Category: Finance/Economy

International Monetary Fund (IMF) Managing Director Kristalina Georgieva on Thursday said that India deserves to be called a bright spot “on this otherwise dark horizon because it has been a fast-growing economy, even during these difficult times, but most importantly, this growth is underpinned by structural reforms”.

She was speaking on the fourth day of the IMF and World Bank Annual Meetings at the IMF headquarters here.

“Most importantly, this growth is underpinned by structural reforms,” Georgieva told reporters after the meeting.

She was replying to a question on her expectations from India just days before it takes over the presidency of G20. She also praised India’s digitization process.

Earlier even Paolo Mauro, Deputy Director of the Fiscal Affairs Department at the IMF, had praised India’s direct benefit transfer scheme.

“From India, there is a lot to learn. There is a lot to learn from some other examples around the world. We have examples from pretty much every continent and every level of income. If I look at the case of India, it is actually quite impressive,” he told reporters. (IANS)

The International Monetary Fund has once again downgraded its forecast for the global economy with a sharp warning: “The worst is yet to come, and for many people 2023 will feel like a recession.” The agency said Tuesday that it expects global growth to slump to 2.7% next year. That compares with projected growth of 3.2% this year. 

The prospects for the global economy as outlined by the IMF are the third weakest since 2001, behind only the 2008 financial crisis and the worst phase of the coronavirus pandemic. According to a new CNN poll, just 22% of Americans rate economic conditions in the country as good, with 78% calling conditions somewhat poor or very poor. President Biden told CNN on Tuesday that the prospect of a “slight recession” is possible but that he doesn’t anticipate it — even as experts are sounding the alarm about the future of the American and global economies.

A strong dollar and rising U.S. interest rates are looming over this week’s International Monetary Fund (IMF) and World Bank meetings in Washington, D.C. where the Federal Reserve is likely to come under some criticism over how its policies are impacting the rest of the world.  Treasury and Federal Reserve officials say they’re sticking to their guns in their battle against inflation despite a chorus of international voices cautioning against the risk of a global recession.

“If monetary tightening in the advanced economies continues over the coming year … a global recession is more likely,” the United Nations Conference on Trade and Development wrote in a sharply worded report released last week. “It will almost unavoidably harm potential growth rate in the developing economies.”

Senior Treasury officials said Monday they were sensitive to “potential spillovers” and “issues that develop around the world” but that “the U.S. economy remains quite resilient, even in the face of some significant global headwinds.”

A Treasury official said that during meetings this week, Treasury Secretary Janet Yellen would speak with “key counterparts” to discuss how to take on global economic challenges.  

“This involves taking strong actions at home to deal with our priorities but also communicating about those policies, working with the IMF and our allies to monitor spillovers,” the official said.

These spillovers are the losses that many smaller and midsize economies are increasingly expected to endure due to higher U.S. interest rates, which are designed to stop domestic inflation by slowing demand.  

But the hikes also attract investors into the U.S. from abroad, looking to take advantage of higher returns. This strengthens the dollar relative to other currencies, which has the knock-on effect of diminishing export revenues in countries that don’t use the dollar and is all bad news for developing economies.

Federal Reserve Vice Chair Lael Brainard echoed the Treasury’s sentiments, saying in a Monday speech that “monetary policy will be restrictive for some time to ensure that inflation moves back to target” while nodding to “elevated global economic and financial uncertainty.”

“The Federal Reserve takes into account the spillovers of higher interest rates, a stronger dollar and weaker demand from foreign economies,” she said.

Such remarks provide little comfort for lower-income countries hoping for debt relief in the run-up to what could be a prolonged period of economic stagnation brought on by the pandemic and the decade of near-zero interest rates that preceded it.

The United Nations Development Program (UNDP) released a paper Tuesday warning that 54 developing economies, accounting for more than half of the world’s poorest people, need debt relief now to avert a major crisis.

“The debt crisis is intensifying,” the UNDP paper found. “Debt is trading in distressed territory for more than one third of developing economies issuing dollar debt in international markets, with 19 countries paying more than 1,000 basis points over US Treasury bonds. Similarly, of all developing economies with a sovereign credit rating, 26 — close to one third — are now rated either ‘substantial risk, extremely speculative or default.’ ”

The largest geographical subgroup of the 54 countries noted by the U.N. is sub-Saharan Africa, which accounts for nearly half.

A representative for African Development Bank Group President Akinwumi Adesina, who is attending the World Bank and IMF meetings, told The Hill that securing assets for African economies from advanced economies like the U.S. is a top priority.

A key concern for the bank is “the re-allocation of IMF Special Drawing Rights from willing advanced economies to Africa to leverage the resources to provide greater financing to African economies,” the representative said in an email, referring to a type of foreign exchange reserve asset used by development banks.

But U.S. Treasury officials said they weren’t expecting any major breakthroughs on funding for Africa or emerging markets despite some progress on the cases of a few individual countries.

“We have been making some incremental progress on Chad and Zambia, as you know, and we will certainly be calling for rapid progress on those two cases, but I’m not anticipating that we’ll get there in the next few days,” a Treasury official said.

Complicating efforts to fund developing countries is competition from China, which is now by far the largest bilateral creditor in the world. China now services more debt to foreign countries than the combined financing of the U.S., France and the 20 other countries that make up the “Paris Club” of traditional lenders.

“China’s enormous scale as a lender means its participation is essential,” Brent Neiman, counselor to the Treasury secretary, said in September at the Peterson Institute for International Economics. “Estimates of the total stock of outstanding Chinese official loans range widely from roughly $500 billion to $1 trillion, concentrated in low- and middle-income countries.”

“A recent study estimates that as many as 44 countries now owe debt equivalent to more than 10 percent of their GDP to Chinese lenders after factoring in both on- and off-balance sheet liabilities,” he said.

Despite competition from China, a report released by the Group of 20 over the summer found that development banks could be lending hundreds of billions of dollars more than they currently are during a perilous time for the global economy, helping to keep people out of poverty.

“The expected potential scale of the increase is substantial, likely to be several hundreds of billions of dollars over the medium term,” the report found.

The price for that additional lending would be an increased risk tolerance. The report argues that increased levels of risk could be acceptable but says that banks’ use of credit rating agencies gets in the way.

The authors of the report recognize “the great importance for the business models of [development banks] of maintaining superior financial strength as reflected in AAA ratings, and, to that end, make use of an enhanced dialogue with [credit ratings agencies] and clear public statements of shareholder support.”

“Moreover, specific numeric leveraging targets should be removed from [development bank] statutes and integrated into capital adequacy frameworks,” the report said.

Other voices in the global economy have also taken issue with continued interest rate hikes and monetary tightening policies from the Federal Reserve — notably OPEC, which last week announced a production cut in global crude oil of 2 million barrels per day.

The move is expected to drive up energy prices ahead of U.S. midterm elections and add further upward pressure on inflation.

“With this severity that you see, you run a big risk that you lose growth,” Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, said last week. “Growth is coming down and there is a potential with more aggressive rate hikes that this growth will come even lower.”

Goldman Sachs reckons crude oil prices are going to $140 in the coming months. JPMorgan said they could even surge to $380 in a worst-case scenario. UBS reckons they’ll hit $130 in September.

But Citi is bucking the trend. The investment bank’s strategists predict oil will fall sharply by the end of the year, from prices of around $100 a barrel on Friday.

Francesco Martoccia, the bank’s head of European commodities strategy, warned in note to clients Tuesday that oil prices could even slump to $65 a barrel by December, if a nasty recession hits.

The same day, oil prices tumbled, with US benchmark WTI crude dropping below $100, as investors worried that central banks’ interest-rate hikes would trigger sharp slowdowns in economic growth. “The timing was exquisite,” Martoccia told Insider this week.

Yet Martoccia and his colleagues expect oil to drop even if there’s no drastic slowdown. Their so-called base case is that the price of global benchmark Brent crude tumbles to $85 a barrel by the end of the year — that’s around 18% lower than Friday’s price of $104.

At the heart of Citi’s contrarian view is its expectation that Russia will keep exporting and producing crude, even as the US and its allies batter the country with sanctions.

Many analysts expect Russian energy exports to fall sharply by the end of the year as the European Union gradually bans purchases from the country. The G7 is also exploring how to cap Russian oil prices — which could cause exports to drop further.

The logic is simple. Unable to sell its oil, Russia will shut down production. Buyers will then be competing for the remaining global supplies, driving up oil prices.

But Citi takes a different view. Its strategists believe India and China will ramp up purchases, keeping Russian oil pumping and alleviating the pressure on the market. “We actually don’t see a supply crunch in the making,” Martoccia said.

Crude oil exports to European countries in the OECD will drop from 2.5 million barrels a day in the first quarter of the year to 970,000 in the fourth, Citi predicts.

Yet it thinks China will step up its imports from 1.4 million to 2.3 million barrels a day, and India from 110,000 to 950,000 a day. Other developing economies will lift their purchases slightly, meaning Russia will be exporting more crude by the end of the year than at the start.

“I’m skeptical that the governments wouldn’t listen to their own energy needs, because we have seen already protests and riots around the world because of the increase in food prices and energy prices,” Martoccia said.

The other key ingredient in oil prices is demand. Citi thinks the world’s appetite for oil is going to slow over the coming months as the global economy cools.

Martoccia said Europe in particular is likely to cut back on its energy consumption. Many economists expect the eurozone to fall into a recession as a result of soaring inflation driven by rocketing natural gas prices. Germany has already started to dim its streetlights to save energy.

“When you look at the gas demand, for instance, from the industrial complex in Italy, or even the orders of one of the biggest industrial facilities, it’s going down,” he said. “And eventually you have to see spillover effects elsewhere.”

Oil-price prediction is a difficult game. Many analysts say the opposite to Citi, arguing Russian production will fall, and a Chinese economic recovery and the return of global tourism will boost demand.

Citi is hedging its bets. It thinks there’s a 30% chance oil jumps back up to around $120 by the end of the year. “This year, it’s very difficult to have a high conviction,” Martoccia said.

Shortly after moving to South Florida for a new job with the U.S. military, Shannon Kaufman and his wife, Wendy, signed up for a whole other mission: buying a home.

For months, they scoured listings, strategizing late into the night on which homes to target and working out how much they could afford, even if it meant using some of their retirement savings.

After visiting 200 listings and making offers on 15 homes that ultimately didn’t pan out, the Kaufmans finally found a home that fits at least some of their needs. They’ll be renting it, however.

“We found a place that’s smaller than we want, but it’ll work until we have something built or until the market cools off,” said Shannon Kaufman, 47.

America’s housing market has grown increasingly frenzied, and prices are out of reach for many buyers, especially first-timers. This spring, traditionally the busiest season for home sales, is more likely to deliver frustration and disappointment for aspiring homebuyers than it is homeownership.

The number of homes for sale nationally remains near record lows, fueling fierce competition among buyers vying for fewer homes. From Los Angeles to Raleigh, North Carolina, when a house does hit the market, it typically sells within days.

Bidding wars are common, often driving the sale price well above what the owner was asking. And would-be buyers planning to finance their purchase with a home loan are often losing out to investors and others able to buy a home with cash.

A quarter of all homes sold in February were purchased with cash, up from 22% a year ago, according to the National Association of Realtors. Real estate investors accounted for 19% of transactions in February, up from 17% a year ago.

Nichol Khan, a project manager, and her husband Ed moved to Mesa, Arizona, from Phoenix two years ago to shorten their commute to work. Home prices in the Phoenix area have jumped 20% from a year ago to $500,000, according to Realtor.com. “The prices just keep going up and up,” Khan said.

The couple has lost out on more than a dozen homes they bid on. Some of the homes ended up selling for less in cash than the couple had offered. “We don’t have $500,000 in cash,” said Khan, 42. “We just could not be competitive with that.”

Fewer homes on the market and high prices have been the hallmark of the housing market for the past 10 years or so. Now, rising mortgage rates further complicate the homebuying equation. Higher rates could limit the pool of buyers and cool the rate of home price growth — good news for buyers. But higher rates also weaken their buying power.

Interest rates for loan has climbed to around 4.7%. A year ago, average rates hovered just above 3%, according to mortgage buyer Freddie Mac. The increase follows a sharp move up in 10-year Treasury yields, reflecting expectations of higher interest rates overall as the Federal Reserve moves to hike short-term rates in order to combat surging inflation.

Would-be buyers who applied for a home loan in February faced a median monthly mortgage payment of $1,653, including principal and interest, an increase of 8.3% from a year ago, according to the Mortgage Bankers Association.

“It’s hard to believe, but I do think it’s going to be tougher this year, in some respects, than it was in previous years,” said Danielle Hale, Realtor.com’s chief economist. “So far, at least, we have seen the number of homes for sale continue to decline and prices continue to rise. Those two factors combined suggest that the competitive market is going to keep buyers on their toes.”

Buyers should set their sights on homes that are listed well within what they can afford, experts say.

“You should be looking 15%-20% below their limit; that gives them room for appraisal gaps, it gives them room for negotiating,” said Tracy Hutton, a broker with Century 21 in Indianapolis.

Being well prepared sometimes isn’t enough when a homeowner prefers to accept an all-cash offer, rather than sell to a buyer with financing.

Wendy Kaufman in South Florida couldn’t even get into an open house for a property on the market after she revealed the couple had a mortgage backed by the Veterans Administration.

“When they saw I had a VA preapproval they said, ‘Sorry we don’t want to work with you.’” she said.

Sometimes, buyers don’t have a chance to make an offer before a home is snapped up, sight unseen. In the Miami area, so-called “blind offers” have become common as a way to get around other buyers, said Rafael Corrales, a Redfin agent.

One reason is the ultra-low level of homes for sale, which for the greater Miami metropolitan area, was down 55% in February from a year ago, according to Realtor.com.

While every market is unique, there is one common hurdle across the U.S.: affordability. The median U.S. home price jumped 15% in February from a year earlier to $357,300, according to the National Association of Realtors.

The San Jose, California, metro area had 40% fewer homes for sale in February than a year ago, according to Realtor.com. Buyers there have to navigate some of the most expensive home prices in the nation. The median home listing price climbed 13.3% to about $1.36 million in February from a year earlier.

The market trends are a bit more welcoming for buyers in the Midwest, including the Indianapolis metropolitan area, where the number of homes for sale was down about 23% from a year ago. The median home price there stood at $287,000 in February, up 8.5% from a year earlier.

In Raleigh, home listings were down a whopping 55% in February from a year earlier. Competition for fewer homes helped push the median home price to $430,000, a 9% increase from February 2021.

Those trends made for a more competitive market for first-time buyers like Lisa Piercey and her husband, Alex Berardo. First-time buyers made up 29% of all homes sold nationally last month. That share has averaged 31% annually over the past 10 years.

The couple began looking in December for homes at $350,000 or below. They offered $5,000 over the asking price on two properties but lost out to rival bidders.

“That was all we could afford,” said Lisa Piercey, a 32-year old project manager. “It’s really defeating, really disappointing.”

In the end, the couple bought a townhome in a new construction community, though they see it as a stepping stone to a more spacious house with a big yard.

“Its big enough that we can still start our family and then move when the market hopefully dies down in a couple of years,” she said.

Inflationary concerns over elevated commodity prices are expected to maintain pressure on the Indian rupee during the upcoming week.

Accordingly, high crude oil as well as other raw material prices are expected to unleash a domestic inflationary wave.This trend, said senior analysts, will dent growth prospects along with leading to an eventual rise in interest rates.However, fiscal end dollar selling by software majors will arrest any sharp downfall in rupee value against the USD. Consequently, the Spot USDINR is expected to settle in the range of 76 to 76.50 for the next week.

“Crude and rising US yields kept the rupee weak amid Ukraine war concerns,” said Sajal Gupta Head Fx & Rates Edelweiss. “Rising inflation is a concern across the globe and does not see a immediate solutiona which shall keep the currency weaker.”

Last week, the rupee depreciated by half a per cent amidst a strong US dollar, higher crude oil and weaker risk sentiments. The rupee closed at 76.20 to a greenback after swinging between 75.80 and 76.50 to a USD. “Biggest driver remains crude oil prices and sentiment towards equity markets,” said Devarsh Vakil, Deputy Head of Retail Research, HDFC Securities.

“We expect RBI to keep utilising its large forex reserves to keep the INR stable at around current levels. The bias for USDINR remains skewed to the upside following continued geopolitical worries and broad-based selling by foreign institutions.” The RBI is known to enter the markets via intermediaries to either sell or buy US dollars to keep the rupee in a stable orbit.

Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services, said: “Next week, on the domestic front, market participants will continue to monitor how crude prices will be moving and at the same time, FIIs participation will be important to watch. “Fiscal deficit and trade balance number will also be released next week and will be influencing the rupee.”

Social Security Administration offices have remained closed since March of 2020, and now, two years later, they will finally be reopening this month.

The agency is currently facing major backlog issues, similar to the IRS, due to the pandemic and staffing issues. Many are hoping that reopening the physical offices will resolve many of these issues. Despite the offices closing, the SSA did not stop functioning.

Is it possible I won’t get Social Security benefits?

In person appointments have been available for people in critical situations in need of assistance. If someone found themselves with no food or shelter, they could make an appointment to get help immediately.

Social Security’s backlogs and reopening of offices

Most of the work done by the Social Security Administration for the last two years has been by phone, email, or mail.

Bump in benefits may get them taxed

This means administrative issues have come about. Only 51% of calls were answered in 2021, according to Forbes and The Sun. After an investigation was completed by the Office of the Inspector General, it was found policies were not in place.

Social Security: Only claim if you know these answers

This was because there were not strong policies surround the tracking and returning original documents, which they themselves require. Documents being mishandled included passports, driver’s licenses, and birth certificates. The hope is that Congress gives funding to not only reopen the offices, but provide better service to the public.

India’s central bank will launch a digital version of the rupee in the next financial year, the country’s finance minister said on Tuesday.

“Introduction of a central bank digital currency will give a boost, a big boost to the digital economy,” Nirmala Sitharaman said as she delivered the country’s annual budget. “Digital currency will also lead to a more efficient and cheaper currency management system.”

The Reserve Bank of India will introduce the digital rupee in the 2022-2023 financial year which begins on Apr. 1.

Sitharaman gave no details about how the digital rupee would work or what it would look like, but said it would be introduced “using blockchain and other technologies.”

Blockchain refers to the technology that was originally created alongside bitcoin, but the definition has since evolved as its applications have moved beyond cryptocurrencies.

India would be one of the world’s largest economies to introduce a so-called central bank digital currency (CBDC) if it sticks to its plans.

China has been working on a digital version of its yuan since 2014 and is furthest ahead when it comes to launching CBDCs globally.

Over the past two years, the People’s Bank of China has been carrying out trials in the form of lotteries, where digital yuan is handed out to citizens in certain cities for them to spend. More recently, the central bank has looked to expand the use of the digital yuan. China has not launched its digital currency nationwide yet and has no timeline to do so, however.

Elsewhere, Japan is looking into its own CBDC, and the U.S. Federal Reserve last month released a study into a digital dollar, but did not take a firm position on whether it would issue one.

While India is pushing forward with a digital rupee, it has tried to take a tougher stance on cryptocurrencies like bitcoin and is currently working on regulation for the sector.

On Tuesday, Sitharaman said income from the transfer of virtual digital assets should be taxed at rate of 30%.

The US Senate voted 48-50 to begin the debate on the measure the House already passed, which wasn’t enough to overcome a Republican filibuster, requiring 60 votes

Senate Republicans blocked a House-passed bill to suspend the debt limit and avert a government shutdown from advancing in the Senate on Monday, September 27, 2021. The move comes after Republicans had insisted that Democrats act alone to address the debt limit and leaves Congress without a clear plan to keep the government open with the threat of a potential shutdown looming by the end of the week.

Government funding is set to expire on September 30, and the stopgap bill the House approved last week would extend funding and keep the government open through December 3. In addition, the measure includes a debt limit suspension through December 16, 2022. The clock is ticking to address the debt limit and Congress may only have until mid-October to act before the federal government can no longer pay its bills.

The Senate voted on a procedural motion to advance the legislation, which needed 60 votes to succeed. Since Democrats control only 50 seats in the chamber, they would have needed 10 Senate Republicans to vote in favor.

The Senate voted 48-50 to begin debate on the measure the House already passed, which wasn’t enough to overcome a Republican filibuster. The bill would have extended government funding to Dec. 3 and suspended the debt limit until Dec. 16, 2022. The measure also would have provided $28.6 billion for disaster assistance and $6.3 billion for Afghan refugees.

But 60 votes were needed to overcome a Republican filibuster. Republicans have insisted that Democrats deal with the debt limit on their own to avoid supporting the broader taxing and spending priorities of Democrats. But Democrats argue both parties should support raising the debt limit, as happened three times during the Trump administration, because a default could spark a worldwide economic crisis.

“It’s an unhinged position to take,” said Senate Majority Leader Chuck Schumer, D-N.Y. “There is no scenario in God’s green earth where it should be worth risking millions of jobs, trillions in household wealth, people’s Social Security checks, veterans’ benefits and another recession just to score short-term, meaningless political points.”

But Senate Minority Leader Mitch McConnell, R-Ky., said Democrats should separate the government funding extension from the debt limit – and then raise the debt limit themselves.

“Democrats want to use this temporary pandemic as a Trojan horse for permanent socialism,” McConnell said. “Republicans aren’t rooting for a shutdown or debt limit breach.”

Democrats must now find another way to keep the government operating and the country borrowing. Without a funding extension, the federal government will shut down Friday. Treasury Secretary Janet Yellen projected the country will reach its limit on borrowing in mid-October.

Democrats do have options to raise the debt limit on their own to prevent the US from defaulting on its debts, but they argue that the vote should be a bipartisan shared responsibility.

Schumer criticized Republicans ahead of the vote, saying, “After today there will be no doubt about which party in this chamber is working to solve the problems that face our country, and which party is accelerating us towards unnecessary, avoidable disaster.”

House starts debate on bipartisan infrastructure bill

The House began an hour of debate Monday on an infrastructure bill, but isn’t expected to vote until Thursday as lawmakers haggle over the rest of President Joe Biden’s agenda. The $1.2 trillion infrastructure bill, which includes $550 billion in new funding, has already been approved by a bipartisan majority in the Senate.

A group of nine moderate Democrats negotiated for a vote by Monday in exchange for their support for a $3.5 trillion framework for Biden’s social welfare priorities. The deadline slipped to what moderates said would be “no later than Thursday,” when federal highway legislation expires.

Dr. ManMohan Singh became Prime Minister on 22 May 2004, and he remained in office until 26 May 2014. After that Narendra Modi government has been continuously in power. This article dwells into how both governments faired on controlling inflation in India. We first took the CPI (Consumer Price Index) published by Government of India as a measure of inflation. However, this index represents just a fraction (includes only the goods that consumers consumed) of the total economic activity and ignores the substitution effect that arises from price changes. To have a comprehensive measure of inflation for the economy as a whole and incorporating the substitution effect on net inflation we calculated GDP Deflator where inflation is measured by (GDP at Current prices / GDP at constant prices) -1 and converted into percentage. Finally, we tried to verify the accuracy/consistency of inflation data published by Government of India with the international monetary theory which predicts long run inflation differentials between two countries. For this we used US dollar as the base currency and compared depreciation of rupee as the differential inflation.

This differential inflation between two countries talks about inflation of traded goods and investible assets including stocks and bonds. It also indicates how international investors perceive the overall health of the Indian economy i.e. if they see low inflation of a period as the strength of the economy or the weakness of the economy.  Remember during recession, inflation is low and during deflation inflation is negative, and both the situations are undesirable. The third situation is that of stagflation when real GDP stagnates or declines like we have since Indian Lockdown on account of Covid, while nominal GDP and stock market booms.

Taking historical data from the Economic Survey of India and trading economics for the recent months, we found that during the era of UPA Government (from May 22, 2004m to May 26 2014) headed by Dr. ManMohan Singh, inflation for the entire ten years was 8.48% per annum as per CPI measure, while as per GDP deflator it was 6.81% and as per US inflation differential it was 2.84% and since US inflation has been around 2%, this tells Indian inflation has been around 5% (2.84+2) for traded goods and investible assets. These figures look consistent.

However, Modi government has completed only 7 years, hence it would be fair to compare the inflation figures for the first 7 years of UPA government. During that period (May 2004 Until May 2011), as per CPI measure the annual average inflation rate had been 7.57%, as per GDP Deflator it had been 6.81% and as per US inflation differential it had been negative 0.17%. Rupee actually became stronger vs. US dollar. On 28^th May, 2004, the exchange rate was $1 = 45.29 rupees and on May 26, 2011 this rate was $1= 44.75. These exchange rate figures were not much different from average values of the month. This means international investors saw Indian domestic inflation as a mark of strength and demanded more rupee for investments in India because trade deficit and total current account deficit was still there. Huge foreign investments in India (surplus on capital account) made rupee stronger and boosted foreign exchange reserves.

Compared to this, we now see the inflation scenario during NDA (Modi Government) era. As per CPI measure, inflation has remained lower at 5.11% while it was 7.57% under UPA. We then we compare the GDP deflator figures, which we find from our calculation to be equal to 3.19%. The main reason for this low inflation for the entire seven years was the period of demonetization as during the demonetization period, the inflation rate was very low, just 1% during 2016 and 2.8% during 2017. Since this inflation rate was slightly lower than US inflation rate of 2% for the entire two years, rupee became slightly stronger. The principles of economics are working. But after March 2018, the weakness of lower inflation became visible to international investors and rupee sharply depreciated.

On March 31^st, 2018, the exchange rate was $1 = 65.01 and within one year it depreciated to 69.30 (a depreciation by 6.6%) giving international inflation figure of 8.6% (6.6+2% US inflation) for the year 2018-19. For the overall seven-year period until May 26, 2021, relative international inflation rate of India has been 3.14% seen by depreciation of rupee measure. This is sharply worse when compared with the relative international inflation figure of (-0.17%) of UPA government for their first seven years. This means that foreigners are either seeing low inflation of India as a weakness of the Indian economy or they are simply not believing the Indian inflation data, otherwise rupee would not have depreciated against dollar. According to International Investors, inflation in India for traded goods and investments should be 3.14%+2% = 5.14% while for Dr. ManMohan Singh’s first seven years period, this figure was just 1.83% (-0.17+2%).

To conclude, we can say that Dr.Manmohan Singh has performed far better in tacking inflation and having a better economic performance when compared to Narender Modi Government. The inflation number achieved by Modi government has been because of negative growth of entire GDP by 9.2% since pandemic, otherwise the performance of Modi Government would have been visibly more worse. People have become so poor that they don’t have enough purchasing power to buy goods. Manufacturing, trade, transport, communication and social-person services all have been in decline. Modi government has failed tremendrously in tacking Inflation when compared with UPA government domestically.

Internationally also, Dr. Manmohan Singh Government had performed much better when compared to the Modi Government in attracting economic investments. Even though the Modi Government has altered the domestic calculation index for GDP and Inflation to show a better picture, international figures are completely reliable as they can not be manipulated by the domestic governments since exchange rates are traded daily. India has seen better economic performance and perception during the Manmohan Singh Government in almost all aspects when compared to the Modi Government.

Sources:

1. https://www.indiabudget.gov.in/economicsurvey/doc/Statistical-Appendix-in-English.pdf
2. https://tradingeconomics.com/india/inflation-cpi
3. https://www.google.com/search?q=exchange+rate+dollar+to+rupee&rlz=1C1CHBF_enUS834US834&sxsrf=AOaemvJLApHUnQXmNy2x8hIJKIVq464nYg%3A1631641979141&ei=e-FAYcrwB4jm_QaBobLwDQ&oq=exchange+rate+dollar&gs_lcp=Cgdnd3Mtd2l6EAEYATIFCAAQgAQyCwgAEIAEELEDEIMBMgoIABCABBCHAhAUMgoIABCABBCHAhAUMgUIABCABDIGCAAQBxAeMgUIABCABDIFCAAQgAQyBQgAEIAEMgUIABCABDoHCAAQRxCwAzoHCCMQsAIQJzoICAAQCBAHEB46BggAEAgQHjoECAAQDToJCAAQDRBGEIICSgQIQRgAUIv4AljokQNguLADaAFwAngAgAG2AYgBsQ6SAQQxLjEymAEAoAEByAEIwAEB&sclient=gws-wiz

Despite COVID-19, the global consumer class—those who are middle class or rich—is rising fast. In an earlier post, we showed that we are experiencing a truly secular shift in the size of this global consumer class. COVID-19 is a transitory setback of one or two years in this long-term shift. Since 2000, the global consumer class grew by more than 4 percent each year, reaching a new milestone of 4 billion people—for the first time—in 2020 or 2021. At the beginning of this century, the middle class was mostly a Western phenomenon. Consumer companies were selling their goods in OECD countries, especially the USA and Europe. Today, the consumer class is global and increasingly Asian. Spending by the Asian middle class exceeds that in Europe and North America combined.

We define the global consumer class as anyone living in a household spending at least $11 per day per person, of which the global middle class ($11-$110 per day) represents the lion’s share with 3.75 billion people. It is very important to define the global consumer class correctly and allow for comparability across countries and over time. Incorrect definitions could cost companies billions, as Nestle experienced painfully in Africa. The company based its decision to expand on announcements of a rapid rise of Africa’s middle class. While Africa’s middle class has indeed been rising rapidly, the threshold of $3 per day in consumer spending was too low to gain traction with products that are enjoyed by American or European consumers.

Cornel Krummenacher, then chief executive for Nestle’s equatorial Africa region, noted that “we thought this would be the next Asia, but we have realized the middle class here in the region is extremely small.” Even today, Africa’s consumer class is only 283 million people strong according to projections by World Data Lab, growing at 4.1 percent per year. However, there is an untapped potential in Africa below the middle-class threshold. If companies want to benefit from Africa’s growth in this decade, a focus closer to the bottom of the pyramid would yield more success.

Under current projections, Asia will represent half of the world’s consumer spending by 2032. By contrast, Asia’s consumer class is advancing strongly. Since 2016, half of the global consumer class has been Asian. Today, out of the 4 billion global middle-class consumers, 2.2 billion live in Asia. However, while Asia has more than half of the world’s consumers, they only represent approximately 41 percent of consumer spending ($26 trillion out of $63 trillion in 2011 purchasing power parity, see Table 1). Under current projections, Asia will represent half of the world’s consumer spending by 2032.

Table 1. Asia’s consumer class power

Source: World Data Lab’s MarketPro; 2021 projections.

Today, there are 13 Asian economies in the top 30. The composition of these top 30 countries will not change until 2030. However, there are big shifts within the top 30: Only 7 countries are expected to keep their position; 14 countries will lose position while 9 countries gain positions (see Figure 1). To assess which countries will move up in the consumer class tally, we used our unique modeling capacity to project the change of the consumer class between 2020 and 2030.

Figure 1. The top 30 consumer markets of this decade
Daily spending of more than $11 (2011 PPP)

Everyone is familiar with consumer class growth in China and India. In Europe and North America, the numbers in the consumer class will stagnate and growth will come about only because households will become richer.But there are other countries, too, growing under the radar, which are forecast to have very large increases, in the tens of millions, in the numbers in the consumer class in 2030.

Here is an overview of the five top movers:

1. Bangladesh (+17 positions), from place 28 to 11; future consumer class: 85 million (+50 million)
   Global share of consumer class: 0.8 percent (2020), 1.6 percent (2030). Bangladesh’s consumer class is projected to more than double by 2030: Today, 35 million people in Bangladesh spend more than $11 a day. By 2030, it will be 85 million!
2. Pakistan (+8 positions), from place 15 to 7; future consumer class: 121 million (+56 million)
   Global share of consumer class: 6 percent (2020), 2.3 percent (2030). Pakistan will add 56 million new consumers by 2030, for a total of 121 million. This means that in 2030, for the first time, every other Pakistani will be able to spend more than $11 per day.
3. Vietnam (+7 positions), from place 26 to 19; future consumer class: 56 million (+21 million)
   Global share of consumer class: 9 percent (2020), 1.1 percent (2030). Vietnam’s consumer class will grow from 35 million to 56 million within this decade, which is a success story particularly of the middle-aged generation: Consumers between 45 and 65 years of age will contribute nearly 25 percent of Vietnam’s spending, as opposed to 20 percent today.
4. Philippines (+6 positions), from place 20 to 14; future consumer class: 79 million (+38 million)
   Global share of consumer class: 1 percent (2020), 1.5 percent (2030). The Filipino consumer class is projected to grow steadily, from 41 million today to 79 million in 2030. By then, more than two-thirds of the Filipino population will spend more than $11 per day.
5. Indonesia (+2 positions), from place 6 to 4; future consumer class: 199 million (+76 million)
   Global share of consumer class: 2 percent (2020), 3.8 percent (2030). While Indonesia is only moving up two places, it is experiencing a large gain of consumer class growth. Starting from an already large base of 123 million, Indonesia will have almost 200 million consumers in 2030, making it the fourth-largest consumer market in the world.

The big message of this analysis is that the consumer class is spreading across the world, and that many emerging markets will have large consumer markets where supply-chain-scale economies, digital platforms, and local preferences will need to be better understood and developed.

Treasury Secretary Janet Yellen has warned congressional leaders that the U.S. is on track to default on the national debt in October if the White House and Congress are unable to raise the debt limit. In a letter, Yellen said that the Treasury Department would likely run out of cash and exhaust “extraordinary” measures to keep the federal government within its legal borrowing limit at some point next month.

“Once all available measures and cash on hand are fully exhausted, the United States of America would be unable to meet its obligations for the first time in our history,” Yellen said. “Given this uncertainty, the Treasury Department is not able to provide a specific estimate of how long the extraordinary measures will last. However, based on our best and most recent information, the most likely outcome is that cash and extraordinary measures will be exhausted during the month of October,” she continued. Yellen wrote the letter to Speaker Nancy Pelosi (D-Calif.), House Minority Leader Kevin McCarthy (R-Calif.), Senate Majority Leader Charles Schumer (D-N.Y.) and Senate Minority Leader Mitch McConnell (R-Ky.).

The Treasury Department has taken so-called extraordinary measures to prevent the U.S. from defaulting on the national debt since the federal debt limit was reimposed on Aug. 1. If the Treasury Department runs out of ways to stave off a default without borrowing more money, the inability of the U.S. to pay its debts could send debilitating shockwaves through the financial system. Yellen urged lawmakers for months to raise the debt limit before it was reimposed in August, warning that a delay could “cause irreparable damage to the U.S. economy and global financial markets.” She has since pleaded with Congress to give Treasury the ability to pay debts already approved by previous presidents and congressional majorities.

“Waiting until the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States,” Yellen wrote. “At a time when American families, communities, and businesses are still suffering from the effects of the ongoing global pandemic, it would be particularly irresponsible to put the full faith and credit of the United States at risk.” Even so, Democrats and Republicans are locked in a stalemate over who bears responsibility for protecting the full faith and credit of the U.S. The White House and Democratic leaders are planning to tie a debt limit increase to another must-pass government funding bill, daring Republicans to trigger both a government shutdown and a default by opposing the measure.

“We fully expect Congress to act promptly to suspend the debt limit and protect the full faith and credit of the United States and we expect them to do that in a bipartisan way just as they did three times during the prior administration,” said a White House official. But Republicans have refused to raise the debt ceiling unless spending cuts and debt reduction programs are attached.

El Salvador has become the first country to adopt bitcoin as legal tender on September 7th, a real-world experiment proponents say will lower commission costs for billions of dollars sent from abroad but which critics warned may fuel money laundering.  The change means businesses should accept payment in bitcoin alongside the U.S. dollar, which has been El Salvador’s official currency since 2001 and will remain legal tender.  President Nayib Bukele, who has pushed for adopting the cryptocurrency, says it will help Salvadorans save about $400 million the government calculates is spent annually on commissions for remittances, while giving access to financial services to the unbanked.

The 40-year-old president is popular with the public but has been accused of eroding democracy, including by the administration of U.S. President Joe Biden.  Doubters say bitcoin could increase regulatory and financial risks for the Central American nation, and polls show Salvadorans are wary of the volatility of the cryptocurrency, which can shed hundreds of dollars in value in a day.  To warm up a skeptical public, Bukele has promised every citizen $30 in bitcoin if they sign up for a government digital wallet. Ahead of the launch, El Salvador bought 400 bitcoins, Bukele said, helping drive the currency price above $52,000 for the first time since May.

Underscoring the risks, bitcoin weakened about 4% to $50,516 hours later. In the early hours of Tuesday, El Salvador’s wallet had not appeared on Apple Inc, Google and Huawei’s app download platforms, however, prompting a series of tweets from Bukele, including one with a red-faced “angry” emoticon.  “Release him! @Apple @Google and @Huawei,” Bukele said. The wallet was later available from Huawei.  Some citizens were optimistic. “It’s going to be beneficial … we have family in the United States and they can send money at no cost, whereas banks charge,” said Reina Isabel Aguilar, a store owner in El Zonte Beach, some 49 km (30 m) southwest of capital San Salvador.  Known as Bitcoin Beach, the town of El Zonte aims to become one of the world’s first bitcoin economies. However, uptake may be slowed by low internet penetration across the country. It remains unclear whether businesses will be sanctioned if they do not adopt the new currency.

In the run-up to the launch, the government installed ATMs that will allow bitcoin to be converted into dollars and withdrawn without commission from the digital wallet, called Chivo.  Bukele on Monday asked for patience.  “Like all innovations, El Salvador’s bitcoin process has a learning curve,” he said on Twitter. “Not everything will be achieved in a day, or in a month.”  In barely two years in office, Bukele has taken control of almost all levers of power. Last week, top judges appointed by his lawmakers ruled he could serve a second term. Bukele has promised to clean up graft, but the Biden administration recently put some of his close allies on a corruption blacklist.  Analysts fear adopting the cryptocurrency could fuel money laundering.. After the bitcoin law was approved, rating agency Moody’s downgraded El Salvador’s creditworthiness, while the country’s dollar-denominated bonds have also come under pressure.

The move has muddied the outlook for El Salvador’s quest for more than $1 billion in financing from the International Monetary Fund (IMF).  But Bukele, who does not shy away from controversy, on Monday retweeted a video that showed his face superimposed on actor Jaime Foxx’s in a scene from Django Unchained, a Quentin Tarantino film about American slavery. The video portrayed Bukele whipping a slave trader who had the IMF emblem emblazoned on his face.  Bukele later deleted the retweet.  In his own tweet, Bukele said: “We must break the paradigms of the past. El Salvador has the right to advance towards the first world.”

Jeff Bezos, the multibillionaire has lost the title as the richest person on earth as his net worth actually tumbled — by $13.9 billion in one day, August 2nd.   Bezos’ net worth fell because Amazon’s AMZN, +0.12% stock price took a hit last week, sliding 7% after the company reported less-than-anticipated second-quarter growth.

The drop in Bezos’ net worth allowed for French tycoon Bernard Arnault to claim the No. 1 spot of the ultra-wealthy. Arnault heads the luxury goods conglomerate LVMH LVMH, +1.49%,  whose subsidiaries include Louis Vuitton, Sephora, Moët & Chandon and Tiffany & Co.

It might seem that a global pandemic and economic recession would set the luxury goods market back a bit, but Arnault remarkably grew his wealth by nearly $100 billion during the first year of the pandemic.

Arnault’s net worth sat at $195.8 billion as of Monday, while Bezos’ hovered at $192.6 billion.  Bezos made history in 2020 as the first person ever to be worth $200 billion, as Amazon enjoyed big gains from pandemic lockdowns.

The two billionaires had jockeyed for the top spot throughout May and June of this year, but the recent toss up put an end to Bezos’ 50-day streak at the top of the heap, according to Forbes.

In total, there are 2,755 billionaires worldwide, 86% of which are richer than they were a year ago for a combined $5 trillion increase in wealth in 2020.  Meanwhile, the median net worth for American families is $121,700.

The US economy grew at a lower-than-anticipated annual rate of 6.5 per cent in the second quarter, marking the return to an above pre-pandemic level of overall economic activity, the Commerce Department reported. However, the 6.5 per cent gain was considerably less than the 8.4 per cent Dow Jones estimate, Xinhua news agency reported.

In terms of real gross domestic product — the broadest measure of economic activity — the economy has now recovered in that has grown bigger than its pre-pandemic size. Earlier this month, the National Bureau of Economic Research designated the pandemic recession as the shortest on record, lasting just two months: March and April 2020.

In the first quarter, real GDP increased by 6.3 per cent, 0.1 percentage point less than previously reported, according to the latest data issued by the Department on Thursday. The increase in real GDP in the second quarter reflected increases in personal consumption expenditures (PCE), non-residential fixed investment, exports, and state and local government spending that were partly offset by decreases in private inventory investment, residential fixed investment, and federal government spending, the Commerce Department report showed.

Imports, which are a subtraction in the calculation of GDP, increased. The GDP data was released a day after the Federal Reserve signaled that it was inching closer to tapering its asset purchases amid concerns over surging inflation and the rapid spread of the Covid-19 Delta variant.

In the latest update to its World Economic Outlook, the International Monetary Fund (IMF) on Tuesday projected the US economy would grow by 7.0 per cent this year, up 0.6 percentage point from its April projection.

The upward revision reflects the anticipated legislation of additional fiscal support in the second half of 2021 and improved health metrics. In 2022, the US economy is expected to grow by 4.9 per cent, according to the IMF.

The Internal Revenue Service and the Treasury Department announced today that millions of American families have started receiving monthly Child Tax Credit payments as direct deposits begin posting in bank accounts and checks arrive in mailboxes. This first batch of advance monthly payments worth roughly $15 billion reached about 35 million families today across the country. About 86% were sent by direct deposit.

The payments will continue each month. The IRS urged people who normally aren’t required to file a tax return to explore the tools available on IRS.gov. These tools can help determine eligibility for the advance Child Tax Credit or help people file a simplified tax return to sign up for these payments as well as Economic Impact Payments, and other credits you may be eligible to receive.

Under the American Rescue Plan, each payment is up to $300 per month for each child under age 6 and up to $250 per month for each child ages 6 through 17. Normally, anyone who receives a payment this month will also receive a payment each month for the rest of 2021 unless they unenroll. Besides the July 15 payment, payment dates are: Aug. 13, Sept. 15, Oct. 15, Nov. 15 and Dec. 15.

Here are further details on these payments:

• Families will see the direct deposit payments in their accounts starting today, July 15. For those receiving payment by paper check, they should remember to take into consideration the time it takes to receive it by mail.
• Payments went to eligible families who filed 2019 or 2020 income tax returns.
• Tax returns processed by June 28 are reflected in these payments. This includes people who don’t typically file a return, but during 2020 successfully registered for Economic Impact Payments using the IRS Non-Filers tool or in 2021 successfully used the Non-filer Sign-up Tool for Advance CTC, also on IRS.gov.

• Payments are automatic. Aside from filing a tax return, including a simplified return from the Non-Filer Sign-Up tool, families don’t have to do anything if they are eligible to receive monthly payments.

Additional information is available on a special Advance Child Tax Credit 2021 page, designed to provide the most up-to-date information about the credit and the advance payments.

The Indian government has denied reports that it has asked state-owned banks to withdraw funds from foreign currency accounts abroad in anticipation of their potential seizure with regard to the Cairn legal dispute, terming such information as “false and baseless”.

“Condemning all such source-based reports as false, the Government of India said that these are totally incorrect reports which were not based on true facts. Certain vested parties appear to have orchestrated such misleading reporting, which often relies upon unnamed sources and presents a lopsided picture of factual and legal developments in the case,” said an official statement.

It said that the India is “vigorously” defending its case in this legal dispute, and has filed an application on March 22 to set aside the “highly flawed” December 2020 international arbitral award in The Hague Court of Appeal.“The government has raised several arguments that warrant setting aside the award. This proceeding is pending,” the government said, adding that it is committed to pursuing all legal avenues to defend its case in this dispute worldwide.

It was also stated that the CEO and the representatives of Cairns have approached the government for discussions to resolve the matter. “Constructive discussions have been held and the Government remains open for an amicable solution to the dispute within the country’s legal framework,” the Finance Ministry statement said. (IANS)

Wild, stomach-churning moments are part of the experience when you buy a ticket to the crypto circus. But the past week’s volatility was enough to make some of the crypto faithful wonder whether they’ve been bamboozled.

On Wednesday, a broad crypto crash wiped out about $1 trillion in market value — a staggering drop from $2.5 trillion just a week ago. Bitcoin, which accounts for more than 40% of the global crypto market, nosedived 30% to $30,000 on Wednesday, its lowest point since January.By Friday, bitcoin had rebounded slightly, to around $37,000 — bruised by continued regulatory concerns, and far off its all time high above $64,000 that it hit a month ago.

Volatility is baked into the nascent cryptocurrency market, but the digital assets’ explosive growth in the past year has attracted hordes of amateur and professional investors looking for a quick profit. Many of them ride an upswing and get out, or panic sell when things turn sour, exacerbating gains or losses.

What happened?

The crypto market had been especially shaky for about a week before the crash on Wednesday.

On May 12, bitcoin fell 12% after Elon Musk walked back Tesla’s commitment to accept bitcoin as payment, citing concerns over the crytocurrency’s massive carbon footprint. Musk added to investor anxiety last weekend with a pair of seemingly contradictory tweets about bitcoin that left investors scratching their heads.

Then the big crash came Wednesday, after Chinese officials signaled a crackdown on crypto use in the country. The central bank issued a warning to Chinese financial institutions and businesses not to accept digital currencies as payment or offer services using them.The threat of increased regulation triggered a panic, and bitcoin plunged before rebounding slightly and leveling off. Other cryptocurrencies also tanked: Ethereum fell more than 40%, while dogecoin and binance lost around 30%.

By Thursday, bitcoin had recouped some losses and was back above $41,000. But a Friday statement from Chinese officials reiterating the need to crack down on cryptos beat bitcoin back down. It was trading around $37,000 on Friday afternoon. Other cryptos were also in the red.

Regulatory concerns

China has long had limits around crypto trading within its borders. Officials declared in 2013 that bitcoin was not a real currency and banned financial and payment institutions from using it. Individuals can hold or trade cryptocurrencies, but major exchanges in mainland China have been shut down.

On the surface, this week’s statements simply underscored China’s suspicion of cryptocurrencies generally. But they sent a clear signal that Beijing is not loosening its grip on the market anytime soon. Authorities are also launching a state-backed digital yuan that would keep money flows under strict oversight.

And it’s not just China. On Thursday, Federal Reserve Chairman Jerome Powell warned about potential risks cryptocurrencies pose to the financial system. Powell also said the central bank would publish a paper this summer that will explore the implications of the US government developing a digital currency of its own.

A potential central bank digital currency “could serve as a complement to, and not a replacement of, cash and current private-sector digital forms of the dollar, such as deposits at commercial banks,” Powell said. The Treasury Department is also turning its attention to the crypto space. On Thursday officials said any transfer of digital currency valued at $10,000 or more must be reported to the Internal Revenue Service.

“Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion,” the Treasury said in a statement. “Despite constituting a relatively small portion of business income today, cryptocurrency transactions are likely to rise in importance in the next decade, especially in the presence of a broad-based financial account reporting regime.”

Bitcoin had been up nearly 6% Thursday but pared its gains after the statements from US officials, according to Bloomberg.

The future of cryptos

The week’s wild swings were a test for cryptocurrency fans. True believers tend to take the long view: At the start of 2020, bitcoin was trading around $7,000 a coin, which means it’s still up more than 400% in that time, even after crashing this week.

“We all tend to focus on day-by-day, week-by-week,” said William Quigley, managing director at crypto-focused investment fund on Wednesday. “But that’s not how most people buy cryptocurrencies, or even stocks.

Is it a bubble? Probably, according to ethereum co-creator VitalikButerin. In an interview with CNN Business this week, Buterin said he wasn’t surprised by the crash, because he’s seen it all before.

“We’ve had at least three of these big crypto bubbles so far,” he said. “And often enough, the reason the bubbles end up stopping is because some event happens that just makes it clear that the technology isn’t there yet.” (Courtesy: CNN Business)

Bitcoin has officially reached an all-time high of $59K. Its market capitalization is now over a trillion dollars. The fact is that those of us who know nothing about cryptocurrencies are getting excited when we learn that thousands have been harvested in recent days.

If you want to move into an investment, it is cheaper and easier than trading stocks and options.

FSix years ago, when I first analyzed the cryptocurrency Bitcoin and recommended it to some, many people said it was a scam, and I thought it was crazy. It then had a market capitalization of just over $ 6 billion. This year, Bitcoin became the first crypto to earn a trillion dollars.

Over the past few years, the lucky few have had the opportunity to book high gains of up to 16,377% – a rare history of those who were able to turn $ 1,000 into $ 164,770.

As mentioned above, at about $ 59,000 each, Bitcoin is still a clever strategy to double your money to 10x or 20x. Over time, as more and more people try their luck, the event may turn out to be a catastrophe.

Gold has always been. The era of what was once considered a safe haven seems to be coming to an end.

Hedging is a good idea, but no one wants to do it with gold that has fallen into a bear market pattern. When the pandemic hit the United States in March 2020, gold prices fell again after a slight rise. Then the yellow metal is not doing its job now.

Last year, the United States spent $ 5.3 trillion on coronavirus relief, more than $ 27% of our annual GDP, but that did not significantly affect the price of gold.

The situation in the U.S. stock market has changed significantly this week. However, few investors may have noticed these signs. After a month of market fluctuations, the S&P and Dow jumped simultaneously, hitting all-time highs. For the first time in history, the Dow jumped to 33,000

Most people are thankful for Biden’s $ 1.9 trillion U.S. rescue plan, which will soon create a massive surge in the economy and pocket many Americans in the crowd.

Now, if you are a gold digger, many other things are hard to accept. It’s even more challenging for you to buy that Bitcoin has taken over the job of gold.

This is because gold has a history of thousands of years, while bitcoin has existed for a decade.

People have used horses for thousands of years. Within a decade, cars had eliminated horses, as the saying goes!

Then crypto has become your question mark!

If you have not yet taken your first step in this burgeoning market, there is no better time to do it. One reason for this is that as of January 2021, there are more than 4,000 cryptocurrencies in existence. Many are worthless. In the name of this, brokers and advisers are flooding the internet. Without a phone number or an office to ask questions about, or a certificate to show off, this cryptocurrency system, which continues to buy and sell only on digital platforms worldwide, has become a headache for economists and a secret money-making platform for intelligent greed.

For example, Bitcoin was the story of the highest investment in 2013 and 2014.

They have been at the forefront of developing currency exchanges and investment funds, driving Bitcoin into the headlines. At the time, Bitcoin was trading at $ 90. Over the next five months, Bitcoin rose 1,192 percent to $ 1,163. People across the country made millions of dollars. Some were even millions of banks. As a matter of fact!

Bitcoin’s popularity has grown due to its resistance to inflation, which is expected to become a more widely used payment method. But skeptics argue that its wild price rise could keep many companies away.

The market was buoyed when the electric car maker’s investment raised Bitcoin to a record high of $ 58,332.36. Still, the currency fell slightly after billionaire CEO Elon Musk expressed some skepticism on Twitter.

Many tons of cryptocurrencies are benefiting from this massive cash flow. Although many share the same DNA as Bitcoin, their total is very small.

As the world looks back on our time’s most revolutionary technological advances, two of the most important of these cryptocurrencies should be seen as examples.

1. ETHEREUM (ETH)

As of March 2020, the ETH is trading at $ 130.

Today, a single shot costs more than $ 1,825. That’s about ten times more in a year. If you invested in ETH five years ago, a 1,000 investment would be worth more than $ 800,000. This is a very rare and unusual 80,000% gain.

2. LITECOIN (LTC)

LTC was the first crypto to launch with Bitcoin in 2011. Today, a litecoin costs $ 201.11. Five years ago? It was trading below $ 5 that day. If you had bought $ 1,000 worth of Litecoin in 2016, you would have $ 34,200 in your pocket today.

There is no such thing as intellect when you think of yourself, and you have to test whether it exists today.

As Bitcoin soared from close to $ 5,000 last March and soared to $ 60,000 on March 13th, you may feel that something is missing now.

But it would be best if you were 100% focused on allowing your stock portfolio winners to rise higher and continue to know how to protect those gains when the market finally turns around.

The price of the world’s largest digital currency rose 8 percent to $ 59,274.13 a day earlier. That brings the total value to $ 1.15 trillion. (Coindesk Data Show).

Prices began to rise following further indications that institutional investors and large corporations were coming to cryptocurrency.

For example, Bitcoin-based investment firm NYVDG announced on Monday that it had raised $ 200 million from a group of investors, including Wall Street Titans Morgan Stanley, New York Life, billionaire financier George Soros, and Soros Fund Management.

Insurers on the company’s platform now have exposure to bitcoin worth over a billion dollars, which can be “an example of accelerating institutional bitcoin adoption”. The company’s announcement comes a month after Tesla revealed it had bought $ 1.5 billion worth of bitcoin, following in the footsteps of smaller companies such as Microstrategy and Jack Dorsey’s Square.

It remains at full strength this year as well.

The latest US stimulus package worth $ 1.9 trillion has now brought more money to market. The arrival of this new paper money reduces the value of the already popular dollar. This happens naturally. If the dollar had depreciated 13% of purchasing power against foreign currencies last year – it would have continued and would have had accurate results. This means that your purchasing power is declining rapidly. This means that following the same policy is a big mistake. Winners are said to be added quickly.

These are just some of the goal-setting shareware that you can use. No strategy is perfect. Any investment always carries the risk of loss. Some fail along the way.

But the coming months and years are likely to be more exciting and rewarding than anything we’ve seen before. There can be no doubt that peer-to-peer transactions and digital currencies are echoing a revolution that removes intermediaries and transfers power into the people’s hands. Any Crypto investment is a risky affair, play responsibly, lucky ones mint the fortune!

(My safer recommendation, there is a Bitcoin tracking stock whose symbol is GBTC, which trades around $52; which moves in parallel to Bitcoin).

Let me conclude,  nothing is guaranteed, but the potentials are enormous.

The US Senate approved President Biden’s $1.9 trillion coronavirus relief plan Saturday, March 7^th securing additional aid for American families, workers and businesses — and a legislative victory for the Biden administration.

After more than 24 hours of debate, the evenly divided Senate voted 50-49 to approve the measure. Republican Sen. Dan Sullivan of Alaska was absent because he was in Alaska for a family funeral.

The final vote was 50-49, with all Democrats voting in favor of the bill and all Republicans voting against it. The passage of the bill was met with cheers and applause from Democrats, celebrating the passage of one of Mr. Biden’s key priorities. Vice President Kamala Harris did not need to visit the Capitol to break any ties, as GOP Senator Dan Sullivan left due to a family emergency on Friday.

The package would deliver a new round of financial assistance to Americans grappling with the impact of the pandemic, including $1,400 direct payments, an extension of supplemental unemployment benefits and an increase to the child tax credit.

Individuals earning up to $75,000 and couples earning up to $150,000 would receive the full direct payments of $1,400 per person. But those payments would phase out for individuals and couples who make more than $80,000 and $160,000, respectively.

The income cutoff was lowered after moderate Democrats demanded that the latest round of checks target lower-income families.

Federal unemployment benefits would be extended through Sept. 6 at the current rate of $300 per week, and the first $10,200 of those benefits would be tax-free for households that earn $150,000 or less. That provision followed a lengthy debate Friday among Democratic senators.

Democrats were under pressure to get the bill to Biden’s desk before current federal unemployment benefits expire on March 14.  The budget reconciliation process allowed them to act without Republican backing, requiring only a simple majority to pass the bill.

Democrats took a victory lap after the passage of the bill, with Senate Majority Leader Chuck Schumer telling reporters after the vote that “it’s a great day for this country.” Senate Budget Committee Chair Bernie Sanders called the bill “the most significant piece of legislation to benefit working families in the modern history of this country.”

President Biden dubbed the plan “historic” during an address on Saturday.

“For over a year the American people were told they were on their own,” he said, and later added, “This nation has suffered too much for much too long, and everything in this package is designed to relieve the suffering and to meet the most urgent needs of the nation.”

The president noted that 85% of American households will now soon receive direct payments of $1,400 per person, and a “typical middle class family of four” will get $5,600. “That means the mortgage can get paid. That means maintaining the health insurance you have. It’s going to make a big difference in so many lives in this country,” he said.

“The bottom line is this: This plan puts us on the path to beating this virus,” Mr. Biden said Saturday. “This plan gives those families that are struggling the most the help and the breathing room they need to get through this moment. This plan gives small businesses in this country a fighting chance to survive. And one more thing,” he added, “this plan is historic.”

In his annual letter to shareholders of Berkshire Hathaway (BRKB), investing guru Warren Buffett disclosed that the company took an $11 billion writedown last year on its 2016 purchase of Precision Castparts, describing it as “a mistake.”

The 90-year-old billionaire, Berkshire’s chairman since 1970, said in the company’s annual letter to shareholders that the “ugly” write-down had a simple explanation. “I paid too much for the company,” he said. “My miscalculation was laid bare by adverse developments throughout the aerospace industry.”

Despite that loss and fallout from the pandemic in general, the company’s operating businesses enjoyed a solid end to 2020. The sprawling conglomerate, which owns Geico, Dairy Queen, the Burlington Northern Santa Fe Railway Company, Duracell batteries and many other consumer, financial, industrial and energy companies, said Saturday it posted a net profit of $35.8 billion in the fourth quarter, an increase of 23%.  Berkshire’s operating profit rose nearly 14% in the quarter, to $5 billion.

In the letter, Buffett also disclosed that Berkshire Hathaway’s annual shareholder meeting on May 1, normally held in Buffett’s home town of Omaha, Nebraska, will instead be livestreamed from Los Angeles so that vice chairman Charlie Munger, who lives in Southern California, can attend.

The 97-year old Munger did not attend last year’s virtual shareholder meeting in Omaha due to the Covid-19 pandemic. Instead, Buffett was joined on stage by another Berkshire vice chairman, Greg Abel.

“I missed him last year and, more important, you clearly missed him,” Buffett said of Munger, who is also chairman of California newspaper publisher Daily Journal (DJCO), which held its own shareholder meeting on Wednesday in Los Angeles.

Buffett said Abel and Berkshire’s third vice chairman, Ajit Jain, will also be on stage in LA to answer questions during the virtual May 1 meeting, which is scheduled to last from 1:30 p.m. ET until 5:30 p.m. Buffett said he hoped Berkshire can once again hold an in-person meeting in Nebraska in 2022. As he often does in Berkshire’s annual letter to shareholders, Buffett — who has a net worth of some $90 billion — dispensed some words of wisdom about the current state of the market.

Staying away from bonds and buying back more Berkshire stock

He is not currently a fan of bonds because despite a recent uptick, yields remain historically low. “Bonds are not the place to be these days,” he wrote, adding that the yield on the 10-year Treasury, now hovering around 1.46%, was 15.8% in 1981.

“In certain large and important countries, such as Germany and Japan, investors earn a negative return on trillions of dollars of sovereign debt. Fixed-income investors worldwide — whether pension funds, insurance companies or retirees — face a bleak future,” Buffett noted.

He also defended Berkshire’s propensity for using cash to buy back its own stock. The company spent $24.7 billion last year to repurchase shares. Some investors have argued that Berkshire could find a better use for its cash, which totaled more than $138 billion in cash at the end of 2020. Berkshire could it use to make more acquisitions.

“In no way do we think that Berkshire shares should be repurchased at simply any price,” Buffett wrote. “American CEOs have an embarrassing record of devoting more company funds to repurchases when prices have risen than when they have tanked. Our approach is exactly the reverse.”

Still, some wonder if Buffett has lost his Midas touch. Berkshire Hathaway’s stock is up just 11% over the past year, compared to a nearly 23% gain for the S&P 500. The company has lagged the broader market during the past five years, too, despite being a major investor in Apple (AAPL).

Buffett, however, defended the company’s investment strategy, describing it as like a classic diner. “At Berkshire, we have been serving hamburgers and Coke for 56 years. We cherish the clientele this fare has attracted,” Buffett wrote.

Although he has dipped his toe into higher techs like Apple and Amazon (AMZN) recently, the majority of Berkshire’s investments are in slower growth “value” stocks such as Chevron (CVX), Verizon (VZ), American Express (AXP) and, yes, Coca-Cola (KO). (Buffett is an avid drinker of Cherry Coke.)

In other words, don’t expect Buffett to start investing in meme stocks like GameStop (GME) or momentum darlings such as Tesla (TSLA).

“The tens of millions of other investors and speculators in the United States and elsewhere have a wide variety of equity choices to fit their tastes. They will find CEOs and market gurus with enticing ideas,” he said. “Many of those investors, I should add, will do quite well.”

But Buffett stressed a more patient approach to investing. “All that’s required is the passage of time, an inner calm, ample diversification and a minimization of transactions and fees,” he said.