place.

Progressives initially pushed a $6 trillion measure before falling back to $3.5 trillion — in part to signal that cut represented a concession on their party. The lower figure also proved too high for Manchin and fellow centrist Democratic Sen. Kyrsten Sinema (D-Ariz.), however, and the House ultimately passed a roughly $2 trillion version of Biden’s spending plan in November, which had a number of key provisions that were temporary. For example, the bill included provisions to extend the increased child tax credit amount for one year, and to create a universal preschool program for six years.

“To get someone like Manchin, a Democrat representing a conservative state, to a point where they can support something, [Democrats] started off on the wrong foot about letting the bill get too big about too many things,” said Tucker Shumack, a principal at Ogilvy Government Relations who previously served as an aide to former moderate Sen. Olympia Snowe (R-Maine).

Manchin argued that Democrats are not being honest about the cost of the bill, since temporary programs are likely to be extended in the future. “They continue to camouflage the real cost of the intent behind this bill,” Manchin said in a statement Sunday outlining his opposition to the measure.

In his recent comments, Manchin said he couldn’t explain voting for Build Back Better in West Virginia, a state former President Trump won twice by double digits. Jorge Castro, co-lead of the tax-policy practice at Miller & Chevalier and a former aide to former West Virginia Democratic Sen. Jay Rockefeller (D), said that a more focused bill could help Democrats counter Republican attacks that the bill is a grab-bag of spending. “I think it definitely helps from a messaging perspective,” he said.

Some moderate Democrats have long called for the Build Back Better Act to include fewer items for a longer time period, and are emphasizing this idea in the wake of Manchin’s recent comments.

“At the start of these negotiations many months ago, we called for prioritizing doing a few things well for longer, and we believe that adopting such an approach could open a potential path forward for this legislation,” Rep. Suzan DelBene (D-Wash.) chair of the centrist New Democrat Coalition, said in a statement Sunday.

White House Chief of Staff Ronald Klain tweeted a link to DelBene’s statement, saying the administration appreciates “all that @RepDelBene and the House New Dem Coalition has done to move forward on Build Back Better and the President’s agenda!”

Progressive lawmakers have been leading supporters of including more items in the bill, even if that means some programs are temporary. But they are acknowledging that some items may need to be removed from the package in subsequent negotiations.

In a statement on Wednesday, Congressional Progressive Caucus Chair Pramila Jayapal (D-Wash.) said that cuts should be as minimal as possible.

“In Congress, we will continue to prioritize a legislative path for Build Back Better, focused on taking the current text of the legislation passed by the House, keeping as much of it as possible — but no less than the elements contained in the framework negotiated by the President and committed to by Senators Manchin and Sinema some months ago,” Jayapal said.

It’s not certain exactly which items from the House-passed bill would end up in a narrower bill, and exactly which would be left out. The New Democrat Coalition in their statement mentioned as top priorities the expanded child tax credit, building on ObamaCare and addressing climate change. Senate Finance Committee Chairman Ron Wyden (D-Ore.) also made reference to those items in a statement.

Manchin has raised concerns about including Medicare expansion and paid family leave in the spending package, suggesting that those items might not make it into a package with fewer content areas.

The expanded child tax credit could prove to be challenging to include in a compromise with Manchin. The West Virginia senator has expressed a desire for the income limits for the credit to be lowered and for there to be work requirements associated with the credit.

The Washington Post on Monday reported that Manchin had provided the White House last week with a $1.8 trillion proposal that included universal preschool for 10 years, ObamaCare expansion and climate spending, but not the expanded child tax credit. Neither Manchin’s office nor the White House have publicly confirmed the report.

Ritz said it’s possible that Manchin and other Democrats could reach a compromise on the child tax credit, such as by targeting the child tax credit expansion more toward younger children or lowering the income level where the expanded credit starts to phase out.

He also said that even if a bill didn’t include an extension of the expanded child tax credit, a package that included other items such as universal preschool, Obama Care expansion, climate funding and affordable housing investments would still be transformative.

Biden Administration Extends Student Loan Pause Through May 1, 2022

The U.S. Department of Education announced a 90-day extension of the pause on student loan repayment, interest, and collections through May 1, 2022. The extension will allow the Administration to assess the impacts of the Omicron variant on student borrowers and provide additional time for borrowers to plan for the resumption of payments and reduce the risk of delinquency and defaults after restart.

The Department will continue its work to transition borrowers smoothly back into repayment, including by improving student loan servicing.

“Since Day One of this Administration, the Department has focused on supporting students and borrowers throughout the pandemic and ensuring they have the resources they need to return to repayment successfully,” said U.S. Secretary of Education Miguel Cardona. “This additional extension of the repayment pause will provide critical relief to borrowers who continue to face financial hardships as a result of the pandemic, and will allow our Administration to assess the impacts of Omicron on student borrowers.

As we prepare for the return to repayment in May, we will continue to provide tools and supports to borrowers so they can enter into the repayment plan that is responsive to their financial situation, such as an income-driven repayment plan. Students and borrowers will always be at the center of our work at the Department, and we are committed to not only ensuring a smooth return to repayment, but also increasing accountability and stronger customer service from our loan servicers as borrowers prepare for repayment.”

The pause on student loan payments will help 41 million borrowers save $5 billion per month. Borrowers are encouraged to use the additional time to ensure their contact information is up to date and to consider enrolling in electronic debit and income-driven repayment plans to support a smooth transition to repayment. More information can be found at StudentAid.gov.

This action is one of a series of steps the Biden-Harris Administration has taken to support students and borrowers, make higher education more affordable, and improve student loan servicing, including providing nearly $13 billion in targeted loan relief to over 640,000 borrowers. Actions within that include:

Revamping the Public Service Loan Forgiveness program in October, which has already provided $2.4 billion in loan relief to 38,000 borrowers. As part of that effort, the Department implemented a Limited PSLF Waiver to count all prior payments made by student borrowers toward PSLF, regardless of the loan program. Borrowers who are working in public service but have not yet applied for PSLF should do so before October 31, 2022, and can find out more at StudentAid.gov/PSLF.

Providing $7.0 billion in relief for 401,000 borrowers who have a total and permanent disability. Approving $1.5 billion in borrower defense claims, including extending full relief to approved claims and approving new types of claims.

Providing $1.26 billion in closed school discharges to 107,000 borrowers who attended the now-defunct ITT Technical Institute. Helping 30,000 small business owners with student loans seeking help from the Paycheck Protection Program.

The Temple Economy Of Goa, Famous For Its Churches

When Pune’s D.S. Pai visited Goa four years ago for an official conference, he took out time early one morning to visit his Kuldev, family deity, Ramnathi temple at Bandivade. “My colleagues were interested and came along with me. They said they did not even know of the existence of such a beautiful temple,” Pai, who is India Meteorological Department’s (IMD) head, Long-Range Forecast, told IANS on phone.

Pai’s family migrated to Kerala in the 17th century when the Portuguese took over Goa. Like him, several others chose to make Kerala their home, but almost all of them have retained ties with the family deity even now. The trips have increased since he was posted to Pune, he said.

Pai is not the only example. Not all visitors to this sunshine state go to the beach first but a bulk of them are actually temple goers. In fact, even when for the majority of tourists visiting Goa, the equation is simple: ‘Goa = Sun, Sand & Sea’, over a dozen major temples and several smaller ones attract regular and annual crowds that have a sizable contribution to Goa’s economy.

According to India Tourism Statistics 2019, a government of India publication, in 2017, Goa had 68,95,234 domestic and 8,42,220 foreign tourists while in 2018, the respective number of 70,81,559 and 9,33,841 showing a growth rate of 2.70 per cent and 10.88 per cent, respectively. Of course, the pandemic changed the situation, and the tourism sector was the hardest hit. In 2021, even when the domestic sector has picked up slowly, foreign tourists’ numbers are no match.

But even before the pandemic and lockdown, tourists in general were unaware of Goa’s rich tradition of multiple temples for centuries, and it would only be the niche tourists who would opt for it or those like Pai, who came for their deities.

Amongst the 50-odd main temples across Goa, about a dozen stand out for various reasons, their distinct architecture being one of them. Brick and mortar structures, most of these big temples are 400-year-old, have unique tiled, sloping roofs and almost all of them have ‘deep maal’, a vertical decorative pillar with niches to keep earthen oil lamps. Each temple compulsorily has a tank / water body next to it.

Mangeshi temple is amongst the most famous, but there are scores of others. Shantadurga at Kawale, Mhalsa Narayani at Mhardol, Lakshmi Nrusinha at Veling, Ramnathi and Mahalakshmi at Bandivade, Kamakashi at Shiroda, Santeri at Kelshi are amongst the bigger temples. Many of them are listed on the official website of Goa Tourism Development Corporation (GTDC).

And then there are temples with even older vintage. The 1000-year-old Mahadev temple at Tambdi Surla near the border with Maharashtra and about 700-year-old Rudreshwar temple at Harale are the stone temples. When the Portuguese conquered Goa, devotees of several temples lining the coastal areas took the deities away to either deep inside the forests and undulating landscape of Goan territory, which now comprises the area between Panaji and Fonda, or further away to coastal Karnataka. With it, a lot of community members — all Konkani speakers — too migrated away to almost the entire coastal belt from south Gujarat to Kerala. Konkani speaking Gaud Saraswat Brahmins (GSBs), scores of Marathi speaking families from across Maharashtra and of course, many from Goa itself, all have their family deities in Goa.

Shanta Durga at Amone is the family deity, the Kuldevi, of senior journalist Rajdeep Sardesai’s family that hails from Madgaon. Not much into religious rituals — “God resides in my heart” — Sardesai said, “but I visit Goa for family functions regularly”.

Sardesai agreed that outsiders are unaware of the rich temple traditions. “Goa lives by the river and not by the sea. Once you start discovering the river, you discover the real Goa. There is nothing wrong in promoting beaches but there is more to Goa than the beaches,” he said.

Over the decades, especially after Independence, the diaspora spread to other states and even abroad. Many families make it a point to annually visit their family deities, many visit when there is a special occasion such as a marriage in the family and likewise. “The Goan temples are unique by the fact that the deities are identified not just as Brahminical, but those belonging to all types of communities. The temples had a land of their own, they supported the economy of the area around them,” said Padmashree Vinayak Khedikar, author who has documented the folk arts and literary traditions of Goa.

Families and villages from ‘thal’, a local term meaning the catchment for that temple, were dependent on the temple as a central institution and in turn they donated to the temple. “Each of the temples is an independent Sansthan institution. Till a few decades ago, anyone from the thal getting married would get a saree and dhoti from the temple. Also, some minor repairs or such chores to be carried out at people’s homes were supported by the temple,” said Khedikar, who has authored a book ‘Goa Dev Mandal: Unnayan aani Sthalantar’ (Goa temple boards: upgradation and migration). e

“Except for the law & order, the temples reigned over their respective thal even in the Portuguese era. There was a Mahajan system — which led to a Mahajani Act in the late 18thecentury — who were responsible for the maintenance of the temples and all its real estate. There were separate families identified for daily puja. Much of it has changed later,” he said. But he was non-committal about the popularity of these temples. Sardesai said, “Temples would have to be promoted by the local community.”

“Last 6-8 years, lots of people who read my blogs budget a day or two for temples and inform me or ping me or ask for information. Sometimes, they also put out a thread on social media and tag me to say, it was because of my blog,” said Anuradha Goyal, author, columnist and blogger based in Goa and who has extensively written about Goa temples.

There has been no active promotion of temples by the state either. The BJP government for the last 10 years has had no promotional schemes for popularising temples to domestic tourists. However, given the political mileage that ‘pilgrimage’ is yielding — Delhi Chief Minister has announced trains to pilgrim places from Goa; West Bengal Chief Minister Mamata Banerjee said Trinamool Congress stood for the temple, mosque and church; the Congress seems to have slowly woken up to the opportunity.

Former Deputy Chief Minister Ramakant Khalap agreed that temple tourism has been neglected and also acknowledged the contribution of temples in Goa’s economy. “Ahead of the Assembly elections, we are preparing the Congress manifesto. It will prominently feature dev ghar (temple) promotion and planning to celebrate Goa as ‘God’s Own Abode’,” Khalap said.

However, his idea of places of worship is not restricted to Hindu temples. “We plan to promote all places of worship. Puranas tell us this is a place reclaimed by Parshuram. Parvati did her penance here, we have Shanta Durga. Then much later came the Buddhists and Jain, there are a lot of remnants. Jews were here, Muslims were here and last were the Portuguese. Goa is a good example of how all religions have a syncretic existence. The temples, churches, and mosques, we have all of them,” he said.

“Our manifesto will demand to have designated state festivals from each religion,” Khalap added.

How Elon Musk Became The Richest Private Citizen In The World

If you want to become a billionaire—and you didn’t happen to be born into the Saudi royal family—there are a few ways to get the job done. You could come up with one seriously good idea, like a new computer operating system or social network, and then build it into a gigantic company. Or you could take the Warren Buffet route, making a decades-long series of shrewd, low–risk investments, and then watch the wealth slowly trickle in. And then there’s what Elon Musk did.

Musk made his money differently than most of today’s famous billionaires. Instead of one amazing idea, he had several good ones. And instead of a bunch of clever, safe investments, he made just a few spectacularly risky ones. But there was a method to his madness, even if it wasn’t apparent to many at the time. The sum total of those bets made Musk the richest private citizen on the planet this year, and their world-altering effects—from privately-launched space missions to an electric vehicle titan that has left the auto industry desperate to catch up—have landed Musk as TIME’s 2021 Person of the Year.

Musk’s family was well-off. He had an early aptitude with computers, designing his own video game at 12-years-old. When he was 17, he left for Canada to escape military service in South Africa’s apartheid regime, attending Queens University in Ontario.

In 1992, he transferred to the University of Pennsylvania, where he studied physics and business. Penn’s tree-lined campus may have also given Musk his first taste for risky business ventures—he and a couple of friends rented out an off-campus house and turned it into a nightclub.

Then it was on to Silicon Valley and—briefly—to grad school. Musk enrolled in a physics Ph.D. program at Stanford, then dropped out after two days. Young entrepreneurs were starting to realize that the internet, a newfangled web of connections between computers, might be more than a playground for nerds, and Musk wanted to try his luck. Together with his brother Kimbal, Musk founded a company called Zip2 as an online business directory, a kind of web-enabled yellow pages with maps—a nifty idea back in the mid-nineties.

Elon and Kimbal recruited investors and brought on outside help to run the company, which made deals with publishers like the New York Times. In 1999, they sold the Zip2 to Compaq, a then-declining computer manufacturing giant, for $307 million. Musk netted a cool $22 million from the Zip2 sale; he promptly went out and spent $1 million on a McLaren F1 supercar. “It’s not consistent with the rest of my behavior,” he would tell CNN, which filmed Musk as the car was delivered to his home. A year later, Musk wrecked the car—he was trying to show off its acceleration and ended up accidentally launching it into the air like a frisbee. The million-dollar sports car was not insured.

But by then, Musk was already on to his next venture. Driving with him in the McLaren the day of the wreck was Peter Thiel, co-founder of a payments startup called Confinity. (Thiel and Musk weren’t injured in the crash).

Musk had plowed his millions into starting another online banking startup called X.com. The two companies would merge in March 2000, forming a business that eventually became PayPal. Musk was named CEO, but in September, while he was on vacation, the board fired him, replacing him with Thiel, partly due to a disagreement over switching the company’s servers.

“It’s not a good idea to leave the office when there are a lot of major things underway that are causing people a great deal of stress,” Musk would later reflect. Musk still had a stake in the company, though. When eBay bought PayPal for $1.5 billion in 2002, Musk netted a $180 million mega-fortune from the deal.

Musk didn’t end up relaxing with all the things his new millions could buy. In 2002, he founded SpaceX with the almost ludicrous mission of colonizing Mars. The next year, he sank an initial investment of more than $6 million into Tesla, which was then not much more than a pair of founders and a vision of electric sports cars.

The company planned to take advantage of new lithium-ion batteries, which were both light and energy-dense, to revolutionize the struggling field. At the time, lithium-ion cells were only being used in small electronic devices, and one of Tesla’s central innovations was scaling them up, which enabled it to create an electric vehicle with far greater range than previous electric cars had been able to achieve.

Both companies had a tough start in the first few years—Musk says he ended up pushing essentially all his proceeds from the PayPal sale into funding the ventures. SpaceX endured multiple failed launches, which almost put it out of business, while Tesla ran into trouble as its engineers realized its prototype battery packs were likely to catch fire. “It was a potentially company-ending discovery if we couldn’t fix it,” says former Tesla chief technical officer J.B. Straubel. Later, Tesla almost went bankrupt during the Great Recession in 2008.

Eventually, Musk’s investments began to pay off. In 2008, SpaceX secured a $1.6 billion deal with NASA, while Tesla in 2012 began cranking out its first mass-market car, the Model S. Today, Tesla is a behemoth, controlling about two-thirds of the U.S. electric vehicle market. SpaceX is the undisputed leader in private space exploration.

Rich Morgan

Though Tesla produces fewer vehicles than legacy carmakers like Ford and GM, its valuation has soared many times higher than theirs. In the past 18 months, Tesla’s stock price has more than tripled, pushing its market cap over $1 trillion.

Musk controls a healthy chunk of that stock, even after selling off almost $12 billion worth of shares in the past two months, though exercising his additional stock options may leave him with a bigger stake than when he started. It’s anyone’s guess as to whether the company will maintain its massive valuation—if Tesla’s stock falls, so does Musk’s fortune.

He currently holds about 17% of Tesla’s stock, valued at $175 billion, which constitutes the largest portion of his net worth. And with SpaceX’s value floating at over $100 billion, according to its October funding round, Musk’s 48% stake in the rocket-maker, plus cash and other assets, brings his total net worth to around $266 billion.

He’s put his money into new companies as well. In 2016, Musk started The Boring Company, which digs tunnels, and neurotechnology startup Neuralink. Both are now worth hundreds of millions of dollars. Those two most recent ventures are illustrative examples of the mindset that created Musk’s fortune. They’re both highly speculative endeavors—Neuralink is trying to develop telepathic interfaces with machines; The Boring Company aims to revolutionize infrastructure.

There’s not much chance either will pay off in the long run, experts say, but big-bucks risk-taking is Musk’s bread and butter. That same approach, throwing millions of dollars at impossibly difficult projects, is what turned Musk from a lucky kid with a dot.com fortune into the wealthiest person on the planet. Or at least the wealthiest private citizen. “I think [Russia’s] President Putin is significantly richer than me,” Musk told TIME in early December. “I can’t invade countries and stuff.”

The Reasons And Solutions To Rising Inflation In The US

With inflation at a 39-year high, Americans are feeling the pinch in just about every facet of daily life. The consumer price index jumped 6.8% from a year earlier, the fastest pace since 1982, as prices surged for staples such as food and gasoline, as well as new and used cars, rent and medical care, the Labor Department said Friday.

There’s been plenty of finger-pointing from both sides of the political aisle about who’s responsible for the spiraling costs, but as usual with issues that have such a broad impact, the causes are complex.

President Joe Biden acknowledged last month that “inflation hurts Americans’ pocketbooks, and reversing this trend is a top priority for me.’’ But he said his $1 trillion infrastructure package, including spending on roads, bridges and ports, would help ease supply bottlenecks.

Here’s a quick breakdown of how we got here and some of the strategies that might help reverse the trend:

►CPI Report: Consumer prices climbed 6.8% in November from a year earlier, the most since 1982, as inflation surged higher

►Inflation surges to 39-year high: How much more are you paying and what’s the damage for Biden?

►Personal finance: What’s not to love? The US savings bond that earns 7% with inflation protection, yet gets ignored

Why are grocery prices so high?

There are myriad reasons for the higher grocery bills, including the same labor shortages, supply chain bottlenecks and strong consumer demand that have driven up the cost of other goods and services. Toss in the wild cards plaguing the food industry: Extreme weather, particularly heat and drought that have curtailed crop yields. A surge in exports. COVID-19 outbreaks at meatpacking plants. Volatile consumer eating patterns amid the ups and downs of the health crisis.

Meanwhile, dire worker shortages, particularly at restaurants, have pushed up wages and the cost of dining out.

There are still fewer factory, warehouse and port workers as parents care for distance-learning children or stay home because of COVID-19 fears. Fuel costs have soared. Dozens of container ships are stuck in the waters near the Ports of Los Angeles and Long Beach, California, waiting to unload cargo. The cost to lease a shipping container for a delivery from China has increased nearly tenfold to $20,000.

Other factors driving inflation

Cars are one of the leading culprits.

Also behind the spike are items such as hotel rates and airline fares, which plunged last year in the early days of the pandemic and rose sharply from those lows this year as consumer demand returned amid the reopening economy.

Supply chain bottlenecks, with COVID-19-related worker absences at factories and ports still high, are also leading to low supplies and higher prices for consumer electronics, appliances and many other products.

The crunch comes on top of a semiconductor shortage and parts supply disruptions that have meant low inventories and higher prices for cars.

The average sales price of a new vehicle hit a record $42,802 in September, breaking the old record of $41,528 set in August, J.D. Power said. The average U.S. price is up nearly 19% from a year ago, when it broke $36,000 for the first time, J.D. Power said. The auto price increases have helped to drive up U.S. inflation.

The Gerald Jones Honda lot in Augusta, Ga., is mostly empty. On a late October morning, there were only six new cars available when there are usually around 250.

►Where are we going from here? Are we at risk of stagflation as prices rise and growth slows?

►The high cost of buying a car: US vehicle sales tumble amid chip shortage, record prices

What role did the stimulus play in driving inflation?

That’s complicated. The stimulus checks, which started to get mailed out under President Donald Trump’s administration, continued through March, when eligible married couples, for example, received up to $2,800 – plus $1,400 for each dependent.

The economy looked very different in the spring of 2020, when Americans first started to receive stimulus checks: The U.S. economy had collapsed as lockdowns took effect, businesses closed or cut hours and consumers stayed home as a health precaution. Employers slashed 22 million jobs. Economic output plunged at a record-shattering 31% annual rate in last year’s April-June quarter.

Everyone braced for more misery. Companies cut investment. Restocking was put off. And a brutal recession ensued.

Yet instead of sinking into a prolonged downturn, the economy staged an unexpectedly rousing recovery, fueled by massive government spending and a bevy of emergency moves by the Fed. By the spring of 2021, the rollout of vaccines had emboldened consumers to return to restaurants, bars and shops.

Suddenly, businesses had to scramble to meet demand. They couldn’t hire fast enough to plug job openings – a near record 10.4 million in August – or buy enough supplies to fill customer orders. As business roared back, ports and freight yards couldn’t handle the traffic. Global supply chains became snarled.

Costs rose. And companies found that they could pass along those higher costs in the form of higher prices to consumers, many of whom had managed to sock away a ton of savings during the pandemic.

To curb inflation, fed reduces bond purchases

Last month, in a milestone for the U.S. recovery from the COVID-19 recession, the Federal Reserve agreed to gradually dial back the bond-buying stimulus it launched early in the health crisis.

The decision, which has been expected for months, reflects the strides the economy has made, with unemployment falling sharply from its pandemic peak. But it also pointedly reveals the central bank’s growing concern about inflation that has surged in recent months amid supply chain bottlenecks.

Fed Chair Jerome Powell told reporters the Fed will be patient and hold off on raising rates so the economy can reach full employment, but he added officials “won’t hesitate” to act if inflation doesn’t ease, presumably by the second half of next year.

►Worker shortage: As millions of jobs go unfilled, employers look to familiar faces in ‘boomerang employees’

►Personal finance and politics: What the jump in consumer prices means for your pocketbook, Joe Biden’s troubles

Biden announces ports open 24/7 to fight inflation, reduce supply chain crunch

In October, Biden announced that the Port of Los Angeles – at the center of the supply chain logjam – will operate around the clock to help clear out some of the hundreds of thousands of shipping containers from Asia stranded on its docks. The neighboring Port of Long Beach, which has been conducting a similar pilot project at one of its 12 terminals, is expected to follow.

As ports gear up operations, dozens of cargo vessels dot the surrounding harbor, waiting for the chance to unload 40-foot containers filled with food, clothing and even holiday gifts, from skateboards to elliptical bicycles. In normal times, there are no waits. But it’s not that simple.

A visit to the ports of Los Angeles and Long Beach and interviews with port officials, union representatives, workers and freight companies reveal it likely will take months to make a significant dent in the port backlog and disentangle the myriad other kinks in the nation’s vast supply network.

Other players, including truck drivers and warehouse workers, need to shift their schedules. There are also equipment shortfalls, bureaucratic hurdles and severe worker shortages at other hubs in the overwhelmed supply chain.

►Will it save holiday shopping? Biden says running LA ports 24/7 will help save Christmas shopping. It’s not that simple, experts warn.

Gasoline Costs More For A Host Of Reasons

Americans are acutely sensitive to gasoline prices, especially when they’re on the rise. One reason, of course, is that we buy a lot of gas: an estimated 570 gallons this year for the average driver, which at current national average prices would cost close to $2,000. Also, gas prices are posted all over town on large signs – unlike, say, milk prices – and people typically buy gas on its own rather than as part of a larger shopping trip, making price changes more noticeable. And gas prices can and do swing sharply and unpredictably, in ways that can seem unconnected to the rest of the economy.

Regular gas costs, on average, 58.7% more than it did a year ago this time – $3.491 a gallon last month, versus $2.20 in November 2020, according to the federal Energy Information Administration (EIA).

But looking just at the recent rise can be misleading, or at least incomplete. For one thing, a year ago the United States was battling yet another wave of COVID-19 cases, large parts of the economy were still shuttered and demand for gas was way down. Estimated consumption in 2020 was 534 gallons per driver, down 14.4% from 624 gallons in 2019.

How we did this

Also, the volatility of gas prices means they can go down as sharply and as suddenly as they go up. In the spring of 2020, as the COVID-19 pandemic sparked widespread lockdowns, the average gas price sank 27% between Feb. 24 and April 27. Since 1994, average gas prices have fluctuated between a low of 96.2 cents a gallon in February 1999 and a high of $4.114 in July 2008. The current average price, in fact, is almost exactly what it was in September 2014 – at least on a nominal basis.

When inflation is factored in, today’s prices appear more modest. In today’s dollars, gas cost an average of $5.20 a gallon in June 2008, and more than $4 as recently as September 2014.

Also, gasoline is not a single, uniform product. Besides regular, midgrade and premium gas, which differ by octane rating, there’s conventional and “reformulated” gas. The latter is required to be sold in California, along the Northeastern seaboard and in several other major urban areas to reduce smog and other air pollutants.

Over the past year, reformulated gas was consistently 30 to 35 cents more expensive than conventional gas until mid-October, when the differential began to widen, according to an analysis of EIA price data – it’s­ now about 46 cents more expensive. Over the same period, midgrade gas has ranged from 37 cents to 46 cents more expensive than regular, while premium has been 25 to 27 cents higher than midgrade.

Where you buy gas also matters. Much of the U.S. petroleum industry is concentrated along the Gulf Coast, making it perhaps unsurprising that gas tends to be cheapest there. The average price in that region was $3.072 a gallon in late November, and in Texas it was also a hairsbreadth above $3.

By contrast, California almost always has the most expensive gas in the country. The state’s average price in late November was $4.642 a gallon, and in San Francisco it was $4.816. Besides the fact that California already uses pricier reformulated gas and has relatively high gas taxes and environmental fees, it is geographically far removed from other refining centers and relatively few fuel pipelines cross the Rocky Mountains to connect California’s refineries to the rest of the country.

Under normal conditions, the state’s refineries can produce enough gasoline to meet demand there, according to the California Energy Commission. But if refineries go offline due to weather, accidents or mechanical breakdowns, the state typically imports gasoline from overseas – adding to the price because of the cost of marine shipments.

A Good Pay Raise Next Year Expected As Companies Struggle To Fill Jobs

The amount of money companies are setting aside for raises is expected to rise at the fastest rate in more than a decade, as employers fight to keep and hire workers in a historically tight labor market, a new survey says.  

Budgets for wage hikes are projected to jump 3.9% next year, the biggest annual leap since 2008, according to a November survey of compensation executives by the Conference Board, a nonprofit membership group of mostly large businesses.  

The growing pools of cash are meant to entice young workers and hold on to existing staff at a time when a record number of jobs are going unfilled, and consumers are dealing with the worst inflation in 39 years.   

“Growth in wages for new hires and accelerating inflation are the main causes of the jump in salary increase budgets,’’ the report said. It added that 46% of executives said higher pay for new employees was a reason for the larger pay pools that are expected, while 39% said inflation helped fuel the increase.

The consumer price index increased 6.8% in November as compared to the previous year, the fastest pace since 1982, with the cost of groceries, gas, rent and cars all on the rise, the Labor Department said Friday.

Labor shortage and wages

Budgets for salary increases have already risen, with the average pool of cash increasing by 3% in the survey taken last month, compared with the 2.6% that was predicted in an earlier survey in April.

A labor shortage has helped spark a ripple effect, enabling younger people entering the workforce to earn higher wages, more experienced employees to pursue new positions and potentially higher pay, and blue-collar workers to demand union representation and better work conditions.

“The rapid increase in wages and inflation are forcing businesses to make important decisions regarding their approach to salaries, recruiting, and retention,’’ the Conference Board report said, It tnoted that labor shortages will probably continue through 2022 while wages likely increase by more than 4%.

Blue-collar workers as well as those in unions are also expected to see pay hikes. “Wages for new hires, and workers in blue-collar and manual services jobs will grow faster than average,’’ the report wrote. 

Workers, from Kellogg cereal facilities to university faculty to Starbucks stores, are demanding higher wages and improved working conditions amid a pandemic that many say magnified inequities and disparities.

The pay hikes many businesses are offering could cost consumers if companies raise the price of services or goods to cover the higher wages, says the Conference Board.. 

And the Federal Reserve may boost interest rates beyond the two increases that economists are already projecting for next year to help slow inflation, according to the Board.

Gita Gopinath Promoted As First Deputy Managing Director At IMF

Indian-American Gita Gopinath, the chief economist of International Monetary Fund, is being promoted as IMF’s First Deputy Managing Director, the fund announced last week. She would replace Geoffrey Okamoto who plans to leave the Fund early next year. Ms. Gopinath, who was scheduled to return to her academic position at Harvard University in January 2022, has served as the IMF’s chief economist for three years. Gopinath was to return to her position as John Zwaanstra Professor of International Studies and of Economics, Harvard University in January 2022.

“Both Geoffrey and Gita are tremendous colleagues — I am sad to see Geoffrey go but, at the same time, I am delighted that Gita has decided to stay and accept the new responsibility of being our FDMD,” said Kristalina Georgieva, IMF’s Managing Director.

Ms. Georgieva said Ms. Gopinath’s contribution to the Fund’s work has already been exceptional, especially her “intellectual leadership in helping the global economy and the Fund to navigate the twists and turns of the worst economic crisis of our lives.”

She also said Ms. Gopinath — the first female chief economist in IMF history — has garnered respect and admiration across member countries and the institution with a proven track record in leading analytically rigorous work on a broad range of issues.

The IMF has had 10 occupants of the FDMD chair since the position was created in 1949. Each – only one of them a woman – has been a citizen of the US. Gopinath too is a US citizen.

Noteworthy that Gopinath wasn’t always the topper type she became as an economics undergraduate in Delhi’s Lady Shriram College. Till her Class 7, she was at around 45 per cent and then toyed with the idea of professional sports. Also, she briefly showed up for modelling.

In an interview to an Indian weekly some years back, her mother, V.C. Vijayalakshmi, had talked of the ascent since Class 7: “The girl who used to score 45 per cent till class seven, started scoring 90 per cent.”

Then a good science intermediate degree at Maharaja PU in Mysore and topping Delhi University in BA. “She created quite a flutter by bagging the gold medal as LSR had beaten St Stephen’s for the first time, and by just two marks.” Like many kids her age in India, Gopinath also entertained ideas of taking the civil services exam and MBA too.

Today, the IMF MD spoke of the struggling Class 7 student thus: “…given that the pandemic has led to an increase in the scale and scope of the macroeconomic challenges facing our member countries, I believe that Gita – universally recognised as one of the world’s leading macroeconomists – has precisely the expertise that we need for the FDMD role at this point. Indeed, her particular skill set – combined with her years of experience at the Fund as Chief Economist – make her uniquely well qualified. She is the right person at the right time.”

Georgieva, a Bulgarian economist, noted Gopinath’s contribution has already been exceptional, especially her “intellectual leadership in helping the global economy and the Fund to navigate the twists and turns of the worst economic crisis of our lives”.

She said Gopinath – also the first female Chief Economist in IMF history – has garnered respect and admiration across our member countries and the institution, with a proven track record in leading analytically rigorous work on a broad range of issues.

Georgieva said that the IMF’s Research Department had gone from “strength to strength”, particularly highlighting its contributions in multilateral surveillance via The World Economic Outlook, a new analytical approach to help countries respond to international capital flows (the integrated policy framework), and work on a Pandemic Plan to end the Covid-19 crisis by setting targets to vaccinate the world at feasible cost.

Born in Kolkata, Gopinath will take the lead on surveillance and related policies, oversee research and flagship publications and help foster standards for Fund publications.

Gopinath has a Ph.D. in economics from Princeton University in 2001 after the B.A. from LSR and M.A. degrees from Delhi School of Economics and University of Washington. She is the younger of two daughters of T.V. Gopinath and Vijayalakshmi. They are both from Kannur, Kerala and settled in Mysuru.

Understanding Medicare Fraud

“Corruption, embezzlement, fraud are all characteristics which exist everywhere. It is regrettably how human nature functions, whether we like it or not. What successful economies do is keep it to a minimum. But, unfortunately, no one has ever eliminated any of that stuff”- said. Alan Greenspan, on the evil characteristic of frauds in general.

In USA, the system of Medicare benefits has been an abundant resource for fraudsters. Medicare improper payments were estimated to be $25.74 billion in fiscal year 2020. However, the amount of improper payments made in Medicare are significant, during 2019 representing to an amount of $28.91 billion.

Medicare fraud occurs when someone, whether doctors or patients or scammers, knowingly deceives Medicare to receive payment when they receive a higher payment than they should. Committing fraud is illegal and should be reported. Anyone can commit or be involved in fraud, and there are cases of fraudsters  including doctors, other providers, and Medicare beneficiaries.

Some common examples of Medicare fraud include billing for services that were not provided, over billing, billing unnecessary services, misrepresenting dates of service or providers of service, and paying kickbacks for patient referrals.

Medicare fraud happens when someone illegally use their Medicare card to get medical care, supplies, or equipment, or sell their Medicare number to someone who bills Medicare for services not received, or provide their Medicare number in exchange for money or a gift.

But sporadic instances of frauds are committed by greedy doctors, and a recent case reported, unveils an example of similar cases.

Ravi Murali, 39, formerly from Wisconsin, was sentenced by Chief U.S. District Judge James D. Peterson to 54 months in federal prison for Dr. Murali’s role in defraud Medicare. He pleaded guilty to this charge on March 31, 2021.

Dr. Murali wrote thousands of fraudulent orders for Durable Medical Equipment (DME). Other participants in the scheme used Dr. Murali’s fraudulent orders to bill Medicare $26,000,000, of which Medicare paid $13,000,000.

As we all know, Medicare is complicated. What may seem like an error to the beneficiary, may result from a misunderstanding about benefits.

It may also be abuse, which involves billing Medicare for services that are not covered or are not correctly coded. The provider has not knowingly and intentionally misrepresented the facts to obtain payment.

Medicare fraud assumes criminal offense. The Centers for Medicare and Medicaid Services (CMS) defines fraud as “the intentional deception or misrepresentation that the individual knows to be false or does not believe to be true,” and that is made “knowing that the deception could result in some unauthorized benefit to themselves or some other person.

Some common examples of suspected Medicare fraud or abuse are:

  • Billing for services or supplies that were not provided
  • Providing unsolicited supplies to beneficiaries
  • Misrepresenting a diagnosis, a beneficiary’s identity, the service provided, or other facts to justify payment
  • Prescribing or providing excessive or unnecessary tests and services
  • Violating the participating provider agreement with Medicare by refusing to bill Medicare for covered services or items and billing the beneficiary instead
  • Offering or receiving a kickback (bribe) in exchange for a beneficiary’s Medicare number
  • Requesting Medicare numbers at an educational presentation or in an unsolicited phone call
  • Routinely waiving co-insurance to attract business

The federal government has made significant strides in reducing fraud, waste, and improper payments across the government.

The CMS “Guard Your Card” campaign tells people how they can protect themselves against fraud by:

  • Never give out their Medicare or Social Security Number to anyone except those you know should have it.
  • They reported any suspicious activities like being asked over the phone for their Medicare/Social Security number or banking information. Medicare will NEVER call you uninvited for this information.
  • By checking their billing statements and reporting suspicious charges. Using a calendar to track doctor’s appointments and services helps quickly spot possible fraud and billing mistakes. Check claims early by logging into gov.

Any suspicious activities may be reported by calling 1-800-MEDICARE (1-800-633-4227).

Under the False Claims Act (FCA), the government may pay a reward of up to 30% to people who report healthcare fraud. In September 2019, TELG client Kevin Manieri was awarded more than $12 million for reporting that a drug company defrauded Medicare and other government insurance programs by encouraging doctors to prescribe an unnecessary medication to patients.

Health care fraud is a felony under Michigan’s Health Care False Claims Act, punishable by up to four years in prison, a $50,000 fine and loss of health insurance. It’s also a federal criminal offense under the Health Insurance Portability and Accountability Act.

India Ranked Fourth Most Powerful Country In Asia

India is the fourth most powerful country in Asia, as per the Lowy Institute Asia Power Index 2021. The annual Asia Power Index — launched by the Lowy Institute in 2018 — measures resources and influence to rank the relative power of states in Asia. The project maps out the existing distribution of power as it stands today, and tracks shifts in the balance of power over time.

The top 10 countries for overall power in the Asia-Pacific region are the US, China, Japan, India, Russia, Australia, South Korea, Singapore, Indonesia and Thailand, Lowy Institute said.

India is ranked as a middle power in Asia. As the fourth most powerful country in Asia, India again falls short of the major power threshold in 2021. Its overall score declined by two points compared to 2020. India is one of eighteen countries in the region to trend downward in its overall score in 2021, the report said.

The country performs best in the future resources measure, where it finishes behind only the US and China. However, lost growth potential for Asia’s third largest economy due largely to the impact of the coronavirus pandemic has led to a diminished economic forecast for 2030, Lowy Institute said.

India finishes in 4th place in four other measures: economic capability, military capability, resilience and cultural influence.

India is trending in opposite directions for its two weakest measures of power.

On the one hand, it remains in 7th place in its defense networks, reflecting progress in its regional defense diplomacy — notably with the Quadrilateral Security Dialogue, which includes Australia, Japan and the US. On the other hand, India has slipped into 8th position for economic relationships, as it falls further behind in regional trade integration efforts, Lowy Institute said.

India exerts less influence in the region than expected given its available resources, as indicated by the country’s negative power gap score. Its negative power gap score has deteriorated further in 2021 relative to previous years.

As per the report, many developing economies, including India, have been hardest hit in comparison to their pre-Covid growth paths. This has the potential to reinforce bipolarity in the Indo-Pacific, driven by the growing power differential of the two superpowers, the US and China, in relation to nearly every other emerging power in the region.

The US beat the downward trend in 2021 and has overtaken China in two critical rankings. But its gains are dogged by a rapid loss of economic influence.

China’s comprehensive power has fallen for the first time, with no clear path to undisputed primacy in the Indo-Pacific.

Uneven economic impacts and recoveries from the pandemic will likely continue to alter the regional balance of power well into the decade. Only Taiwan, the United States and Singapore are now predicted to have larger economies in 2030 than originally forecast prior to the pandemic.

Yet richer countries, such as Japan, have seen their economic prospects improve not just relative to 2020, but also to economies with lower vaccination rates. China, which avoided a recession last year, is not far behind. (IANS)

VISA Complains To U.S. Of India Backing Rupay

Visa Inc has complained to the U.S. government that India’s “informal and formal” promotion of domestic payments rival RuPay hurts the U.S. giant in a key market, memos seen by Reuters show.

In public Visa has downplayed concerns about the rise of RuPay, which has been supported by public lobbying from Prime Minister Narendra Modi that has included likening the use of local cards to national service.

But U.S. government memos show Visa raised concerns about a “level playing field” in India during an Aug. 9 meeting between U.S. Trade Representative (USTR) Katherine Tai and company executives, including CEO Alfred Kelly.

Mastercard Inc has raised similar concerns privately with the USTR. Reuters reported in 2018 that the company had lodged a protest with the USTR that Modi was using nationalism to promote the local network.

Alfred Kelly, Jr., CEO, Visa Inc. speaks at the 2019 Milken Institute Global Conference in Beverly Hills, California, U.S., April 29, 2019. REUTERS/Lucy Nicholson/File Photo

“Visa remains concerned about India’s informal and formal policies that appear to favor the business of National Payments Corporation of India” (NPCI), the non-profit that runs RuPay, “over other domestic and foreign electronic payments companies,” said a USTR memo prepared for Tai ahead of the meeting.

Visa, USTR, Modi’s office and the NPCI did not respond to requests for comment.

Modi has promoted homegrown RuPay for years, posing a challenge to Visa and Mastercard in the fast-growing payments market. RuPay accounted for 63% of India’s 952 million debit and credit cards as of November 2020, according to the most recent regulatory data on the company, up from just 15% in 2017.

Publicly, Kelly said in May that for years there was “a lot of concern” that the likes of RuPay could be “potentially problematic” for Visa, but he stressed that his company remained India’s market leader.

“That’s going to be something we’re going to continually deal with and have dealt with for years. So there’s nothing new there,” he told an industry event.

Modi, in a 2018 speech, portrayed the use of RuPay as patriotic, saying that since “everyone cannot go to the border to protect the country, we can use RuPay card to serve the nation.”

When Visa raised its concerns during the USTR gathering on Aug. 9, it cited the Indian leader’s “speech where he basically called on India to use RuPay as a show of service to the country,” according to an email U.S. officials exchanged on the meeting’s readout.

Finance Minister Nirmala Sitharaman said last year that “RuPay is the only card” banks should promote. The government has also promoted a RuPay-based card for public transportation payments.

While RuPay dominates the number of cards in India, most transactions still go through Visa and Mastercard as most RuPay cards were simply issued by banks under Modi’s financial inclusion program, industry sources say.

Visa told the U.S. government it was concerned India’s “push to use transit cards linked to RuPay” and “the not so subtle pressure on banks to issue” RuPay cards, the USTR email showed.

Mastercard and Visa count India as a key growth market, but have been jolted by a 2018 central bank directive for them to store payments data “only in India” for “unfettered supervisory access”.

Mastercard faces an indefinite ban on issuing new cards in India after the central bank said it was not complying with the 2018 rules. A USTR official privately called the Mastercard ban “draconian”, Reuters reported in September.

Is India Against Cryptocurrencies?

While the crypto currency market is booming and thousands of new virtual currencies are being mined every week, many financial experts and governments are vehemently raising voice to ban all cryptos for various reasons.

Last week, RBI governor Shaktikanta Das said the Reserve Bank had “serious concerns from the point of view of macro-economic and financial stability” and that blockchain technology can thrive without cryptocurrencies. Really, there is a grain of truth to the claim that cryptocurrencies are rivals of central banks as they cannot control them like sovereign money.

India has recently taken a more keen note on cryptocurrencies, thanks to its robust growth in the country amid a lack of regulations. However, things are likely to undergo a drastic change, with the government eager to bring in rules and regulations in the digital currency sector. (News18.com 12/18/2021).

There are thousands of virtual currencies on the market today, which are known as cryptocurrencies. Such currencies exchanged through crypto exchanges have not yet been approved by any country or central bank. Recently, El Salvador, a Central American country, officially recognized only the powerful Bitcoin.

But the CBDC is the official cryptocurrency issued by the Central Bank of India. This is the main difference between other cryptocurrencies and CDBC. The CBDC (Central Bank Digital Currency) will also be  marketed through the blockchain technology as done by other virtual currencies . It is likely to be a digital token or electronic form of the current currency. The Reserve Bank of India will be in charge of supervising and monitoring the official crypto of the Indian government. Digital money cannot be withdrawn as we usually withdraw from banks and ATMs. Their transactions will be through digital platforms. It is not yet clear whether it will be listed on other crypto exchanges.

There is no doubt that the operation of private currencies is being restricted to strengthen the official cryptocurrencies. There are some valid points to know about the official cryptocurrency of India.

The primary concern for India’s central bank is the anonymity that virtual currencies offer to their investors. While the record of cryptos is kept on an open ledger, the owner’s identity is not revealed. This can create problems for banks and the IRS to track the flow of money. And hence cryptocurrencies could be used to transfer illegal money or evade taxes and fund terrorist activities.

Digital currency will reduce the difference between the value of an ordinary currency and the cost of printing it. The bottom line is that government spending will go down. Meanwhile, the RBI Due to the restrictions, the value of digital currency will not fluctuate as seen in cryptocurrencies. This is where investors are most likely to stay away.

The total amount of digital currency issued can be converted into cash and is part of the currency in circulation in the economy. Over the last 5-6 years, the currency, including notes and coins, has grown from Rs 16.63 lakh crore to Rs 28.60 lakh crore. One of the main reasons for the rise in inflation is the circulation of this currency in the markets.

With the advent of digital currency, the RBI’s ability to intervene in markets will increase. Digital currency can reduce the amount of money in the market. After Kovid, people are increasingly using digital means.

Tamil Nadu CM MK Stalin Appoints MR Rangaswami As State’s ‘Investment Ambassador’

Tamil Nadu Chief Minister M.K. Stalin has appointed a prominent Indian American venture capitalist, M.R. Rangaswami as Tamil Nadu’s ‘Investment Ambassador’ on Friday, November 26.

Rangaswami has been an active member of the Indian American community whose influence has inspired many.

Over the years he has worn many hats including being an entrepreneur, investor, corporate eco-strategy expert, community builder and a philanthropist.

Most importantly, he is the founder of Indiaspora, a nonprofit who mission is to unite the Indian diaspora and to transform their success into meaningful impact in India and on the global stage.

By sharing insights, hosting events and connecting people, Indiaspora unites the professionally, geographically and religiously diverse Indian American community toward collective action, the press release said.

On honoring him his new crown, CM Stalin praised Rangaswami for his achievements in the US.

Dr. VGP, an Indian American community leader and president of the World Federation of Tamil Youth, USA in Chicago, congratulated CM Stalin on the appointment and said Tamil Nadu will soon become India’s number one industrialized state under Rangaswami’s captaincy, it said.

Neil Khot, national chairman of the Indian American Business Coalition, based in Washington, D.C., congratulated Rangasawami, saying that he is an excellent and apt choice who can make things happen.

Tamil Nadu has made giant strides in attracting global investment recently, thanks to IAS officer T. Muruganandam, who was till recently industries secretary and was now promoted to the key position as the state’s finance secretary, noted the release.

The event was attended by Rangaswami wife and his two children, who have been supportive of his past endeavors and his current leadership position to tackle more India-centric issues.

Will The $1.75 Trillion Spending Bill Passed By US Congress Survive US Senate?

After months of wrangling, House Democrats managed a big win Friday, November 19th passing their roughly $1.75 trillion social and climate spending package despite a Republican effort to delay the final vote. House Speaker Nancy Pelosi, wearing white, announced the passage of President Joe Biden’s “Build Back Better Act,” with the vote falling largely along party lines at 220-213.

The final tally was 220 to 213. Rep. Jared Golden of Maine was the only Democrat to vote against the bill and no Republicans voted for it. The vote took place on Friday morning after House GOP leader Kevin McCarthy stalled an effort to vote Thursday evening by delivering a record-breaking marathon floor speech overnight.

The sweeping economic legislation stands as a key pillar of Biden’s domestic agenda. It would deliver on longstanding Democratic priorities by dramatically expanding social services for Americans, working to mitigate the climate crisis, increasing access to health care and delivering aid to families and children.

The legislation is meant to fulfill many of President Biden’s promises during the 2020 campaign, including plans to address climate change and provide a stronger federal safety net for families and low-income workers.  “We have the Built Back Better bill that is historic, transformative and larger than anything we have ever done before,” House Speaker Nancy Pelosi, D-Calif., said on the House floor. “If you’re a parent, a senior, a child, a worker, if you are an American … this bill’s for you and it is better.”

House Democrats overcame internal divisions over the cost and scope of the spending package, but the fight will continue as the bill heads to the Senate for revisions. The vote was delayed after House Minority Leader Kevin McCarthy, R-Calif., spoke all through the night — for more than eight hours. His speech decried Democrats’ spending plans, but also veered to subjects including China and border security.

“Never in American history has so much been spent at one time,” he said. “Never in American history will so many taxes be raised and so much borrowing be needed to pay for all this reckless spending.”

Biden praised House passage of the bill, noting it was the second time in two weeks that the chamber moved two “consequential” pieces of his legislative agenda, referencing the new infrastructure law. He described the vote as a “giant step forward in carrying out my economic plan to create jobs, reduce costs, make our country more competitive, and give working people and the middle class a fighting chance.” What’s in the measure

The legislation includes:

$550 billion to address climate change through incentives and tax breaks;

funding to extend the expanded, monthly child tax credit for one year; housing assistance, including $150 billion in affordable housing expenditures; expansions to Medicaid and further assistance to reduce the cost of health care premiums for plans purchased under the Affordable Care Act; four weeks of paid family and medical leave; funding for universal pre-K for roughly 6 million 3- and 4-year-olds; a provision to allow Medicare Parts B and D to negotiate prices directly with drug manufacturers on certain drugs and cap out-of-pocket spending for seniors at $2,000 per year; a $35 cap on monthly insulin expenses.

The spending is mostly offset with taxes on the wealthy and corporations, including:

a 5% surtax on taxpayers with personal income above $10 million, and an additional 3% added on income above $25 million; a 15% minimum tax on corporate profits of large corporations that report more than $1 billion in profits; a 1% tax on stock buybacks; a 50% minimum tax on foreign profits of U.S. corporations.

House Democrats unite after months of fighting

Moderate Democrats ultimately voted for the legislation after concerns that estimates from the nonpartisan Congressional Budget Office would show the measure to be more costly than leaders have projected.

Ultimately, the CBO found the bill would cost the federal government $367 billion over the next decade, “not counting any additional revenue that may be generated by additional funding for tax enforcement.” Many Democrats, including the White House, argue that when that is taken into account, the measure would pay for itself.

Members of the fiscally moderate New Democrat Coalition endorsed the legislation ahead of the final cost estimates. Rep. Brad Schneider, D-Ill., said the official estimates don’t take into account extra revenue from increased tax enforcement — or the broader economic benefits of the legislation.

“When discussing the importance of the bill, we also have to talk about the costs that would be incurred if we don’t pass this bill,” Schneider said on a call with reporters. “The cost of inaction is simply too high, and it can only be headed off if we act now.”

For progressive Democrats, the vote fulfills a promise from Biden and House leaders not to neglect policies that have energized the left wing of their party. Members of the Congressional Progressive Caucus set aside major demands throughout the negotiations, including more spending and plans for aggressive changes to the nation’s health care system, in order to reach an agreement that satisfied the full caucus.

Senate hurdles could drag on for weeks

The House vote is just the latest step in a lengthy process that will almost certainly involve further changes to the bill. Centrist Sens. Kyrsten Sinema, D-Ariz., and Joe Manchin, D-W.Va., have each expressed concerns about the House version of the legislation. Manchin is particularly opposed to a provision that would provide four weeks of paid family and medical leave for most workers. Sinema’s objections are less clear but Democrats need both lawmakers on board in order for the legislation to pass.

It is unclear how long it would take for senators to work out their disagreements and finalize the legislation. Once that work is done, the Senate would have to start a lengthy process to vote on the bill using the budget reconciliation process that would allow the bill to be passed in the Senate with 50 votes, rather than the 60 votes needed for most legislation.

Pelosi told reporters on Thursday that Senate staff have already completed a necessary step to ensure the legislation meets the basic requirements to avoid a Republican filibuster. But the process still has several steps, including a series of unlimited amendment votes known as a vote-a-rama.

Historic Immigration Reform Included In House-Passed Spending Bill

The social spending bill approved by the House Friday in a 220-213 vote includes the most extensive immigration reform package reviewed by Congress in 35 years, albeit in a much reduced version from what proponents originally sought.

If the provision is approved by the Senate as-is, the immigration measure in the bill would allow undocumented people present in the U.S. since before 2011 up to 10 years of work authorization, falling short of an initial goal to offer them a pathway to citizenship.

The provision approved by the House offers a sort of waiver to immigration laws, using a process known as parole to allow people to stay in the country for five years with the option to extend for another five years thereafter.

About 6.5 million people would stand to benefit from the measure directly, according to an analysis by the Congressional Budget Office (CBO).

According to that analysis, about 3 million of those people would become eligible to springboard from the parole status to legal permanent residency, the first step toward citizenship.

“CHC remains focused on passing immigration reform.

The Build Back Better Act includes long-term work permits and protections for seven million hardworking immigrant essential workers that will help prevent family separation, stabilize our workforce, boost our economy, and create jobs,” said Congressional Hispanic Caucus (CHC) Chair Raúl Ruiz (D-Calif.).

“The CHC urges the Senate to protect the work-permits and protections and we are hopeful they will use the Senate rules to build upon them and create an earned pathway to citizenship to further improve our nation’s economy,” added Ruiz.

Still, the immigration provisions fall short of Democrats’ initial goal of providing a pathway to citizenship for an estimated 11 million undocumented people living in the U.S.

Rep. Veronica Escobar (D-Texas) lamented that the package was ultimately reduced to protections through a decade of work authorization.

“While that is absolutely inadequate, we have to get that across the goal line. We have to. That would provide the ability for so many of these incredible people to be able to get to work every day without fear of retaliation, and to be able to live without fear of deportation. And in fact, for millions of them it would allow them the important step towards stabilizing their situation,” she told reporters Thursday.

“And hopefully at some point, getting them fully protected through a pathway to citizenship. It buys Congress more time, so that we can fulfill our obligation and ensure that we give them the path to citizenship that they deserve.”

The bill also includes visa recapture, preventing the loss of some 222,000 unused family-based visas and 157,000 employment-based visas that otherwise expired at the end of last fiscal year. The move will help retain immigration pathways for those abroad who often wait years to immigrate to the U.S.

The inclusion of immigration provisions has taken a secondary role in the political fight to craft President Biden‘s signature legislative package, as Democrats have publicly quarreled about the top-line pricing of the bill.

The immigration provisions, while a relatively small line item within the larger bill, are expected to raise deficits by around $111 billion over the next decade, according to the CBO analysis.

While the immigration debate was a minor issue through negotiations for the Build Back Better bill, as the spending proposal is known, it pitted Democrats and immigration advocates against each other behind closed doors.

Advocates often called out Democrats for showing a lack of interest in an issue that’s personal for millions of U.S. citizens and foreign nationals in the country.

At the center of that friction was the debate over whether Democrats should push for a path to citizenship in the bill, or settle for parole — only a temporary respite from immigration enforcement for millions of immigrants.

Three House Democrats, Reps. Jesús García (Ill.), Adriano Espaillat (N.Y.) and Lou Correa (Calif.) became known as “the three amigos” for their threat to withhold their votes for the final bill unless immigration provisions were included.

The three later campaigned to include permanent residency rather than parole in the bill, but those efforts faltered as the CHC failed to coalesce behind their cause.

“This is a good first step forward that allows our constituents to breathe. This historic legislation includes work authorizations and protection from deportation for more than 7 million individuals,” said the three lawmakers in a joint statement after the bill’s passage.

“Make no mistake, while this is the most transformational policy our communities have seen in over three decades, much work remains in our efforts to ensure a pathway to citizenship,” they added.

The core issue that protracted itself over weeks — and remains unresolved — was the Senate parliamentarian’s advisory opinion on what could and could not be included in a reconciliation bill, which is limited to budgetary line items.

The House-passed bill will now go to the Senate under reconciliation rules in an effort to sidestep a Republican filibuster and pass the package with only Democratic support.

The parliamentarian, an unelected official who provides counsel on Senate rules, advised the first two Democratic immigration proposals were incompatible with reconciliation, warning they went beyond a budgetary impact and represented a substantial change in policy.

Those two proposals would have granted the possibility of legal permanent residency, also known as green cards, to millions of foreign nationals, including undocumented immigrants.

The first proposal was innovative in that it made green cards available to specific groups of undocumented immigrants and other foreign nationals, in this case so-called Dreamers, beneficiaries of the temporary protected status program, essential workers and agricultural workers.

The second proposal nixed by the parliamentarian revived a provision of immigration law that’s been dormant since the Reagan administration, which allows Congress to change the registry date prohibiting certain immigrants from adjusting their status, essentially enacting a statute of limitations for long-tenured immigrants.

The parliamentarian’s ruling against that proposal stunned the five Senate Democrats who led the way on immigration — Sens. Dick Durbin (Ill.), Bob Menendez (N.J.), Alex Padilla (Calif.), Catherine Cortez Masto (Nev.) and Ben Ray Luján (N.M.) — because of the registry proposal’s historical precedent.

A third proposal — the parole option included in the House bill — has yet to be presented to the parliamentarian.

Menéndez on Friday celebrated House passage of the bill, saing “it provides long-overdue legal protections for millions of undocumented immigrants that kept the country afloat during the pandemic.”

“Now, the Senate will continue to fight for the broadest immigration relief possible. We cannot fully build back better without protecting the dignity of millions of people who are critical to our long-term economic recovery. This is their home, and it is time for the Senate to help them fulfill their American dream,” added Menéndez.

Grassroots groups and García, Espaillat and Correa explicitly called for the House to send the registry proposal to the Senate, giving the five Senate Democrats a stronger negotiating position, but that view was overruled by Democratic leaders and advocacy groups closer to party politics.

“We should be trying to do the most we can, push the most we can — we shouldn’t be negotiating against ourselves,” Correa previously told The Hill.  While the House version’s loophole could quell some of the tensions between Democrats and grassroots immigration advocates, a reversal from the parliamentarian could quickly reignite those flames.

What Does Current Inflation Tell Us About The Future?

What signal should we be taking from current inflation for future inflation? The answer: some signal, but not a lot. To be sure, inflation is running high (figure 1); and, after excluding the typically volatile categories of food and energy prices, is running higher than it has been in decades. But because the factors that are leading to inflation are pandemic-related and therefore temporary, the current trend does not forecast the future.

To examine whether this short-term run up in inflation points to higher inflation in the years ahead, I look at the factors that appear to be contributing. I find that the strength and composition of consumer demand for goods since the pandemic began as well as supply constraints caused by the pandemic are the sources of the current spike. The clearly temporary nature of those factors suggests we should not extrapolate recent inflation pressure into the future.

Key Points:

Goods inflation has indeed been extraordinarily high.

The identifiable factors behind goods inflation—a surge in consumer demand and lagging supply—are primarily pandemic-related.

Increasing vaccination rates and decreasing the health risks should rebalance spending patterns, leading to a decrease in demand for goods and an increase in demand for services.

If increases in the supply of services lags behind increases in demand for services, we would see new and worrying inflation risks arise.

Inflation as of October 2021

Figure 1 shows inflation from 1969 to 2021, both by the consumer price index (CPI) and by the personal consumption expenditure (PCE) deflator. Some observers have tried to draw parallels between the current episode in inflation and the 1970s; this is incorrect.

While inflation has increased relative to recent years, inflation is significantly below the levels seen in the 1970s.

As measured by the CPI, the annual rate of inflation from October 2020 to October 2021 was 6.2 percent. As measured by the PCE deflator, the annual rate of inflation from September 2020 to September 2021 (the most recent available data) was 4.4 percent. Some of those price increases reflect a bounce back from the unusually low level of prices in the first part of the pandemic. For example, if the CPI had grown at a rate close to the Federal Reserve’s target from the first month of the pandemic through October 2020, the CPI annual inflation rate over the last year would have been 5.1 percent. That rate is still quite high, but a percentage point lower than the actual annual rate.

Which goods and services have driven the recent run-up in inflation? Figure 2 shows that the answer is core commodities, or goods. As figure 2a shows, core goods inflation has been strikingly high in recent months. In contrast, inflation in core services (2b) has been far more muted and has generally recovered to pre-pandemic rates.

Figures 2c and 2d show that inflation in energy and in food, which are excluded from core inflation, are both elevated. Energy inflation is quite volatile; domestic energy producers faced very low prices early in the pandemic, and those producers may be waiting to see if price increases are durable before increasing supply. Food inflation is worrying and appears to be a global trend related to the pandemic among other factors. The same trends are evident looking at PCE inflation (not shown).

Figure 3 shows just how unusual core goods inflation has been: it is higher than it’s been over the last 30 years. Since 2000, core goods inflation has been negative roughly half the time, meaning that the price of goods (on a quality-adjusted basis) falls on average. Given this recent history, the skyrocketing goods prices seen during the pandemic are all the more extraordinary. In contrast, core services inflation has been close to its average from the early 1990s to 2008 (when the significant decline in house prices dampened shelter costs).

Inflation in Economic Recoveries

As I have shown, the primary contributor to the recent spike in inflation is core goods. The strength in real consumer spending (shown in figure 4a) has reflected a surge in spending on consumer goods (shown in figure 4b). Real goods spending is currently about 15 percent higher than it was pre-pandemic, and there were a couple of months when it was 20 percent higher.

Are the trends described above a signal that we should expect continued extraordinary inflation for core goods—everything from automobiles to exercise mats—in the coming years? Three factors suggest no.

First, the surge in spending on goods has put upward pressure on prices as suppliers have been unable to keep up with demand. Suppliers have strong incentives to iron out issues with the supply chain to get more product onto shelves; in addition, the problems with the supply chain that owe more directly to the pandemic will ebb as the pandemic is brought under control globally.

Second, that surge in goods spending is no doubt temporary because households—as the pandemic recedes—will rebalance consumer spending toward services, which has been unusually depressed (figure 4c).

Third, the fiscal support to households that has helped to finance the surge in goods spending has largely waned.

In contrast to spending on consumer goods, spending on services remains below its pre-pandemic peak. This pattern is a significant departure from previous business cycles where services were relatively unaffected.

Inflation Risks on the Horizon

Although the recent surge in consumer goods inflation does not suggest persistent inflation in this sector going forward, two other issues present risk to the inflation outlook: labor supply and demand in the services sector as well as the recent increases in housing prices.

As consumer spending rebalances towards services, demand for labor in the services sector will rise beyond already-elevated levels. For example, in September, job openings in leisure and hospitality were a remarkable 530,000 higher than trend but employment was 1.5 million below its pre-pandemic level. If consumer demand for leisure and hospitality services return to (or temporarily exceeds) pre-pandemic levels, demand for labor will likely increase significantly.

Softness in labor force participation rates and a frustratingly slow pace of matching job seekers with jobs has raised concerns about weakness in the supply of labor. To be sure, the pace of job matching is probably slowed by the sheer number of job openings and opportunities across multiple industries that candidates have to consider. In addition, because of pandemic-related issues, some people are constrained from working or worried about the health risks of working. My expectation is that those issues will resolve.

However, continued weakness in labor supply may suggest that the experience of the pandemic and the changing nature of work since March 2020 could persistently dampen how much labor people are willing to supply. If labor supply continues to be restrained, this will affect the ability of the U.S. economy to produce goods and services.

That would increase inflationary pressures for a given level of aggregate demand, which is a problem. But, in that circumstance the more significant problem to address would be that our standard of living would be lower.

The other factor that is creating some inflationary risks on the horizon is house price growth and how that is going to spill over into the rental market. Historically, there is a strong relationship between house price growth and inflation in the rental market (figure 5). After rents grew at roughly a 3¾ percent annual pace before the pandemic, this inflation rate was at a remarkably low level of less than 2 percent in the first half of this year.

Rent inflation is now rising to more typical levels; rents grew 2¾ percent between October 2020 and October 2021 and that rate looks poised to increase. While deserving of notice, worrying inflation in this sector would be more of the plain vanilla-type that less accommodative monetary policy would be well-equipped to dampen.

Conclusion

The biggest risk to inflation going forward is not a continuation of the forces currently at work in the goods sector: this will not be persistent. Instead, the biggest risk is that large increases in demand for workers in the services sector will not be met by equally large increases in labor supply.

Policymakers can encourage labor supply by continuing to get the pandemic under control through vaccinations and sensible health policies. Moreover, policymakers can also remove barriers that make work costly, such as lack of access to affordable, high-quality childcare. Policymakers can facilitate the matching of job seekers with jobs through job fairs and better access to labor market information. Finally, immigrants are a critical source of workers in the U.S., and rates of immigration are significantly down relative to pre-pandemic projections.

A return to more typical levels of, for example, green card issuance would help to expand labor supply in the U.S. to meet the growing demand for labor. In short, the policies that will rein in inflation in the future are the same policies that support a sustained and equitable labor market recovery.

World Bank Reports, India Received Largest Remittances In 2021

The recently launched report by World Bank noted that India received $87 billion in remittances in 2021, and the United States was the biggest source, accounting for over 20% of these funds.

On Wednesday, November 17, the World Bank report stated, “Flows to India (the world’s largest recipient of remittances) are expected to reach $87 billion, a gain of 4.6% — with the severity of COVID-19 caseloads and deaths during the second quarter (well above the global average) playing a prominent role in drawing altruistic flows (including for the purchase of oxygen tanks) to the country,”

India is followed by China, Mexico, the Philippines, and Egypt, the report said. In India, remittances are projected to grow 3% in 2022 to $89.6 billion, reflecting a drop in overall migrant stock, as a large proportion of returnees from the Arab countries await return, it said.

Remittances to low- and middle-income countries are projected to have grown a strong 7.3% to reach $589 billion in 2021, the Bank said.

This return to growth is more robust than earlier estimates and follows the resilience of flows in 2020 when remittances declined by only 1.7% despite a severe global recession due to COVID-19, according to estimates from the World Bank’s Migration and Development Brief.

“Remittance flows from migrants have greatly complemented government cash transfer programs to support families suffering economic hardships during the COVID-19 crisis. Facilitating the flow of remittances to provide relief to strained household budgets should be a key component of government policies to support a global recovery from the pandemic,” said Michal Rutkowski, World Bank Global Director for Social Protection and Jobs.

USCIS To Allow Automatic Renewal Of Employment Authorization For H-4 Workers

U.S. Citizenship and Immigration Services has settled a lawsuit Nov. 10, which allows the spouses of L-2 workers to automatically receive work authorization, and also provides an automatic 180-day extension of work authorization for some spouses of H-1B workers.

“Once implemented by the agency, L-2 spouses will no longer have to apply for work authorization and need an EAD (Employment Authorization Document) as proof in order to work in the United States,” said Jesse Bless, director of litigation at the American Immigration Lawyers Association, in an interview with Forbes magazine. This means L-2 spouses could immediately work upon entering the U.S.

“For H-4 spouses who have lawful status and merely need to renew their employment authorization, they will now enjoy an automatic extension of their authorization for 180 days after expiration should the agency fail to process their timely-filed applications,” said Bless.

Concerns have arisen that the extension of EAD is only valid as long as the H-4 status is valid. The law firm Puyang and Wu noted on Twitter: “In most cases, filing the H-4 extension and H-4 EAD renewal concurrently does not grant you the automatic extension. The H-4 extension would have to be approved first before you may benefit from the full 180-day auto extension.”

The lawsuit, Shergill vs. Mayorkas — Alejandro Mayorkas heads up the Department of Homeland Security — was initiated by the law firm Wasden Banias, which represented 15 plaintiffs in the class action case, filed with the U.S. District Court in Seattle, Washington, and the American Immigration Lawyers Association. The lawsuit arose in response to lengthy delays by USCIS in processing H-4 Employment Authorization Document applications.

“After years of outreach to the agency, it became clear that litigation was unfortunately necessary,” said attorney Jon Wasden in a press statement. “Despite the plain statutory language, USCIS failed to grant employment authorization incident to status for L-2s.”

“The other issue relates to H-4s whose work permits expire prior to their H-4 status; this is a group that always met the regulatory test for automatic extension of EADs, but the agency previously prohibited them from that benefit and forced them to wait for re-authorization. People were suffering. They were losing their high-paying jobs for absolutely no legitimate reason causing harm to them and U.S. businesses. So, while I’m glad the agency finally followed the law, it is frankly frustrating that an easily fixable issue took this long to address,” he stated.

In their lawsuit, the plaintiffs alleged that USCIS unlawfully withholds employment authorization to spouses of L-2 workers, and unlawfully withholds automatic extensions of L-2 employment authorization.

They further alleged that USCIS unlawfully withholds automatic extensions of employment authorization for H-4 workers, who are overwhelmingly women from India, many with degrees and qualifications equal to or exceeding those of their H-1B spouses.

About 100,000 immigrants currently hold H-4 EADs. A great amount of controversy has arisen over the authorization, especially during the Trump administration, which tried to end the program created by former President Barack Obama via executive order. In a long-simmering lawsuit, SaveJobs USA contends that allowing H-4 women to work in the U.S. means American workers have to compete with foreign workers for jobs, and that overall salaries are reduced as a result.

H-4 visa holders are allowed to get work authorization after their spouse has filed for permanent status, usually within six years. Current policies often force workers with H-4 EAD to lose their jobs as they wait for USCIS to adjudicate their renewal application, which could take up to two years.

Immigration attorney Cyrus Mehta noted the limitations of the settlement. “USCIS needs to be sued again. H-4s who file EAD renewals concurrently with an I-539 extension may receive only a brief auto-extension, just to the end of their current I-94 date, but most existing EADs end with the current I-94 date,” he tweeted.

“The H-1B spouse will have to premium the H-1B extension, and upon approval, the H-4 will need to leave and be readmitted in H-4 status coterminous with new H-1B validity. Highly impractical as visa stamping appointments are not being issued quickly in India,” wrote Mehta.

H-1B workers and their spouses could also apply for the H-1B/H-4 extension six months in advance via premium processing and if H-4 status is granted, file the EAD renewal and get a 180-day auto extension, noted the attorney, cautioning however: “Not sure whether USCIS is competent enough to approve H-4 status within 6 months though. So this too is highly impractical.”

Wasden Banias Law also addressed those who were unhappy with the settlement in a statement on Twitter. “For the H-4s disappointed/angry at the scope of the Shergill policy, three quick points: (1) we have an all-encompassing H-4 delay suit pending; (2) we don’t control the headlines of news articles; and (3) a small step forward is still a step forward.”

Several Indian publications have reported that this is a major step forward for H-4 EAD.

Rajeshwar Prasad Presented Life Time Achievement Award At NIAASC Annual Meeting In New York

Rajeshwar Prasad, founder and chairman of  The National Indo-American Association for Senior Citizens (NIAASC) was honored with a Lifetime Achievement Award, During the 32nd annual Conference and 23rd Annual meeting of NIAASC on Sunday, November 7th, 2021 at the India Home in Jamaica, New York. He was recognized for his 23 years of admirable and outstanding community outlook and service, creating and nurturing NIAASC and dedicated to all seniors across the USA.

Dr. Vasundhara Kalasapudi, who is the founder of India Home nonprofit organization and a current board member of NIAASC hosted the conference, which  was informative and entertaining with vegan breakfast and lunch served.  Dr. Bhavani Srinivasan, Vice president – NIAASC was the coordinator of the conference and coordinated the event effectively and flawlessly.

The conference started with opening remarks and greetings by NIAASC Chairman and founder Rajeshwar Prasad. in his speech, Prasad reflected on the growth of the organization since its inception in 1998. He stated “NIAASC helps Senior Citizens and Senior Associations through information, referral and advocacy services “. Following the Chairman’s speech, Mrs. Gunjan Rastogi, the current president of NIAASC welcomed ­­the attendees and echoed the chairman’s message and reaffirmed and reminded everyone that NIAASC is a unique nonprofit organization that provides resources for all the seniors while collaborating with other nonprofit organizations and this was well received and acknowledged.

The main speaker was Dr. Vikas Malik, a board-certified medical professional in both Child-Adolescent Psychiatry and Adult Psychiatry and his PowerPoint presentation on Mental Health in light of COVID-19 captivated the audience of roughly 70 physical attendees and 30 virtual attendees, who appreciated the information and knowledge that was succinctly explained.  His presentation was followed by Dr. Swaminathan Giridharan, a Geriatric specialist, who spoke about COVID-19 Vaccination.  The conference also focused on physical health and a presentation by   Mrs. Suman Munjal, president of World Vegan Vision, who discussed the health benefits pertaining to a vegan diet.

The occasion marked NIAASC honoring Mr. Mukund Mehta, President of Indo-American Senior citizen center, a nonprofit organization and the President of India Home. In introducing Mr. Mukund Mehta, Dr. Vasundhara Kalasapudi informed the audience about his active involvement as a director with the Federation of Indian American Seniors Associations of North America (FISANA).

NIAASC’s goal of collaboration with other organizations was evident as the conference was well attended by members of the National Federation of Indian American Associations (NFIA). Members included current executive board members and past presidents who made the effort to connect via zoom. NFIA attendees belonged to different states/different time zones and remained present throughout the duration of the program. Also in attendance were members from several other organizations such as World Vegan Vision (WVV) and India Association of Long Island (IALI). Many IALI members attended In-person and on Zoom, including nine past presidents. Other NIAASC Board members that joined via zoom were: Satpal and Satya Malhotra(New York), Baldev Seekri ( Florida), Chandrakant Shah (Florida), Santosh Kumar (Chicago), Asha Samant (New Jersey ) and Jyotsna Kalavar (Indiana).

Lunch was followed by Diwali cultural program that was presented by Ms. Jyoti Gupta and her team consisted of several singers, Dr.Jag Kalra, Kul Bhooshan Sharma, Gautam Chopra and Raj Dhingra. The group entertained and regaled the audience with lively Bollywood songs. Music program was followed by Diwali Felicitation by Nilima Madan.

In her closing remarks, Gunjan Rastogi thanked the sponsors that supported the entire event financially and also thanked the India Home volunteers who had helped set up the venue while precluding any hiccups.

The vote of thanks was given by Mr. Harbachan Singh, NIAASC Secretary who appreciated the presence of large number of audiences, sponsors, and well-wishers.

Upon adjournment of the conference, the 23rd general body meeting was conducted by NIAASC president, Gunjan Rastogi, who requested Mr. Rajeshwar Prasad to present the report of nominating committee, since the chairman of the nominating committee Chandrakant Shah, was not able to the report due to some technical issue. Rajeshwar Prasad informed the members that as per NIAASC constitution and bylaws; 1/3rd members retire every year, but based on eligibility criteria, members are eligible to be re-elected for another term of three years that resulted in all the retiring members Gunjan Rastogi, Bhavani Srinivasan, E.M. Stephen, Santosh Kumar, and Rajeshwar Prasad to be elected for three additional years and was approved by the General Body.        For additional information about NIAASC, please email the president at [email protected]

Inflation Explained: Why Prices Keep Going Up And Who’s To Blame?

Confused about inflation? You’re not alone. Inflation is, paradoxically, both incredibly simple to understand and absurdly complicated.  Let’s start with the simplest version: Inflation happens when prices broadly go up.

That “broadly” is important: At any given time, the price of goods will fluctuate based on shifting tastes. Someone makes a viral TikTok about brussels sprouts and suddenly everyone’s gotta have them; sprouts prices go up. Meanwhile sellers of cauliflower, last season’s trendy veg, are practically giving their goods away. Those fluctuations are constant.

Inflation is when the average price of virtually everything consumers buy goes up. Food, houses, cars, clothes, toys, etc. To afford those necessities, wages have to rise too.

It’s not a bad thing. In the United States, for the past 40 years or so (and particularly this century), we’ve been living in an ideal low-and-slow level of inflation that comes with a well-oiled consumer-driven economy, with prices going up around 2% a year, if that. Sure, prices on some things, like housing and health care, are much higher than they used to be, but other things, like computers and TVs, have become much cheaper — the average of all the things combined has been relatively stable.

Still with me?

All right, let’s cut to today, and why inflation is all over the news.

When ‘inflation’ is a bad word

Inflation becomes problematic when that low-and-slow simmer gets fired up to a boil. That’s when you hear economists talk about the economy “overheating.” For a variety of reasons, largely stemming from the pandemic, the global economy finds itself at a rigorous boil right now.

In the United States, prices have climbed 6.2% — the biggest increase since November 1990, and well above the Federal Reserve’s long-term inflation goal of around 2%.

And here’s where Econ 101 merges a bit with Psych 101. There’s a behavioral economics aspect to inflation where it can become a self-fulfilling prophecy. When prices go up for a long enough period of time, consumers start to anticipate the price increases. You’ll buy more goods today if you think they’ll cost appreciably more tomorrow. That has the effect of increasing demand, which causes prices to rise even more. And so on. And so on.

That’s where it can get especially tricky for the Federal Reserve, whose main job is to control money supply and keep inflation in check.

How’d we get here? Blame the pandemic.

In the spring of 2020, as Covid-19 spread, it was like pulling the plug on the global economy. Factories around the world shut down; people stopped going out to restaurants; airlines grounded flights. Millions of people were laid off as business disappeared practically overnight. The unemployment rate in America shot up to nearly 15% from about 3.5% in February 2020.

It was the sharpest economic contraction on record.

By early summer, however, demand for consumer goods started to pick back up. Rapidly. Congress and President Joe Biden passed a historic $1.9 trillion stimulus bill in March that made Americans suddenly flush with cash and unemployment assistance. People started shopping again. Demand went from zero to 100, but supply couldn’t bounce back so easily.

When you pull the plug on the global economy, you can’t just plug it back in and expect it start humming at the same pace as before.

Take cars, for example. Automakers saw the Covid crisis beginning and did what any smart business would do — shut down temporarily and try to mitigate losses. But not long after the pandemic shut factories down, it also drove up demand for cars as people worried about exposure on public transit and avoided flying. Automakers had whiplash.

Cars require an immense number of parts, from an immense number of different factories around the world, to be built by highly skilled laborers in other parts of the world. Getting all of those discreet operations back online takes time, and doing so while keeping workers from getting sick takes even more time.

Economists often describe inflation as too much money chasing too few goods. That’s exactly what happened with cars. And houses. And Peloton bikes. And any number of other items that became hot ticket items.

How’s the supply chain involved in all this?

“Supply chain bottlenecks” — that’s another one you see all over, right?

Let’s go back to the car example.

We know that high demand + limited supply = prices go up.

But high demand + limited supply + production delays = prices go up even more.

All modern cars rely on a variety of computer chips to function. But those chips are also used in cellphones, appliances, TVs, laptops and dozens of other items that, as bad luck would have it, were all in high demand at the same time.

That’s just one example of the disconnect in the global supply chain. Because new cars have been slow to roll in, used car demand shot through the roof, which drove overall inflation higher. In some cases, car owners were able to sell their used cars for more than what they paid for them a year or two prior.

What happens next?

Prices and wages are likely to keep going up well into 2022, officials and economists say. But for how long and how much depends on countless variables across the globe.

Policymakers’ top priority is to unclog the supply chain bottlenecks to get goods moving at their pre-pandemic pace. That’s a lot easier said than done. And there’s no telling what kind of shocks — a resurgent Covid variant, a massive shipping container getting stuck in a key waterway, a natural disaster — could set back progress.

Economists and investors in the United States expect that the Fed will tighten monetary policy by raising interest rates and dialing back emergency stimulus, thereby slow the pace of inflation. When money becomes more expensive to borrow, that can take the heat off price increases and bring the economy back down to that nice, gentle simmer.

US Announces Big Hike In Medicare Premiums

The federal government announced a large hike in Medicare premiums Friday night, blaming the pandemic but also what it called uncertainty over how much it may have to be forced to pay for a pricey and controversial new Alzheimer’s drug.

The 14.5% increase in Part B premiums will take monthly payments for those in the lowest income bracket from $148.50 a month this year to $170.10 in 2022. Medicare Part B covers physician services, outpatient hospital services, certain home health services, medical equipment, and certain other medical and health services not covered by Medicare Part A, including medications given in doctors’ offices.

The Centers for Medicare and Medicaid Services played down the spike, pointing out that most beneficiaries also collect Social Security benefits and will see a cost-of-living adjustment of 5.9% in their 2022 monthly payments, the agency said in a statement. That’s the largest bump in 30 years.

“This significant COLA increase will more than cover the increase in the Medicare Part B monthly premium,” CMS said. “Most people with Medicare will see a significant net increase in Social Security benefits. For example, a retired worker who currently receives $1,565 per month from Social Security can expect to receive a net increase of $70.40 more per month after the Medicare Part B premium is deducted.”

The increase, however, is far more than the Medicare trustees estimated in their annual report, which was released in late August. They predicted the monthly premium for 2022 would be $158.50. The actual spike — the largest since 2016 — could hurt some seniors financially.

It “will consume the entire annual cost of living adjustment (COLA) of Social Security recipients with the very lowest benefits, of about $365 per month,” said Mary Johnson, a Social Security and Medicare policy analyst for The Senior Citizens League, an advocacy group. “Social Security recipients with higher benefits should be able to cover the $21.60 per month increase, but they may not wind up with as much left over as they were counting on.”

Medicare premiums have typically increased at a far faster rate than Social Security’s annual adjustments, the league said. And much of the 2022 increase in Social Security benefits will be eaten up by inflation, which is also rising at a rapid clip.

CMS said part of the increase for 2022 was because of uncertainty over how much the agency will end up paying to treat beneficiaries to be treated with Aduhelm, an Alzheimer’s drug approved by the US Food and Drug Administration in June over the objections of its advisers. Some experts estimate it will cost $56,000 a year. Medicare is deciding whether to pay for it now on a case-by-case basis.

Because Aduhelm is administered in physicians’ offices, it should be covered under Medicare Part B, not Part D plans, which pay for medications bought at pharmacies. Traditional Medicare enrollees have to pick up 20% of the cost of most Part B medications, which would translate into about $11,500 in out-of-pocket costs for those prescribed Aduhelm.

“The increase in the Part B premium for 2022 is continued evidence that rising drug costs threaten the affordability and sustainability of the Medicare program,” CMS Administrator Chiquita Brooks-LaSure said in a statement. “The Biden-Harris Administration is working to make drug prices more affordable and equitable for all Americans, and to advance drug pricing reform through competition, innovation, and transparency.”

Also, Congress last year limited the 2021 premium increase even as emergency Medicare spending surged during the coronavirus pandemic. The monthly charge rose less than $4.

Along with the premium spike, the annual deductible for Medicare Part B beneficiaries is rising to $233 in 2022, up from $203 in 2021.

Medicare is the federal health insurance plan covering more than 62 million people, mostly 65 and older.  Part B premiums are based on income. Individuals earning $500,000 or more a year and joint filers making $750,000 or more annually will pay $578.30 a month for coverage in 2022.

China Overtakes U.S. To Grab Top Spot On Global Wealth

Global wealth tripled over the last two decades, with China leading the way and overtaking the U.S. for the top spot worldwide.

That’s one of the takeaways from a new report by the research arm of consultants McKinsey & Co. that examines the national balance sheets of ten countries representing more than 60% of world income.

“We are now wealthier than we have ever been,” Jan Mischke, a partner at the McKinsey Global Institute in Zurich, said in an interview.

Net worth worldwide rose to $514 trillion in 2020, from $156 trillion in 2000, according to the study. China accounted for almost one-third of the increase. Its wealth skyrocketed to $120 trillion from a mere $7 trillion in 2000, the year before it joined the World Trade Organization, speeding its economic ascent.

Richest 10%

The U.S., held back by more muted increases in property prices, saw its net worth more than double over the period, to $90 trillion.

In both countries — the world’s biggest economies — more than two-thirds of the wealth is held by the richest 10% of households, and their share has been increasing, the report said.

As computed by McKinsey, 68% of global net worth is stored in real estate. The balance is held in such things as infrastructure, machinery and equipment and, to a much lesser extent, so-called intangibles like intellectual property and patents.

Financial assets are not counted in the global wealth calculations because they are effectively offset by liabilities: A corporate bond held by an individual investor, for instance, represents an I.O.U. by that company.

The steep rise in net worth over the past two decades has outstripped the increase in global gross domestic product and has been fueled by ballooning property prices pumped up by declining interest rates, according to McKinsey. It found that asset prices are almost 50% above their long-run average relative to income. That raises questions about the sustainability of the wealth boom.

“Net worth via price increases above and beyond inflation is questionable in so many ways,” Mischke said. “It comes with all kinds of side effects.”

Surging real-estate values can make home ownership unaffordable for many people and increase the risk of a financial crisis — like the one that hit the U.S. in 2008 after a housing bubble burst. China could potentially run into similar trouble over the debt of property developers like China Evergrande Group.

The ideal resolution would be for the world’s wealth to find its way into more productive investments that expand global GDP, according to the report. The nightmare scenario would be a collapse in asset prices that could erase as much as one-third of global wealth, bringing it more in line with world income.

Spouses Of H-1B Visa Holders Can Now Look Forward To Getting Work Permit Faster

The Biden administration has been making gradual changes in the immigration department to make it easier for foreign professionals to travel to US, unlike the previous administration.

In the past few months, President Biden has been signing off crucial documents that will let IT professionals find working in the US more comfortably.

One of the major issues many H-1B visa holders facing were getting work permit for their spouses in the US.

Several visa holders, especially, Indian American has been urging the Biden admin to take this into consideration.

Now the administration has agreed to provide automatic work authorization permits to the spouses of H-1B visa holders, most of whom are Indian IT professionals.

An H-4 visa is issued by the US Citizenship and Immigration Services (USCIS) to immediate family members (spouse and children under 21 years of age) of the H-1B visa holders. The visa is normally issued to those who have already started the process of seeking employment-based lawful permanent resident status in the US.

The H-1B visa is a non-immigrant visa that allows US companies to employ foreign workers in specialty occupations that require theoretical or technical expertise. The technology companies depend on it to hire tens of thousands of employees each year from countries like India and China.

A settlement was reached by the Department of Homeland Security in a class-action lawsuit, which was filed by the American Immigration Lawyers Association (AILA) on behalf of immigrant spouses this summer.

“This (H-4 visa holders) is a group that always met the regulatory test for automatic extension of EADs (employment authorization documents), but the agency previously prohibited them from that benefit and forced them to wait for reauthorization. People were suffering. They were losing their high-paying jobs for absolutely no legitimate reason causing harm to them and US businesses,” Jon Wasden from AILA said.

The litigation successfully achieved the reversal of the USCIS policy that prohibited H-4 spouses from benefiting from the automatic extension of their employment authorization during the pendency of stand-alone EAD applications.

“Although this is a giant achievement, the parties’ agreement will further result in a massive change in position for the USCIS, which now recognizes that L-2 spouses enjoy automatic work authorization incident to status, meaning these spouses of executive and managers will no longer have to apply for employment authorization prior to working in the United States,” AILA said.

“We are delighted to have reached this agreement, which includes relief for H-4 spouses, through our litigation efforts with Wasden Banias and Steven Brown. It is gratifying that the administration saw that settling the litigation for non-immigrant spouses was something that should be done, and done quickly,” said Jesse Bless, AILA director of federal litigation.

The Obama administration had given work authorization to certain categories of spouses of H-1B visa holders. So far, more than 90,000 H-4 visa holders, a significant majority of whom are Indian-American women, have received work authorization.

100 Most Expensive U.S. Zip Codes In 2021: Include Boston’s Back Bay And Weston

BOSTON–PropertyShark released its annual most expensive zip codes of 2021. New England is home to 11 of the priciest U.S. zip codes, including #2 with Boston’s Back Bay. The full list is included towards the end in this article.

Key Takeaways:

  • At nearly $7.5 million, Atherton, Calif.’s 94027 remains #1 most expensive zip code for fifth consecutive year
  • Record $5.5 million median sale price gives Boston’s 02199 #2 spot
  • Top 10 most expensive zip codes in 2021 all surpass $4 million mark — a historic first
  • 33109 in Miami jumps 66% Y-o-Y, becomes #5 priciest in U.S.
  • Nationally, 30 zips feature median sale prices higher than $3 million, more than double the number of areas in 2020
  • Country’s 100 most expensive zip codes located in 10 states, with 70% from California
  • Bay Area claims 47 of nation’s most exclusive zip codes
  • Los Angeles County remains priciest county with 21 entries
  • Once again, San Francisco boasts highest concentration of pricey zip codes, while NYC drops out of top 20
  • Gibson Island’s 97% Y-o-Y price surge claims Maryland’s highest position yet at #23
  • Exclusive Lake Tahoe enclaves rule Nevada real estate, Paradise Valley returns Arizona for 3rdconsecutive year

Ranking the Priciest U.S. Zip Codes by Closed Home Sales

Even as another uniquely challenging year — marked by the efforts of tackling the pandemic and boosting the economy — is coming to an end, the U.S. residential market continues to experience vertical price trends. And, that picture is clearly visible in our 2021 edition of the 100 most expensive zip codes in the U.S. — which, for the first time ever, includes 127 zip codes due to multiple ties.

Compiled by calculating median home sale prices as opposed to listing prices to ensure an accurate picture of market conditions as opposed to selling prices that reflect sellers’ wishes, this year’s edition highlights the ever-increasingly competitive residential markets of economically vital urban centers.

The Bay Area, Los Angeles County, and New York City yet again have a heavy presence, joined by exclusive pockets of affluence scattered across the country, like Arizona’s Paradise Valley, Washington state’s Medina and Connecticut’s Fairfield County. What’s more, 2021’s competitive residential landscape is further evidenced by the country’s 10 most expensive zip codes — all of which surpassed the $4 million threshold, marking a new record.

For the full ranking of 2021’s 100 most expensive zip codes, scroll to the bottom of the page. For an even more detailed picture, explore last year’s rankings.

California Claims Overwhelming Majority of Expensive Zips Yet Again, Alongside New York & 8 Other States

Unsurprisingly, California continued to provide the bulk of the country’s most expensive zip codes: The Golden State originated 70% of all of the zip codes on this list, including six of the top 10 priciest. And, as usual, New York came in second, providing 17 zip codes in our ranking.

Notably, New York logged three fewer than last year — demonstrating California’s more vertical price trends, as well as the pricing slowdown in NYC’s top markets. In fact, while 2020 marked the first time that no NYC zips ranked among the country’s 10 most expensive, 2021 brought another historic first for the East Coast giant: No NYC zip codes ranked among the 20 priciest in the U.S. this year, with the state represented only by the Hamptons at the top of our ranking.

The East Coast made its presence further known with Massachusetts, home to seven of the top 100 zips in the U.S., up from last year’s four. Not only that, but as sales activity improved in Boston’s Back Bay area, Massachusetts claimed the #2 most expensive zip code in the country with 02199’s $5.5 million median sale price, which was only surpassed by California’s Atherton at more than $7 million.

To the south, Connecticut’s presence also improved compared to previous years: For the first time since 2018, it contributed four zips to the country’s priciest, most of which ranked in the bottom half of our list — similar to the three zips provided by New Jersey. Out west, Nevada and Washington added two zips each, with Washington state claiming #10 with Medina’s ever pricey 98039.

Additionally, Arizona, Florida and Maryland each contributed one zip code. Florida claimed the #5 most expensive zip code with Miami Beach’s 33109 — the highest-ranking for the Sunshine State since 2017. Meanwhile, New Hampshire missed the top 100 this year, having secured a presence during the last two years with Rye Beach.

Maryland Claims Sharpest Price Gain at 97%, While NYC’s Upper West Side Contracts 39%

The U.S. residential market’s vertical price trends were evident among the country’s top zip codes as well, with 92 zips registering price gains — including 23 where the median surged by more than 25%. Conversely, only 12 locations among the priciest registered drops in their medians this year – by comparison, 2020 brought median increases to 78 zips and drops to 23 locations.

At the same time, a record 30 zip codes posted median sale prices of $3 million and above — more than double those in 2020 — with the top 10 most expensive zips coming in at $4 million and higher. Moreover, the last zip code to enter our ranking — San Francisco’s 94122 — did so with a 12% year-over-year (Y-o-Y) increase in its median sale price, managing to hold onto its #100 position from last year.

The sharpest price gain was claimed by 21056 in Maryland’s Gibson Island, which nearly doubled its median sale price, surging 97% Y-o-Y to hit $3,195,000. Gibson Island was followed by 89402 in Nevada’s Crystal Bay, which swelled 68% to reach #39 with a $2.5 million median. The third-sharpest gain was claimed by 33109 in Miami Beach, which rose 66% to a $4,475,00 median sale price to become the #5 most expensive zip code in 2021.

The sharpest price contraction was registered in NYC’s Upper West Side, where zip 10069 contracted 39% Y-o-Y to stabilize at $1,663,000. As a result, the Upper West Side zip dropped from last year’s #22 to #93 this year. Notably, this zip code was actually the leader of price growth in 2020, when its median shot up 42% Y-o-Y.

Across the country, the second-sharpest price drop was registered by 94904 in Greenbrae, Calif., which contracted 12% Y-o-Y. It was followed by Bridgehampton, N.Y.’s 11932, down 11% Y-o-Y. Located in the famously pricey Hamptons, 11932’s price contraction meant that this zip — which was the #7 most expensive in 2020 — came in at #31 this year, its lowest position in three years.

Unshakeable Atherton Maintains #1 Spot for 5th Consecutive Year, Boston Grabs #2 with Record $5.5M Median

A record-setting year for the most expensive zip codes in the U.S., the 10 priciest zip codes in the country now sport median sale prices of $4 million and above. All in all, the 10 most expensive zip codes in the U.S. were provided by five states (as opposed to last year’s three): California claimed six of the top 10 and was joined by Massachusetts, Florida and Washington, as well as New York, which was solely represented by the Hamptons.

Reaching a new record median sale price at $7,475,000, Atherton’s 94027 remains the #1 most expensive zip code in the U.S. for the fifth consecutive year — nearly $2 million ahead of the runner-up. Not only that, but the billionaire favorite also saw its median rise 7% Y-o-Y, suggesting that this exclusive enclave may continue to retain its leading position in the future.

Meanwhile, on the opposite coast, Boston’s 02199 was conspicuously absent last year due to depressed sales activity during the onset of the pandemic — despite that it historically features one of the highest median sale prices in the U.S. However, the Prudential Center area of Back Bay returned in 2021 with a $5.5 million median sale price — its highest figure yet. Consequently, Boston’s 02199 became the #2 most expensive zip code nationwide, outpacing even ultra-exclusive Hamptons enclaves.

Similarly, another well-established presence among the priciest zip codes in the country, Sagaponack’s 11962 was this year’s #3 most expensive zip code, dropping from the runner-up slot it held for three consecutive years, despite a 29% Y-o-Y price uptick that raised its median sale price from $3,875,000 to $5 million. It was also the only zip from New York state to rank in the top 10, as NYC lost further pricing ground, failing to rank a single zip among even the top 20.

In Ross, Calif., 94957 retained its previous year’s position at #4 with a $4,583,000 median sale price, the result of a 27% Y-o-Y increase. A favorite of Silicon Valley executives and celebrities, this marked the first time that Ross surpassed the $4 million pricing mark.

Conversely, Miami Beach’s 33109 may have ventured into the $4 million and over category back in 2017, but this exclusive Florida enclave reached new pricing heights in 2021: 33109 on exclusive Fisher Island stabilized at $4,475,000 to become the #5 most expensive zip code after a staggering 66% Y-o-Y price jump.

Bay Area Still the Priciest Metro with 47 of the Top U.S. Zip Codes

As has increasingly been the case in recent years, greater Los Angeles, the vast New York metropolitan area and the Bay Area remained the leading metros for pricey zip codes. In particular, the Bay Area was yet again the uncontested leader, contributing 47 zip codes to our list — including three of the top 10 zips — while the greater Los Angeles was represented by 30 Orange and L.A. County zips.

The New York metro was represented by 22 zip codes, with only six of those from NYC proper and the rest located in the Hamptons, Nassau County and Westchester, as well as Connecticut’s Fairfield County and New Jersey’s Bergen and Monmouth counties.

L.A. County Remains Most Expensive, Santa Clara & San Mateo Form Pricey Zip Supercluster

Clearly, not even the tech dollars of Silicon Valley could unseat Los Angeles County, which again was the hottest county in the country for expensive real estate with 21 of the priciest zips in the U.S. Its most expensive zip was Beverly Hills’ famed 90210, a veteran of our yearly rankings and the #6 nationally with a $4,125,000 median sale price.

Not to be outdone, the Bay Area’s Santa Clara and San Mateo counties contributed 15 and 10 zips, respectively, to our ranking as the second- and third-most expensive counties in the U.S. As a result, they form a nearly contiguous supercluster of ultra-expensive zip codes that cover high-profile tech centers such as Menlo Park, Mountain View, Palo Alto, San Jose and Sunnyvale. And, while San Mateo’s top zip was overall leader 94027 in Atherton, Santa Clara’s highest-ranking zip was 94022 in Los Altos, which landed at #9 with a $4,052,000 median sale price.

A special note goes to Santa Barbara County, which increased its presence from just one zip code in 2020 to five in 2021. Its top zip code was 93108 in Santa Barbara’s exclusive enclave of Montecito — home to the likes of Oprah and former royals Prince Harry and Meghan Markle — which claimed #7 overall with a $4,103,000 median, following a 40% Y-o-Y pricing jump.

San Francisco, Los Angeles & New York City Hold Highest Concentrations of Exclusive Zips

For the fifth year in a row, San Francisco had the highest concentration of expensive zip codes of any city, ranking seven among the top 10. It was followed by Los Angeles and NYC, with six zips each. However, while San Francisco led the way, most of its zip codes were actually in the bottom half of our ranking: Its priciest zip (94123) placed at #46 — down 10 positions compared to 2020, despite a 7% uptick in its median. Covering the iconic Marina District, 94123 featured a $2,307,000 median sale price.

Of L.A.’s six zips that ranked nationally, its top three — 90272, 90077 and 90049 — form an uninterrupted cluster of pricey real estate with medians greater than $2 million. The trio was led by Pacific Palisades’ 90272 at #21 with a $3.25 million median sale price after an 18% Y-o-Y increase. Covering Bel Air, Holmby Hills and areas of Beverly Glenn, 90077 was #42 nationally with a $2.46 million median, while Brentwood’s 90049 grabbed #52 at $2,165,000.

Back in the Empire State, NYC’s presence weakened yet again: While 2020 marked the first time ever that no NYC zip codes were among the country’s 10 most expensive, in 2021, NYC came in below the top 20, too. More precisely, its most expensive zip — 10013 — just missed out, landing at #22 with a $3,212,000 median sale price, followed by 10007 at #25 with a median of $3,125,000.

Next up, Newport Beach had the the third-highest concentration of pricey zips in a city, with five entries, followed by Santa Barbara with four. Specifically, the most expensive Newport Beach zip — Balboa’s 92662 — grabbed #15 with a $3,577,000, while Santa Barbara’s top zip — 93108 in the exclusive community of Montecito — was #7 nationally.

Sagaponack Finishes as #3 Priciest Nationally, NYC Drops Out of Top 20

Usually one of the strongest presences in the 100 most expensive zip codes in the U.S. (second only to California), New York state retained its position in 2021 — although with a weakened presence. Specifically, the state recorded just 17 zip codes, only six of which were in NYC. Historically speaking, the East Coast powerhouse has had a strong presence in the uppermost levels of our ranking, but only two New York state zips were among the 20 most expensive in 2021 — none of which were in New York City proper.

Rather, the Hamptons’ 11962 in Sagaponack was the #3 most expensive zip code in the U.S. And, although its median sale price of $5 million was up 29% Y-o-Y, Boston’s Back Bay pushed it down one position, ending Sagaponack’s three-year reign as runner-up to the priciest zip code in the country.

The next-highest New York zip code was fellow Hamptons zip 11976 in Water Mill, which came in at #13 with a $3,745,000 median sale price, up an impressive 51% Y-o-Y. At the same time, last year’s #7 nationally — 11932 in Bridgehampton— dropped to #31 after an 11% Y-o-Y price contraction suppressed its median to $2,963,000.

Other zip codes outside of NYC included four more Hamptons locations: The pricey North Shore’s 11568 in Old Westbury which climbed to #62 with a $1.95 million median, as well as two Westchester zip codes. The latter included top 100 veteran 10580 in Rye at #72, plus newcomer 10577 in Purchase, which placed 88th with a $1.7 million median sale price.

Of NYC’s famously expensive real estate, only six zip codes ranked nationally in 2021. And, as a historic first, not one of them placed among the country’s 20 most expensive. Overall, NYC’s top two zips were Manhattan’s 10013 and 10007, claiming #22 and #25, respectively.

To be precise, 10013 — which covers parts of TriBeCa, SoHo, Little Italy and Hudson Square — posted a $3,212,000 median sale price, up 7% Y-o-Y, but still reeling from the 19% price crunch it experienced in 2020. Likewise, Downtown Manhattan, TriBeCa and SoHo’s 10007 posted a $3,125,000 median sale price, dropping 14 spots Y-o-Y. They were followed by Battery Park City’s 10282 with its $2,725,000 median at #35.

And, while Brooklyn made waves in 2019 with zip 11231’s break into the top 100, the Red Hook and Carroll Gardens zip code departed the top 100 in 2021 after a two-year stint, outpaced by sharper price gains in dozens of other zip codes nationwide.

At $2M Median, Alpine’s 07620 Leads New Jersey Real Estate for 5th Consecutive Year

While the Mid-Atlantic region was, as expected, dominated by exclusive New York locations, three New Jersey zip codes also represented the region — the highest number New Jersey has ever contributed to our list. Just 15 miles from Midtown Manhattan and with a $2 million median sale price, 07620 in Bergen County’s Alpine was the most expensive New Jersey zip code. Landing at #58 nationally, Alpine’s median was up 38% Y-o-Y, but, nonetheless, fell short of its 2018 pricing high of $2.2 million.

Alpine was joined by two beach communities, with 08750 in Monmouth County’s Sea Girt placing #70 nationally with a $1,892,000 median sale price, and 08202 in Cape May County’s Avalon landing at #92 with a $1.67 million median. Notably, both zip codes ranked among the 100 most expensive zip codes in the country for the first time.

New England Home to 11 of the Priciest U.S. Zip Codes, Including #2 with Boston’s Back Bay

Further north, New England originated 11 of the most expensive zip codes in the country — the highest figure yet for the region — with Massachusetts contributing seven zips and Connecticut adding four. What’s more, New England also provided the #2 most expensive zip code in the U.S. with Boston’s ultra-pricey 02199.

Zip 02199, which covers the Prudential Center area of Back Bay, usually ranks among the country’s most expensive areas, but was conspicuously absent in 2020 due to depressed sales activity. However, in 2021, zip 02199 returned not only to its highest position yet at #2 nationally, but also reached a new pricing record with a $5.5 million median sale price.

Meanwhile, Nantucket’s 02554 was Massachusetts’ next most expensive zip code, with its $2 million median sale price placing it #58 nationally and marking a new median peak for the exclusive island. It was followed by Weston’s 02493 at $1.85 million,as well as Wellesley Hills’ 02481, Waban’s 02468 and Chilmark’s 02535. Boston also ranked a second time with Beacon Hill and Downtown Boston’s zip 02108, which was the 91st most expensive in the U.S. at $1,673,000.

Connecticut was represented by four Fairfield County zip codes that regularly post some of the highest median sale prices in the country: Greenwich’s perennial representative, 06830, reached its highest median sale price yet at $2.05 million — up 36% Y-o-Y. It was joined by another Greenwich zip code, newcomer 06831, which claimed the #94 spot with a $1,653,000 median.

Notably, last year’s most expensive New England zip — Riverside, Conn.’s 06878 — was only the 4th priciest in the region this year, despite reaching a new median sale price high at $1.98 million. Finally, Connecticut’s contributions were rounded out by 06870 in Old Greenwich, which returned to national rankings after last year’s absence with a $1,807,000 median in 2021 — its highest pricing point yet.

Miami Beach Returns to Top 10 Nationally, Maryland’s Gibson Island Hits Historic $3M Mark

Down south, Florida’s perennially pricey 33109 zip in Miami Beach’s Fisher Island was on the upswing compared to last year, climbing all the way from #23 to #5 nationally. And, although it wasn’t the highest position yet for the popular celebrity location (having been the #3 most expensive in the U.S. in 2017), the exclusive 33109 zip nevertheless reached a new pricing peak in 2021 with its $4,475,000 median. That came as the result of a 66% Y-o-Y price surge — the third-sharpest increase among the country’s 100 leading zip codes.

In Maryland, Gibson Island’s 21056 was among the most expensive zip codes in the U.S. yet again and marked the sixth consecutive year that it has led the state in terms of pricing. However, while 21056 usually ranked in the bottom half of our list (even ranking at #100 in 2019), the Chesapeake Bay community reached its highest position yet this year, placing #23 nationally. That was the result of a whopping 97% Y-o-Y surge — by far the sharpest gain among the country’s top zips. Not only that, but by nearly doubling its median year-over-year, Gibson Island also reached a $3,195,000 median sale price — nearly double its previous record from 2016.

Arizona & Nevada’s Most Expensive Communities Enter Top 50 for 1st Time

Across the country, the Mountain States were again led by three high-income enclaves — Nevada’s Glenbrook and Crystal Bay on the shores of Lake Tahoe, as well as Arizona’s Paradise Valley — marking the first time that all three landed in the upper half of our ranking.

Specifically, 85253 in Arizona’s Paradise Valley claimed #50 after a 41% Y-o-Y price jump raised its median to $2,175,000. A favorite of some of the highest-profile rock stars in the world, the Maricopa County zip finally broke into the country’s most expensive zip codes in 2019, although it had already been the leader of pricey Arizona real estate for years.

Nevada was represented by two zip codes — 89413 and 89402 — for the third consecutive year, with both Lake Tahoe enclaves reaching their highest positions and pricing points to date. In particular, Glenbrook’s 89413 placed in the upper third of our ranking, landing at #29 with a record $3 million median sale price, the result of a 38% Y-o-Y price jump.

The Douglas County zip was joined by 89402 in Washoe County’s Crystal Bay at #39 with a record $2.5 million median sale price. Up 56 positions compared to last year, 89402 logged a staggering 68% median sale price surge, the second-sharpest price increase among the country’s top 100 zips.

Exclusive King County Enclaves Lead Pacific Northwest’s Priciest Real Estate

About 1,000 miles further north, the Pacific Northwest was, once again, represented not by Seattle or Portland, but by the high-income enclaves of Medina and Mercer Island in Washington state.

Specifically, Medina’s 98039 reached its highest pricing point with a $4 million median. This was the result of a 24% Y-o-Y increase that helped the tech-billionaire favorite remain among the most exclusive zip codes in the U.S., ranking as the #10 priciest. It’s also worth noting that 2021 marked the sixth consecutive year that Medina’s 98039 was the undisputed leader of expensive real estate in the Pacific Northwest.

And, returning to our list after its 2019 debut, fellow King County zip 98040 landed at #82. Also a favorite of tech executives, high-profile sports figures and media personalities, the Mercer Island zip code posted a $1,795,000 median sale price.

# Zip Code Location County State Median Sale Price 2021
1 94027 Atherton San Mateo County CA $7,475,000
2 2199 Boston Suffolk County MA $5,500,000
3 11962 Sagaponack Suffolk County NY $5,000,000
4 94957 Ross Marin County CA $4,583,000
5 33109 Miami Beach Miami-Dade County FL $4,475,000
6 90210 Beverly Hills Los Angeles County CA $4,125,000
7 93108 Santa Barbara Santa Barbara County CA $4,103,000
8 90402 Santa Monica Los Angeles County CA $4,058,000
9 94022 Los Altos Santa Clara County CA $4,052,000
10 98039 Medina King County WA $4,000,000
11 94024 Los Altos Santa Clara County CA $3,856,000
12 94301 Palo Alto Santa Clara County CA $3,800,000
13 11976 Water Mill Suffolk County NY $3,745,000
14 90742 Huntington Beach Orange County CA $3,625,000
15 92662 Newport Beach Orange County CA $3,577,000
16 94970 Stinson Beach Marin County CA $3,500,000
17 94028 Portola Valley San Mateo County CA $3,400,000
18 92067 Rancho Santa Fe San Diego County CA $3,399,000
19 92657 Newport Beach Orange County CA $3,365,000
20 92661 Newport Beach Orange County CA $3,293,000
21 90265 Malibu Los Angeles County CA $3,250,000
21 90272 Los Angeles Los Angeles County CA $3,250,000
22 10013 New York New York County NY $3,212,000
23 21056 Gibson Island Anne Arundel County MD $3,195,000
24 95070 Saratoga Santa Clara County CA $3,150,000
25 10007 New York New York County NY $3,125,000
26 94528 Diablo Contra Costa County CA $3,100,000
27 94010 Hillsborough/Burlingame San Mateo County CA $3,075,000
28 94920 Belvedere Tiburon Marin County CA $3,050,000
29 89413 Glenbrook Douglas County NV $3,000,000
30 95030 Los Gatos Santa Clara County CA $2,995,000
31 11932 Bridgehampton Suffolk County NY $2,963,000
32 90266 Manhattan Beach Los Angeles County CA $2,910,000
33 94306 Palo Alto Santa Clara County CA $2,810,000
34 93953 Pebble Beach Monterey County CA $2,750,000
34 11975 Wainscott Suffolk County NY $2,750,000
35 10282 New York New York County NY $2,725,000
36 92625 Corona Del Mar Orange County CA $2,695,000
37 11930 Amagansett Suffolk County NY $2,645,000
38 11959 Quogue Suffolk County NY $2,593,000
39 94025 Menlo Park San Mateo County CA $2,500,000
39 94062 Redwood City San Mateo County CA $2,500,000
39 89402 Crystal Bay Washoe County NV $2,500,000
40 91108 San Marino Los Angeles County CA $2,490,000
41 92651 Laguna Beach Orange County CA $2,475,000
42 90077 Los Angeles Los Angeles County CA $2,460,000
43 90212 Beverly Hills Los Angeles County CA $2,429,000
44 94507 Alamo Contra Costa County CA $2,400,000
45 95014 Cupertino Santa Clara County CA $2,310,000
46 94123 San Francisco San Francisco County CA $2,307,000
47 93921 Carmel By The Sea Monterey County CA $2,300,000
48 93067 Summerland Santa Barbara County CA $2,190,000
49 94087 Sunnyvale Santa Clara County CA $2,180,000
50 85253 Paradise Valley Maricopa County AZ $2,175,000
51 10001 New York New York County NY $2,171,000
52 90049 Los Angeles Los Angeles County CA $2,165,000
53 90274 Rolling Hills Los Angeles County CA $2,118,000
54 92660 Newport Beach Orange County CA $2,111,000
55 94040 Mountain View Santa Clara County CA $2,100,000
55 93920 Big Sur Monterey County CA $2,100,000
56 94070 San Carlos San Mateo County CA $2,055,000
57 6830 Greenwich Fairfield County CT $2,050,000
58 2554 Nantucket Nantucket County MA $2,000,000
58 94127 San Francisco San Francisco County CA $2,000,000
58 7620 Alpine Bergen County NJ $2,000,000
58 91008 Bradbury Los Angeles County CA $2,000,000
59 90048 Los Angeles Los Angeles County CA $1,985,000
59 94041 Mountain View Santa Clara County CA $1,985,000
59 91436 Encino Los Angeles County CA $1,985,000
60 90254 Hermosa Beach Los Angeles County CA $1,980,000
60 6878 Riverside Fairfield County CT $1,980,000
61 94402 San Mateo San Mateo County CA $1,968,000
62 11568 Old Westbury Nassau County NY $1,950,000
62 94002 Belmont San Mateo County CA $1,950,000
63 92118 Coronado San Diego County CA $1,940,000
64 10012 New York New York County NY $1,935,000
65 91302 Calabasas Los Angeles County CA $1,925,000
66 94705 Berkeley Alameda County CA $1,913,000
67 95032 Los Gatos Santa Clara County CA $1,911,000
68 90291 Venice Los Angeles County CA $1,907,000
69 95129 San Jose Santa Clara County CA $1,900,000
69 94563 Orinda Contra Costa County CA $1,900,000
69 91011 La Canada Flintridge Los Angeles County CA $1,900,000
69 90036 Los Angeles Los Angeles County CA $1,900,000
69 11963 Sag Harbor Suffolk County NY $1,900,000
70 8750 Sea Girt Monmouth County NJ $1,892,000
71 94118 San Francisco San Francisco County CA $1,868,000
72 10580 Rye Westchester County NY $1,861,000
73 94506 Danville Contra Costa County CA $1,860,000
73 94939 Larkspur Marin County CA $1,860,000
74 90211 Beverly Hills Los Angeles County CA $1,850,000
74 95120 San Jose Santa Clara County CA $1,850,000
74 2493 Weston Middlesex County MA $1,850,000
74 92014 Del Mar San Diego County CA $1,850,000
75 94904 Greenbrae Marin County CA $1,849,000
76 92663 Newport Beach Orange County CA $1,845,000
77 94030 Millbrae San Mateo County CA $1,840,000
78 94114 San Francisco San Francisco County CA $1,830,000
79 90232 Culver City Los Angeles County CA $1,819,000
80 6870 Old Greenwich Fairfield County CT $1,807,000

 

81 93109 Santa Barbara Santa Barbara County CA $1,805,000
82 98040 Mercer Island King County WA $1,795,000
83 94549 Lafayette Contra Costa County CA $1,775,000
84 94061 Redwood City San Mateo County CA $1,773,000
85 94941 Mill Valley Marin County CA $1,758,000
86 2481 Wellesley Hills Norfolk County MA $1,756,000
87 94121 San Francisco San Francisco County CA $1,701,000
88 95130 San Jose Santa Clara County CA $1,700,000
88 10577 Purchase Westchester County NY $1,700,000
89 2468 Waban Middlesex County MA $1,695,000
90 93103 Santa Barbara Santa Barbara County CA $1,682,000
91 93923 Carmel Monterey County CA $1,665,000
91 2108 Boston Suffolk County MA $1,673,000
92 8202 Avalon Cape May County NJ $1,670,000
93 2535 Chilmark Dukes County MA $1,663,000
93 10069 New York New York County NY $1,663,000
94 6831 Greenwich Fairfield County CT $1,653,000
95 93110 Santa Barbara Santa Barbara County CA $1,650,000
95 94131 San Francisco San Francisco County CA $1,650,000
95 94574 Saint Helena Napa County CA $1,650,000
95 92861 Villa Park Orange County CA $1,650,000
95 94707 Berkeley Alameda County CA $1,650,000
96 11030 Manhasset Nassau County NY $1,647,000
97 94960 San Anselmo Marin County CA $1,645,000
98 90027 Los Angeles Los Angeles County CA $1,640,000
99 94303 Palo Alto Santa Clara County CA $1,633,000
100 94122 San Francisco San Francisco County CA $1,627,000

Make sure to explore 2020’s rankings as well.

Methodology

To determine the most expensive zip codes in the U.S., we looked at residential transactions closed between January 1, 2021, and October 22, 2021, taking into account condos, co-ops, and single- and two-family homes. All package deals were excluded.

For an accurate representation, we considered only zip codes that registered a minimum of three residential transactions. Due to a number of ties, 127 zips made it onto our list of the 100 most expensive zip codes in 2021.

2020 and 2021 median sale prices were rounded to the nearest $1,000.

The Bay Area was defined as Alameda, Contra Costa, Marin, Napa, Santa Clara, San Francisco, San Mateo, Sonoma and Solano counties; the Los Angeles metropolitan area was defined as Los Angeles County and Orange County; and the 23-county New York metropolitan area was defined as New York City, Long Island, the Mid- and Lower Hudson Valley, Central and Northern New Jersey, Western Connecticut and Pike County, Penn

$1.2 Trillion Infrastructure Bill Passed By Congress Welcomed By Industrial Leaders

Corporations and business groups are calling on President Biden to sign the bipartisan $1.2 trillion infrastructure bill into law quickly after it finally cleared Congress late Friday, November 5th, after several months of painstaking negations.

The infrastructure bill passed the House 228-206 on Friday. Thirteen Republicans voted for the bill, while six progressive Democrats voted against it, arguing that Democratic leaders didn’t do enough to ensure that the party’s moderates would support the larger reconciliation package. The infrastructure legislation had cleared the Senate in August, with 19 Republicans joining all 50 Democrats in support.

The business community has rallied behind the infrastructure package, which makes huge investments in roads, bridges, broadband internet, drinking water, rail and public transit without raising taxes on corporations. Business groups say that Biden should sign the bill as soon as possible so transportation officials can get started on construction projects.

According to reports, nearly every major business group in Washington, D.C., backed the infrastructure bill while opposing the reconciliation package, which will implement a minimum tax on corporate profits.The Business Roundtable, which represents CEOs at some of the nation’s largest companies, urged Biden to “swiftly sign” the infrastructure bill. The U.S. Chamber of Commerce, the largest American corporate lobbying group, called the bill’s passage “a major win for America.”

Ford Motor Co., which will benefit from the bill’s investment in electric vehicle charging stations, lauded the House vote as “great news for the United States’ infrastructure and transition to a zero emissions transportation future” and said it looked forward to Biden’s signature.

“We urge President Biden to quickly sign this bipartisan package into law, so we can build back better with increased jobs, enhanced safety, and improved roads,” Jay Hansen, executive vice president for advocacy at the National Asphalt Pavement Association, said in a statement after the bill passed the House.

The United Steelworkers union welcomed the bill’s passage. “The House has passed the #InfrastructureBill, which would provide roughly $1 trillion for upgrading the nation’s critical infrastructure. This is a big freakin’ deal for us because Steelworkers supply America in so many ways!” the union tweeted.

Biden and Vice President Kamala Harris appeared in the White House State Dining Room about 12 hours after moderate and progressive Democrats in the House of Representative overcame internal bickering and delivered the president his biggest legislative win thus far. WASHINGTON, Nov 6 (Reuters) – A giddy President Joe Biden on Saturday hailed congressional passage of a long-delayed $1 trillion infrastructure bill as a “once in a generation” investment and predicted a broader social safety net plan will be approved despite tense negotiations.

Biden and Vice President Kamala Harris appeared in the White House State Dining Room about 12 hours after moderate and progressive Democrats in the House of Representative overcame internal bickering and delivered the president his biggest legislative win thus far.v”Finally, infrastructure week,” Biden said with a chuckle. “I’m so happy to say that – infrastructure week!”

President Joe Biden on Saturday hailed congressional passage of a long-delayed $1 trillion infrastructure bill as a “once in a generation” investment and predicted a broader social safety net plan will be approved despite tense negotiations.

Biden and Vice President Kamala Harris appeared in the White House State Dining Room about 12 hours after moderate and progressive Democrats in the House of Representative overcame internal bickering and delivered the president his biggest legislative win thus far.

The president’s comment referred to a running joke in recent years after Biden’s Republican predecessor Donald Trump declared “Infrastructure week” in 2018 but was unable to pass a bill after multiple tries during his presidency.

The bipartisan bill’s passage gives Biden a jolt of good news after sobering election losses for his Democratic party this week and a drop in his approval ratings. Referring to the losses, Biden said they showed American people “want us to deliver.” “I think the one message that came across was – ‘get something done. It’s time to get something done – stop talking,'” said Biden

Inflation Expectations Among Consumers Hit New Highs, Fed Survey

Americans’ inflation fears continued to accelerate in October, climbing for the 12th consecutive month in a row to another record high, according to a key Federal Reserve Bank of New York survey published Monday, November 8, 2021.

“Median inflation uncertainty – or the uncertainty expressed regarding future inflation outcomes – increased at both the short- and medium-term horizons. Both measures reached series highs in October,” the survey said.

Heads of households surveyed by the New York Fed expected consumer prices to rise by a median of 5.7 percent over the next year, according to the bank’s October Survey of Consumer Expectations.  The one-year inflation rate projected by consumers rose 0.4 percentage points since September and reached the highest level since the survey began in 2013.

The Fed and economists pay close attention to inflation expectations among consumers, particularly long-term expectations, when assessing the future of price increases. Steady increases in consumer inflation expectations could lead to what economists call a wage-price spiral: higher prices prompting workers to hold out for higher wages, which exacerbates the need to raise prices.

With consumers braced for the highest inflation levels in nearly a decade, they are also expecting the price of things like food, gasoline, rent and college tuition to rise over the next year. The only things that Americans expect to get cheaper over the next year are home prices and medical care.

The report is based on a rotating panel of 1,300 households.

Federal Reserve Chairman Jerome Powell has largely attributed the spike in consumer prices to pandemic-induced disruptions in the supply chain, a shortage of workers that has pushed wages higher and a wave of pent-up consumers flush with stimulus cash.

Although Powell has repeatedly said the rise in inflation is likely “transitory,” he acknowledged last week during the Fed’s two-day policy-setting meeting that the surge may not fade until the latter half of 2022. He maintained that wild swings in consumer prices will stop once current pressures on the supply chain dissipate.

“Our baseline expectation is that supply bottlenecks and shortages will persist well into next year and elevated inflation as well,” Powell told reporters. “And that, as the pandemic subsides, supply chain bottlenecks will abate and job growth will move back up. And as that happens, inflation will decline from today’s elevated levels.”

His comments came after the Federal Open Market Committee voted to begin pulling back on the extraordinary stimulus it has given the economy since March 2020. The U.S. central bank announced that it would reduce its aggressive bond-buying program by $15 billion a month in mid-November, lowering its purchases of long-term Treasury bonds by $10 billion a month and purchases of mortgage-backed securities by $5 billion a month.