ALBANY, N.Y. (May 13, 2022) – It was a rough week for the global cryptocurrency market.
Amid a worldwide selloff, Bitcoin, the largest digital currency, plunged under $26,000 per coin for the first time in 16 months, while Ether, the second-largest, dropped below $2,000 per coin for the first time since June 2021. In total, more than $200 billion in crypto wealth was erased in less than 24 hours.
Bitcoin, and other crypto giants, have a history of bouncing back from crashes to reach new highs. But in such a volatile, unregulated market, investments are risky and can lead to huge financial losses.
David Banks, program director of Globalization Studies at the University at Albany, shared his thoughts on why the “cryptocurrency dream is fading fast” in an opinion piece published by The Guardian on Thursday.
“Crypto-evangelists imagine technology as a replacement for social and political institutions. But technology never replaces social and political behaviour; it merely alters the rules and norms we follow,” said Banks, a visiting professor at UAlbany’s Department of Geography and Planning.
“To see this in action, one need only look at the plummeting value of Terra Luna, a crypto token that crashed by 98% in a day, causing some investors to lose their life savings; the plunging value of Bitcoin and Ethereum; or the countless scam victims whose non-fungible tokens (NFTs) have been stolen.”
Along with investment risks and fraud risks, Banks also points to the massive amounts of energy that crypto mines consume as states and institutions have begun to treat the market as a “potentially destabilizing geopolitical force.”
“The crypto mining industry already consumes 0.55% of global energy production – about as much as a small country… Churning out inscrutable financial assets using coal-powered electrical grids is contributing to a rapidly warming planet that is already experiencing the worst droughts seen in more than 1,000 years.”
“The servers that mine crypto exist on the planet in real countries with laws, wars and resource shortages – which are governed by politicians that have real commitments and interests. With the Russian invasion of Ukraine, we are beginning to see an emerging geopolitics of crypto that looks very much like the old world of banking and finance.”
Banks is a writer and researcher currently working on a book with University of California Press about how cities in the New York Capital Region are enticed to act like social media influencers to attract capital and new residents. He holds a Ph.D. in science and technology studies.
About the University at Albany:
A comprehensive public research university, the University at Albany-SUNY offers more than 120 undergraduate majors and minors and 125 master’s, doctoral and graduate certificate programs. UAlbany is a leader among all New York State colleges and universities in such diverse fields as atmospheric and environmental sciences, business, education, public health, health sciences, criminal justice, emergency preparedness, engineering and applied sciences, informatics, public administration, social welfare and sociology, taught by an extensive roster of faculty experts. It also offers expanded academic and research opportunities for students through an affiliation with Albany Law School. With a curriculum enhanced by 600 study-abroad opportunities, UAlbany launches great careers.
High import tariffs lead to baby formula shortage in US: Report | World News
With only four major manufacturers of formula in the United States today-Mead Johnson, Abbott, Nestle, and Perrigo, some 40 percent of the nation`s baby formula has been out of stock recently, causing new mothers to hunt from store to store to feed their infants. “One reason the market is so concentrated is tariffs up to 17.5 percent on imports, which protect domestic producers from foreign competition,” said The Wall Street Journal last week, citing the Donald Trump administration`s efforts to protect domestic formula producers by imposing quotas and tariffs on Canadian imports in the United States-Mexico-Canada Agreement trade deal.
“America`s baby-formula shortage illustrates how bigger government can make big business bigger, thereby limiting competition and choice,” said the newspaper, noting that this is especially worth noting as Democrats push to expand entitlements and government control over the private economy.
It also illustrates that global trade has its uses, and there are costs to the faddish drive to produce everything in the United States, according to the report. “Members of both parties in Congress want to subsidize domestic production, but this can create its own supply-chain vulnerabilities,” said the report, adding that “globalization nowadays may be a dirty word, but having diverse suppliers is an economic strength.”
India will provide 25% of global workforce and contribute 15% of world GDP by 2047: Scindia
Union Minister Jyotiraditya Scindia has said that India has to focus on “building capability, capability and capability” as the country is on the road to providing “25 per cent of the total global workforce and contributing 15 per cent of global gross domestic product by 2047”.
“India has shown that the Indian way of globalisation will show the path for globalisation that will be balanced, decentralised, symmetrical and pivoted on territorial integrity,” Scindia said at the India Ideas Conclave here on Saturday.
Speaking on India @2047 at the conclave organised by India Foundation, the minister said if democracy was prospering in different parts of the world, “some level of the credit should come to India”.
According to Scindia, there are eight pillars for the India model, which “had shed the socialist straitjacket and myopic ideas and replaced them with Atmanirbhar Bharat”.
The BJP-led government has been transforming the country by empowering the people through direct benefit transfer, the minister said. Scindia said that in the past eight years, $200 billion was distributed among 950 million people—$86 per person, adding that central schemes would benefit every citizen and the per capita income would rise above Rs 4 lakh by 2047. This was Rs 53, 000 in 2010-11.
According to the minister, the second pillar is infrastructure development focusing on the streamlining of logistics for urban areas and on last-mile connectivity for rural areas. Technology will be the third pillar. “Technology today is all pervasive—India has moved a long way in it. The amount of digital transactions happening in India is equal to the GDP of 21 countries,” he said. India’s power is that it has a billion people with their biometrics digitised and there are a billion bank accounts, he said.
According to Scindia, the fourth pillar will be the “paradigm shift” in the GDP position. With production-linked incentive schemes in place in sectors like telecom, semiconductor and drones, 35 per cent of India’s GDP will be from manufacturing, 10 per cent from the agrarian sector and 55 from the service sector, he said, adding that the transformation of the tier-two cities into tier-one cities would further strengthen the economy. The minister listed the rise of the urban economy as the fifth pillar.
Scindia said demographic power would be the sixth pillar and India would provide 25 per cent of the global workforce. While diplomacy and diaspora, which Union minister said Prime Minister Narendra Modi had reinvented to India’s advantage, will be the seventh pillar and India’s global standing will be the eighth one. “The geopolitical climate is incrementally favourable to India, thanks to our foreign policy,” he said.
NatWest’s Sir Howard Davies: ‘I’m quite pessimistic. Brexit was a significant mistake’ | Banking
Sir Howard Davies is a worried man. He is worried about political polarisation. He is worried about the long-term impact of Brexit on the City of London. And he is worried by the pushback against globalisation.
One thing he is not especially worried about is the health of the bank he chairs, NatWest, which in its former guise as Royal Bank of Scotland was on the edge of collapse during the global financial crisis of 2008.
Davies has been chair of NatWest for seven years and the turning point in the bank’s fortunes, he says, was paying a $4.9bn (£3.6bn) fine to the US authorities in 2018 for its role in the sub-prime mortgage crisis. Until that point, NatWest had been “scrambling behind the sofa” to find capital, but now it is in better financial shape than many comparable European banks and has been able to expand. It has, he says, been “a game of two halves”.
The footballing metaphor is telling because Davies has another concern. As a lifelong Manchester City fan, he fears his side will be pipped to the Premier League title by Liverpool in Sunday’s last round of matches. To mitigate the
Family Married to a lapsed journalist. Two sons, one left, one right.
Education Bowker Vale primary; Manchester grammar school; Memorial University of Newfoundland; Merton College, Oxford; Stanford business school.
Pay “The usual answers are ‘enough’ or ‘no comment’, but £750,000 is published in NatWest’s accounts.”
Last holiday Cycling along a section of the Rhine path. “One day I will complete it.”
Best advice he’s been given “Always show you could do your boss’s job if required.”
Biggest career mistake “Agreeing to be director of the LSE. It ended in tears.”
Word he overuses “Guardiola, as in ‘we’ve got Guardiola’, sung to the tune of Glad All Over.”
How he relaxes Playing cricket, and listening to pianist Brad Mehldau: “Not usually at the same time.”
potential agony, he has staked £100 at 8-1 on Liverpool adding the title and the Champions League to the FA and Carabao cups they have already won.
It’s an “emotional hedge”, he admits, as he discusses a career spanning half a century in which he has worked at the Foreign Office, the Treasury and the Bank of England, and been Britain’s top financial regulator, director general of the CBI, a management consultant, and the head of the inquiry into UK airport capacity.
Asked which of his many jobs he has enjoyed the most, he picks none of the above but plumps for running the Audit Commission (subsequently scrapped by David Cameron’s government), which looked into whether local authorities were providing value for money.
“It was a riveting job. I found you could make significant improvements to local services, where the variations were absolutely enormous. It was really interesting and rewarding, and you could actually see you were making a difference.”
Far less enjoyable was the end of Davies’s stint as director of the London School of Economics after concerns were raised about the school’s decision to accept funding from a foundation controlled by the son of Muammar Gaddafi.
Davies says he never asked for money himself and thought there was something not quite right about the arrangement, but accepts that he should have spotted the potential for trouble. “There is no doubt I made a mistake. I should have stopped it and I didn’t.”
Davies was made head of the Financial Services Authority by Brown when supervision was hived off from the newly independent Bank of England in 1997, and he later faced criticism for failing to clamp down heavily enough on the City during the buildup to the crash of 2008. “At the time, people moaned about financial regulation being too tight and that I was judge and jury in my own court,” he says. “I was accused of being an overmighty regulator who was getting in the way of ‘animal spirits’. There was never any criticism in the other direction.”
Asked which of the recent chancellors he has most time for, Davies picks Alistair Darling, whose three years at the Treasury between 2007 and 2010 were dominated by the banking crash.
“Alistair had terrible hand to play. He had no money, a financial crisis and his predecessor as his boss. There wasn’t anything Alistair knew that Gordon didn’t. Yet he was completely unflappable.”
When he started writing the book, Davies was convinced he would conclude that the Treasury should be broken up into separate finance and economic departments, the model preferred by most other European countries. He has since changed his mind. “A bit of check and balance in our system is a very good idea,” he says. “If we divided responsibilities and had a department of economic affairs and a ministry for the budget, they would separately be less powerful than the Treasury is together and that would give No 10 free rein. That would be a mistake.
“This prime minister hated the Treasury partly because of its pro-EU views, or perceived pro-EU views, and role in the referendum. But when he got himself in a hole, who else but the Treasury could bail him out?”
If Davies is upbeat about the prospects for NatWest, he is less positive about what the future has in store for the UK. “I am quite pessimistic actually. Brexit was a significant mistake. You don’t solve the problems of the left-behind by damaging the one area of the country that’s been writing the cheques. London is paying large amounts of tax and will be damaged by Brexit over time.
“I worry about political polarisation. The same thing is happening in France [Davies teaches in Paris] and in the US. It is possibly less bad here than in the US or France, but I sense a kind of bitterness in public life which doesn’t create a good environment for rational solutions to problems.”
Davies says that when he first came to London from Manchester in the 1970s the capital was “gloomy” and “monochrome”, yet subsequently became a vibrant, multi-racial city. He fears the pendulum could now be swinging in the other direction. “China is separating from the US and there is this war [in Ukraine]. London has been the beneficiary of globalisation and if it goes into reverse, maybe the global city is past its peak.”
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