5 underreported economic news stories in 2017

We all know about the meteoric rise of bitcoin, the multiple multi-billion-dollar mergers and acquisitions, the roaring stock market, and the Republican tax plan. These have dominated the news cycles for much of 2017.

But what about some of the underreported business and economic news stories?

Well, there were plenty of those over the last year.

Let’s take a look at five of the most underreported economic news stories from around the world in 2017:

Australia Wants to Adopt E-Cash

Earlier this month, the Australian central bank announced that it was considering adopting a system of electronic bank notes. Reserve Bank of Australia governor Philip Lowe stated that the central bank is mulling over the pros and cons of issuing electronic-based Australian dollar bank notes.

“An electronic form of banknotes could coexist with the electronic payment systems operated by the banks, although the case for this new form of money is not yet established,” he said.

“If an electronic form of Australian dollar banknotes was to become a commonly used payment method, it would probably best be issued by the RBA and distributed by financial institutions, just as physical banknotes are today.”

With the rise of digital currency, it is highly likely that central banks worldwide, including the Federal Reserve, will want to be the ruler over virtual currency. And that will be terrifying.

Imagine Jerome Powell controlling e-money for monitoring, surveillance, and tracking? Scary.

Donald Trump Nominates Gold Hater to Fed

President Donald Trump nominated Marvin Goodfriend to be a governor at the Federal Reserve. This is bad news. Why? Goodfriend is a Keynesian gold hater and is in full support of subzero interest rates – he thinks the only hurdle to instituting negative rates is “paper money” as the alternative, adding that “Even after costs of storage, the effective lower bound probably isn’t much below -1 percent. Goodfriend’s proposed solution to this challenge is truly radical.”

What was the White House thinking?

Minimum Wage Workers Hate the Minimum Wage

A leftist’s mind would explode at the very thought that a minimum wage employee would hate seeing their minimum wage increased. But that is what happened in the state of Maine.

This past summer, the state government voted in favor of overturning a referendum that would hike the minimum wage from $3.75 to $12 by 2024. Why did this happen? Restaurant workers fought against the initiative.

Speaking at the Maine Legislature’s Labor, Commerce, Research and Economic Development Committee, Sue Vallenza, a 55-year-old bartender at the Pilot House in Kennebunk, told officials that her tips were beginning to decrease amid a rising minimum wage.

“I don’t need to be ‘saved,’ and I’ll be damned if small groups of uninformed people are voting on my livelihood. You can’t cut someone off at the knees like that.”

Anyone with even a rudimentary understanding of economics comprehends the unintended consequences of a minimum wage.

Bitcoin Under Surveillance by Japanese Government

And so it begins.

In September, the Japanese Financial Services Agency (FSA) commenced its surveillance of cryptocurrency exchanges. To ensure that bitcoin and other virtual currency exchanges adhere to the updated payment services law, authorities will routinely monitor and regulate the cryptocurrency market.

“We pursue both market fostering and regulation enforcement,” an FSA executive said. “We aim for sound market development.”

There are about two-dozen cryptocurrency exchanges in Japan. But that won’t deter Tokyo as the government established a specialized surveillance team.

This won’t end there.

Is the U.S. Dollar Hegemony at Risk?

It appears that the U.S. dollar hegemony is at risk. Across the globe, there are countries that are attempting to veer away from utilizing the greenback. Even China may be signaling that it won’t be bullied anymore.

Here are just some of the developments over the last year:

Venezuela announced that it will launch a digital currency backed by oil, gas, gold, and diamonds. It will be called the petro and help “advance in issues of monetary sovereignty, to make financial transactions and overcome the financial blockade.” Caracas also said that it will no longer accept dollars.

Russian President Vladimir Putin urged lawmakers to support legislation that makes the ruble the main currency of exchange at all of the nation’s seaports next year. If approved, foreigners will be mandated to buy rubles – it will come with a transition period before ruble settlements are confirmed.

Reportedly, China is in the early stages of creating a crude oil futures contract that is priced in the yuan and can be convertible into gold, which will help crude exporters circumvent sanctions. This report came shortly after Treasury Secretary Steven Mnuchin warned the U.S. government would slap Beijing with sanctions if the nation didn’t support UN sanctions on North Korea.

Over the last several years, many countries have been gradually transitioning away from the greenback. You can definitely expect more moves like this in 2018.

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