Economy


Hedging against US dollar decline: Bitcoin rises after Fed signals loose monetary policy

The price of bitcoin continues to rise as investors opt for crypto assets in an effort to find shelter from the decline of the US dollar’s purchasing power. The world’s most valuable cryptocurrency climbed 6% over the past 24 hours, trading at nearly $58,480 per token at 10:39 GMT. Another daily surge has been reportedly evoked by the latest decision of the US Federal Reserve to keep interest rates close to zero at least through 2023. The move predictably caused deep concerns among crypto investors, bolstering the cryptocurrency’s appeal as a hedge against rising inflation. The price of bitcoin has grown tenfold over the past year. Most analysts attribute the gains to higher attention to alternative assets, as stimulus measures adopted by...

Crypto Exchange Asks Customers To Return Bitcoin After Selling It At 88% Discount

What Happened: The largest crypto exchange in Southeast Asia, Philippines-based PDAX, experienced a technical failure that led to Bitcoin trading at $6,000 – an 88% discount to its current price. Following the incident, PDAX asked its customers to return their Bitcoins, threatening legal action, a local news outlet Bitpinas has reported. According to the exchange’s CEO, the system error was not due to a hack but a technical “glitch” caused by a massive surge in trading activity. Why It Matters: The initial outage is said to have taken place on February 18; however, since then, reports have surfaced on social media of customers being locked out of their exchange accounts and being asked to “return their Bitcoin.” “After almost 24 hours, ...

LVMH Buys 50% of Jay-Z’s Champagne Brand Armand de Brignac

LVMH’s Moet Hennessy has bought a 50 percent stake in Armand de Brignac, a Champagne producer owned by rapper Jay-Z, another sign of a close relationship between the luxury industry and hip-hop culture. No financial terms were disclosed for Monday’s transaction. Armand de Brignac sold more than half a million bottles in 2019, prices of which run $300 and up. The rap star has been an investor in the brand since 2006, when he touted the brand, known for its Ace of Spades logo on a metallic silver bottle, in a video for “Show Me What You Got.” Jay-Z bought out Sovereign Brands’s stake in the company in 2014. “Armand de Brignac breaks barriers and reflects contemporary luxury, while preserving the tradition of the Champagne terroirs,” Philip...

China outpaces US as Europe’s largest trade partner in 2020

China has become the only country to boost both exports and imports to the European Union amid the pandemic, dethroning the US as the bloc’s top commercial partner last year. According to the data published by the European Union’s statistics office, Eurostat, the 27-nation bloc’s imports from China hit €383.5 billion ($465.6 billion) in 2020, increasing by 5.6 percent year-on-year. Exports were up 2.2 percent to reach €202.5 billion ($245.9 billion). At the same time, trade with the US – historically Europe's top trading partner – saw a significant drop. Last year’s imports plunged by over 13 percent, while exports of European goods to the US fell by more than eight percent. As a result, the US is no longer EU’s top trade destination and ha...

Melvin Capital loses 53% in January

Hedge fund Melvin Capital felt the effects of the buying spree spurred by individual buyers from the r/WallStreetBets subreddit account, with the group losing 53 percent in January. Despite the loss, Capital received fresh cash from investors by the end of January after taking heavy losses due to the unexpected and record stock gains for companies like GameStop, according to a source cited by Reuters. Melvin started January with $12.5 billion in assets, but is closing out the month with $8 billion, according to the Wall Street Journal’s report on the losses. It closed out its short position on GameStop in the wake of the massive surge. Other groups like Citron have also felt the squeeze by betting against GameStop and have closed their sho...

Facebook forces WhatsApp users to share their personal data… or get off the platform

WhatsApp users must share their personal data with parent company Facebook going forward, the app’s new privacy policy has declared – flying in the face of everything that attracted privacy-oriented users to the platform. Facebook’s bait and switch will see WhatsApp sharing private information that goes significantly beyond names and profile pictures with Facebook and other subsidiaries. Phone numbers, address books, status updates, and even detailed data on the type of phone they’re using will be fed to the Facebook hive-mind. And woe betide anyone who does business on WhatsApp – information about shipping addresses, purchases, and the amount of money spent also belongs to Facebook under the new policy, which is supposed to take effect o...

China to dethrone US as world’s biggest economy sooner than we'd predicted, expert group says

The Centre for Economics and Business Research (CEBR) expects that China’s economy will outshine that of the US by 2028, half a decade sooner than it had previously forecast. According to a report from the UK-based consultancy group, the country’s quick rebound from the Covid-19 pandemic will generate a two-percent growth in 2020, while the US is expected to contract by five percent. China's economy, when measured in dollars, is set to narrow the gap with its biggest rival. At the same time, the CEBR report suggests that global gross domestic product (GDP) would drop 4.4 percent, marking the biggest year-on-year decline since the second world war. “The big news in this forecast is the speed of growth of the Chinese economy. We expect it to...

US sanctions may lead to dollar’s demise, Russian central bank warns

The greenback may fall victim to Washington’s sanctions, as these policies force global players to ditch the US dollar and switch to national currencies in trade, according to the Central Bank of Russia (CBR). “Active use of the sanctions regime by the US administration in recent years is something that seriously undermines the reliability of the dollar as means of savings and payments,” CBR Deputy Chairman Aleksey Zabotkin said as cited by Russian media on Wednesday. The official noted that this will result in a reduction of the use of the US currency over the years. While the US is not expected to change its sanction rhetoric, we could see more and more countries opting to trade in national currencies, he added. Russia has been long cal...

Canada likely to become the next 'Five Eyes' nation to ban Huawei 5G

Canada is likely to become the next 'Five Eyes' nation to ban Huawei 5G, a step which may come following the creeping monopoly by the Chinese firm in the 5G world that has sounded alarm bells for major world powers. These world powers are unwilling to allow their communication infrastructure in the future to be comprised of equipment sourced, manufactured and maintained by a single. Since the regime of Mao Zedong, state-controlled companies have played a major role in the Chinese economy, but lately private Chinese companies have begun to play a much larger role in propelling China's economy. This has led to the Chinese Communist Party (CCP), especially since the rise of President Xi Jinping, interfering more and more in the workings of pr...

Mercedes recalls over 660,000 cars from China amid likely oil leak

Mercedes-Benz will recall over 660,000 cars this year from China amid likely oil leak, the Associated Press reported. A seal between the high-pressure fuel pump and a low-pressure fuel pipe may weaken over time, and it will lead to oil leak when the engine starts in cold weather, China’s State Administration for Market Regulation said in a statement. The recall of 668,954 vehicles includes C-class, E-class, V-class, GLK-class, CLS-class, SLC-class, GLC SUV and VS20 VITO models....

‘Brexit is madness’, French finance minister declares, claiming the British will be ‘the big losers’

France’s finance minister has claimed it’s the UK that will lose out big from Brexit, as the UK and EU attempt to overcome significant differences and secure a trade deal in extended, last-ditch talks. Speaking on France Info TV, the minister of the economy, Bruno Le Maire, used a phrase coined by the recently deceased John le Carré, calling the UK’s departure from the EU a “political, economic and historical folly,” and stating that “Brexit is madness.” Asked about the impact of a no-deal Brexit, the finance minister said he believes “the big losers from Brexit will be the British,” predicting that it will have a minor effect on France’s GDP, while the UK experiences a significant dip. Le Maire has repeatedly been critical of the UK’s ...

Global economy to contract by 5.6% this year due to pandemic – UN

The volume of global trade is set face the sharpest decline since the end of the global financial crisis, falling as much as 5.6 percent this year, the UN Conference for Trade and Development (UNCTAD) predicts. The figure, announced by the agency earlier this week, is more optimistic than its previous forecast, which expected global trade to contract by nine percent year-on-year. The previous largest decline was seen in 2009, when global merchandise trade took a 22-percent nosedive. However, the UNCTAD downgraded its forecast for the service sector, which was hit hard by a steep decline in travel, transport and tourism activity during the pandemic. The troubled sector is on path to fall by a staggering 15.4 percent to levels last seen in th...