Economics: China Has a Few Things to Teach the U.S. Economy - by Noah Smith

Ever since China’s spectacular economic growth became apparent in the 2000s, people have wondered whether that country’s brand of authoritarian state capitalism has proven superior to the more liberal American model. Until recently, it was possible to dismiss those concerns, but Chinese successes and U.S. failures keep piling up. If the U.S. wants to maintain both its relative power and its prestige as a model for the world, it needs to make some big adjustments.

Read more at: China Has a Few Things to Teach the U.S. Economy - Bloomberg

BITCOIN Currency: The dream currency is in trouble - by John Pittis

Investors in libertarian dream currency want establishment help over missing millions: Don Pittis

Read more at:

https://www.cbc.ca/news/business/quadriga-bitcoin-bankruptcy-1.5004735

Stock Markets: Bitcoin buyers should be prepared to lose all their money, top UK regulator warns

Bitcoin buyers have been issued a "serious warning" from one of Britain's leading financial regulators.

Andrew Bailey, chief executive of the Financial Conduct Authority (FCA), told BBC's "Newsnight" on Thursday, "If you want to invest in bitcoin, be prepared to lose all your money."

Bailey said a lack of backing from governments and central banks for the world's most popular digital currency was evidence that putting money into bictoin was not a secure investment. He also said buying bitcoin was akin to gambling because it had the same level of risk.

Bitcoin's meteoric price rise has stunned critics and enthusiasts alike, leaving investors scrambling to understand the driving factors for the digital currency's runaway rally.

Bitcoin traded at $17,159 on Friday morning, according to CoinDesk's bitcoin price index. The digital currency has a market value of approximately $291 billion — the largest among the cryptocurrencies. A year ago, one bitcoin was worth around $780.

"If you look at what has happened this year, I would caution people … We know relatively little about what informs the price of bitcoin," Bailey told the BBC.

Soaring interest from institutional and retail investors has prompted global exchanges, such as the Cboe, to launch futures contracts.

Meantime, CME Group is poised to a launch bitcoin futures contract on Sunday and a German stock exchange operator is reportedly considering whether to follow suit.

The launch of bitcoin futures contracts represents a significant step in the legitimization of cryptocurrencies, according to some market participants. Futures are derivatives, or financial instruments, that obligate a trader to either buy or sell an asset at a specified time and at a specified price.

Bitcoin bulls have frequently referenced the cryptocurrency's scarcity value as a primary reason for its staying power. Somewhat like gold, bitcoin supply grows at glacial and ever-decreasing fixed rates with only 21 million bitcoins set to be in existence.

But while the trading of bitcoin futures on two of the world's largest exchanges is expected to provide a layer of official oversight that had not previously existed, several leading voices have expressed skepticism.

JPMorgan Chase CEO Jamie Dimon called bitcoin a "fraud" that would eventually blow up, while billionaire investor Warren Buffett urged traders to "stay away from it," calling the rally a "mirage."

Read more: Bitcoin buyers should be prepared to lose all their money, top UK regulator warns

Trade Agreements: Even Mainstream Economists Starting to Admit that "Free Trade Agreements" Are Anything But ..- by Robert Reich

During the US Presidential campaign Trump and Sanders have whipped up a lot of popular support by opposing “free trade” agreements.

But it’s not just politics and populism … mainstream experts are starting to reconsider their blind adherence to the dogma that more globalization and bigger free trade agreement are always good.

UC Berkeley Economics professor Robert Reich – Bill Clinton’s Secretary of Labor – wrote last month:

    "Suppose that by enacting a particular law we’d increase the U.S. Gross Domestic Product. But almost all that growth would go to the richest 1 percent.

    The rest of us could buy some products cheaper than before. But those gains would be offset by losses of jobs and wages.
    This is pretty much what “free trade” has brought us over the last two decades.
   
    I used to believe in trade agreements. That was before the wages of most Americans stagnated and a relative few at the top captured just about all the economic gains.  Recent trade agreements have been wins for big corporations and Wall Street, along with their executives and major shareholders

    But those deals haven’t been wins for most Americans. The fact is, trade agreements are no longer really about trade.

Indeed, while it’s falsely called a “trade agreement”, only 5 out of 29 of the Trans Pacific Partnership’s chapters have anything to do with trade.  And conservatives point out that even the 5 chapters on trade do not promote free trade."

Reich continues: "Worldwide tariffs are already low. Big American corporations no longer make many products in the United States for export abroad.

    Google, Apple, Uber, Facebook, Walmart, McDonalds, Microsoft, and Pfizer, for example, are making huge profits all over the world. but those profits don’t depend on American labor – apart from a tiny group of managers, designers, and researchers in the U.S.

     To the extent big American-based corporations any longer make stuff for export, they make most of it abroad and then export it from there, for sale all over the world – including for sale back here in the United States.

    The Apple iPhone is assembled in China from components made in Japan, Singapore, and a half-dozen other locales. The only things coming from the U.S. are designs and instructions from a handful of engineers and managers in California.

     Apple even stows most of its profits outside the U.S. so it doesn’t have to pay American taxes on them.
    
This is why big American companies are less interested than they once were in opening other countries to goods exported from the United States and made by American workers.

     They’re more interested in making sure other countries don’t run off with their patented designs and trademarks. Or restrict where they can put and shift their profits.

     In fact, today’s “trade agreements” should really be called “global corporate agreements” because they’re mostly about protecting the assets and profits of these global corporations rather than increasing American jobs and wages. The deals don’t even guard against currency manipulation by other nations.

     According to Economic Policy Institute, the North American Free Trade Act cost U.S. workers almost 700,000 jobs, thereby pushing down American wages.

     Since the passage of the Korea–U.S. Free Trade Agreement, America’s trade deficit with Korea has grown more than 80 percent, equivalent to a loss of more than 70,000 additional U.S. jobs.

     The U.S. goods trade deficit with China increased $23.9 billion last year, to $342.6 billion. Again, the ultimate result has been to keep U.S. wages down.

     The old-style trade agreements of the 1960s and 1970s increased worldwide demand for products made by American workers, and thereby helped push up American wages.

     The new-style global corporate agreements mainly enhance corporate and financial profits, and push down wages.

     Global deals like the Trans Pacific Partnership or the TTIP with Europe will boost the profits of Wall Street and big multi-national corporations, and make the richest 1 percent even richer."

Bottom- line - but they are not beneficial for the citizens of the countries which have signed these treaties. 

Read more: Even Mainstream Economists Starting to Admit that "Free Trade Agreements" Are Anything But ... | Zero Hedge