Halloween Brings An Economic Treat

     According to the National Retail Federation, consumer spending on Halloween-related items is expected to reach an all-time high of $10.14 billion in 2021. That is up from the $8.05 billion U.S. citizens spent in 2020, during the pandemic. On average, consumers plan to spend a little more than $100 on costumes, candy, decorations and greeting cards, about $10 more than they spent last year. Americans are nearly back to pre-pandemic levels — at least for Halloween, anyway. The NRF says 65% of Americans plan to participate in Halloween activities this year, just under the 68% that planned to participate in 2019, before the pandemic. That is great news for state and local economies who earn revenue from all the pumpkin patches, hay rides, and corn mazes. 

    Since there will be more people out trick-or-treating than last year, homeowners will have to make sure to have more candy out for children. The Mars Chocolate North America factory in Topeka can produce 14 million bite-sized Snickers candy bars and 39 million M&Ms — enough to fill 1.5 million fun-sized packs — each day, according to some reports. That’s about 8,000 pounds of cocoa butter, and 117,000 pounds of peanuts. States like Kansas will play a starring role in filling the candy bags on the holiday. Milk from western Kansas dairies is dehydrated and turned into milk powder that likely makes it into candies all over the U.S. and the globe. In a country hindering from a worker shortage and a supply chain crisis, at least we can thank Halloween for maybe sparking some economic growth into our economy.  

Source: Halloween brings an economic treat (farmprogress.com)

Squid Game cryptocurrency rockets in first few days of trading

         Squid Game is a Korean survival drama in which contestants who are deeply in debt play children's games in order to win a ton of cash. Those who lose or refuse to comply with the strict rules of the games face a death sentence. It has attracted more than 142 million audiences during its first four weeks from launch and became Netflix’s most-watched series to date. People’s obsession with this Squid Game renders it influential not only in the film industry but also in a rather unexpected area - the cryptocurrency sector of the white-collar blockchain industry.

        Devoted fans of the show created an online version of the game, for which participants need the Squid cryptocurrency – SQUID to play. The rules of the online align with the show in which players will go through multiple rather simple games to win big money at the end. Players pay an entry fee, so the reward pool gets larger as more people participate. What’s different about the game online is that gamers only win money tokens and they play without deadly consequences. "Squid Game" popularity spread like wildfire, and so did SQUID. According to CoinMarketCap, SQUID was worth $0.01 cent on Oct.26th and rose to $6.27 on the morning of Oct. 29th – a 62,600% increase.

        As the market capitalization of SQUID reached 184 million dollars, questions and concerns were raised. It has been criticized for not allowing investors to resell their tokens. The only explanation given by the company is that “it is using ‘innovative’ anti-dumping technology that limits people from selling their coins if there are not enough coins being bought in the market”. Besides, some experts warn prospective investors that cryptocurrencies that were developed upon speculative frenzies carry a substantial amount of risk since the values of these kinds of cryptocurrencies are bound to fluctuate. For example, people’s obsession with Squid Game will not last forever, and when the passion dies down, investors whose money tokens are tied up in the currency will face a significant loss. 

Credit: https://www.bbc.com/news/business-59059097

Trouble In Ecuador

     At the moment, Ecuador is going through mass riots throughout the nation. Protestors have blocked roads and planned marches causing a state of emergency. The plan for the rioters and protesters is to peacefully enter the heavily secured presidential palace. Why is there widespread out-roar in Ecuador?

    Last week the president of Ecuador Guillermo Lasso recently increased the price of fuel in the country. This brought outrage across the nation and the people of Ecuador demanded it be reversed. Due to this pressure President Guillermo Lasso decided to fix the price of fuel with petrol costing $2.55 a gallon and diesel $1.90 a gallon. This was released after a constant increase in fuel prices freezing the costs to one stable price. These inflated gas prices aren't coming from no where though, Ecuador has been experiencing a very unstable economy due to the COVID pandemic. Although the President offered somewhat of a solution to the people, the people rejected it a preferred to go along with the rioting and protesting.

    Do you think President Guillermo Lasso is doing the best he can for his people or trying to save face while only being on the job for five months so far?

https://www.aljazeera.com/news/2021/10/26/indigenous-lead-protest-against-ecuador-economic-policies

Restaurants prep for long-term labor crunch by turning to robots to work the fryer, shuttle food to tables

 

The COVID-19 pandemic has caused many problems for people and businesses. One of the obstacles that have arisen during the pandemic is labor shortage issues. Many companies are not finding enough workers or not finding enough qualified workers to fulfill their positions. One of the industries that have suffered from the pandemic is the restaurant industry not finding enough servers to treat their customers. To combat this issue restaurants have started looking at unique ways to fulfill their server position using technology. 

At Inspire Brands’ Innovation Center in Atlanta, robots made by Miso Robotics have taken on a server and fry cook role. These robots have been featured in many restaurants including CaliBurger, WhiteCastle, Buffalo Wild Wings, Domino’s, and Chiptole. Miso Robotics has a goal of these robots becoming mainstream in 2022. The fry cook robots help to relieve the dangerous, boring job and the server robots help deliver food quicker. These robots can be very beneficial in helping ease the labor shortage issue in the restaurant industry. “The National Restaurant Association recently reported that 4 in 5 operators are understaffed. This includes 81% of full-service operators and 75% of limited-service operators. Robotics can help ease the staffing challenges and speed up operations”. Any technology increase ideally should increase the supply of jobs, even though some jobs will be lost to these robots. 

One issue with these robots is although they are being used to ease the labor shortage issue, producing the robots is a problem because of the labor shortage issue. The robots use AI technology to operate and other industries such as automotive, electronics, and metal also use AI technology and those other industries are more lucrative than the restaurant industry. 

Although there are problems with producing robots to operate as fry cooks/servers I believe that it will be more efficient to have them. By implementing restaurants robots one would be able to receive their food faster as well as not have to worry about having a server they did not get along with. Increasing technology would also increase the supply of jobs which would be beneficial. Although it may be years until these robots become mainstream I think it is a unique way to fix the labor shortage issue. 

by: Kate Rogers -CNBC

https://www.cnbc.com/2021/10/22/restaurants-looking-for-labor-and-speed-turn-to-robots-.html

Afghanistan Faces Economic Challenges

 In Afghanistan, following the return of the Taliban, a humanitarian crisis is on the horizon. Within the months of the Taliban's reign, humanitarian efforts have been almost entirely cutoff. Along with this, the Afghan economy has teetered on the edge of collapse due to the strict rules and regulations that have been harshly implemented. Without any help from the outside, it is unlikely that we will see any improvement, and this is bad news for the million children that are at risk of starvation. 

Before Afghanistan was reconquered by the Taliban, the country was heavily dependent on foreign aid efforts to feed its impoverished families. The Taliban claims that the US is holding funds hostage from them and therefore they can not provide the humanitarian efforts that are neccesary to help the hungry population. The US is currently freezing over $9 billion in assets from the Taliban, and other countries have made it a point to do the same until they have proven that they have rolled back their previously harsh ways. There is no way to know exactly how much funds that the Taliban has access to, but one thing is for certain, and that is that there is very much uncertainty about the future of Afghanistan and its economy. There is not much food, the economy is on the decline, and the Taliban are doing very little to help the problems that are running ramped in their country. 

Link: https://www.cbsnews.com/video/afghanistans-economy-is-on-the-brink-of-collapse/#x

U.S lifting travel restrictions

 As of November 8th, international travelers will again be allowed to travel into the United States. This will end a 21 month ban in which some citizens of certain countries were denied travel rights to the United States. The ban first began when Trump was in office where he banned Chinese citizens from traveling to the United States. From there it then spread to other countries receiving similar bans with little reasoning as to why. These bans effected countries such as: China, Canada, Mexico, Brazil, and much of Europe. In terms of the economy though, this move should help boost the travel economy in the United States. Within a week of this news plane ticket sales have already spiked and will be interesting to see how much lifting this ban will help the struggling airline industry. Not only that but one could expect for tourism to increase as well considering the lift of sanctions. In result this increase in tourism could help benefit the United States economy as a whole. It will be interesting to see how the international travel is handled and if it will lead to a spike in Covid again, and if so does Biden impose the travel ban again. Lastly, it will be interesting to see how much this move benefits the economy not just from a travel standpoint, but as a whole as well. 

Yellen not concerned with rising inflation

U.S. Treasury Secretary Janet Yellen had confirming words for the economy today as she said the United States was not losing control of inflation. She even stated that she expects inflation levels to return to normal by the near-end of next year. 

Yellen also went on to explain that President Biden’s spending through his domestic infrastructure and ‘Build Back Better’ packages will be allocated throughout the next ten years. She failed to mention the impact of this on the inflation rate, but we can expect that with high government spending prices will rise. However, this seems to not be a concern to the U.S. Treasury Secretary. 

Backing up her claim that normal levels won’t return until late next year, Yellen said, “On a 12-month basis, the inflation rate will remain high into next year because of what's already happened. But I expect improvement by the middle to end of next year - second half of next year.” 

We know that the ongoing problems with the supply chain have caused enormous problems in a growing demand United States economy which definitely doesn’t benefit the inflation rate. Yellen stated that she expects these bottlenecks to fade away in the near future. 

Regardless of the ongoing economic conditions, The Federal Reserve will keep its promise to keep interest rates near-zero and until the economy is back to full employment and an inflation rate of 2% or better. 

Article : https://www.reuters.com/world/us/yellen-says-us-has-options-raise-revenue-pay-build-back-better-bill-2021-10-24/ 

President Biden, Taiwan and Chinese control

 In East Asia, many countries are connected through many things such as History, Business, Trade, and politics, making the area one of the most unique Socio-Political areas in the world. One of the main Socio-Political topics in East Asia is that of Taiwan and China. For many years China has had control over Taiwan, and as such does not recognize it as a sovereign and independent nation. Despite Taiwan's best efforts, they are still under Chinese rule. The United States is an example of such a country, that as of late, thinks Taiwan should be independent. 

On Thursday, October the Twenty-First, President Joe Biden made a comment saying that if China were to attack Taiwan, the United States would defend them against a potential Chinese invasion. China did not take kindly to the comments made by President Biden, as Foreign military spokesperson Wang Wenbin commented on this issue saying " When it comes to issues related to China’s sovereignty and territorial integrity and other core interests, there is no room for China to compromise or make concessions, and no one should underestimate the strong determination, firm will and strong ability of the Chinese people to defend national sovereignty and territorial integrity" Weng went on to say that Taiwan is an "Inalienable" part of China's territory and China does not intend to have any foreign intervention as it is strictly internal. While the war between China and Taiwan does seem very unlikely, it seems the U.S is more than willing to cut ties with a growing superpower, to help defend Taiwan.

Sources: https://apnews.com/article/joe-biden-china-beijing-taiwan-f4fdeb6e15097d55f5d4c06b5f8c9c29

As Starbucks Workers Seek a Union, Company Officials Converge on Stores

 As Starbucks Workers Seek a Union, Company Officials Converge on Stores

https://www.nytimes.com/2021/10/18/business/economy/starbucks-union-buffalo.html 

A couple of Starbucks store in Buffalo, New York is making an effort to unionize. In late August, these stores filed for union elections. Around the same time, Starbucks began sending officials out to stores. These officials include managers and top corporate executives from out of town. There has also been an increase in staffing. Those in the unionization effort feel that these actions are a countermeasure to intimidate workers into not voting for a union. The increase of staffing has mostly been teenagers, who are not eligible to vote in the union election. Starbucks claims that these are not intimidation tactics, but instead to fix longstanding problems in the workplace. 

Currently, none of the US locations for Starbucks are unionized. If the stores in Buffalo are able to form a union, it will be the first time there is a union for company-owned stores in the United States. In the Unites States, unions have had a brutal history when it comes to corporations. When people first began unionizing, they were brutally put down by hired "tough guys" and even the government. I hope that the stores who want to unionize are able to do so, as I think that unions are an important tool for the everyday worker. This fight for a union is just one of many acts of labor activism currently happening in the US. 

Why won't Australia give up coal?

Australia is known to be one of the most pollutant countries in the world. Australia 2030 pollution emissions are twice as much of what USA's and UK's emissions are. Yet, with climate change being a huge problem around the globe Australia refuses to give up coal. Australia is one of the world's largest fossil fuel producers. They will continue to mine for coal because: 

1. Loyalty to the industry 
2. Market monopoly 
3. Not wanting to go green. 

Loyalty to the industry: 

Australia has relied on coal for years to save its economy. Coal mining has helped Australia's economy for decades. The coal mining industry supports a huge workforce in the rural areas and is also credited for the country's wealth which is why the government can not abolish it. 

Market Monopoly:

The demand for coal is still there and Australia is one of the top coal producers. Hence, a lot of international income flows into the country. India and China alone use up 64% of Australia's coal. With the high demand, Australia continues to profit from this industry. 

Not wanting to go green: 

The argument is that even if Australia stops cola production, the alternative for the country is liquified gas. The government has already pledged half a billion dollars to new gas basins and plants, defying global calls for an end to new fossil fuel projects.

Apart from this the government has cut the renewable energy funds and has also withdrawn from the UN's Green Climate Fund. 

Are economic growth and high exports good enough reasons for Australia to keep mining coal? 

Source: https://www.bbc.com/news/world-australia-57925798

Inflation Surges Worldwide as Covid-19 Lockdowns Ends and Supply Chains Can't Cope

 

Rising Inflation, as a surge in demand after the easing of Covid-19 lockdowns, has been confronted by supply bottlenecks and rising prices around the world. Central banks responded differently to the sharp consumer-price increases in every country. Most of them increased the interest rates except two, the Federal Reserve and the European Central Bank. The reason why their responses differ is mainly due to the reason whether a further increase in prices will feed further cycles of inflation or fade out. The largest central banks are relying on that there are sufficient under-utilized workers available to keep wage rises in check and households as they have a track record of keeping inflation low. In poorer countries, the largest share of spending usually goes to food and energy that have seen the largest price rise. In Chile, the central bank increased its interest rate to 2.75% by 1.25%, which is the biggest rate increase in 20 years. Price rises began to accelerate in March, and the inflation rate was above what the central banks had expected. According to the chief strategist at UBS Research, Emerging markets are turning hawkish because there is a risk of inflation expectation going much higher.” Without increases in wages to match, many households are in financial difficulty.

 

https://www.wsj.com/articles/inflation-sets-off-alarms-around-the-world-11634304187

A real-time revolution will up-end the practice of macroeconomics

  The article I read was called "A real-time revolution will up-end the practice of macroeconomics" and was found on the Economist. The article talks about how data that central banks use such as GDP and productivity are data sources that lag behind because of how long it takes to compile that data. They then use that data to make big policy decisions that can affect millions of people. If the data is bad or is received to late it can lead to bad decisions that can ruin an economy. An example used in the article is if the Fed could have had real-time data in 2007 they could have cut interest rates to 0 then which would have helped the economy out a lot.  

According to this article these changes to using real-time data could be happening sooner then we think. The pandemic started central banks and governments had too use other forms of information like tracking contactless payments , and JP Morgan giving them information on peoples bank accounts/credit cards to see if they are spending money or not. This is instead of the official surveys they normally use that take time to make. 

There are obviously some issues that arise with using real time data. One of which is what if the central bank overreacts to a data trend that may just be an anomaly? They could then hurt the economy by over adjusting when it doesn't necessarily need it. Could it also lead to a more centrally planned economy if there is adjustments and interventions every day with the daily data? Some very interesting things to think about.  

https://www.economist.com/leaders/2021/10/23/a-real-time-revolution-will-up-end-the-practice-of-macroeconomics

 We see more progress in the fight against Covid-19. Health officials saying that infections are going down. While the number of people qualifying for a booster is going up. Around 10 million Americans are eligible for booster shots. Pfizer announced that its vaccine for children is more than 90 percent effective against a virus. Health regulators will be reviewing the data that could soon clear Phizer’s coveted vaccine for children ages 5 to 11. This week Biden administration outlined a strategy to vaccinate around 28 million children. Also, CDC signed off on Moderna boosters for individuals 65 and older, adults with a bad health condition, and those at higher risk of catching the virus. For the J&J vaccine, adults who have been vaccinated for at least two months can get boosters too. 

Is the world economy entering a wage-price spiral?

 Both wage growth and inflation are really high. What does this mean for America amidst the recovery of the Covid-19 pandemic?

In the past year, the American hourly pay rose by 4.6% and there was consumer-price inflation of 5.4% which is canceling any increase in pay that we have seen in the past year. This is not only happening in the United States but as well as in Germany and Japan the public-sectors are asking for a pay increase. 

What are the causes of these higher prices? It is the high demand for goods with the blockage of supply chains as well as energy prices have escalated. We know the cause for the increase in consumer-price inflation but is still unknown the exact cause of wage growth is. Is it because workers are unwilling or unable to take the many jobs that are at hand? Additional reasons for this labor shortage could be the struggle to move through professions or to a different physical place, as well as the continued fear of the Covid-19 virus. Is it from the lingering effects of the economic stimulus that are keeping workers from finding work? Or is it that people now put time with their families above their careers? All of these could be the cause for the increase in the wage but it is not possible to say which one exactly.

There are three ways to avoid long-lasting inflation; firms could absorb higher wages in their margins rather than raising prices, productivity growth could make a higher increase in real-wage sustainable, or idle workers could return to the labor force.

The unknowing of the cause of wage growth makes it difficult for central banks to make their decisions. They have to focus more on labor supply due to it taking about 18 months for the central bank’s policies to go through the economy. So far the recovery from the Covid-19 pandemic is mediocre, and there are minimal signs that the end of the stimulus plan increased the number of people returning to work.

https://www.economist.com/leaders/2021/10/16/is-the-world-economy-entering-a-wage-price-spiral