By Adinah Brown
Cryptocurrency – This past Monday China’s financial regulators banned virtual coin fundraising schemes that have exploded over the course of this year and is expected to follow up with further rules to tighten up the entire industry of virtual currencies. According to Yicai, a nationally based publication site, China has banned the practice of raising funds through initial coin offerings (ICO) that issue token based digital funds. According to the report, a source close to the China Securities Regulatory Commission has advised that this is merely the start of further more aggressive regulation on virtual currencies.
Undoubtedly, the regulators are reacting to the surge of funds that has been put into ICOs, of the $2.32 billion dollars that has been raised, $2.16 billion of that, was raised just within 2017 alone. As a result of this development, Bitcoin, which cracked the $5,000 glass ceiling over the previous weekend subsequently dropped 20% on Monday and then continued to fall, albeit less dramatically, over the course of the week.
European Central Bank Policy Meeting – Held in the first week of September the ECB met to address the unwinding of its massive quantitative easing program. A senior European Central bank supervisor called for subjecting private investors to market discipline in order to share the burden of a bank rescue. According to the report, responsibility to share the burden must fall on them as “this is a non-negotiable prerequisite prior to public funds being touched”. Even still the ECB upgraded its growth outlook and reduced inflation slightly. The ECB announced the selection of a technical committee that will be tasked with crafting policy options, an important step towards scaling back stimulus programs.
Weak inflation rates in the US – With inflation rates over the summer falling well short of the target rate set by the Federal Reserve, Fed Govenor Lael Brainard, cautioned the US central bank on pushing interest rates any further, at least until it is confident that it is able to push prices above the 2 percent target. Brainard, a permanent voter on monetary policy, said that inflation needs to be on target, before the Fed can consider a change in tightening its monetary policy.
In other parts of the country, the economic impact of hurricane Harvey is still being surveyed. However according to Enki Holdings who have conducted studies on the economic impact of natural disasters, the cost of the flooding on the economy is likely to be around $30 billion. While a third of Houston’s economy is directly tied to oil and gas production, the region is also home to small manufacturers and large corporations such as KBR, food production and waste management companies. In the wake of the storms many of these companies will have closed down, as have hospitals, airports and sea ports. According to an expert at Enki “Houston, the fifth largest economy in the United States has been sitting at a standstill for over four days, the reverberations of the impact are going to be felt widely”.
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Britain struggling to find their exit – According to a senior source from within the trade department, Britain simply does not have the capacity to strike a new trade deal with every partner of the European Union, leaving it in a position where the best approach appears to be of “copy pasting” existing EU deals. Late August Britain and Japan agreed that the EU-Japan trade agreement would become the basis of their own trading arrangement once Britain leaves the bloc. However, Japan is just one of forty FTAs (Free Trade Agreements) that still need to be negotiated, and Britain remains limited in its capacity to achieve bilateral deals across the board.
About the Author:
Adinah Brown is a professional writer who has worked in a wide range of industry settings, including corporate industry, government and non-government organizations. Within many of these positions, Adinah has provided skilled marketing and advertising services and is currently the Content Manager at Leverate.