Crisis in Nigeria

Inflation in Nigeria is hitting its record high this year causing small businesses to squeeze. Cost of raw materials, food, fuel, and etc. keep rising with no sign of coming to a flat top. Small businesses have to cut down on their menu items and cost of production to sustain or they have to pass the high costs as prices to customers, who are also struggling. Nigeria’s economy shrank 1.8 percent in 2020, it is the sharpest decline since 1983. According to International Monetary Fund, Nigeria is expected to grow only 2.5% this year. These rising prices are affecting the growth rate as well. Monetary policy and exchange rate management has further damaged the situation. The central bank had devalued the currency, causing high inflation rate. This is a serious problem in Nigeria because most of their products are dependent on the exchange rate because they import them. All of this has worsened small businesses in Nigeria which makes up 96% of the business and 84% of jobs. These businesses are also reluctant to raise prices in attempt to transfer costs to the customers because they are in fear that people will learn to live without these products are find alternatives. Experts predict recovering from this crisis is going to be far from difficult for the economy of Nigeria, and not so soon. 

Source:

https://www.aljazeera.com/economy/2021/11/8/as-inflation-bites-nigeria-small-businesses-struggle-to-survive

U.S. Recovering At a Rate Biden Likes

 U.S. President Joe Biden said that the U.S. is recovering from the COVI-19 pandemic faster and stronger than expected. This came from payroll gains which made the labor market appear to be back on track. Those payroll gains were nonfarm payrolls increasing 531,000 last month which beat an estimate of 450,000. Biden said that the economy is working for more Americans and that America is getting back to work as the unemployment rate fell to 4.6%. He then claimed that this recovery is historical. This all comes after Biden's announcement of moving parts in his Build Back Better programs and infrastructure bill compiling his economic agenda. Biden will look to use the positive recovery news to influence his economic agenda bills to pass as much as he can. 

Japanese Economic Stimulus

 The economic recession caused by Covid has hit Japan hard, and the Japanese government is taking unprecedented actions to help with the recovery efforts. In order to stimulate the slow economy, Japan plans to put a 30 trillion Yen recovery stimulus into the economy. This is comparable to about $250 billion. While this is not comparable to the US stimulus's in size, it is comparable in its aim. By giving money directly to families with children, Japan plans to give 100,000 Yen per child to families in hope of stimulating both the consumption of goods and services back to their level pre-Covid.

Financing the bill will be quite different from US methods as well. Last fiscal year, Japan had a sizeable surplus that will be rolled over into this year, and the rest will be covered by issuing new debt. This is not surprising, since Japan spends a lot compared to its GDP. This large of bill is not common in Japan and the aftermath of the big purchase may have positive and negative effects for the future that we can not predict. 

Source: https://www.reuters.com/world/asia-pacific/japan-economic-stimulus-seen-topping-265-bln-require-new-debt-kyodo-2021-11-08/

Biden Admin considering vaccine mandate for business with fewer than 100 employees

 The occupational safety and health administration said they were "seeking comment" about whether businesses with fewer than 100 employees should be subject to the COVID-19 vaccine and the testing mandates it is also implementing on bug businesses. This new requirement will force businesses with over 100 employees to mandate the vaccine for their employees or the employees will have to wear a mask and get test for Covid weekly. Since this has been announced administration is now considering implementing this for businesses under 100 employees as well. As of now the administration believes they need more time to access the effects this could have on smaller employers before they go an implement the policy. Personally I find this to be a shock that administration is considering this. considering the labor shortage that is effecting the whole United States, I feel as if making it harder to have one enter the work force is counter productive in trying to lower the unemployment rate. The most recent unemployment numbers had shown a decrease which is good, but could that also be because less people are looking for jobs given a vaccine requirement?

Eurozone Economy Outpaces U.S., China, But Tougher Times Lie Ahead

 

The eurozone economy expanded rapidly, and mainly this was due to the loosening of social restrictions and widespread vaccinations that powered the region’s comeback from the pandemic. However, the supply-chain issues and the increase in prices are expected to hold growth back. Eurozone consists of 19 nations, and the Gross Domestic Product for the 19-nations grew at a seasonally adjusted rate of 9.1% in the three months. This is significantly faster than the 2% growth rate by the United States and around 1% for China over the same period. Analysts predict that the U.S. economy is expected to grow in the coming months, and they also predict that the growth for the eurozone will decline. The eurozone economy grew by 2.2% in the third quarter. The large manufacturing economies of the eurozone such as Germany and Italy are more dependent on international trade than is the U.S., where the service sector makes up a large portion of the economy. Due to supply chain issues, the manufacturers struggle to secure supplies and raw materials. The initial boost from consumption as Europeans returned to restaurants and began traveling again, the effect is wearing off and now some governments have started to reintroduce social restrictions as the cooler weather leads to a rise in COVID-19 cases. France and Italy were the top performers of the eurozone economies, followed by Germany and Spain. The growth in France was mainly due to the easing of covid restrictions, leaving economic output just 0.1% short of its pre-pandemic level. Whereas in Spain, the growth was held back by a decline in consumption and economic output remains around 6% below its pre-pandemic level.

 

https://www.wsj.com/articles/eurozone-economy-outpaces-u-s-china-but-tougher-times-lie-ahead-11635505779

Black Friday.... Boring?!?

 November is a good month, not just because we get a needed week-long break before plunging into finals, and we get to see our family and friends on Thanksgiving, but also because of... Black Friday. Every year Hundreds of stores and retailers sell off inventory at low prices, sometimes at all-time lows that never will reoccur. However, due to supply chain issues and the Covid-19 pandemic in 2019-2020, this may not be the case anymore.

A recent study by Stacy Widliltz of the SW Retail Advisor tracked retail chains and found out that at 90% of those stores promotions are down from that of 2020. Electronics is not as big as it was in 2020 being down from then almost 2%. Bigger stores like Target, Walmart, and Costco are still having the sale but will not have as good deals and products due to, you guessed it, supply shortage issues. Luckily, however, they are still able to give the sales as they are able to place orders earlier and have their own shipping charters. On the other hand,  companies like Nike inc. and Bed Bath & Beyond are suffering from shortages and delays in shipping, but will eventually have sales later on and steel in 2022.

Whether or not you decide to go out and shop on Black Friday is up to you but know that if you do, you shouldn't be expecting any good deals anytime soon.

source: https://www.blogger.com/blog/post/edit/8612138668326220332/8051654966674824504

 COP26: Fossil fuel industry has largest delegation at climate summit

Campaigners at the COP26 have found that 503 people attending the conference have links to fossil fuel interests. These delegates are said to be [fossil fuel] lobbyists for oil and gas industries and campaigners want them banned from the summit. Campaigners are saying that the delegates are the reasons why 25 years of UN climate talks have not led to real cuts in global emissions.

Fossil fuel lobbyists are defined as people who are part of a delegation of a trade association or is a member of a group that represents the interests of oil and gas companies – this definition was created by Global Witness, Corporate Accountability, and other companies that did the research.

They found that:

                    i.             Fossil fuel lobbyists are members of two country delegations, Canada, and Russia.

                  ii.            The fossil fuel lobby at COP is larger than the 8 delegations from countries worst affected by climate change in the last 20 years.

                iii.            Over 100 fossil fuel companies are represented at COP, with 30 trade associations and membership organizations present.

                iv.             Fossil fuel lobbyists dwarf the UNFCCC’s official indigenous constituency by {approximately) two to one.

One of the largest groups identified as the International Emissions Trading Association, with 103 delegates present including 3 people from BP.

According to Global Witness, IETA is supported by major oil companies that promote offsetting and carbon trading as a way of allowing them to continue extracting oil and gas.

 I believe there should be fewer delegates that are from oil and gas companies because of their selfish interests, which would keep their businesses afloat. The summit needs to come up with more restrictions on these companies, not just carbon trading because that has not had any significant impact on the climate. These restrictions need to be stricter and have corresponding sanctions for any violations, in order to slow down the rate global warming. 

**COP26 is a United Nations climate change summit. COP stands for a conference of the parties and 26 highlights that this is the 26^th conference.

Source: https://www.bbc.com/news/science-environment-59199484

China’s long wait for a tax everyone loves to hate

 Apparently in the past China has never had any sort of property tax. It has experimented with the idea in cities like Shanghai but the Chinese president has now announced his support for property tax that is supposed too  "promote common prosperity".  According to the article China needs this tax because a lot of people avoid the personal income taxes and their value added taxes are to regressive to be effective. Also this property tax would help homes for being bought and held as second homes as people will be discouraged by the additional taxes. However these taxes will probably be extremely unpopular because who like to pay taxes and also they might feel the government wont spend the tax money well. Another worry is that these taxes wont have the desired effect of lowering prices as the trial of them in Shanghai did not have that effect. It will be interesting to see over time if these taxes work out and have an effect on the market as a whole. 

https://www.economist.com/finance-and-economics/2021/10/30/chinas-long-wait-for-a-tax-everyone-loves-to-hate

Congress Passes Joe Biden’s Infrastructure Bill

On November 5th congress passed an infrastructure bill totaling up to one trillion dollars. This bill will be used to update America’s aging infrastructure. Much of the United States’ infrastructure has not been touched since its origin over 100 years ago. America is constantly growing and changing so it is important that our buildings, bridges, roads, etc. do too. The allocations of the bill are as follows:

$2.5 Billion - Inland Waterways

$40 Billion - Fixing Bridges

$70 Billion - Passenger Rail

$65 Billion - Ensuring Americans have access to high-speed internet

The list does not stop there, and much will also be allocated to highways, airports, electricity grids, water pipes, etc.

This bill is Joe Bidens and the Democratic Party’s first major legislative success since the shorter stimulus package passed earlier this year. This bill constitutes half of Biden’s “Build Back Better” agenda. 

Although America’s infrastructure is said to take $2.6 trillion dollars to build it up to a satisfactory level which this bill will not cover fully. This bill will be a great start in the right direction for a real difference. From 2022 to 2026 federal infrastructure spending as a percent of GDP will rise from 0.8% to about 1.3%. The impact that this may have on the United States is great. For every $100 billion dollars more spent on infrastructure, it may immediately boost growth by a tenth of a percentage point. This bill will also provide an opportunity for private investors to join the government’s efforts, which could both enlarge total spending and impose more financial discipline.

This is a step in the right direction for America’s infrastructure, but this will still be a challenging obstacle to overcome. Especially being that American’s are reluctant when it comes to being taxed compared to other rich countries, and the infrastructure is a direct result of taxes.

https://www.economist.com/united-states/joe-biden-passes-the-less-contentious-half-of-his-legislative-agenda/21806187

Wall Street 'permanently changed' by meme stocks, retail trading: star YouTube trader

 https://finance.yahoo.com/news/wall-street-permanently-changed-by-meme-stocks-retail-trading-star-you-tube-trader-164910032.html

By: Ines Ferré·Markets Reporter

If you have been following the stock market in the last year, you have seen some anomalies in the stock market as “meme stocks” have seen massive spikes in stock price. “Meme Stocks” refers to stocks that are not viewed as fundamentally sound stocks that have seen large spikes in price change due to discussion boards such as Reddit. These discussion boards will pick said stock and a wave of people will invest in the stock driving the price up artificially. When retail traders have been asked about this phenomenon they have said that the market favors hedge funds and big investors and this craze levels the playing field. The goal of this craze seems to make the market more transparent. Well-known stocks that have been involved in this craze have been AMC and GME. Despite both stocks falling from their highs, they still remain over 50% higher than they were pre-surge. The discussion board army adds an interesting factor to the stock market because it adds an element where if you are paying attention to the right discussion post you may have the ability to invest in a stock that may surge 80% in one day.

Brexit: 'Serious consequences' if Article 16 triggered, warns EU

 Brexit: 'Serious consequences' if Article 16 triggered, warns EU

https://www.bbc.com/news/uk-northern-ireland-59167024 

In the wake of Brexit, the UK and EU are still having trouble coming to an agreement for trade. Currently there is a Northern Ireland Protocol put in place by the Brexit term agreements that controls the flow of trade from Great Britain to Ireland. The products from Great Britain are taken to ports in Northern Ireland, and then move across the border into Ireland. The Protocol is causing difficulties for businesses and the EU is attempting to ease checks and and controls for the goods moving into Ireland. These changes have not been accepted by the UK and are causing issues between Great Britain and the EU. 

Great Britain has threatened to invoke Article 16, which invoked means that there would be a suspension of goods traveling from Great Britain to Northern Ireland. This would lead to significant issues for Ireland, as they would not be receiving any goods from the UK. Irish officials are not fond of the Protocol in the first place but are even less fond of the thought of the UK invoking Article 16. I think that the UK needs to try harder to work the EU, as they were the ones who decided to leave. The United Kingdom knew when it left the EU that they would not be able to easily make new trade deals that benefitted them because the EU needs to crack down on Britain so that other countries don't try to leave as well.  

USA 2022 economic crisis

 The US will be facing another economic crisis in 2022 if the labor market shortage is not fulfilled. Ever since COVID - 19 and stimulus checks people have become comfortable living without jobs and hence there is a labor market shortage. Usually, this shortage is quickly overcome because there is only a short period where people can live without a pay check. However, over the past two years, during the global pandemic, Americans have been saving more than they have been spending, which is allowing them to stay without a job. 

About 51% of the firms have reported that they have labor shortages. Last year 52% reported that they are having trouble finding qualified candidates. This year 74% of businesses have reported the same thing. Businesses have increased the labor prices but this will increase the cost of living which will cause inflation. 

Here are some reasons why there is a labor shortage;

 - People are scared that the pandemic will hit again. 

 - The mask and vaccine mandate in workplaces has limited people to. getting jobs. 

- People are expecting higher salaries.

- Americans have become more selective with their job search. 

Experts suggest that if the USA goes into 2022 with this labor shortage then there is a serious threat to the economic growth of the country.

Source: https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=newssearch&cd=&cad=rja&uact=8&ved=2ahUKEwjvsa_m24b0AhV-pnIEHSTEDZIQxfQBKAB6BAgPEAI&url=https%3A%2F%2Fwww.cnn.com%2F2021%2F11%2F04%2Fperspectives%2Flabor-shortage-us-

Diwali sales break 10 year records in India

For the first time in 10 years, Diwali sales crossed 1.25 Trillion Indian Rupees (16.85 Billion USD). Sales majorly consisted of earthen lamps, candles, paper lamps, sweets, toys, clothing, foods, and so on. This growth in sales in those areas helped craftsmen, potters, chefs and small businesses.

Surprisingly, on most Diwalis, fireworks take up the highest share of sales, but recently, due to rise in online shopping and climate change advocacy and education, people are reducing expenditure on fireworks. Online retailers, especially gigantic ones like Amazon, Flipkart and JioMart do not by default sell fireworks. Climate change advocacy and literacy has also slumped fireworks expenditure.

India's festivities do not seem to be hampered by its rising inflation and slowly recovering economy. With supposedly India's biggest wedding season coming up, jewelry and clothing sales are predicted to skyrocket. Such boosts in economic activity should help heal the economy faster.

Article Link: https://www.business-standard.com/article/companies/diwali-festive-sale-crosses-rs-1-25-trn-breaks-all-records-in-10-yrs-cait-121110500886_1.html

Also, taking a small tangent, on October 31, Chinese Communist Party (CCP) owned Global Times released an article detailing how boycotting Chinese products would hurt Indian economy, but as evident, India beat previous 10 years' records and shattered this article. The article outlines how Chinese products are good quality, cheap, and have helped grow Indian economy over many years. It weirdly mentions "India's GDP contracted an unprecedented 7.3 percent in the last financial year that ended in March 2021" but fails to recognize that India overshot expectations on its economic growth and is headed towards the endemic stage of the virus in the nation. 

https://www.globaltimes.cn/page/202110/1237749.shtml

Chinese military base in Tajikistan

 China creates another military base in Tajikistan. The approval has been granted by the Tajik parliament. The government of Tajikistan said that they need this military base to counter security threats from Afghanistan. This base will be located right on the border with Afghanistan. This base will be owned by the Tajik defense group, but it will be built with Chinese funding. The incentive of this military base is that it would carry out policing duties focused on combating organized crime. Also, the Tajik government has also offered full control of the pre-existing Chinese military base to Beijing. This base is located close to Pakistan. Tajikistan has offered absolute autonomy to China of this military base. Moreover, China will not have to pay rent for this base. What is the reason for this decision? In my opinion, to get more aid from China. China is trying to build its military base in Central Asia. Central Asia was always an important region for Russia. During the Soviet Union, countries such as Kyrgyzstan, Kazakhstan, Turkmenistan, and others in Central Asia were part of the Soviet Union. During the last decade, China is expanding its military, economic influence in this region. Also, China is the largest partner of all countries in Central Asia. Many students used to apply for universities in Moscow. However, this trend has changed in the last decade. China offers numerous opportunities for students from Central Asia. China is winning the game in Central Asia. Its gain might seem small. However, Chinese geographical influence in this region would be profound

Initiative to Curb Effects of Medical Debt in Our Future

The political action group known as Fair Fight, led by voting rights activist Stacy Abrams, has taken on a new initiative to tackle medical debt for working families. The group has taken its first step by donating $1.34 million to an initiative that will help alleviate debt for many families starting in the US South. The project is run by another organization called RIP Medical Debt and aims to settle debt for more than 108,000 families in Georgia, Alabama, Mississippi, Louisiana, and Arizona.

Of the many issues crippling the United States today, medical bills are among the most dangerous for a family financially. One costly disease, injury, or condition can devastate a working class family as they will be forced to pay down debt for many years to come. In some cases, the debt payment can now extend across generations as the price to pay reaches astronomical levels. It is also more likely for you to have health problems if you live in a low income area so you are more likely to develop more serious health issues and the need for more debt to cover the costs. In this regard, it is holding people back from reaching their full potential as exorbitant medical bills keep hard working people in the vicious cycle of paying down debt instead of improving their standard of living.

This donation is a good first step in opening people's eyes to alternatives to the bleak reality. Ultimately, it will be up to our representatives on the state and federal level to pass legislation to expand medical benefits and cap the ever-increasing medical care prices. But to get to that stage, there needs to be a change in hearts and minds to make this an issue top of mind when voters go to the polls in the future. It will require a large public outcry to inflict change at this scale and I hope these organizations will have enough impact to make a difference.

Credit: https://www.cbsnews.com/news/stacey-abrams-fair-fight-action-donation-medical-debt/

Is Texas is a paradise city?

 Austin became one of the fastest-growing cities in the US. New constructions are everywhere. During the pandemic, Austin was the most popular place for Americans to move during the pandemic. Many people moved from California to Texas due to the cost of living in California. According to data, living in California is 50% more expensive than the average cost of living in the United States. Another reason is the way Texas boosted its surging technology industry. Apple constructs a massive campus here. While Samsung is considering building a new facility. Around a month ago, Elon Musk announced that he will move Tesla’s headquarters to Texas, from California. Businesses and people like Texas’ climate. Also, low taxes is a huge benefit for any business. However, all these migrations to Texas might cause some problems for the city. Such as lack of public transportations, competition growth, and increase in the cost of goods

The Fed is expected to announce end to bond-buying program as investors seek clues on first hike

https://www.cnbc.com/2021/11/02/federal-reserve-investors-seek-clues-on-interest-rate-hikes.html

The article discusses how the Federal Reserve is expecting to announce the unwinding of its monthly bond-buying program. This program was implemented to support the economy during the pandemic. Other sources expect that the Fed will fight the trend of higher prices by beginning to raise interest rates next year. The article further goes on to discuss that traders are pricing in more than two interest rate hikes for next year, however the majority of Fed officials do not even see one in 2022 in their most recent forecast. This is due to inflation, which is now at a 30 year high which has seemed to linger longer than the "transitory" description the Fed had included in its recent policy statements.

Inflation rose 0.3% for September, driving the year-over-year gain to 4.4%. Companies continue to struggle to find workers but are also raising wages to keep and attract employees. Economic experts believe that the Fed is being "stubborn" in accepting that inflation is being stickier than what they expected. Rick Rieder, the chief investment officer of global fixed income at BlackRock, said the Fed needs to show it would be willing to raise interest rates if it had to.

In regards to interest rates, it is expected that Powell will not talk about raising interest rates, but he likely won't discourage the market's pricing in of rate hikes either. Interest rates and inflation tend to be the biggest topic of discussion at the moment, especially with the holidays right around the corner.

The Car Industry could cause Economic Crisis

 There are roughly around 1.2 billion cars in the world. There is always a high demand for cars across the world. However, right now car industries are struggling with production which leaves millions of workers across the world at risk for unemployment. 

The auto industry is said to account for roughly 3% of the world's economic output. The supply chain crisis has severely impacted the auto industry.  One of the main issues was the lack of semiconductors. They were forced to slow production or even stop it all together while waiting on parts. This puts millions of workers across the world wondering if they will be called into work tomorrow. You have the manufacturing countries of the auto industry such as the United States, Germany, and Japan scrambling. Companies such as GM, Ford, Honda, and Volkswagen are producing much less which requires fewer workers. Japan has experienced a 46% decrease in its exports this year compared to last. On top of that, it is affecting countless countries that provide parts to these large manufactures. With fewer cars rolling off the assembly line you have less of a need for tires, instrument panels, and more impacting all of those workforces as well. Germany has had to shut down some factories all together and other countries have done the same. 

This issue is one that should clear up over time, but some people do not have time. They need a job now. It's a waiting game right now with the bottleneck of semiconductors and other parts that will impact how fast things get back to normal. 

Source: https://www.nytimes.com/2021/11/02/business/car-shortage-global-economy.html 

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

Inflation in Moldova

Moldova is currently in the midst of an energy crisis. Prices of energy have been rising and Moldova receives almost all of their energy supply in gas supplied by a Russian company, however only 67% of their gas needs are being satisfied. Because of this Moldova's parliament declared a state of emergency to secure more. Negotiation attempts with the Russian company have been made but were unsuccessful. Moldova even accused Moscow of intentionally undersupplying them but Russia denies doing anything intentionally. The state of emergency allows Moldova to look towards other European countries for their energy supply. The rising energy prices combined with the global supply chain issues and pandemic recovery has resulted in rising costs for most products in the economy. Food prices have been effected the most rising by 8.3% compared to the 6.7% inflation rate. This was unexpected by the National Bank of Moldova and they are scrambling to react appropriately. The inflationary pressures are on the demand side so they have raised their interest rate from 4.65% to 5.5% to discourage borrowing and encourage savings. They do not expect a quick recovery and fear the inflation rate may exceed 10%. Moldova relies heavily on foreign aid and are again looking for outside assistance to  stabilize them through this crisis.

https://www.euronews.com/2021/10/22/europe-s-energy-crisis-moldova-declares-state-of-emergency-over-gas-prices

Australia and Climate Change

Australia, a nation among the developed, is currently one of the most prime advocators of coal and fossil fuels. Prime Minister Scott Morrison, from the Liberal Party, is a conservationist who is still stuck in the past with supporting and subsidizing coal mining and fossil fuels extraction.

He has only recently agreed to attend the UN Climate Conference in Scotland, and that was not without criticism from Queen Elizabeth II and mocking from a billboard in Times Square.

Australia is currently the largest exporter of coal and has suffered among the most from wild fires. But still, Australia doesn't have any concrete plans for working towards curbing climate change, whereas other developed nations all have pledged in some manner to reduce emissions by 2050, or even 2030! The Liberal Party and the National Party have used coal as their political agenda.

And as much as I hate to say this, because I am from India, Adani, one of India's largest industrialist, is looking to invest in Australia to build the world's largest coal mine. And the current Australian government is ready to provide subsidies for this investment to happen.

Australia, is like a black mole, because it is becoming the sole reason for negating other developed nations' climate change efforts. It is not only slowing other countries' efforts, but also pulling their efforts because only when everyone work together does any real change take place quickly.

Article: https://www.nytimes.com/2021/10/21/world/australia/australia-coal-fossil-fuel-carbon.html

Interest rate cuts in Turkey

Turkey has been suffering with severe inflation, where people are complaining and crying about how they will feed their children if the prices keep rising. While this is happening, Turkey’s central bank announced a bigger-than-expected interest rate cut. Opposition parties and the people are really concerned and questioning the independence of the central bank. Opposition leaders have condemned this action. Meral Aksener, head of the country’s third largest opposition party, called it “an irrational decision made by a frivolous government through an unqualified bureaucrat.” With all this going on, Lira has hit an all time low with this action. It is now at 9.49 against the US dollar. This year alone, Lira has lost 20% of its value. Import companies were already at a verge of bankruptcy when the Lira was at 8 against the US dollar, now it is even harder to continue business and pay off debt. This interest rate cut has triggered a chain reaction and caused a shift in related economic behaviors. This entire situation is reminding people of the inflationary cycle that gripped in the 1990s. Signs indicate that turkey is going towards a breaking point. When the inflation is already 5 times the target value, interest rate cuts don't make sense. It will eventually increase the long term interest rates. This action is a lot of risk and not consistent with the macro economic fundamental. Is the central bank really independent in Turkey or the people claiming it to be influenced by the ruling party is true. 

source:

https://www.aljazeera.com/economy/2021/10/21/as-turks-wrestle-with-inflation-central-bank-cuts-rates-again

Scrapped Plans for Free Community College in the U.S.

 In the U.S. Congress, the passage of the 2 major infrastructure bills has been halted as internal debates inside the Democratic party continue. A major concern by one of the senators is the enormous price tag of the larger bill of $3.5 trillion. In these debates, there are concessions being made to substantially lower the spending in this bill to make it more palpable for more fiscally conservative members.

One of the major pieces of this bill that has now been taken out is the spending allocated for free community college. This section would have guaranteed paid community college for people of color and low income to have a chance at higher education. However, this piece of legislation will be cut out to ensure that the rest of the bill can pass with all Democrats on board.

In my opinion, this was one of the most important pieces of this bill as higher education is extremely important for future prosperity of the United States. More well educated workers can encourage more businesses to keep their operations in the US as they can better guarantee the quality of their products. This can also lead to more innovative products to be invented domestically to give US companies an advantage in the global market. There are societal issues that could have been addressed as well. Income discrimination is a fundamental problem in the United States as systems in place make it harder for people of color to climb up in the social hierarchy. One of those systems is in our education as it is one of the best ways to climb out of poverty. Higher levels of education ensures better employment and higher wages to provide for their families. But the extremely high price for higher education has only raised the barrier to entry. Without free community college, there will be no incentive for the free markets to correct this market failure as there is no economic benefit in doing so.

Credit: https://www.nbcnews.com/politics/congress/democrats-abandon-free-community-college-white-house-warns-social-safety-n1281939

How Banks will Respond as Interest Rates Rise

As the economy is getting back to pre-pandemic levels we are going to see the interest rates rise fairly quickly by the time 2022 rolls around. There is going to be an extremely large change in mortgages over the coming months, but the question is just how big?

According to the Mortgage Bankers' Association, there is going to be approximately a 33% decline in mortgage originations. This is due to the fact that they also predict that interest rates will rise to 4%. Interest rates right now are sitting around 3%. The interest rates are going to increase drastically in a very short period of time according to their projections. They also project that this will result in a 62% decrease in refinances. 

Due to a large decrease in mortgages being taken out, lenders are going to have to look at other options to make up some of this lost revenue. One of the suggestions made by Marina Walsh was for these lenders to focus more on their servicing business. 

Source: https://www.cnbc.com/2021/10/18/real-estate-mortgage-originations-will-drop-33percent-in-2022-as-interest-rates-rise.html 

China's Power Shortage

 China is undergoing a rough economic patch at the moment. Their steel mills are having power cuts, property companies are purchasing less construction material, and the country is also under more floods as of recently. China is still growing but at a slower rate than they were last year from 4.9 percent to 7.9 percent. China's industrial output has not been very good as it put up numbers last quarter more similar to when the pandemic first hit. 

The Chinese government has recently put a limit on energy use. This is stemming from concern with climate change and also income inequality in China. This has backlashed on China as the industrial side of the country is short on power and now burning coal, which goes against one of the reasons they have for limiting energy use in the first place.

https://www.nytimes.com/2021/10/17/business/economy/china-economy-gdp.html

Retail Sales Rise in September Better Than Expected

 https://www.usnews.com/news/economy/articles/2021-10-15/retail-sales-rise-in-september-better-than-expected

As we get closer to the holidays, it is expected to see rises in retail sales. This article discusses how retail rates rose by 0.7% in September which was higher than expected. After a 0.9% increase in August, economists predicted a drop of about 0.2% due to consumers being "skittish" about the delta variant and the rising inflation. One of the top contributors were food and gasoline. Gasoline sales were up 38.2% from a year ago and food service establishments saw an increase of 29.5%. They suspect that this is due to students returning to school and workers returning to the office played a role in the increase in gas sales and food sales. With people returning to work, it likely means that most of those people will be going to food establishments for lunch, thus increasing the sales. 

The article goes further to discuss how it is expected that sales increase into October with the spending for Halloween and then holiday shopping. It continues to be somewhat of a concern as to how the economy will perform during the holiday months due to the delta variant, labor and material shortages, and rising prices for many products. The reach of the coronavirus has proved to be more pervasive than expected earlier this year which has resulted in global supply chains which has been one of the biggest unexpected results. Additionally, this has caused bottlenecks of key components used across the economy from housing to auto production and has, in turn, raised prices.

What do you think will happen with retail sales with the supply shortages and the holidays being impacted by covid?

Americans were kidnapped in Haiti

 This morning American missionaries were kidnapped somewhere in Haiti. Seventeen people including children snatched by gangsters. One of the kidnapped messaged for help n a WhatsApp group. This happened in Port-au-Prince, the capital of Haiti. Haiti is the poorest country in the western hemisphere. Thousands of people leaving their homes in recent months and seeking safety at the U.S. border. In July of this year, the country’s president Jovenel Moise was assassinated in his home. With the government divided and the economy cratering, most of Port-au-Prince has fallen to armed gangs. In this chaos, kidnapping became a huge business. Men, women, and children were snatched at gunpoint for a little as a hundred dollars. At least 328 people were kidnapped in the first eight months of 2021, according to UN data. In my opinion, the UN should send the military to Haiti in order to stop this chaos.