globalization news

[Ivanhoe]

On the one hand;

https://foreignpolicy.com/2022/08/02/companies-fleeing-china-friendshoring-supply-chains/

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“The only thing predictable about China today is its unpredictability, and that is poisonous for the business environment,” Bettina Schoen-Behanzin, a vice president of the European Chamber, said in a statement accompanying the 2022 survey. “Increasing numbers of European businesses are putting China investments on hold and re-evaluating their positions in the market as they wait to see how long this uncertainty will continue, and many are looking towards other destinations for future projects.”

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Apple has begun moving manufacturing from China to Vietnam, where its AirPods Pro 2 are now likely to be produced. Two years ago, Samsung moved its Chinese manufacturing to Vietnam. Hasbro has moved its Chinese production to India and Vietnam. In July, Volvo announced that it would open its first European factory in 60 years, in Slovakia. (The Swedish carmaker is owned by Geely of China.) Apparel and footwear companies such as Adidas, meanwhile, have shifted production to Vietnam, though this was primarily motivated by cost. “Partly it’s that old adage about eggs and baskets,” said Sam Wilkin, the director of political risk analytics at the insurance broker Willis Towers Watson. “Recent events have reminded everyone that too much exposure in any single country, no matter what country, puts a company at risk for large losses or even bankruptcy.”

 

However, Klaus Blofeld never sleeps;

https://www.zerohedge.com/economics/cbdcs-expiration-dates-restrictions-could-target-social-policies-economist-tells-wef

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The World Bank studied the effects of expiring money and argued that this could be a “potential monetary policy tool” to stimulate consumption during recessions or pandemics.

“Expiring money would increase both the velocity of money and overall economic activity, similar to applying a negative rate to digital cash,” the organization wrote. “In practice, a carrying fee on money would encourage people to spend it and thus prevent it from being hoarded.”

Indeed, CBDC advocates say digital money can be a flexible instrument to micro-target sectors, regions, interest rates, and socio-economic demographics with real-time feedback.

 

 

Somehow I see the "arbitrage class" getting their cut/fee when "expired" DC gets converted back to SiliBucks. 

I am going to guess that those sectors, regions, etc. that are micro-targeted will lose some percentage of value by central bank fiat. 

 

[JWB]

 

[Ivanhoe]

https://www.zerohedge.com/crypto/bis-cbdc-roll-outs-may-require-changing-constitution

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Speaking at a conference of African central banks in Rabat, Morocco, IMF Managing Director Kristalina Georgieva said that there needs to be agreement among CBDC implementations,

“on a common regulatory framework for digital currencies that will allow global interoperability. Failure to agree on a common platform would create a vacuum that would likely be filled by cryptocurrencies”

Not to be outdone, the Bank of International Settlements (BIS) worked with seven central banks to publish YARP (Yet Another Research Paper) on CBDC policy, entitled “Central Bank Digital Currencies: ongoing policy perspectives”… (*yawn*).

The central banks involved were: Japan, Sweden, Switzerland, England, the United States, Canada, and the European Union.

 

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That said, Christine Lagarde also clarified in April that “programability” will be done at the retail banking level:

“For us [central banks], the issuance of a digital currency that would be central bank money would not be programmable […] Those who can associate the use of digital currency with programmability would be the intermediaries — would be the commercial banks” 

…which gives us a hint at something else we’ve been pondering in our monthly coverage of CBDCs in The Bitcoin Capitalist (“Eye On EvilCoin” section): how will the big banks avoid being disintermediated out of existence when central banks create CBDC accounts directly to the consumer?

Maybe they’ll be the ones enforcing the expiry dates, negative interest rates, social credit scores and personal carbon footprint quotas and that will become the raison d’être of the Too Big To Fail Banks.

 

I haven't ground through the cited works yet, but it sounds like they are talking about some linear or otherwise monotonic linkage between the absolute size of CBDC deposits and interest rates paid to depositors. 

If interest rates increase with larger deposits, then that implies a wealth transfer from poor to rich. 

If interest rates increase with larger deposits, then that implies a wealth tax. 

Quote from one of the cited publications put here as a placeholder to remind myself to look up the bolded terms, as some CBDC critics mention programmability as an evil;

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Compared with today’s central bank reserves, wholesale CBDC might enable programmability, composability and tokenisation within the future financial system. 

 

[JWB]