Ten Years Later: The Crisis Has (Not) Taught Us So Much

A growing debt-to-GDP ratio of many countries, high credit indebtedness of individuals and households, insufficiently dynamic development of small businesses that was supposed to generate employment growth, advocating for austerity, even when such an approach is detrimental, the political divergence of decision-makers who were supposed to lead to any kind of new regulation and general the state of hopelessness – all this is a picture of today’s society, exactly a decade after the outbreak of the biggest economic crisis after the Second World War, the Global Economic Crisis, that appeared as the consequence of the preceding financial crisis, and that has started on September 15th 2018 with the fall of Lehman Brothers.

The rhetoric of the majority of European politicians, especially from those from the center, has split many concerns on the subject, mostly concluding that the financial markets had only to perform well and that the rest of the world would see the stabilization after a while. However, the financial crisis has rapidly turned into a more solemn international economic disaster since the crisis of 1929, as it affected the real economy by distressing credit and led to sharp weakening in GDP growth of the countries with the strongest economies by domino effect. As it became visible, the leaders of the most powerful countries at that time met regularly at G20 meeting, declaring big determinations, promising nothing would be the same.

More and more people nowadays are understanding that the numerous crises we face are connected to the perpetuity of the supremacy of finance and that the society is no longer able to stand the expenses of its overindulgences. Global population clearly understands that economic growth has certain boundaries, that the unsustainable levels of dissimilarity we are experiencing are discordant with a society living in peace with it and that the climate problem is a major problem for our future. For example, if one country wants their trade imbalances to be sustainable, and the other surpluses to persist, absolute freedom of capital actions is needed, which is why it is impossible to seriously regulate finance without shifting the ladder and global economic scheme at the same time.

As information and technology move across borders without factual change of the ownership, countries are led to focus and position themselves in different parts of the productive system. This situation does not simply create interdependence, which, as a consequence, generates hierarchy. The latter financial crisis has determined, like the previous ones, by obtaining time so that nothing essential changes in the end except the announcement that any further crisis will probably be more threatening as the finance gained a specific role in the world economy since it now helps to cover the trade disproportions.

Correspondingly, the more significant these are, the more the financial imbalances would exist, which causes exhaustion of even world’s most powerful financial industries by allowing the deficits of some and the extras of others to grow faster. Similarly, any kind of effort at financial corsetry can only lead to the downfall of the global trading system, as it happened few months after the emergence of crisis when the disruption of the financial system led to the distraction of trade flows. For example, taking a look at the fact that the global economic machine yields to satisfy the need for consumption of households in the United States has something captivating about it, as brings together the way in which ancient Rome acquired the surplus of wheat produced in other Mediterranean areas in order to feed each day its population of one million.

Apart from that, the situation in the US also reflects something from not that much late history when the president Theodore Roosevelt has promised to move the merchants out of the temple while the American Congress approved a financial guideline named the Glass-Steagall Act. That specific financial act detached investment banks taking huge risks from deposit banks, beneficial and needed to the rest of the economy, as the president understood that this was the only method to evade a thoughtful catastrophe in the US. When the administration of Bill Clinton annulled the Glass-Steagall Act in 1999 it appeared that the fears of the Great Depression were forgotten. However, not so many people denounced it when the crisis occurred in 2008, while later the administration of the president Barack Obama made not enough effort in order to accomplish better financial results.

The situation in Europe was characterized by the regulation of bank under the policies of the European Central Bank, as they were compulsory to rise their own assets, to reinforce the barriers that protect them and to contribute to a joint reserve fund that could be used in case of bankruptcy. Since the world economic crisis many leading central banks were required to make financial stabilization a priority and therefore ECB handled a sovereign debt crisis that led it to reconsideration the broadcast of monetary strategy within the Eurozone. Besides that, the ECB initiated the process of massive refurbishments of state debt in the spring of 2015 by buying up to 80 billion euros each month until this year, while its zero interest rate policy is still in power.

When the crisis occurred, the banks themselves had become unable to assess their own losses. Some particular financial labels they had designed during the years of enthusiasm had become unconceivable to their own specialists, while the insurance taken out to cover their fatalities was misleading because the insurers themselves could became insolvent at any time. The biggest US banks that had been the machines of securitization and speculation could organize much more recovering than some of those small regional banks in Europe that had borrowed to individuals and businesses, which had been cautious not to gamble on the financial markets, and yet had to face the losses connected with the global crisis. Due to money creation over the past decade the expansion in liquidity has supported the financial markets and has directed to an increase in global stock market indices, as some of them have augmented roughly four times between 2009 and 2018.

Avoiding austerity was the key priority for investors who are currently driving for the regulation to be resolved while the banking system is both more cortrolled and because of the boost of some banks even more dangerous. That boost led not only to the lack of necessary reforms achieved, but also to the occurence of shadow banking as the financial actors were tryinh to avoid the regulations by multiplyig operations off balance sheet operations, as those subsidiaries were not subject to regulation. Today’s circumstances in the financial world are very similar to the situation that existed a decade and a half ago. The situation on financial markets is still dynamic as the stock indexes and real estate prices have exceeded the peaks they had reached before the crisis. The situation with the debt of households has not improved significantly, whic means that the solvency of large majority of population did not improve. This is also the case with small business that is shut out in the short term or is experiencing great difficulties and limitations.

Awareness of the crisis and regulatory needs has, to a greater extent, caused new fears that consequently contribute to the limited expansion of business, the insufficiently rapid dynamics of reducing unemployment and hopelessness, which many people find difficult to oppose for entrepreneurial steps. The decennial story of the crisis has produced more rhetoric that has served political subjects around the world for internal accounts with non-emigrants who are declared responsible for the emergence of a crisis situation even in segments where it is obvious that it is a product of a number of external factors to which no government has any of the countries whose banking system was internationally networked could not be affected.

Awareness of the crisis and the detrimental consequences of the policy that preceded the outbreak of the crisis did not produce a change, only diminished the possibility that political entities whose attitudes are united in finding a common solution, since the next steps are nevertheless transposed into the domain of decision-making by national governments, reduced chance of being properly reacted if one does not want to repeat a similar scenario.

There are not so many people who, ten years later, can claim that the crisis is behind us, especially those who do not feel any kind of relief in their financial situation, whether they are measuring the share of loans in their wages or they are tracking stimulus programs that remain at all levels as anti-crisis measures. Not only are there preconditions for the same terrible scenario to be repeated today, but the consequences would be much more dangerous.


Oil Price Range: From Conflicts and Terrorism to Mass Tourism

Crude oil price per barrel reached 75 dollars for the first time after four years. The International Energy Agency (IEA) recently stressed that the Organization of the Petroleum Exporting Countries (OPEC) would soon announce that it had achieved one of their key goals, which, based on a five-year strategy, included a reduction in inventories. However, all of this happened when global oil demand increased to nearly 100 million barrels per day, but which are not proportionally provided with the level of supply, which causes the fear of additional price increases.

Of course, the level of supplies depends on Russia’s decision whether to follow OPEC and end the politics of cuts in deliveries that the global market denies from 1.5 million to 2 million barrels per day. On the other hand, US shale gas producers are no longer the key factor on the basis of whose actions prices fluctuate. From 2014 to the last week the price of crude oil was between $27 and $70 per barrel, which has stimulated a number of different industries.

Thanks to cheaper fuel, the airline industry and cruising companies experienced significant flourishing, which, thanks to reduced operating costs, represented the possibility to offer arrangements to an increasing number of passengers whose income ranks among the national average of the countries they live or even below. Flights and cruising were never cheaper and more accessible to those who, over a decade ago what they would reason what they could have to give up if they wanted to afford summer and winter holidays abroad.

The price of crude oil from 2010 to 2014 was above $100. During this time, the political situation in the Middle East countries as well as in the African countries has drastically worsened, along with the redirection of revenues from the sale of oil into pockets of oil tycoons, as well as weapons dealers, and for the financing of terrorist organizations instead of public goods.

Even in the welfare countries there was a resurgence of the population and the emergence of shortages that the current generation never experienced due to the fact that production in some of them has dropped drastically. Such a situation was very obvious in Morocco, which was in front of bankruptcy and therefore forced to use supplies from countries that helped them, thanks to which the financial crisis was sidestepped.

Over the course of the year 2014, oil prices had a downward trend for most of the time, and shorter periods of stability mainly included the price between about $50 per barrel. With a particularly difficult situation, Algeria, a country with 40 million inhabitants, faced a particularly difficult situation, which in large quantities does not produce anything other than oil for other markets, and where money from the sale of energy is necessary for the import of all other goods for the normal functioning of the economy. In order to maintain Algeria’s economy, it was necessary for the barrel price to be around $115, in an ideal world $120, in order to provide funds for imports. However, due to the decrease in oil prices in the global market in 2014 and 2015, purchasing power in that country has dropped significantly.

The downward trend in oil prices started in July 2014, when the barrel costed $115, to slide to around $30 in January 2016, and the situation in the exporting countries drastically worsened. Such a situation, in addition to panic in the global market, has caused and intensified the promotion of the use of energy from renewable sources, nevertheless new reasons for the concern of ecologists have appeared when, in all global projections from 2015 to 2017, it was highlighted that the energy produced that way can only partially reduce the necessity to use fossil fuels and increase CO2 emissions.

At the same time, none of the official reports published then indicated an increase in the number of pollution factors, although the level of pollution from CO2 is still above the anticipated level.

The theory of the emergence of fossil fuels has served many supporters of increasing production to refer to the claim that without existing pollution an animal population would change in the direction of a complete disorder of the food chain, dangerous to survival of the human beings, as the resources for the production of pharmaceutical products were the most vulnerable in that case, which would apparently further increase mortality rate of people faster than CO2 is currently triggering.

The concern for the survival of the resources necessary for the normal functioning of mankind was the most striking half a century ago when even many scientists claimed that the beginning of the 21st century would be ruinous for the mankind due to the anticipated phenomenon of mass hunger in the world caused by the belief that accelerated population growth would not be followed by an equal increase in dynamics food production.

What has happened, however, is that the population has been doubled since the 1970s, and that food production has been drastically improved so that there are no huge shortages. All this shows how much the assessment of the sustainability of certain resources has always been untouched, especially as regards the coal projection, which in fact has for three more millennia, as well as for oil and gas, whose production has doubled.

The industrial revolution has actually improved the quality of life, which can be directly linked to the increase in the use of fossil fuels and a drastic reduction in infant mortality, a reduction in hunger caused by shortages and a prolonged lifetime of the human beings.

The last decade has shown that the data about oil inventories are actually a far more important factor affecting the range of oil prices, since oil exporters, primarily the countries of the Arab world where it is a core business, can achieve economic growth exclusively when the barrel price is above 100 dollars, for all others, this price is extremely unfavorable, since all economic activities, from production of anything to the provision of services, require some type of transport, which is dominantly dependent on the price of oil.

While the high price of oil fits only exporting countries, especially those who count on other economic activities less, and only accumulate budgetary resources, such circumstances are detrimental to all other activities, as transport costs are increasing and making business more expensive. However, when the price of oil after a drastic fall on the transition from 2014 to 2015 was maintained for some time at a level that was sufficiently stimulating, primarily for industrial production, the stock exchanges were revived, and the owners of the capital were on the win again after a long time.

At that time, the price reduction could have forced Arab countries to make serious internal reforms through which, in order to secure a budgetary balance, funding for terrorist groups would be reduced. However, this did not come about through official strategy, but the changes became visible on a wider scale. Even if the statistics were taken into account, the number of attacks by militant groups at certain periods in which the producer countries would face the lack of money provided through the export would be shorter. Nevertheless, in such circumstances, taxes and other disbursements to the population would increase, which would become more dissatisfied, resulting in more and more frequent internal disorder. The problem of lack of funds was sought by the governments of these countries through an increase in the financial supply, which only encouraged inflation, and the purchasing power of the population seemed weaker.

In the period since the beginning of war in Iraq in 2003, until the conflict in the northeast of Africa in 2014, there was a pressure on the global supply chain, accompanied by foreseeable growth in capital and operating costs, and an additional challenge for manufacturers was research on the impact of oil wells on seismic activity. All these were the reasons why the world’s leading consumers were re-examining the possibilities to find alternative fuels for new fuel for industry and transport, since renewable energy sources are not yet exploited to the extent that they would satisfy even the minimal needs of a part of the market that try to concentrate on them. First of all, the construction of these power plants represents a relatively expensive investment in the moment when saving is avoided, although in the long run they bring benefits that, after less than ten years, result in earnings.

However, the problem is that the growing demand for energy products – now and immediately, as well as the fact that the world market for at least another two decades will depend on oil. While oil and gas prices continue to grow, exporting countries are the only ones benefiting from a change in prices that alleviate at times when production levels are in line with demand and when the key issue is to control production costs. Markets at that point depend on the manufacturer’s operational capacity – if, for example, part of the territory of the exporting country is blocked due to war, which is why it is forced to use ports at the other end of the country, increasing operating costs, regardless of other factors, affects the price increase.

The price of oil in the United States is conditioned by the amount of reserves, which are reduced in those periods of the year when seasonal fuel production is increased, but also due to shale production, which is becoming stronger and stronger. By concentrating on this type of production in the middle of this decade, price growth has been halted and temporary stabilization of the US economy has been made precisely because many American companies have seen a place for profit here. Not only have they increased their employment, especially in rural areas, but have influenced, on the principle of competitiveness, that fuel is being traded at lower prices.

The expectations were that by the beginning of the next decade, US oil imports could double in relation to the existing one. With regard to oil reserves, they are still concentrated on Iraq, Iran, Syria, Libya, Egypt and South Sudan – those countries with a very unstable political situation, which threatens the reduction of partial or complete spending cuts with each new geopolitical tensions and armed conflicts.

Only when no conflicts occur in order for OPEC member countries to provide budget sustainability oil must be exported at a price not lower than $80 per barrel, while any difficulty in exporting by blocking ports and inability to transport through the Suez Canal price of this fuel is rising sharply.

However, the IEA has long pointed out that, in order to recover from the global market, it is essential that the price of crude oil is calmed at no more than $100 per barrel, for a period of not less than a year, which, in view of the existing conflicts The Middle East is almost inconceivable.

With $75 per barrel of countries such as Russia and Saudi Arabia are on the rise, this price is still insufficient for the economic recovery of other OPEC members. In the rest of the world, the increase in fuel prices reduces the possibility of increasing wages and, consequently, personal consumption that further stimulates economic activity. Such a price ratio, however, makes US production of shale gas significantly more favorable. The Arab attempt to get the US competitors out of the game by lowering the price has actually returned to the OPEC countries as boomerang, as the US increased productivity, so the price of $40 per barrel was acceptable. Saudi Arabia, as the leading country in OPEC, has changed its approach after its financial reserves began to disperse.

However, the transition from $40 to $75 a barrel, although it implied a two-year period, went too fast to leave room for recovery, especially in European countries. In other words, economies need at least two years of functioning under certain conditions to see all the circumstances on the basis of which strategies for adapting to new prices would be created, but such a long stagnation was not nearly as early as this century.

Consequently, expansion in certain areas is to a much greater extent a reflection of a number of favorable circumstances than the actual results of the work of the entities that directly benefit from it. For example, focusing on tourism in any of the European, especially Mediterranean countries, shows that positive results are least conditioned by an internal approach.

A decrease in oil price, Middle East uprisings and better life standards of the middle class in Far east countries are three factors that have directed to a number of flights to a number of European airports, leading to a growing number of cruisers in the European ports of the European region. We should remember this, at the end of the year, when we will, as always, celebrate the results of a visit by as many more percent of tourists, especially American and Chinese, who would have a different attitude in case of dissimilar cyclical effects, when fuel would be expensive and when some destinations would not have status of risky ones, either negligible in relation to the one in these market circumstances.

35. Using the Mechanisms of Cryptocurrencies in Regular Cash Flow

Over the past several years, before the popularization of combining financial and technological trends emerged to the extent of creating fintech trends, the general public was familiar only with the concept of digital currencies, bearing in mind that banks are using their power to confront it the way they can. However, the situation after fintech trends became the subject of scientific and academic researches is very different.

Blockchain technology was initially operated as many areas which, like all those advanced enough and too complicated things, was something that only enthusiasts use, showing that its development gives them more emotional satisfaction than material gain. The solutions are out of the act reflect upon one timeless, others contrived, but the way it is personified usually be tied to the defenders harsh attitudes to the current system unfair and that is a big change necessary.

Since the digital money was not designed to only represented a revolution, but to the actual, gradual changes opened the way, its concept has not been disputed in the way rejecting a priori an idea, but it is also a kind of fight from the centers of financial power against a phenomenon that is a little makeup the threat progressed slowly.

The sudden decrease in the value of digital currency bitcoin that occurred several times was the result of a number of moves, from hacking platform, destroying the system of electronic mining, to shopping at the market and sold at almost zero price when the giants of Wall Street sought to eradicate, but the relationship of supply and demand did his.

The focus has, however, for long been only on bitcoin as a phenomenon, but only when it went down deeper into what causes his indestructibility, it was observed that there is actually a system in which the function that that is in fact revolutionary. Today there is less sharp opponent, much less those who deny the success of bitcoin, as it was followed by a phase in which they are just leading global banks and corporations have shown a willingness to infrastructure that allowed traffic cryptocurrency use in their own business. This is a great milestone for joint technological and financial developments and from it could arise one of the most productive moments of banking in the previous financial history.

This model conceived in the created joint database which can be customized in many ways, while retaining all the performance you have. Transactions limited models, such as those that occur with bitcoin is based on a specific way of contracting or forced preservation process model, as it ethereum, who at blockchain can perform the tasks of general purpose.

There is already a huge number of companies in the world to experiment with ethereum, and usually work in a closed environment, and interest in investment occurs just at companies that still retain the status of market giants, but are aware of how the strategy and the domain of business it is necessary to adapt trends can be discerned.

The first application and experimentation around blockchain begins, first of all, in the sphere of transmitting and sharing digital content, while in common with what is related to the accounts and finances in general far less represented. From the results of recently published research on digital currencies, in the drafting of which participated and the German Bundesbank, it is possible to conclude that the financial sector in the next few years, expect more complex transformation than anything that happened in the last few decades. The emergence of digital currency has shown that space for promoting electronic payments and earn the transaction does not exist only in the improvement of services provided to the end user, but also in that which is to support these activities.

There was created as an attempt to improve bitcoin network on which it is only a possibility of performing transactions, but has not been adapted to other activities that, otherwise, in banking practice with money, such as savings and the like. Therefore, the role of ethereum is just to try on the basis of decentralized networks that exist in cryptocurrency create options that will allow such coverage in contractual relationships takes just a digital money, without having to be a value expressed in global currencies.

A few years ago such an idea seemed to say the least as vain, but now it does not initiate only alternatives, but there is a huge interest entities in the financial world mainstream. In time bitcoin breakthrough in global financial waters expectation that JP Morgan be interested in investing in this technology it would be absurd, but to date this financial giant has invested millions of dollars in financial startup Digital Asset Holdings to investigate the potentials of bitcoin.

In private chains cryptocurrency there is no element which completely defines the characteristics of the chain, without the possibility of observing it somewhere else. Here, in fact, lie all potential transactions in such networks, because of defining values ​​to be created opportunities for exchange, storage, withdrawal and allocation of resources without involving a physical cash or any other unit of measurement in the process.

The advantage is that when transferring the assets will not be necessary complex calculations, because the funds are not actually dislocated from the chain, but only changes the record that exists in the database.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

34. A Widespread Decline of Confidence in Euro and Dollar

Bitcoin is used for different types of online payments by the user is sent to the recipient’s address in the message, combined with a private key, known only to the sender. Each user on the side has a file that serves as a wallet that represents an arbitrary amount of pairs of keys. This allows access only to their money and the use of an amount just one time, when it comes to real money.

Reviews on this phenomenon in the beginning were far from analytical, more in disbelief and without a lot of serious dedication to this issue. The one thing that caused many economists to bring wrong conclusions is the assumption is that bitcoin works as real money, which is not the case. Although there is as a medium of exchange, it does not imitate all the traditional functions of money, what is of value and unit of account.

This can be explained more clearly by using the example of that in the last few months have seen a big rise in the value of bitcoin. In classical economics, that is the same as bitcoin money here to talk of deflation, as well as when it is in the moments when, after reaching an extremely large amount of this bitcoin bubble bursting, a value drastically drops coming inflation.

However, with the bitcoin this is not the case, since the inflation and deflation have no effect on the growing bitcoin economy, because its value is created after the users voluntarily accepted as currency in actual transactions. They can be exchanged for the existing currency, the value applying on a particular day, but not bitcoin price denominator. It is, however, a part of many investment portfolios, and the laws of supply and demand are the banks which have had owned it and bowed their value by offering it to the market at extremely low prices. At the same time, it lasted only until the bankers have not exhausted the stocks and lost the ability to continue to affect the value of bitcoin, which gradually comes to the realization of the original idea – that the money managed by all who use it, not just the selected central banks.

This idea certainly easily becomes accepted by the population worldwide, overburdened debt and loan installments which we come to collect exactly the moments until their currency differences are not in favor. Alternative payment methods existed before, but the bitcoin become interesting to the public from a completely different reason. The total value of bitcoins on the stock market could be represented in billions of dollars, but it is what has become so popular topic in economic circles just questioning whether it is about someone’s hidden intention to destroy entire financial and banking system in the world.

This was the reason that in many reviews of this phenomenon points to the potential danger and risk, and is not that exactly what make systems at the time of dealing with their own powerlessness. At this time bankers are becoming aware that the end of the era in which sovereign dominated the world of money, which is why the public is increasingly placed a warning that it is a dubious and risky form of investment.

A lesson as such can be drawn from current trends and orientation of a large number of market investors is decline of confidence in the euro and dollar, as well as the announcement of a new, gradual redistribution of wealth, which is initiated by distrust of citizens in the financial, primarily banking system.

Under these circumstances, a confidence in bitcoin grows because its value is not affected by the decision of any center of power such as the political and economic establishment, which is why his influence in financial flows revolutionary. One thing that might be called as certain is the dominance of the financial elite that caused the crisis is slowly coming to an end, and the fear of bitcoin and identifying its deleterious effects only the initial stage of entering the market for a long fight from which will go out as losing those most damaged system.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

The Currency Market is Excluded from the Productive Economy

Taking into account the fact that the world population for four decades increased from four to around 7.5 billion people, that for what 1975 could be bought for 100 dollars today should allocate at more than 450, and that the price of a barrel of oil then stood at about 13 dollars, there is no formula which could carry out a factor that makes the worth of anything increased much more than 500 times, as it is the case with the currency market.

If the early seventies of the last century currency exchange used solely to simplify international trade, another imposing figure is about the size of this market is that the foreign trade transactions in foreign currencies amounted to only two percent of world currency exchange.

Inflation Calculator data shows that, if the completion of major oil crisis in the seventies it took 200 days to exchange on the foreign exchange markets reached a global level of annual world exports. The level of world exports, which since the beginning of the seventies to the present quadrupled, has a turnover in the foreign exchange market of 84 hours. This is one of the key indicators that the currency market is excluded from the productive economy and world trade.

Over the past several years, four leading banks of the world controlled half of the world market – UBS, Citigroup, Barclays and Deutsche Bank and when they join the six other powerful banks, including Morgan Stanley, Bank of America, JP Morgan, Royal Bank of Scotland, HSBC and Credit Suisse, that will lead to coverage to 80 percent of the foreign exchange market. The remaining 20 percent controlled by the smaller banks, and only a tenth of this free part refers to transactions in export to international markets.

Half of the traffic takes place on the London market, where the scandal of manipulation of Libor has not been solved completely. However, fines for furnishing at Libor amounted to “only” 5.8 billion dollars, much less than what would, if proven, could pay the bank responsible for the impact on the exchange rate difference of the euro and the dollar, as the only daily volume of their mutual exchanges amounts to 1,300 billion.

In the meantime, it is more and more often possible to hear the warning to be among those responsible for manipulation could find and the Bank of England, from which since the spring of 2012 began to arrive alert large investors, which lead to the realization of transactions in a very short time, before what would any official information remained available in the mainstream media. Countries that are largely trying to overcome this problem, trying to maintain control over all available mechanisms are certainly members of the Eurozone.

Clearly, a set of convergence criteria on the basis of which enables the use of the euro as well as the rigorous procedures of the European Central Bank and its restraint of conduct aggressive monetary policy are just an attempt to keep control in this area, however, the competing interests of banks whose headquarters are outside of the beneficiary countries of the euro, but and the governments of the countries where the problems of the Eurozone, is not the only concern that overstate these restrictions.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

32. Misuse of the Currency Derivatives Causes Losses that Affect the Entire Society

The data from the foreign exchange market for 2016 showed that the exchange turnover on a daily basis has reached the amount of 5.067 billion dollars. This huge sum is a key source of daily financing activities of banks, that, due to transaction costs, even when they are marginal, ensure bank liquidity in a system that runs on the principle of inter-related investment funds daily resources.

However, the possibility of conversion of funds from one currency to another was not where banks were willing to stop at earning a commission, though they went a step further and offering the ability to purchase certain currency at a higher or lower rate, guaranteeing themselves profit from changes in foreign exchange differences. One of the key advantages that banks have are the currency derivatives where misuse of it can cause losses that can affect the entire society.

One of the key fields where manipulation with rate difference takes place is in everyday exchange between euros and dollars. To speculators on exchange rate difference this currency pair, which is the most popular on the market, brings earnings expressed in billions of monetary units on a daily basis brings. Besides that, key irregularities became very visible during the big oil crisis in 2013. The exchange rate of the US currency, as the one that is being used by the world’s leading economies and largest global consumer of energy is conditioned by the price of oil and it is inversely proportional to its growth and vice versa.

When the information come from the market in the United States are received information regarding the observed phenomenon that increases the purchasing power of citizens of this country, the price of oil in the U.S. market is growing, but the level of growth depends on what the effect of this trend has on the price on the London market. In those circumstances the dollar exchange rate was lower against the euro and the same relationship was applied in cases where, due to the increase in oil prices, mostly because of the blockade of exports or deliveries as a result of conflict in the Middle East there was a decrease in the dollar, as the world’s largest consumer, the United States, due to increased production costs so trying to fight for favorable export.

What has repeatedly happened in recent years is that, precisely at a time when the market was the most active, was that the daily volume of traffic was the largest that has occurred to the simultaneous growth and oil prices and the dollar exchange rate against the euro. Changes in exchange rate between the dollar and the euro and therefore are among the most unpredictable trends highest risk for long-term forecasts, but also a permanent source of income, as well those who assess opportunities, and banks on every transaction earning a certain amount.

Therefore, in addition to market derivatives, foreign exchange market registered the highest growth in total global trade. Markets, particularly futures, of certain listed goods have already reached the level at which the traffic is based on trade agreements that go beyond the actual stock exchange stocks, thanks to the fact that traders futures, for example, oil, aluminum or cereals are not looking for the physical delivery of goods over which have ownership.

The situation with gold from the stock exchange agreements has far more than what is physically possible to excavate from mining, showing how many market phenomena in fact are fictitious and to what extent are confined to the papers. However, all this is negligibly small, even negligible fictitious in relation to the money which circulates. If the starting argument takes the information that is primarily about forty international currency market total assets worth less than ten billion dollars, and that today it is almost 530 times more, or 5.300 billion, the only conclusion that we can reach is that the growth fictitious.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

31. Currency Wars Due to Introducing Monetary Incentives through Money Printing

Further than the hesitancy of the legislator, the response of the banks to the questioning of their profession is also strongly to be feared. From this standpoint it might seem that the banks have not yet realized that a peer-to-peer system the bitcoin is based on reduces the scope of depository banks, since a bitcoins deposit does not exist as such, it is hard to see how the banks could justify their deposit services under bitcoin.

The ongoing printing of money that occurred in Japan, United States and China also happened it the EU, which in general public created an image of unsustainability, especially in the longer term. The opinion that is generally accepted is that the global scene today is characterized by currency wars of enormous proportions due to the fact that the United States, followed by Japan and later China, and finally the European Central Bank began to introduce monetary incentives through additional printing money, or programs to purchase bonds that increases the level of available resources, but also causes a condition that is unsustainable in the longer term.

While for the economies of these countries this was a signal that in the future could be a very complex problem, global financial centers have recognized it is a generous source of earnings. Changes in exchange rates were conditioned by political and economic developments in the countries that use them, but also moved that behind the scenes pulling the leading banks in the world, after which it seemed that once completely reliable guarantor factors are not expected to reverse the trend.

Forex trading, that became increasingly popular over the past decade, has attracted millions of users around the world, which contributed to the vertiginous growth of the daily trading volume, a growing number of those who observed the legality of trading and the ability to predict the directions of growth, but also an increasing number of reports that start with the word “despite” and explanation a situation in which there was an unexpected change in circumstances.

Since there are logical rules on the basis of which the trends of changes in exchange rates can be predicted to the fifth decimal, but since, at the same time, one may also come up with unexpected shifts in this area, there is only one possible explanation and that is that there are devices used to manipulate in order to enable additional income for certain entities. The currency market is huge and it continues to grow, which prevents any intervention, agreements and coordinated actions of a number of participants with high-stakes, especially so that it reflected at the global level could shake up relations between currencies. This does not mean that there are those who are not able to influence the courses.

The mismatch of the political situation, reports on the economic growth of a country, inflation, employment data and other parameters with courses leading world currencies is explained as an outcome of activities performed by the biggest global banks. As one of the key subjects of currency exchange various mechanisms they are contributing to the instability of exchange rates, mostly because a huge proportion of them are related to the speculative schemes. In such environment, only about five percent of foreign exchange transactions are related to investment, trade in goods and services that have impact on the real economy, as well as remittances from inhabitants from abroad, while the rest of the leading banks in the world belongs to the segment from which derive key sources of funding and the duration of, or in the currency exchange and the commission that thanks to exercise.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

30. Defining the Level of Sovereignty in Comparison with the Position of Leading Central Banks

One of the biggest threats in today’s economy is a deflation. When prices are falling steadily, consumers and businesses are less inclined to spend and invest. Also, the weight of debts automatically increases, as they do not degenerate with prices. In particular, central banks target an inflation rate of more than 0 percent to 2 percent to reduce the risk of deflation. If in inflation rate is excessively low, interest rates are lowered and the money supply is increased.

By observing the data related to the global economic growth and policies of leading central banks in the world there could be noted that since 2014 there were billions of share repurchases, while at the same time huge amount of money was spent in order to lift up prices of corporate shares from the companies themselves. The fact is that the reason for the governments to borrow was covering their operating costs, while companies have borrowed to increase, to develop new segments, as well s to buy their shares making up the prices. However, none of them was able to follow the rule of selling or buying at lowest or highest since during the crises corporations have taken advantage of such a chance to buy back their own shares at a reduced prices. Those prices are high again, they give the impression almost each and everyone wants to buy, even though it must surely end. It is easier than ever to predict what will happen when stock prices will collapse.

Since the global financial crisis emerged of 2008 a real war against savers has begun to lower interest rates and consequently the recompense of savings, followed by the lower refinancing rate almost on zero level and Quantitative Easing programs. The increase in liquidity caused by quantitative easing programs does not wash out the real economy, but is largely directed towards the financial sectors. The accumulation of public debts has reached such a level that monetary policies will have to transform, and inflation will make its return with its instruct of dislocations, unemployment and various types of injustices.

Measures that the leading central banks have applied in order to trace the path to economic recovery, combined with tighter regulations and heavier taxation has led to an end of private investment and a deflationary spiral. In this situation it became very obvious that currencies, especially those that are under control of the leading central banks, are not only an expression of the value of commodities like the indicator, but they serve as a connection between the present and the future. Price stability, which describes the situation, where price fluctuations are very low or do not exist, does not concern the decisions of economic subjects as they are standardized across all economic areas. On the other hand, the behavior of economic subjects, responsive to inflation or deflation, influences the development of inflation. Individuals try to preserve their real cash balances because they are not fooled by the monetary illusion created by inflation and they require the maintenance of their purchasing power in real terms.

It is difficult to envisage that virtual currency, without the assistance of a government, without regulatory mechanisms and likely to cause unstable inflation, may one day be used on a large scale. A strapping regulatory framework would also be required to guarantee that different users are not harmed. If account, exchange and transaction costs are low with cryptocurrencies, it is notably because there is no protective covering and recourse in case of prejudice to the users. In the traditional monetary system, several components work to protect the citizens, but these structures have a cost, where deposit protection is a good example. Regulatory requirements are increasing according to the use of the currency in order to cover the new risks that appear. The bitcoin network allows the currency to change owner, but does not allow lending funds.

It seems that the method of spread of monetary policy is not working, or is at least detained. The spread means that the effects of changes in the key rate have a collision on the economy as a whole, down to the rate of inflation, which can be explained by the caution of banks to lend to the private sector as a result of recent stress tests and the rules set during 2010. Therefore, explaining the meaning and the purpose of the digital currency has lead to defining its level of soveregnty in comparison with the existing monetary system or the position of leading central banks, where many people think that a country is sovereign and that if it has contracted a debt in a currency, it is free to reimburse it in another country it chooses.

All of these shows that the users are hence reliant on its volatility, which is the spot on which bitcoin enthusiasts must not fail to turn down any liability, clearing up that the rate of conversion of the regular money into bitcoin may be dissimilar from what is relevant when we convert bitcoin into regular money. This does not mean that one might require bitcoin address in order to send money, since an e-mail or a phone number is as much as necessary, though the beneficiary does not have a digital wallet in some of major supported currencies they will receive bitcoins which could be exchange on other platforms.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

29. Formation of a Private Blockchain Explains Optimizing the Reconciliation Procedures between Financial Institutions

The usage of blockchain in financial sector could revolutionize the situation fundamentally by reducing the significant amount of complexity of the reconciliation processes. This platform intends to make this process straightforward by performing only one computation and submitting a harmonized representation to the stakeholders, consequently eliminating dissimilarities in theory. 

To make this transformation take place, a greater part of mining instruments will fall behind the idea that it should correspond to three-quarters of the computing power of the network for two weeks in order to reveal that it runs the engine correctly and can consequently enforce this new standard reasonably. Experiencing any kind of bugs at this time will lead to solving problems at the earliest stage in order to prevent any risky situation before broader implementation.

It would be too optimistic and even unreal to expect that this technology could transform the payment industry in the next several years since the current technologic usage is not tailored to the performance of mass payment resources that require short-time responses, as it is the case with payment cards.

The formation of a private blockchain, shared with the smart contract tools, comes out to be the ultimate explanation to optimizing the reconciliation procedures between financial institutions at the same time as lasting visible to the supervisory body. In any type of transaction services this is supposed to ease the automatic transmission of verified information, while automating the confirmation procedures and definite supervisory and that is the reason why these segments would take an advantage to a great extent of optimization, effectiveness and protection.

The creation of new units of account for most cryptocurrencies that operate on blockchain platform is programmed once and for all by an intangible algorithm, without possibility of modification if not by a majority decision of its users. In that regard, new units in the bitcoin system, new units are created every ten minutes as compensation for the formation of blocks by miners and only in that way.

Initially fixed at 50 bitcoins per block, it is currently 25 bitcoins, i.e. a growth of the money supply in bitcoins in the order of 10 percent per year. This fee will be divided by two every four years, which implies a limit of 21 million which will be reached around 2140, though 99 percent of this limit will have been reached by 2032. The bitcoin is ultimately an intrinsically deflationary currency whose value is destined to grow over time, which should give it a competitive advantage as a store of value. The very low transaction fees explain the emergence of a third demand factor for bitcoins as a means of payment.

A number of online vendors, more particularly specialized in the provision of Internet services and the online sale of rather exotic items, now accept to be paid in bitcoins, due in particular to the almost total guarantees of anonymity associated with them. The latter factor of increasing demand for bitcoins is still in its infancy, if only because at present only a very small number of items can be paid for in bitcoins and most sellers continue to display their prices in dollars, euros and other currencies.

The battle between customary payment systems and peer-to-peer payment systems, and therefore between state currencies and cryptocurrencies, is likely to be the subject of regulation. In the camp of bitcoin and its derivatives, two positions are already taking configuration. The first, faithful to the purpose of the existent promoters, is to fight frontally against attempts at state control, to further modify the anonymity, invulnerability and closed nature of the system, even if it is at the cost of a less user-friendliness and increased consumption of resources.

This trend is illustrated, for example, by Darkcoin or the analogous Zerocoin project, which aims at complete anonymity of transactions. The other more conciliatory trend is alternatively to seek reputability by respecting the regulatory constraints and by giving the operators the means to satisfy them in the role they have chosen. This is the beginning of a division from which two manages of systems appear, where the biggest part of users choose to be in good standing with the authorities rather than defending central orientation.

It can hence be expected that a vast majority of users will select as reserve currency one of which they are sure that the value will not decrease over time, the bitcoin being a good candidate. Others will favor currencies standing on a material asset such as gold or currency guaranteed by the state, but in any case it is a subjective persuasion about the promise made by the money establishment.

It should be noted that the mere coexistence of several currencies is a protection of the public against the loss of value or the disappearance of one of them. At the first sign of depreciation of a currency, users could convert their assets into a safer one, which would certainly accelerate the decline of the fragile currency but prevent them from ruin. The position of each of the money issuers would therefore be delicate. They should be vigilant and quick to respond to the first signs of depreciation, but the numerousness of issuers would limit the effect of the bankruptcy of one of them, and the system as a whole would be robust.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

28. Usefulness for Data Management, such as the Cost of Index Reproduction

To attract the general public blockchain must surmount several major challenges, such as the user experience that is sometimes complicated when buying or handling bitcoins, but the key challenge is likely to be the confidence to be gained from potential users.

Besides that the study predicts that those who come through the best will be those who have succeeded in creating a very important trust capital and capitalize on it. The study relied on the historical information of 8 of the 10 largest investment banks in the world and sought to figure the type of consequence of using the blockchain on costs. The Accenture concluded that this technology would accomplish about 30% savings in operational costs through streamlining and reducing certain functions.

Blockchain platform is the one that will have to demonstrated extreme robustness to date, that has never been hacked since its initiation. It does not necessarily need to undergo the bitcoin, especially because there are other cryptocurrencies. The taken business of bitcoins could be explained by the fact that they are sites hosting bitcoin that have been copied, but not the blockchain platform as such.

This is good news for investment banks that are more and more looking to reduce their costs to better value their advice and increase their returns to the commercial banks. In addition to the use of bank support purpose, blockchain could also be used for data management, such as the cost of index reproduction, thus increasing data quality and lowering transaction costs. The most important feature of this platform could simply be explained to the potential customer what it would gain by using the service, without the need to qualify the details of the technology used.

For this rational motive, many banks have invested in this new technology since 2014 announced that they will work together on a blockchain application in international trading. Similarly, the Wall Street clearing house DTCC also published a report suggesting that their project will use blockchain in the clearing process. But this technique, which relies in particular on the encryption of data, must be clearly understood by the banks but also by the regulators, the latter being still in the observation phase.

According to the announcement of DTCC, without going so far as to predict the end of banks, the idea that a certain number of banking functions may disappear in the near future for the benefit of actors using the blockchain is a possible upcoming, but everything will depend on the use proceedings, since the transfer of money abroad seems very promising, for example.

It highlights in particular “the very low intermediation costs of services based on the bitcoin, compared to bank charges”. However, due to the powerful regulatory barriers, particularly on credit activities at the heart of the banking business, it predicts, above all, the development of cryptocurrencies in countries where money is unwell controlled and where the cryptocurrencies can have a function of safe haven. More generally, in the short and medium term, cryptocurrencies and blockchain are of particular interest to developing countries and gropus of people that do not use banking services.

It is also necessary to add that assorted trends come together at the same time and call for a redefinition of the role of banks. First of all, the crisis of lasting confidence inactive by crises and various cases which correspond to a certain ideological antagonism of the original community of bitcoin confronted financial institutions. After that, the technological world and the growing number of startup in the financial sector are positioned on the financial market, is bursting.

Under this polymorphic pressure that is constantly gaining in resources and visibility, traditional financial players are involuntary to change their practices. Projects based on blockchain, that are spreading all over the markets of developed countries, are a of a major trend that is quickly changing automatically by conventional actors, who sometimes struggle to adapt.

For their part, the banks do not remain in remission in any case, and try to turn the threat into an opportunity. The method adopted is generally the same nd consists of the incentive for the suitable technology to adapt it within actual systems, by developing actual private or partially private blockchains, or by subordinate with startups of the blockchain ecosystem. This manner of operation describes quite asymptomatic the state of mind of the banks, forced under the threat of cooperating, but also to scientific research more or less indiscreetly internally in order not to be surpassed by technology.

In order to continue control over their systems, experiments are accumulated around private blockchains, where only a limited number of players can record transactions or have the registry. Public blockchains are more complex to use for banks that do not want to lose control of their content and must follow with regulations such as Know Your Client (KYC), which is not compatible with the character of transactions on a public blockchain, where the privacy of a customer is one of the key principles.

Regarding the situation within the private blockchain, for example, where the connections would be concentrated in a few selected associations or even within the different sections of the same bank, the attraction of the blockchain for the bank is simply cutback in costs. According to a 2015 Santander report, the use of blockchain could save banks 15 to 20 billion dollars a year by 2022, thanks to a reduction in “infrastructure costs related to international payments, trading and compliance”.

The blockchain could for example modify them to administer with clearing and clearing houses, which are complex, concentrated, and which can take two and a half days to guarantee complete clearing. At the same time blockchain transactions would be more reliable and quicker, with the lower transactional costs at the same time.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

27. Focusing on Bitcoin Combination in Conjunction with Fiduciary Currencies

Having in mind that the period without any constructive action has lasted too long, there is a strong decision of bitcoin enthusiasts to overtake the force and to encourage a new version of supplement to the blockcahin world, which competes the very first version and proposes an irreversible adjustment of the rules of the software that governs the bitcoin, in order to boost the control of the network and that it deals more transactions.

For the achievable incorporation of additional protocols, the enthusiasts will be focused on bitcoin combination in conjunction with fiduciary currencies. Bitcoin in practice never ceases to evoke a real interest. The technology on which this currency was built is thus becoming a key factor in the investment strategy of large banks. Savings could be as much as 12 billion dollars per year by 2025 through the contour of certain functions. Banks and financial markets are increasingly interested in this technology.

In this environment, at the same time as the national currencies will be put into competition, which will inevitably lead to the abandonment of many of them, different conceptions of the means of settlement and of new disciplines of monetary creation may be proposed to the judgment In user actions, from which will emerge the most satisfactory solutions.

The current debate between currencies and goods, virtual currencies and state currencies will be decided by the users themselves. All the same, it is likely that this process will leave no chance for inflation currencies, and will put in difficulty those that will remain in discretionary hands.

During 2015 thirteen international financial institutions, including Bank of America, Morgan Stanley, Citi, Commerzbank and Société Générale, joined an undertaking to accommodate and use this blockchain practical application that could overturn their business. The plan of implementation is supposed to be realized by 2024 and in these conditions, the blockchain appeared as a possible recourse to banking institutions whose authority was decreasing.

This type of plan was initiated because of the great benefits of public blockchains like bitcoins is that there is no obstacle to entry where anyone can create a service that works on the blockchain platform. It is difficult for organizations in the financial sector to disregard the subject since blockchain technology in theory allows carrying out all types of transactions for the price that is two to three times lower that the current transaction costs of banks are right now. It is based on a network without a central control body, therefore without the connected infrastructure and administrative costs.

In peculiar, anyone, with a large quantity of assurance, can establish a bank in bitcoin that accepts deposits from customers and issues credits in bitcoins. It is in this sense that the bitcoin can disrupt the bank on credit activity by breaking down this barrier to entry. Decidedly, the studies on the blockchain applied to finance do not end up making this technology the new target.

According to the study published by Accenture there are reasons for optimism in banks that plan to implement the elements of blockchain platform in their further transactions. It is estimated that this movement could save up to 12 billion dollars each year thanks to the application in particular of this technology to back-office function.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

26. Denominating a Secure and Distributed Information Shared by Various Users

To understand the scope of fintech and blockchain revolution it is necessary to recognize a speeding up of hi-tech innovation. While observing these processes there are two phenomenons that became more and more visible and those are the tendency towards better connection with related parameters and the increased rivalry with fintech start-ups.

In the world of growing innovation there is an obvious tendency towards better connection with rules and their fulfillment, as well as changes in banking practice. For example, if a majority of “minors” agree on the possibility of the transaction, then it is validated, time-stamped and entered in the common register. A new block is then added to the blockchain in chronological order and definitively. This approach, which is at odds with the current model, however, faces certain slowness and a high cost because of the computing power required to verify each transaction, limiting its development.

On the other hand there is a growing rivalry among FinTech start-ups that take advantage of their quickness to have a strong impact on the outdated financial sector. This practice has been developing since the crisis of 2008, both in the securities and in cash system. The key problem that was visible from the earliest days of blockchain development was that the current banking system that is planned to be improved is that it requires outsized technical resources, as well as huge number of people on each side involved in these parts of transactions, such as the institutions who play roles of the lender and the borrower. The key element of change introduction is openness, fundamentally through the exploit of a blockchain.

By enlargement, a blockchain, literally a chain of blocks, denominates a secure and distributed information, shared by its various users, containing a set of proceedings, each of which can verify its validity. A blockchain can thus be assimilated to a large block public, anonymous accounting book that could not be falsified. This parallel statistics is a simplification and in reality, the names do not appear in plain text in the blockchain.

Instead, there is a bitcoin address, which can be considered as account numbers. A bitcoin address enciphers the hash of a public key. This huge book of records of transactions allows storing all the exchanges made between the associates from the creation to the present state. The main idea is that security and sustainability are ensured by all the participants that are to say by the community, that come to an agreement.

Smart contracts could be characterized as sections that are programmed to carry out specific actions. The traditional contract, which defines the obligations of the parties and their modalities, is superimposed on a computer program, which automatically checks that the conditions are fulfilled and executes the terms of the contract accordingly. Each block of the blockchain is a page of the transaction register.

The page contains a list of transactions and some other metadata. The red transaction is a special transaction that creates bitcoins and gives them to the author of the block. No central conciliator exists, it is therefore decentralized, which means that it is stored on the servers of its users. Indeed, even if investors were totally uninterested in the future of the bitcoin, this blockchain is already reused in many areas that require a trusted third party.

The blockchain becomes the agreement of an individual and an individual, even at a distance, without the controlling authority. The blockchain makes the virtual world the community it had ceased to be. To accept this interactivity, the conditions must be checked via the blockchain on which the smart contract is layered, and the resulting consequences can be generated from this blockchain.

Consequently, the smart contract as it is understood today consists of lines of codes stored on a blockchain, which activates as a result of transactions on this blockchain, which reads and writes data. The block also contains a hash of the previous block. The minor also had to verify that the previous page is valid, i.e. all transactions on the page are valid, that the previous minor has not allocated more bitcoins than expected by the protocol and that hash of the previous page is satisfactorily small.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

25. Determining the Mechanism Used within Blockchain System and Enabling Acceptance

Blockchain and fintech play a central part in the digital revolution that shakes the world of banks, insurance companies and more financial markets in general, therefore it is the reason why a new arrangement will allow the revision of the positive law in order to empower the issuance and the conduction of certain non-admitted financial securities to the operations of a central securities custodian by using this platform.

The use of blockchain is increasingly considered in many financial institutions, but the way to apply it is quite complex. In this regard, there are two key components that are distinguished: 1) determining the mechanism of the system, and 2) enabling acceptance.

The key challenge for financial institutions today is to determine the mechanism used within blockchain system and apply it in their operations. This is a long process that involves an extremely complex research and testing, which will demonstrate the justification of the adoption of this advanced platform in daily transactions due to lower costs of operation and higher speed transfer of funds.

Bitcoin is based on a distributed database blockchain that is seen as a large register that contains all the transactions made. This database is replicated on all nodes. Blockchain is the computer technology used to create virtual currencies. Many institutions are also interested in applying the features of blockchain, which is a technology of storage and transmission of information at minimal cost, that is also secure, transparent and that operates without central control.

Even if this acceptance changes almost completely in certain activities, for example that of officials who will have to develop towards a greater part of advice and representation to the detriment of the mechanical tasks of registration, conservation and restitution, the opponents will probably be fewer and less powerful than in the monetary field, which in general will promote the adoption of cryptocurrencies.

At the same time, the diversity of fields of application will favor the existence of different payment systems, hence different units of account. As it is the case with other blockchain backed cryptocurrencies, the bitcoin was created from a computer technology that represents secure and functioning information storage and transmission technology without central control. The blockchain is similar to a huge, public, anonymous virtual registry of all transactions made by users.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

24. Market Formed between Chain Payments, Secured by Minors and More Customary Off-chain Payments

Bitcoin trade is the system of fundable bits that are moving from one computer to another and no financial institution plays a role in this process. The initiative in the earliest days of bitcoin was to produce a digital currency that was independent of any kind of national authority or government and that would create electronic payments worldwide without the need for control, directly and in particular anonymous.

Among the key benefits of bitcoin is the reliability of transactions, whose safety is not conditioned by mutual agreement the seller and the buyer, but specific mathematical guarantees, cryptographic proof that the transaction was executed. Changes in demand of bitcoin cause the price change, but most owners do not see it as a limiting factor, because they except earnings target to achieve the right to bitcoin, counting on its future. All this indicates that the key component to successful trading this cryptocurrency is the optimism regarding its future and character that will soon have a smaller reference to media reports and statements of those thanks to whose policies and strategies gap between rich and poor today the largest since the creation of society.

This leads to an assumption that if one of the next versions of cores does not allow miners to create blocks larger than one megabyte, the development of bitcoin would be limited. Although the state of affairs is currently not in the nearer future, the rapidity of change in the geopolitical scenario and, above all, the impact of new digital technologies on game rules in the financial markets are greater than ever. On the other hand, the slowdown has at least two harmful effects on the system. The first one is that involved parties who convey very small amounts will face the most significant deadlines.

Transaction of zero nominal value apparently cannot pay large commissions, which goes for what creates the burning of the currency, for instance in time-stamping a document. For the monetary authorities, running the conversion between old and new organizational supervisory models is certainly not simple, especially for the growing mistrust between governments and confusion in international political relations. The second problem is that the system as such could be destabilized, which might make it very vulnerable under these conditions.

At this phase the blocks are only filled up to 40 percent approximately and half of the transactions are established in just less than 7 minutes, i.e. 90 percent of them in less than 23 minutes, 99 percent in less than 46 minutes and all of them in less than 85 minutes. In cases when the blocks are packed to 80 percent, yet one half of those transactions will still not be completed after 18 minutes. The extent of a block is defined by the number of transactions that the minor inserts, which is now limited to one megabyte. Any kind of elevating this limit would result in accepting a larger number of transactions per second and this increase can already be achieved by adjusting a parameter that is hard-coded in the client node.

Overabundance of these blocks means regard of risk taking for allowing awaiting transactions to build up in the knots of the network at the risk of flooding them, consequently maintaining for an inexact continuance the transactions with the lowest costs. Considering this strategy it is anticipated that bitcoin will remain very proficient for large amounts and the spam of proceedings of very low value will vanish altogether. Overcrowding of the network will also benefit miners who can charge high fees, which will pledge the future of mining and network security when premiums will not be big enough.

In this time period, the general cost of transaction was multiplied by 35. Taking into account the tripling of the transactions carried out during this period, the cost was multiplied by 12 so it does not represent just a growth, but an exponential increase. A common value of transactions is also accelerative and many companies from this sector have begun to make business to business payments and a growing number of them have a mining cost that is too low to be observed as a significant expense. High value-added on chain transactions could thus gradually crowd out small payments that will have to find other spaces.

This created an expectation that an altcoin will sooner or later appear from the lot and take over, but at this stage it is improbable. What is really happening is that a market is being formed between chain payments, secured by minors and more customary off-chain payments. Payments outside the blockchain could surely be made through altcoins, but decreased security, increased unpredictability and deficiency of liquidity, which do not always make this instrument very captivating.

Changing these settings, like any change of any importance, involves putting into circulation a new version of the software, which each user is free to install or not. The most important rivalry is not between bitcoin and an altcoin, but between on-chain and off-chain transactions. As soon as a user installs the new version, the user population splits into two and the blockchain is divided into two branches, one for each version, defining two different currencies, among which users can still choose. As users install a new version, the make communications protocol of the blockchain recurrently switches them from one division to another and thus from the old to the new form of money. They can consequently, by objective action and not a simple vote, preferred for the new rules of money management or stick to the old ones.

If some projects show up, offline payments will become safer than conventional payment methods. Online payments will always be the safest and most popular option, but adapted alternative offers will still cut down the pressure on this type of payment. It is good to have to develop real alternatives to on-chain transactions and allow a market to develop between fully trustless proceedings on the blockchain and offline transactions balancing partly or entirely on a third party.

As off-chain transactions, in one form or another, will develop, growth will sooner or later slow down for miners. With the appreciable investment involved and the regular division of the mining premium, they will be encouraged to increase the number of transactions to compete with “offline” payment solutions. We believe that bitcoin should multiply its turnout by 100 percent in order to be feasible as a store of value. At present, the bitcoin network allows about 300,000 transactions per day and its capacity is clearly inadequate for most financial applications, while the Visa network is known to manage hundreds of millions of transactions per day. Additionally, the bitcoin has for some time been quite concentrated with longer verification times, as seen on the charts that concern the last two years.

The idea is to make them discuss the parts of the protocol in order to define the perfect size according to a global agreement chosen by the users. This makes the storage of data in the blockchain more efficient by introducing the impression of references to transactions, the size of the blocks is eased and therefore the rate is increased. This problem seems to be conceptual and before validating a connection, each miner goes through and checks all the transactions that compose it in order to find a double-spend and an invalid transaction. The block is being rejected in case at least one of them is found, though the explanation of block rejection could be because it is being outsized.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

23. The Advantage of Divisibility into 100 Million Subunits

When it comes to the scarcity of goods such as gold it is guaranteed by the limited amount of it as the resource on the whole world, having in mind that the extraction of gold has generally always required a long time. The confined supply of metallic coins has been a decisive factor in the stability of the purchasing power of these commodities, which in some sense explains why it has been designated by the market.

In this sense the technology provided by the blockchain platform makes the imitation of bitcoin impossible and the emergence of bitcoin is ordered by a public algorithm which gives the legibility to its creation. When compared with gold, it is also limited in supply, because the number of bitcoins cannot exceed 21 million units by 2140. Regarding that, bitcoin is an asset whose purchasing power is conjugated to increase in accordance with the growth in demand on the market.

Besides that a currency must be divisible in order to be used for dealing in transactions of low value. Traditional currencies have a benefit at this point because they have lower units, such as cents, eurocents etc. that allow performance of transactions of smaller value. In this sense gold is less practical, because it is not divisible to infinity, which is the reason why over centuries civilizations were trying to replace gold coins with some type of money of smaller value, using silver and bronze. In this sense bitcoin has the biggest number of advantages because it is exceedingly divisible, since every single bitcoin can be divided into 100 million subunits called satoshis.

Another important feature of money and tradable goods is its possibility to be transferred in  order to ease transaction with smaller number of restrictions. In this sense traditional currencies have a satisfying level of ability to be transported, particularly because electronic payment made possible to cut down provision restraints in order to transmit funds at any desired location.

Nonetheless, some national policies can trim down the mobility of particular currencies. When it comes to gold, just like any other good it is not easily transportable because of its weight and therefore the creation of paper money and other financial products backed by gold was meant to extend the usage of this precious metal as a medium of exchange, making easier to trade assets, especially those of a higher value, such as real estate etc. In the field of cryptocurrencies it is the internet that enabled to carry out transactions in bitcoin anywhere in the world at very low cost in comparison with the traditional methods. This process has one restriction and that is the need to have software support on both sides of transactions and have the authority of having a serviceable network whose decentralized nature makes a control of capital unachievable.

A certain monetary system must be placed in a time-tested and secure institutional framework in order to pledge the respect of the right to make a transaction. Traditional currencies are a part of the system that is dominantly under control of banks, where governments put a lot of precariousness, because their activities may increase the risks of default on public debt and since they use negative interest rates that are similar to a tax on deposits, that risk is even higher, especially with the expectation of picking up deposits in the event of financial undependability or bankruptcy of a state and its implication on their creditors.

Regarding the gold keeping, it is an activity performed by specialized companies that meet particular requirements. It has to be noted that some institutions are issuing on the paper market in an amount that exceeds securities compared to the precious metal reserves actually available which results with the condition in which many certificate holders will never be able to convert the amount of gold they poses on paper into real precious metal on the premise of high demand for conversion, since the paper market is hence to be avoided.

The security content that stimulates the bitcoin is the one that is connected to the digital ecosystem and therefore it is crucial to be cautious with online portfolios. A large number of platforms for bitcoin holding have proved to be fallible against piracy and these providers must consequently be scrupulously chosen. For offline storage, it is generally advisable to use several portfolios on various devices in order to prevent the total loss of assets in case of the problem with particular device, because the bitcoin wallet shares the destiny with the engine where it is installed and in case of any damage electronic money can be lost without any possibility of backup. This is why it is highly recommended to install wallets only on devices that are in good condition, strong, resistible and properly secured.

Regarding the ability to be a subject of exchange money is supposed to be able to be transfer at any time to anyone who is supposed to receive it, so the size of the market is therefore a determining reference point. Traditional currencies are generally exchangeable with any trader and individual in a given territory, except in times when hyperinflation occurs, but this feature is principally due to the fact that currencies take the advantage of the forced price. Still a currency that needs the involuntary price is to be recognized is nevertheless a quality that must be looked carefully.

The situation with gold is that it is easily listed by specialized traders, since their monetary attributes are however very restricted, because most traders do not routinely use this feature as a mediator in trade. Regarding this bitcoin is easy to exchange on specialized platforms and on online trading sites. For the time being, however, there are too few traders willing to accept this commodity as an intermediary on an international scale so that it can be moderately described as medium of exchange.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

22. When Structural Currency Must Constitute a Store of Value

It has become conventional today to compare bitcoin with electronic gold, because by arrangement this currency manages its rarity, and its blockchain remains principally adapted to sizable transfers more than to many payments of diminutive sums. The key principle emphasized in these comparisons is that if something is supposed to be compared with gold could also be used as a store of value.

Money is a commodity mostly wanted because its role as an intermediary in trade. There are several criteria that traditional currencies and tradable goods fulfill and they are all found while comparing them to bitcoin. Regardless the extent to which bitcoin meet these criteria, it is significant to highlight that it has all of the necessary elements of an item that changes value according to the level of the supply and demand shown on the market.

First of all, it comprises a store of value, which implies certain purchasing power over time, then it is sustainable, it must be scarce, i.e. with limited offer, its ownership has to be secured, it must be easily transferable and exchangeable and it has to be must be easily divisible. Through the history many societies have tried numerous commodities, such as gold at the first place because of the initiation of national currencies and that is still the only big difference between gold and “electronic gold” in this sense.

Merely by its strength blockchain is also modified to record nonphysical proofs of existence, etched for timelessness. Any symbol and any code correspond with a factual or essential object that can find its place in it, certifying the date given to it by this global network. For instance, it may certify credentials, communication, contracts, and proofs of claims, identification or assets to be insured. Utilization is immeasurable to cognition necessitous environments of credible property. The blockchain allows total belongings between programs or individuals that do not know each other.

The key principle was that a structural currency must constitute a store of value. Its purchasing power must remain certain over time and therefore it has to be long-lasting. This is the reason why the monetary content of for example consumer goods has failed, because it is perishable and cannot make up reserves of value. The physical properties of gold make them long-lasting and that is why the market valorizes these objects over time. In this regard bitcoin is durable, because its source code is not destructible and its computer properties do not take down its purchasing power.

When it comes to the amount in which it is offered on the market, traditional currencies have a value that depends on their rarity, i.e. the amount of money printed by a particular central bank. Money supply must consequently be limited to preserve the value of medium of exchange in order to protect its purchasing power over time.

It is surely challenging for an individual to falsify the fiat currency, though central banks have an unlimited power of monetary creation, limited by the economic policies of governments that create them. This means that they have the legal monopoly of imitating, which lawfully destructs the scarceness necessary to keep the value of goods over time and that is the reason why traditional money has inflationary nature and continually loses their value.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

21. The Exchange Rate Fundamentally Depends on the Balance of Payments

Electronic money keeps hold of a strong connection with traditional money since both of them are articulated in the same unit of account and are pledged on an asset, while bitcoin relies only on an agreement between their users, without a legal framework drawn up by any centralized body.

Also, its users are the only players in the virtual currency, so the situation is the opposite. In this case it is the informal, which challenges the formal one of the central banks, knowing that this type of currency is not subject to any financial institution. Financial institutions are supposed to act as intermediaries in information gathering, risk management and liquidity. It is highly unlikely that this type of currency will fit into this circuit.

This economic point of view looks at a new phenomenon in the world of money, that of digital currencies such as the bitcoin. The use of these currencies for the time being remains very marginal and limited to basic transactions, but some see a much greater potential and foam their acquisition. In our system, therefore, a boost in the exchange rate means that the currency appreciates. Evidently, exchange rate convenience should also be assessed in relation to inflation. In fact, if the exchange rate rises, but in the other country the prices have risen, it may be that the overseas purchasing power of our currency remains unchanged or even worse, which is the situation with the actual exchange rate.

Since the relationship of trust requires at least two individuals, with currencies of which the sender is not known, it is a safe bet that one is closer to money laundering than to the procedural confidence based just on currency itself. However, a huge gap separates them from fiat currencies because they are not supported by governments and central banks. The absence of a regulatory framework and regulatory mechanisms is very challenging and individuals interested in purchasing these new currencies must for that reason remain careful and be aware of the natural risks.

The exchange rate is determined by the acquiring of demand and supply of currency in the foreign exchange market, called Forex. The demand and the offer of a currency is due to the exchange rate from a foreign currency to international trade. In this regard there is an expectation that bitcoin would evolve in a way that would allow their users to determine an exchange rate and that in doing so it would really be a currency, though traditional currencies have the three functions and in that regard there is a confidence in the unit of account, a value and savings reserve and a protocol instrument.

While taking this into account there should be noted at the first place that the price of bitcoin is very volatile. When this component is observed at fiat currencies it is the stability of exchange and inflation rate that generates confidence of investors. Besides that, with no passing through financial mediations, this function is not sufficiently respected because of the guarantee of deposits. This opens the question whether it is reasonable to consider bitcoin or any other cryptocurrency a safe heaven, because there is no guarantee for its value, however, regardless the smaller volatility of other currencies and commodities the level of safety of transactions is higher than within traditional money transactions.

The exchange rate fundamentally depends on the balance of payments of a country, and on the first place it is derived from the two key factors – from trade and from financial investments. In the first case it comprehends imports and exports of goods, including tourism from one country to another while regarding the later it involves activities such as purchase of foreign treasury bills, since this amount of exchange is linked principally to the level of interest rates that engage capital for good returns.

An aggregation of cryptocurrencies was established in the channel of the bitcoin, but the major principles remain the same. The creators of other cryptocurrencies tend to advocate the fact that their network is less inconvenient to support, that transactions are done much faster and that the reward in terms of new currencies created is more beneficial. Some are counting on a faster or longer expansion of the money supply, though in that case difference has no effect on the purchasing power at the certain moment regarding these cryptocurrencies. Even riskier exchange rate transactions, such as currency purchase and sale transactions with the aspiration only to make profit from the change in exchange rates over time affect the value. Depending on the situation, monetary authorities may choose that the exchange rate openly follows the forces of demand and supply, or they may prefer not to diverge from a certain value.

There should be noted that cryptocurrencies are one of the main restraint in the fight against piracy. In order to overcome the financing of pirate sites, corporations have signed agreement with electronic payment companies, such as Visa, MasterCard, American Express, PayPal and Skrill to ensure that illegal actions cannot be financed, which is declared through agreements between monetary authorities that give advance to the international monetary system.

Regarding this, the real problem is more in the misgiving of a particular currency, especially in those that lose the status of safe heaven they used to have, than in confidence in the cryptocurrencies, as evidenced by the increasing download of bitcoin returns the problem to national currencies and their particular monetary systems and central banks’ policies. Not alike it is the case of bitcoin, the derivation of national currencies is centralized and in most countries this role rests with a central bank.

The growth of the amount of assets is not fixed, so the choice to increase or decrease the supply of money depends on the objectives traced by the entity that issues money. In this area traditional currencies have several advantages in this area, since certainly a banknote is not decomposable by itself, however a central bank system favors inflation over the long term, which continually degrades the value of the state currency.

There could be some doubts regarding the ability of central banks to make good decisions, since in most industrialized countries, central banks mark a low and stable rate of inflation, which ensures the maintenance of the value of the currency. It must be admitted that this system works very well when one looks at the low price increase over the past two decades.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

20. The Multiplication of Mediators Reinforces the Strength of the Protocol

The more bitcoin is being compared with traditional currencies, the more it becomes apparent how some characteristics of money cannot be applied to it. Traditional currencies are characterized by three functions that serve for their legitimization and those are a unit of value accepted by all, a tool of reserve of value and saving, and a mode of settlement of current transactions.

Since bitcoin does not meet these three founding principles of a currency, its apprehension requires examining the extent to which these new instruments respond to the traditional definition of money and to what extent they turn aside from it, raising the question how to frame the existence and the use of this cryptocurrency.

More than an amount of centralization, bitcoin brings about a field for actors within the society. Traditional currencies, irrespective of their format, fulfill various functions, from the simplest to the most complex, that are essential for all processes in modern financial systems. They were given many roles that fundamentally go beyond being the measuring component and basic means of payment, since they also endow with admission to savings and borrowing, as well as other financial transactions. With the emergence of clearing houses between the various marketplaces, bitcoin is making possible to avoid soaking the network with microtransactions. This multiplication of mediators at the end of the day reinforces the strength and smoothness of the protocol, while maintaining peer-to-peer processes at the same time and as in any market, the line of work is structured.

ECB has published a document named “Virtual currency schemes” in 2012, explaining what are the standpoints of this institution regarding virtual currencies and in what way are they supposed to differentiate from electronic currencies that have physical corresponding item, such as banknote or coin, even if this element could evolve for the bitcoin. As a currency, the bitcoin is the object of numerous criticisms of an economic nature, but disparate and even contradictory. Criticism of national currencies is more founded in countries where the central bank is not very autonomous and where members of the government have greater decision-making power over the issue of currency. Since the objective of price stability is less appreciated in these conditions, the value of currencies becomes much more unstable, and episodes of strong inflation can take place.

The free banking system previously anticipated by Hayek implied the elimination of central banks’ strong impact on financial processes and the issuance of currency by commercial banks. The economists from the Austrian school considered that free competition would request the most secure currency as a common prevalence for mass distribution. Part of those critics was also related to the fact that Hayek’s vision does not determine conflicts between currency as a public good and the fact that commercial banks are taking an advantage from it. On the other hand the main critics of conventional or Keynesian insight point the finger at him of not being guaranteed by the national authorities of being unable to be shaped by the level of demand in order to satisfy the needs of the economy, and of being deliberately deflationary.

Electronic money is, in fact, only an improved form of fiat money, based on a bond of confidence that has progressively made it achievable to make a replacement for the sounding and tentative entity, as an appearance of conceptual and dematerialized value, in order to go to a document accepting value, first in contracts and then later between lines of account of the banks. Bitcoin is a simple virtual currency that is not accepted by all as a reliable standard of assessment, since for many subjects the record of its usage do not last long enough in order to represent a foundation for setting rules.

In some respects, cryptocurrencies are similar to goods. Conceptually, the mechanism of monetary creation mathematically simulates the extraction of a precious metal, but also they are particularly rare. Scarcity, corresponding with high demand, is primarily what supports the price of listed goods and that is also the principle that the idea of restraining the increase of the supply of cryptocurrencies is based. On the other hand, in the same way that it is increasingly difficult to extract precious metals from the subsoil, where the finest deposits that have been exploited first, the production rate of cryptocurrencies decreases with time.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

19. Value Justified by Usefulness and Scarcity

Central banks are able to influence the foundation of money throughout the refinancing rate, but also by calling commercial banks to place an assured amount of deposits accumulated from the community on the account that banks of the central bank in forms of reserves.

For example, the European Central Bank is autonomous of the countries from which, according to the Treaties of the EU, which propose that it cannot even receive a simple advice. This is what is called the independent central bank’s doctrine. Banknotes issued by the ECB and the national central banks are the only banknotes with a legal fond in the European Union. Central banks worldwide use these operations to carry out mandates reflecting economic objectives for the central financial institution.

For example, the ECB has the main goal to maintain inflation rate close to 2% on annual basis via most favorable distribution of resources and growth, while the aim of the Federal Reserve in the US is to have reasonable inflation targets in order to support growth and employment rate. The autonomy of these financial institutions is also supposed to ensure avoiding the infidelity of the political assessment in order to give attention to producing a conventional and coherent economic framework, according to the formula that favors rules over the discretion right to take some action. In this framework, a variety of constraints imposed by the traditional monetary foundation path may come into sight to be a commotion, which explains why even financial institutions are trying to test the alternative models of money creation, as well as the new means of payment.

A sharp growth of bitcoin price from the beginning of 2017 indicates that the interest in bitcoin constantly increases. It is often emphasized that the uneven changes in the value of bitcoins on a daily, weekly or monthly basis are not conditioned by guaranteeing profits to investors, as this is not the case with global currencies, precious metals, oil or any other stock exchange goods whose change, except the level of supply and demand dictate and economic and political developments in the countries that use them as a means of payment or trade them. Majority of those investors pointed out that bitcoin does not have a value, stating it in order to deter investment in cryptocurrencies.

The incorrectness of this assertion is quite easy to prove, although between value and price does not stand an equal sign, the fact that one purchases bitcoin for of an amount of assets denies this claim itself. What further points to the steady value of cryptocurrencies is that even if the market turmoil and efforts of financial centers to destroy its price was even so low that there would be no denomination banknotes world currency which could be made without a decimal number, and its value would still exist. This is confirmed by two factors, where the first one is usefulness and the second one is scarcity. If we illustrate this using the example of clean air, we would understand that it has value because it is useful, although it is abundant, why it does not pay. However, if due to any pollution it was preserved only in separate rooms, its price would depend on the willingness to pay to join those who want to breathe through their lungs.

As the most significant digital currency, bitcoin, since its very first days, has been compared with national currencies, though it works on completely different principles. Several things that bitcoin and national currencies have in common are not typical cross-section for only these two categories, but for anything that exists on any type of market, where its value has the possibility of being changed.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

18. A Great Turnaround in the Financial World

One of the main reasons why bitcoin was created is the dissatisfaction and distrust in the existing financial system where monetary creation is principally offered by commercial banks in their lending business. Accepting their disposal means of payment against the institution that declares these agents, credit bodies, generate new liquidity in accordance with the requirements of the financial system and market as a whole. One of the most important purposes of each central bank is to control the inflation rate, while make the circulation of money easier and helping investments to expand.

Quite the opposite, deflation is seen as a risk by economists because money creation accompanies growth. The total fixed volume of 21 million was the main reason why bitcoin was the subject to criticism. In fact, this ceiling reflects its creators’ doubt of the quantitative easing programs that firstly the central financial institution of the United States, Federal Reserve, started to practice after 2008. However, this restraint also leads the bitcoin system to have potential deflationary outcome.

The times after the world economic crisis were characterized by strong expansion of investment that aggregated the need for higher level of security of transactions between agents. On the other hand, the crisis generally led to a retrenchment of credit activities, because consumers cut their expenditure and real estate buying, while the business sector postponed their investments by choosing to set out of their supplies. Since banking is not automatically balanced on a day-to-day basis, there was created a particular money market where banks loan to each other in order to resolve the problem of lack of short-term liquidity, though they can also call the central bank, which embraces the advantage of money creation and establishing the monetary base in terms of issuing banknotes in order to grant liquidity to commercial banks guaranteeing that way the price stability, as well as promoting the security and effectiveness of the payment system.

The possibility for these banks to be refinanced via the mechanisms that institutions of the countries where they operate have established opportunities to manipulate the activities in order to create the need for monetary creation, since commercial banks pay a price for liquidity supply. Central banks could thus buy or extract a repurchase of particular financial securities held by commercial banks against the provision of liquidity.

Bitcoin came into primary focus of global media when the financial crisis in Cyprus occurred and caused one of biggest concerns about the future of the European single currency. The worries about the future of the euro have caused the bitcoin to triple its value in less than a month, reaching the price of 141 dollar for the first time in first days of April 2013. This was one of the most visible examples how a search for an alternative is shifting the demand of the investors who are willing to take new market challenges, looking for more security at the same time.

The fact that the financial world has been witnessing a great turnaround, which was at that time largely represented the exception, not the rule, has made to the occurrence of bitcoin being backed with fierce confrontation. This type of confrontation was seen because of the unpredictability of the bitcoin’s price can be reviewed as a lack of knowledge on questionable reliability of decentralized governance, since it is difficult to rely only on the efficient credit control without a support of the governmental plan and central banks’ monetary policies. There were numerous studies on the supremacy of common goods, open-source assumption and a certain sort of what some called digital collectivism that, all together, have shown that the fact that this group of enthusiasts has no centralized organizational control does not necessarily mean that the whole system is expected to be reduced to into disorder.

The refinancing rates that act as the prices at which central banks allow the credit money usage represent the main structure of the money market and when those rates are high, the demand for liquidity by the banks is low. This reflects on the interest rate of the credits that banks offer to their clients, creating the liquidity shortage, since many individuals or businesses are not able to have an access to this money. This causes dissatisfaction, since the trend is present everywhere and not a single bank can offer something that differentiates completely from the rest of the financial sector. In that terms having decentralized system is something that causes bitcoin’s key advantage, regardless how exposed to peripheral shocks this cryptocurrency is because of the lack of a centralized regulation system.

Particular occurrences, such as cyber-attacks, errors in cryptogram, regulatory transformations, transaction of volumes and dysfunctions of key may have an impact on the value of the bitcoin, though the margin of arbitrage gives rise to financial assumption which additionally makes the circumstances more complex and therefore bitcoin cannot serve as a mean to determine a value, which, on the other hand, is a crucial characteristic of traditional money.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

17. The Impact of the Virtual Money Mechanisms on Total Cash Flow

Currency wars are one of the reasons why the capital of many subjects directed towards investment in those assets in which the chances of manipulation kept to a minimum. Through a review of the relationship of trust in cryptocurrencies, as well as trust in institutions in this work is estimated what impact will the mechanisms on which is based the virtual money have on total cash flow in the future and what kind of perspective of bitcoin and other cryptocurrencies.

Electronic money bitcoin is gaining its popularity, though most economists around the world for a long time did not give importance to it until its value has not started a dizzying growth. There are three key reasons why bitcoin gained its popularity for a short period of time and they are: 1) simplicity in transferring value; 2) ability to perform microtransactions; and 3) growing trust in decentralized systems.

Simplicity in transferring value was recognized as one of the main achievements of digital money. In the history of human relations, changes in the way of material exchange determined the transition to a new civilization level. After the multifaceted exchange of goods for goods has become more orderly when certain units of measure of equal value have emerged, and the need for such a system to be simplified, to provide more precision and clarity among the trading parties.

Also, since the goods were often perishable, it was necessary to establish what could be a value guard. Due to its limitations, the price and scarcity of gold could not play this role for a long time, which resulted in the emergence of money for the development of the culture of Phoenicians, where all goods could be paid. As it was the case with the majority of types of money, bitcoin, as digital money is also characterized by the change of its value.

The value of bitcoin changes on a daily and even hourly basis,  though the advantage of bitcoin is the possibility to have microtransactions, especially with online payment services that cost less than what the smallest unit of a currency is worth.

For example, if a site owner wants to charge an overview of the content to the extent that price is not a big expense for the visitors, but it, counting on the number of visits, in order to earn from it. If it is related to obtaining passwords for access to electronically, and thus performing the payment, it is much easier to calculate these values in bitcoin than in traditional money. First of all, precise ratio price, as expressed in traditional currencies, where the cheapest services can cost one or two cents, although on the micro level, their value is the same. The difference between one and two cents is still double. With bitcoin price may be expressed in as many decimals as necessary to meet the most precise measurements. At the individual level these questions affect negligible, but if it is multiplied by thousands or millions on a daily or annual basis, differences in earnings are enormous. In doing so, there is no payment of transaction costs, such as those that exist in electronic banking, in order to enable intermediary earnings from commissions.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

16. The Need for Encryption Created a New Way of Living

The name of the most common cryptocurrency, bitcoin, also refers to the protocol describing this virtual money and its implementation in the payment system. This cryptocurrency is decentralized and anyone who wishes can join the network by installing the software.

Generally accepted theory regarding the origin and the formation of bitcoin is that it was created in 2009 by one or more crypto programmers using the pseudonym Satoshi Nakamoto, although the preconditions for the development of this technology were created decades ago. The history of work on technology that created the base for cryptocurrency development has four decades long history, since the first RSA encryption that used a public key to encrypt confidential data and a private key to decrypt them was used in 1977.

The following years were characterized by the development of the mechanism of compression that was used to securely and efficiently store and verify a large volume of data that are today used by the bitcoin protocol. At this phase of the late 1970’s there was established the system for calculating all transactions contained in a data block. Later in the 1990’s the programming industry witnessed a wide range of researches related to cryptographic protocols that represented the foundation for development of electronic currencies that were centralized and proprietary.

An article written by mathematicians and digital money enthusiasts Stuart Haber and W. Scott Stornetta, entitled “How to Time-stamp a Digital Document”, announced the key principles of what would later be a platform on which bitcoin works. This article was later quoted by the author signed as Satoshi Nakamoto in his white paper where the principles of blockchain were explained.

One very significant turning point in the development of transaction protocol occurred in 1994 when   a computer engineer and a researcher in cryptography Nick Szabo advanced the idea of “smart contract”, which represented the computer transaction protocol that executes the terms of a contract. During the following decade Szabo was working on uprising of the project called BitGold, that was conceived as a decentralized digital currency based on chains of proofs of application and using countless elements that later were shown as the groundwork of bitcoin, such as timestamping, digital signatures and public keys, but at the first stage of the development it proved to be vulnerable to attacks, while later there were many efforts made in order to overcome this problem.

Later in 1997, the invention of Hashcash by Adam Back represented the proof that this system could work, justifying further research and development in this area. In fact, this idea had already been explored by Cynthia Dwork and Moni Naor in a report entitled “Pricing via Processing or Combatting Junk Mail” published in 1993, but Adam Back had no information about their achievements in this area. At that time Szabo described the possibilities offered by the advance of new technologies in an article entitled “Formalizing and Securing Relationships on Public Networks”. Consequently, many contracts can be implemented without difficulty if the possessions that represent the subject to the contract include a computer code guaranteeing the implementation of the contract provisions.

The next big step was the first peer-to-peer distribution via transfer platform called Gnutella, developed in 2000 by Tom Pepper and Justin Frankel. From the economic approach, it is a classified currency that is not issued by any banking institution nor is linked to a currency settlement. Also it is not commodity money, nor a fiat currency, given that it has no required price.

However, the development of technology enabled bitcoin to have particular elements of trading instruments, even though it does not share key characteristics with them. In that sense there are similarities with fiat currencies although cryptocurrencies are not backed by a material asset, since it has value only because economic actors agree to use it and since the internet makes trade between them achievable. It is more leaning on the monetary exchange function than to that of a store of value, even if its deflationary character can hypothetically lead to it.

The first public announcement of bitcoin occurred in 2008, which opened the space for the first blockchain to be at the beginning of 2009. At that times a repayment for finding a block was 50 bitcoin and is divided by two every 210,000 blocks, which is scheduled to happen every four years. Since December 2012, the return is 25 bitcoin, and according to that division process the year 2140 will be the one when no return will be provided, while the number of bitcoin will have reached a maximum of 21 million.

The rationalization of the nature of bitcoin transactions can begin from the straightforward paradigm of the contract of sale. The smart contract would guarantee that, when the seller broadcasts their possessions, the other party in fact receives the corresponding amount in exchange and, on the other hand, the buyer who pays the price is guaranteed of receiving the goods. In the earliest stage bitcoin was created by a closed community of enthusiasts that used it for internal practice. It is likely to state that they were then used for all intents and purposes as elements of allegation of an identity based on a vision that was contrary to accepted belief of the world in reaction against the establishment.

To illustrate the value of the smart contract mechanism Szabo used a simple example a car rental contract. Under this contract, one pays customary sums in order to use the car owned by a certain rent-a-car company. In this case the smart contract will routinely test out at each due date whether the amount owed is well paid by the renter of the car.

Provided that the imbursement is made, the renter will be the only individual allowed to use the car thanks to the process of authentication. In the event of non-payment, the car is automatically blocked and cannot be used by the tenant, and the renter regains control. The first order, first to generate bitcoins, then as anticipated, but only at one remove, to seize them, was consequently linked to what they served to demonstrate or transmit a certain way of existence and an assured way of seeing the situation.

Fundamentally, the bitcoin was not very diverse from what one finds in the world of fine arts, since for their enthusiasts it represented a way of living and demonstrating its distinction.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

15. Overseeing the Ultimate Impact on the Principles of Real Growth

There is a belief that the negative interest rates only concern banks, which perceive their deposits with the ECB not rewarded, but commissioned up to an annual interest rate that is still under zero percent. In reality, there is not a single entity that could borrow from their bank at rates below zero.

Repaying less than the totality of the borrowed capital is not allowed at any point in financial system and when one borrows 100, one has to pay 100, plus interest, which is the reason why even loans with a reference rate beneath zero do not get their charges descend.

However, there is another perception of this issue where as a substitute of seeing interest rates decrease as an instrument that a growing number of central banks uses in order to recuperate the temporary global demand, they consider zero rates, and especially the postponement of the negative interest rate area is not only the symptom, but also the symbol of a growth at the level of the world economy of enormous financial and monetary disproportions of unparalleled strength. The imbalances that are basically a direct consequence of the regulatory strategy choices completed after the economic crisis by the major central banks, initiated by the Fed.

This perception of zero rates comprises the belief that they are not a tool that would appear in the files of the central bankers, but an apprehension sign that indicates that the circumstances, both in developed and in emerging countries, are now attaining an alarming edge that is even now sincerer than right before the last financial crash. This viewpoint is followed by an unbending disapproval, even though it was articulated in very cautious standings of the outlines of studies, as well as in contemporary responses of central banks to current issues. The key problem is not whether these reproductions are theoretically acceptable or not, but that they have fundamentally been calculated before the factual expansion of the globalization, so their position of accounting therefore remains principally that of state economies, while the actual financial and monetary subjects, even of comparatively not large sized, are nowadays occupied in a day-to-day situation of intercessions without limitations.

Fundamentally, they are not considered to entirely assimilate and account for how international refinancing streams are now taking a key position in the broadcast of financial compulsions, particularly those produced by the decisions of the most important central banks in the world, as it is the case with the spread of the bubble economy to emerging countries through the quantitative easing strategy and the extremely threatening counterattack that generates its closure. In fact, they represent primarily temporary reproductions that disregard the central position of what was perceived as standard. More precisely, they lead to not seeing their ultimate impact on the principles of real growth. In that case a continued practice of zero rate policy lead to a progression of misrepresenting inducements that reduce productivity increase.

From this standpoint, each and every rise in the US inflation rate over the past several years is only a minor feature in comparison to the real intimidation that includes the detonation of global debt, the simplification of policies, the extension of the increase leverage rates, as well as the strengthening of the currency war powered by the development of quantitative easing procedures. There is a common explanation of this situation that refers to the typical connection giving to which rates drop or rise in action, bearing in mind an increase in inflation that gives rise to an opposite system with the persistence to accept as true that it is the decrease in particular rate, which will allow inflation to rise, actually leads to the lowest level of inflation rate with conjunction in the direction of a deflationary negative balance that the central bank wants to evade anyway.

This type of clarification would be connected to the intensification of the scarcity of securities, which appears as a automatic consequence of the crisis, but also because of quantitative easing policy, and that would have the consequence that the actual interest rate of money with fixed yields, which means the one subtracted from the nominal rate of the bond after withdrawing the inflation rate, now includes a liquidity, whose outcome, for a given nominal rate goal, is to diverge the interest rate, while at the same time the inflation rate moves in the opposite way from this premium change of the value.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

14. ECB’s Policy, Like the Code of Hammurabi, Does Not Abolish, But Just Regulates Slavery

The words of the president of the European Central Bank Mario Draghi that have shown his call for insurance on future liquidity made an impact on the price of gold and silver, but have also raised many questions regarding the repeating of economic cycles and situations brought through them.

We live in times when entrepreneurs are looking to finance reasonable projects, while companies with products, customers and profits are looking for savings to grow. There is still an ongoing proces of finding the way to finance these projects of the real economy, garnering capital gains and collecting interests and it is shown as extremely hard during this type of political control of the central banks that will not change a flawed monetary and financial system because of the lack of discipline. Being under pressure of more than 200,000 billion dollars of debt, the announcement of the ECB that it will sstrengthen control of interest rates could happen very soon.

What the history of finance has shown is that the control of the price of credit by the state, such as any control of this kind, will end as a disaster. The state does not have to control the currency, the price of credit or the economy, since the role of the government should be limited to ensuring equal rights between citizens and ensuring that they are respected.

While trying to come out from unusual monetary policies there could be seen numerous examples of multiplying panic-driven measures. The current policies of ECB do not differ a lot from what was prescribed in the Code of Hammurabi, turning the king into a god and leaving numerous people in the class of slaves. The difference is, however, that while adjusting the amount of money in current flows it looks like the ECB does not know what to do with its “Print”, “Rate” and “Delete” buttons. There is a strong need to make a movement in order to prepare for the end of monetary creation in euro, but the mechanisms to do so are not in sight.

This reveals another situation of repetition of numerous times vieved situations which led to the same myths. One of them is that the public money creates more wealth than private money, which is called the Keynesian multiplier. In this situation if the government invests one euro, its return on investment will be higher than that of private persons. According to this belief at the same time the government is not obliged to forcefully stab taxpayers. It can simply borrow because its return on investment will always be positive. While a wretched single entrepreneur, pursuing his guilty selfish interests may be mistaken, since the business may go bankrupt when its return on investment appear to be negative. Keynesians define the multiplier coefficient as the ratio between a change in public expenditure and the consequent change in total income. This explanation justifies the stimulus policies financed by the loan.

The ECB still injects 60 billion euros each a month into the markets in order to keep interest rates low and this trend is lasting, considering the unfortunate state of public finances of of the eurozone countries. The Keynesian multiplier also relies on the strange belief that consumption enriches and the thought that when people do not consume enough, what the government should do is just to distribute them money, created from nothing, taken from others, borrowed, whatever, which will combat economic depression and unemployment. This, however, ruins all hopes of achieving a decent return in the years to come.

Technically, ECB is more autonomous in relations with the governments, though in practice, this independence is completely apocryphical. The decisions of ECB are essentially made in the interests of several eurozone governments. By artificially lowering interest rates, ECB could facilitate public debt and by financing commercial banks lending to the eurozone countries, they guarantee to the latter an almost unlimited source of income, despite their already enormous debt. For Keynesians this situation might seem satisfactory, but its outcome is the credit market that becomes completely distorted. Resources are allocated unproductively, which contributes to slowing economic growth and thus reducing poverty.

The fact is that the large capital gains are no longer on the stock market, where central banks inject thousands of billions to inflate prices, but before the IPO and even in private equity transactions. Since 2012, the money of the insiders drained by venture capital is increasing considerably. The average real return on life insurance was 1.8% in 2016. In today’s markets, listed companies are now too big and too disconnected for their shareholders to be really involved in decision-making. Also, the banking crisis is still threatening and the European system is far from being consolidated. This all leads to a conclusion that the current monetary system, based on unrestricted credit, is a new form of crime against humanity.

There is a strong need to adopt a different approach as the mass of credit is used to protect from bankruptcy the weak links used by the parasitocracy. In these situations banks with doubtful debts, multinationals cooperating in ruinous public projects, and expensive social spendings in southern eurozone countries.

If we return to the comparisson of current situation with the ancient one we will see that it was not the king or the emperor who decided that gold or silver was the best suited to trade and exchange, but it was crowd of individuals, now fallen into dust, who have come to this conclusion. In their situation gold was imposed in a pragmatic and democratic way simply because it worked best, while the so called added value of a centralized system imposed by a ruler was limited to a seal certifying purity and weight. There should be noted that elites hate gold but have not dared to make the last move since central banks still have a gold reserve. Today central banks still have their treasuries, or at least, that is what is being said, while the people bother to rate precious metals. In current situation dollar and the euro have fallen against gold (and silver), while dollar dropped more than the euro. As it is the case anywhere else, there is value and price. Value is what each one attributes at a given moment to something, that is, the satisfaction that everyone anticipates of possessing something one desires the most — the price is what an infividual agrees to pay according to his own value scale.

There are three key problems that became more visible under these circumstances. The first one is that zero interest rates and generous liquidity kept the dying business alive, which inflated supply. In all sectors there is an oversupply of everything, where marginal companies have been able to continue to function even though they are fading, generating just enough income to borrow more money and to postpone the repayment of their debts. The second problem is that the income was carried by a steady growth in social security contributions instead of sallaries. The third problem is that the majority of employers is unable to afford to pay higher wages without considering the labor market as they are faced with ever higher costs, while their power over prices is zero because of the surplus supply. Confronted with a total lack of power over prices and higher costs, employers can either increase the working hours of their current employees or hire part-time workers without contractual benefit.

These three problems represent the most visible effects of monetary measures implemented by the ECB. By market capitalization with the money achieved by borrowing, instead of balancing the market, ECB creates an even greater problem of social stratification, making part of the  companies and therefore huge part of population literally slaves and as it was prescribed by the Code of Hammurabi, anyone who attempts to counter financial movements to these flows in order to facilitate the position of slaves receives a fatal outcome.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

13. Encouranging the Growth of Indebtedness Is the Crime Against Humanity

The years of recovery from the global financial crisis are characterized by the phenomenon of negative effects that point to the detrimentalities of the overall concept on which the monetary policy of the leading central banks in the world is based, with the European Central Bank leading in flaws.

All the shortcomings of the ECB’s movements are noticeable in their results and under the mask of public goods funding, public money instead of funding public goods is diverted to corporate giants, with particular reference to certain industries where the level of risk is extremely high, whose costs grow exponentially, and whose earnings reinforce the position of these lobbies in the creation of public policies of EU member states in partnership with their governments that hire them to carry out public projects.

In the history of the economy, there are innumerable examples of exploiting the poor for the needs of the rich, and now it is systemically, strategically and with the institutional help of the common central bank for countries. As it has been the case ever since the money began to dominate human beings, the story is being based on the belief that bad money is supposed to be transformed into good money, where the bad one is private money, acquired by exploiting the weak and the poor, and it is being fictiously transformed in good public money. In the eye of taxpayers this creates the image how the private money is purified when it is taken by the authorities and becomes public money distributed by the government.

In these circumstances public money is without doubt good since it is being spent in order to finance the common interest. The minds of the people are guided by this myth and it is actually the one of the most rewarding undermining of our power to understand how money circles. In the eye of citizens private money is perceived as dirty result of dishonest actions, while the public money relieves, as, according to what governments are trying to explain, it creates more wealth than private money.

The whole theory is based on the idea that the return on the investment made by the state will be higher than that of private persons, adding that the state can do it by borrowing instead of violently exploiting its taxpayers, basing it on the hope that its return on investment will always be positive. The image of private sector is completely different, starting from the fact that the ideas of an entrepreneur are always being described as selfish, as well as that any business may go bankrupt and therefore the return on those investment may be negative.

The current situation in the Eurozone shows how a change in public expenditure and the consequent change in total income is being used to falsely justify each and every stimulus policy financed by the loan. This is also one of the most harmful misinterpretations of the overall benefits of the increase of the level of consumption, since the money that is supposed to be spent is actually created from nothing, borrowed or redistributed creating drawback on some other budget item, which results in the creation of economic depression and an increase in unemployment. The key problem is the decision to keep Quantitative Easing program unchanged, despite strong growth data in Eurozone countries.

The ECB still injects 60 billion euros monthly into the markets to maintain interest rates low, destroying any anticipation of achieving visible return in the years to come. Besides that the banking crisis is still menacing, while the level of indecisiveness is too high and the European system is far from being restored. Considering the situation on the markets, it is very obvious how companies listed there are now too big and too incoherent for their shareholders to be really concerned in decision-making, so a huge stock market bubble has formed.

Also, big capital gains are no longer on the stock market where central banks inject thousands of billions to boost prices, but before the IPO and even property in private equity transactions. This increases the wealth of the insiders whose money shattered by venture capital is increasing significantly over the past five years, explaining how QE program actually enriches a narrow circle of the powerful elite, leaving the rest of the population deeply in debt. Therefore, the monetary system is currently being based on free credit and literally forcing the citizens to use those credits is actually the crime against humanity.

Thanks to the QE program of the ECB the mass of credit is used to protect the system from bankruptcy, where the weakest link is the banking sector with dubious debts. When this is being combined with multinational corporations that are working on harmful projects supported by the governments, i.e. financed by the public money and the costly social spending in almost half of the Eurozone countries it is not hard to the imagine how hard the situation will be by the end of this decade.

What should be kept in mind is the logical fact that the debt cannot be unlimited since the remuneration capacities of people are limited and since their ability to work fades over time. If the ECB continues to base its activities on an infinite debt, the European population will be enslaved by their credits, and creating any type of slavery that is contrary to human rights means being involved in committing a new kind of crime against humanity.

The proces of making decisions in the ECB is oftenly perceived as a democratic, though it will not change an inconsistent monetary and financial system because of its lack of the regulation and being in command of the price of credit by the authorities will end in devastation. In a system as such under the ECB the member states do not have to have power over the currency, the price of credit, or the control of the economy, while at the same time its goal is to protect human rights of its citizens.

National central banks under the system of the ECB are percieved as more self-directed, while in practice, this autonomy is completely fabricated. Their decisions are essentially made in the interests of governments. By artificially lowering interest rates, central banks smooth the progress of public debt and by financing commercial banks lending to their governments, they pledge to the latter an almost unlimited source of income, despite their already oversize debt. Despite the changes that occur during this process and despite how much growth occurs, this progress is pervasive, since the only long-term outcome of this policy is the creation of debt slavery.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

12. Crossing All Barriers between Nations, Policies and Cultures

Bitcoin is the most common, the first decentralized and the most valuable digital currency that represents means of payment on the internet outside the control of any financial, national on international institution, or a single company from any industry. Each relocation from one collection to another is recorded in the cryptogram of the bitcoin so that the recorded history of all transactions makes it achievable to launch clearly.

What differentiates the bitcoin from national currencies is its independence from any central authority that controls trade, but on a participatory functioning of all users. It is difficult to find a currency in our history which has already been free from political influence or national economy. The bitcoin is a universal currency that is even accessible to population that does not use banking services, which is seen as the key potential of its development, considering the large number of people who do not have bank accounts or are willing to find some type of alternative for it.

Unlike the regular currencies, bitcoin crosses all the barriers between nations, policies and cultures. Its position on the market and its features show that could be characterized as a libertarian currency based on open source and decentralized software. It has no legal framework, unlike other the subjects of the monetary system, since it has no legal tender, though it may be refused by a trader.

Bitcoin transactions take place on its fundamental technology, the blockchain, which represents a distributed public database that contains a record of all exchanges since its initiation, is an ground-breaking technology to make its functioning confident all the way through the world and holds a key function in transparency of the exchange. The bitcoin is accepted as a means of payment by a growing number of online and physical traders.

The technological and methodological features of bitcoin do not relate to any central currency issuer, currency managing is extended over every part of the network, the proper functioning of the system relies exclusively on cryptographic techniques as well as that anyone can generate money at the price of a resulting utilization of time-machine. The creation of bitcoin takes place via the process called mining. Mining is essentially a circulated system of compromises used to authenticate expected transactions by counting them in the blockchain platform, maintaining a chronological order in the system, protecting impartiality of the network and permitting other computers to be in agreement on system status.

In order to be confirmed, transactions must be enclosed in a block that follows very strict cryptographic rules that will be verified by the network. These rules also take account of a creation of the comparable game of chance that puts a stop to anyone from simply adding new blocks successively into the blockchain. Mining is the track of action by which bitcoin transactions are protected and for this purpose the miners accomplish mathematical calculations for their bitcoin network with their computer equipment.

The hash of a block must be slighter than an assured value and in order to accomplish this, miners must discover and insert the block keeping the hash small enough. The miners perform cryptographic hashes on what is called a block header and for each new hash the mining software uses a different random number the only possible way to discover it is to find one that suits, which requires a lot of CPU work. This is actually the key of the ground-breaking aspect of the bitcoin system, since this verification of work causes all those found spots to vote with their CPU, and it is complicated for a single entity that would want to take advantage of to do so.

These procedures prevent everyone from having control over what is incorporated in the blockchain, as well as from replacing parts so that it can pull through. Instead of that, bitcoin permits each individual to firmly accumulate and switch over value on a network that cannot be detained, influenced or blocked by any institution or individual.

When an operation is completed, the user can also give a small amount to minors to encourage them to take the transaction into account, which means that the transactions are not without charge, but that the transaction costs are insignificant. The aim of minors is to distribute a block and they have an interest in finding a block in the course of the return they are allowed to give themselves.

It should first be noted that there is only one method for creating bitcoins that belongs to an algorithm, which is to say to a deterministic computer process. The money supply is generated by the computing power of the network computers, by correlation with mining process and the increase in the number of flow bitcoins is known in advance. At the same time, giving free access to powerful tools plays a significant role in protecting individual privileges and autonomy.

In this regard bitcoin has many advantages that are increasingly creating a center of attention of many users and investors, first of all because there are no exchange fees, while the transaction costs are much smaller in comparison to the traditional monetary system. Besides that, users are anonymous, while their transactions are public, observable and made in a way that, once recorded, they cannot be interfered with or changed.

Since the bitcoin is not regulated by any central authority and the offer of bitcoin is fixed in advance, totaled at 21 million there is no guiding principle or inflationary heaviness that is one of the key problems regarding traditional currencies. A single bitcoin can be divided up to 100 millionths and since the volume of bitcoins that are currently in circulation exceeds 10 million units, according to Brito et al, it expected to reach the limit of 21 million by 2140.

The monetary swiftness of the bitcoin identifies itself in advance and operates through the mining process. These are the features that prevent any type of inflation to occur, since, by structure, the upper limit of bitcoin will not exceed the amount of 21 million, being, at the same time, also characterized by an outsized divisibility of the bitcoin, even though so far it is applied for up to 8 or 10, but theoretically it is infinite.

Bitcoin offers a remarkable list of security-related appearances, since the protocol is also designed to be very opposed to a wide range of hacking attacks, including attempts such as distributed denial-of-service. Users are also allowed to broadcast their credit card number over the internet and what many users see as the key of benefit of bitcoin usage is the fact that the transactions are both secret when it comes to their own privacy, as well as completely public, when it comes to the transparency of the process.

In other words, not a single name or other data that in any way could reveal identity of the user appear in transactions, nevertheless their numeric addresses are broadcasted and stored by all the parts of the network. The blockchain is itself formed by a series of blocks, where each block traces the newest transactions that has not yet been validated and recorded in the preceding blocks, protected by the innovative types of technology.

The condition of every user’s account is open and it results from all the transactions that are connected with this process. The confirmation of operation is not a matter of any central entity, but by the other nodes of the network, while the addresses are alphanumeric chains of approximately 30 characters. Each transaction is accumulated in a special register called blockchain, which is helpful in authenticating the whole procedure in order to complete it successfully, so that the transiting assessment was essentially owned before being finally deposited. Once the process is confirmed by the network, this block is added to the blockchain and consequently it spreads the information.

Bitcoin can be used in transactions to buy goods and services with, both on online shopping sites and in physical stores that accept this currency. To make a payment with bitcoin, the buyer is supposed have an electronic wallet via one of the available software services installed on their computer that uses an application installed on their mobile device, and to go to a website that allows one to generate and handle this particular type of online file.

Electronic wallet is the software creation that allows users to have an access to the bitcoin network, where its selection contains addresses and keys to carry out financial transactions that have the same purpose as money transfers. In this system the wallet is a type of a personal bank for bitcoin and can be either installed on the smartphone for small payments with QR Code or used as a web service, as well as it can represent a software that offers users to have a total command of their assets even offline, though in that type of backup option the security risks are at the owner’s full accountability.

The transaction goes on when the merchant sends the sequence of letters and numbers to the client’s electronic wallet to which the customer is obliged to reassign the quantity of bitcoins at the price of goods or services procured.

There are particular types of members of the bitcoin network that are called miners and their role is to authenticate the regularity of the operation, checking the validity of the payer and their accessibility of funds in order to receive electronic money in exchange. The purpose of introducing this type of process is producing the capability for users to have a free access to the market, without both a central bank and the conventional banking network, avoiding at the same time any type of governmental control and without a risk of inflationary manipulations thanks to its inherently deflationary nature.

The function of this is to authenticate that all transactions in a block are compatible with all preceding transactions, which means that users who initiated the transaction paid the money in advance. The operation could not be allowed even at the slightest inaccuracy, since the block in question will not be registered in the blockchain. The work of the miner consists of adding blocks to the chain of blocks, putting the computing power of his computer at the service of the community. For this work, miners are paid in bitcoins.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

11. The Latest Rise in the Price of Gold – a New Cause for Concern

While the price of gold continues to rise it is a sign that financial resources should be turned into gold, opening the question about the latest causes of this phenomenon and whether gold really still has the status of “safe heaven” investment.

This month’s trading on a global financial market was under the impact of the president of the United States Donald Trump who dismissed the director of the FBI, since an investigation underway could lead to the opening of an exclusion procedure. This unavoidably had an impact on the value of the American dollar, moving the investors to other assets.

On the other side of the Atlantic the start of the monetary downturn from the European Central Bank, their decision not to add 80 billion euros every month, but to reduce it to 60 billion monthly. The expectation that this situation will not be something that the banks in the Eurozone will not be willing to accustom easily tempted bigger awareness of the stock market which so far has been pulled up mostly by banking shares.

Both of these situations have caused the rise of the price of gold. Besides that, two big countries, Russia and China, are the leading global importers of this precious metal and they are making efforts in arranging a new global financial system that is supposed to be completely autonomous and detached from the dollar.

The first half of 2017 was marked by several serious political events, including some of the most critical elections in the Netherlands and France, there are odds-on chance that the financial world is relatively distress with the apparent outcome of a renewed demand for safe assets, where the gold takes first place.

Another thing is that since 2015 the Chinese yuan is incorporated into its official reserves of the Central Bank of Russia announced for the first time to have integrated, which until that time consisted of 44 percent of dollars, 42 percent euros and a bit more than nine percent of pounds sterling.

At this time China and Russia are increasing their gold reserves considerably, making an allowance for progressively strict way of monetizing gold as the foremost mechanism of trade arrangement, particularly through their currencies now held up by gold and also within the structure of an exchange system analogous to that of the rest of the world still locked by a dollar in decline.

Last year at the same time, demand for gold, supported by purchases of the exchange-traded funds, was exceptional. With the uncertainties generated by the prospect of a possible Brexit, investors had massively taken refuge in the gold contracts during the first quarter of 2016.

Global gold demand continued to grow in the second quarter of 2016, marked by the deepening crisis with Brexit and worsening geopolitical factors by 15 percent. Demand for gold reached 1,290 tons in the first quarter of 2016, an increase of 21 percent in comparison with the first quarter of 2015, making it the second-largest quarter in terms of demand.

The price of gold has even augmented by 25 percent in this first half of the year, which represents its highest performance for more than 35 years, while on a twelve-monthly basis global demand for gold fell by 18 percent, a plunge to be put into perspective given the exceptional demand last year, evoking that the first three months of 2016 correspond to the strongest first quarter ever in terms of demand. Gold demand, with a total of 1064 tones, reached a new record in the first half of 2016, surpassing the previous peak by 16 percent in 2009 that was present in the peak of global financial crisis.

When it comes to the strongest political impacts on global financial market it was the election of Trump that pushed investors into a short-lived optimism. Regardless of the prospect of a stronger dollar and a rise in U.S. interest rates, there is still vagueness at the global level today, both economically and geopolitically.

Central banks remained strong buyers, buying 109 tons in the first quarter, while the supply increased by five percent. This increase was fueled by a massive influx of 364 tons of gold-traded funds, reflecting a huge escape from currencies into gold, since the market participants are concerned about the global economy. Also, the investment was the largest component of the demand for gold for two consecutive quarters.

There are two possible outcomes of the current situation, where the first one is reaching the global agreement for maintain the dollar’s status of the world currency, while the other one is related to manipulation with the price of gold. The global agreement is related to upholding the value of the dollar. Since the macroeconomic data of the United States are showing a decline from quarter to quarter, the dollar is no longer used as much in everyday life around the world. The central financial institution in the U.S. Federal Reserve continues the trend of printing money, opening the space for the deficit that became unmanageable. This made the investors recognize that they have to look for alternatives to the green currency.

On the other hand, finding alternatives is not something that banks cannot practice. In this regard, the setback comes from the investment banks, creators of the gold and silver markets and its agents, which are looking for a particular advantage at the cost of investors, as it was the situation in the past. This is obtainable by spreading panic and transferring funds to others, so they can take advantage of the upbeat period until the next similar occasion.

As this has happened several times during the past decades, those were the emerging countries, in particular China and Russia that have benefited from buying gold at artificially low prices, expressed by all these manipulations, which explains the shortage of this precious metal, particularly because Chinese buyers do not return it to the market.

At the same time it is Germany that does not considering publicly the fact that its gold is stored in the United States could be sold and therefore there is no asking for its repatriation. This is why this enthusiastic phase would last for a certain time based on the correction where the potential is considerable for the emerging countries to make further movements in order not to be allied to the dollar.

The article is part of academic publication “Dividing by Zero” and will be available online after October 21st 2017, after e-book distribution to scientific research units.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

10. Rematerializing the Upper Limit of the Debt In Order to Be Renegotiated

American central financial institution Federal Reserve had a goal to stimulate economic growth after the crisis of 2008 by issuing assets ready to be sold on capital market with Quantitative Easing program. Released in three series, QE programs were far from boosting growth, on the contrary, it made economy weaker and more dependable on artificial measures.

That type of a massive financial formation without having real support in the creation of goods and services has proven to be a disaster and instead of learning an important lesson on what the risks of this type of action look like, European Central Bank decided to do the same few years later.

The only institution that has sincerely opposed this type of program was central German financial institution – Bundesbank. The thing is that the ECB was unable to copy the model, while also something that was taught to be the derivative was not applied properly.

Fed was paying off a record dividend to the US Treasury, which was directly linked to the enormous revenues that the Fed received from its acquisitions of assets under its smallest amount of compliant monetary policy followed in 2015 in order to grant liquidity to capital markets and to ponder on long-term interest rates to encourage economic revival.

It might seem unclear whether the influence of the USA comes from its GDP that is still as high as the real economy is in underprivileged shape, so there should be highlighted that most of the wealth produced in that country this way is, in fact, fabricated and comes from financial or banking yields.

Even after completing three series of QE, economic growth in the US continued to be poor, without any visible improvement. One might say that without it American economy would have collapsed, but the thing is that these measures have a result that is in financial sense equal to the amount of resources invested. Contraction the fiscal conditions of the federal authorities, with a quick turn down in the deficit could not, nor in theory, nor in practice, promote growth.

The upper limit of the debt was rematerialized in order to be renegotiated, which caused the increase in real estate price matching with tightening of credit conditions, so consequently the unemployment rate became higher than the situation with this program was supposed to allow. Though, at the very beginning this type rescue was designed to be something that others __ and would therefore be the supreme irony because, as we know, it is the Fed that has been actively working to set aside the financial institutions in the U.S.

The growth rate since last June is lower than projected, which is certainly the major point, since it might mean that there could be a doubt in the efficiency of the Fed policy, because that institution would become a victim of the prominent law of withdrawing.

Sooner or later the operations being discussed become less valuable and apparently create stubborn effects that will be complicated to manage, so the results are finally rather underprivileged in terms of the means arranged through the amount of money added to boost the liquidity.

In this regard, the Fed is paying to the Treasury the total of its earnings, reduced in particular by the operating costs of its headquarters in Washington and the dividends paid to the twelve regional banks constituting the Federal Reserve system. This status is supposed to ensure the sovereignty of its choices in relation to the government. The Federal Reserve does not receive subsidies from the Congress for its operation.

The advantage of the current position is derived from accrued interest on financial securities obtained by the central bank as part of its monetary policy support to the economy, consisting of treasury bills and mortgage-backed securities.

Yet the exit strategy of quantitative rate is lowering down, which would not only stop buying bonds, but also sell them back step by step, could prove disastrous for the Fed if it were to correspond with a strengthening of interest rates.

There is a fear of the explosion of a bubble which never stopped inflating, especially as the number of jobs is falling and that the number of bankruptcies is continuously increasing. Besides that it should be stated that, unlike the ECB, the Fed has the right to buy public debt securities directly on the primary issues market, so it can consequently directly finance part of the budget deficit of the U.S.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

9. ECB Is Hiding Public Debt Instead of Stimulating Growth

The European Central Bank has injected huge amounts of assets into the economy over the past two years in the course of rediscounting public debt of the Eurozone countries, which represents an exceptional monetary measure, referred to as quantitative easing is intended to bring back the rise of the inflation rate, which is itself supposed to neutralize the deflationary and recessionary forces that are affecting development.

While in the beginning the single European currency was weighed down by the proclamation of these new measures to support the European economy, it has recovered against the dollar once the ECB has suggested that descend in interest rates should not necessarily carry on for the foreseeable outlook.

Since at that moment investors are beginning to distrust the efficiency of the monetary policy of the ECB and are increasingly worried about the collapse of solutions, and since the hope that its leaders have expressed that the rates should not go lower is not something that could restore their confidence. After that the dollar plunged to the lowest level since mid-February against the single European currency.

The whole situation has emerged at the times when recession started to put pressure on interest rates, because the investment requirements were extremely low, so the quantity of money borrowed falls by diminishing the interest rate. After this the ECB announced that it would lower its major interest rate to zero, with the plan of infusing inflation and increasing growth.

These conditions have caused the creation of three big problems – first of all, the situation that even the ECB has lowered rates the growth of the inflation rate did not return; second, the euro that lost its value because there was plenty of ready to use money in the financial sector of the Eurozone; third, the increase of public debt, since it was the tool that served as a security to the money produced.

Besides that, all of the liquidity boosters made the euro more plentiful, which decreased its value, first of all against the dollar, causing it became cheaper in terms of interest rates, while on the other side these financial actions constitute the access of the unsound environment of public debt. Conversely, any downgrading of the green currency makes dollar purchases of gold less expensive for traders with other currencies, which is a trend expected to uphold the price of gold, which as well benefits from its category as a safe haven, boosted by these circumstances.

With no the refinancing of the ECB, this kind of debt would have suppress the economy by collecting the money of individuals and companies, in the course of the balance sheets of banks and insurance companies, so the Eurozone countries have found a disposed creditors for their own refinancing at zero or even negative rates.

However, the two key features of this kind of indebtedness are that the total amount is equal with the aggregate of the sums borrowed by the country and the interest on the debt that the government has agreed to pay. On the first sight one might conclude that it is acceptable to practice financing by debt, though in this case, without bearing the burden of salaries, so in order to repay this debt the state has only one option and that is to charge a tax by forcing the taxpayers to pay it, which also has its particular cost.

In those cases when the central bank lends the money to the government at zero-rate, the central bank makes pure monetary creation since it does not pay off. This creates the market tension, especially because of the growing complexity of the repayment of the debt reinforcing the distrust of the depositors.

The only subject in the Eurozone that has the privilege of monetary creation is the ECB, although the Treaty of Lisbon bans lending directly to the states, explaining that that might mean rescuing the countries that would be those who receive the money by other members at their own cost, as well as in order not to cause inflation. Consequently those would be the Eurozone members that agreed the massiveness of their public debts, slightly in the form of deposits made with credits where other members act as lenders.

The situation as such would generate an extremely high inflation rate. Besides that there would be seen the strong tensions on interest rates or stimulated outcomes that would further increase it, creating an environment completely insupportable, both for households and companies, strongly affecting the poorest ones, as well as inflicting a heavy blow on middle class whose purchasing power would decrease so rapidly that the income tax would be impossible to collect in the amount planned by the yearly budget.

These were the reasons why monetary creation was presented as required. However it is inadequate to stimulate growth and inflation this way, because its actual purpose is to hide the public debt in the balance sheet of the ECB in the course of insignificant interest rates. Besides that, these are the banks that this possible through very low or zero interest rates, and whose savings will ultimately be cut off by inflation.

European contracts do not allow ECB to buy new debts issued by the Eurozone members, though it could only purchase them on the secondary market, using the existing savings rather than printing new money out of nothing. However, such public debts stay in proper balance sheets only as much as it is required to relocate newly issued money through quantitative easing program, which made these public debts replaced by nonexistent monetary assets.

All of this is a subject of financial authoritarianism, which represents a situation that leads to recession and a struggle against debt repayment. Financial repression is a context characterized by artificially low rates to reduce the burden of the public debt burden.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

8. Medium of Exchange Rather than the Tool for Value Accumulation

Explaining the meaning and the purpose of the digital currency bitcoin has lead to defining its level of in comparison with the existing monetary system or the position of leading central banks, where many people think that a country is sovereign and that if it has contracted a debt in a currency, it is free to reimburse it in another country it chooses.

Since bitcoin was not created by banks, it does not depend on any state and it is also not linked to any specific currency, therefore it is not tied to a specific central bank. Bitcoin is interchangeable with dollars, euros or any other major currency. From the economic standpoint, it is a classified currency that is not issued by a bank, and is not linked to a currency agreement.  Besides that, it does not have a monetary policy.

If we consider currency such as euro a reward without fundamental value whose procedure is imposed on their users, there is an open question what actually digital currency is and what is it used for.

The easiest way to explain it is to observe euro as a coupon in the monetary sector in which the euro has legal tender. A banknote is a holder’s declare valid in any country where it is in the payment system and it represents a means of payment without inherent value, valid in a large geographical area.

Bitcoin is not a commodity money, nor a fiat currency, since it has no required price. It shares are not being backed by a material asset, since it has value only because economic actors agree to use it in cases where the internet facilitates exchanges between them.

There is no need for great thoughts to look forward to the effects of such guidelines. It is oriented more towards the monetary exchange purpose than to be a tool for accumulating value, even though its deflationary character can theoretically guide to that.

While alternative currency applications are generally distinct by a very strong constructivism or by the necessity of force to enforce a new conception, bitcoin is a merely individual project which aims to rise above private initiatives.

A restricted amount of a valuable supply whose worth cannot be affected by state assessments shows that this is an example of something that can be called digital gold, because the volume of the user base is increasing, which show the way to a price increase.

Besides that, the profile of buyers is widening, too, so it is no longer reserved only for experts in the digital world, assuring users by the rapidity of transfers and the safety of the new currency.

As a result, the bitcoin sustained to grow to the point of declaring itself as the financial asset with the best annual performance in all currencies during 2016. The bitcoin reacts like an asylum since younger generations do not believe in gold as their parents do, and in emerging markets in particular, this cryptocurrency becomes the investment to refer to, whereas it is much easier to use than gold.

This digital currency is resistant to money-laundering, which is the catching disease of growing number of central banks. The reason of its immunity to this it is written in its algorithm of operation (not modifiable) that there will never be more Of 21 million bitcoins in circulation.

Some of them have already earned enormous gains … while we continue to settle for a few percent per year. As one can imagine, such an increase has made some people extremely wealthy, but for once, it was not a handful of bankers. The funds could be generated in order to start new business and helping others in the transition to this new form of savings and banking.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

7. When a Rescue Plan is an Obstacle to Recovery

The central financial institution of the United States, the Federal Reserve, directs global finance, as well as the big part of the global economy, and that is the reason why financial markets worldwide apparently replicate unreservedly qualified prices, since they are entirely under the Fed’s control.

The highest position in the system of Fed’s regulations is the way it regulates admission to the American dollar, since currency is no more than the credit, so the money became no more than additional alarming part in the flow. In processes as such it is the ready money that is guaranteed by a government, while the credit is guaranteed by the banks, so the Fed regulates the price of credit by setting the policy rate, though banks, Wall Street and financial markets depend on these proceedings.

The regulations of the Dodd-Frank Act delayed their way of performing, which has resulted with certain very specific changes so far. The Dodd-Frank Act was adopted after the 2008 financial crisis in order to enforce capital inflow and annual stress tests performed on large banks, whose insolvency may create risks to the global financial system, ensuring that they would hold out financial shocks. However, this act is the object of disapproval of the new American administration, which condemned the guidelines of banking business.

President of the U.S. Donald Trump stated that he hopes that his administration will cut down on Dodd-Frank’s law tremendously because “some of his friends with beautiful companies cannot borrow money”, explaining that the reason is that the banks do not want to lend them “because of the rules of the Dodd-Frank law”.

The whole process represents a big challenge, though the current administration does not have a strong point on numerous of these issues, apart from trade and overcoming the Dodd-Frank Act on financial regulation, there is still a chance to achieve a compromise. The Dodd-Frank Act, quite the opposite, offers a complete framework enabling the institution that plays very important role, the securities Exchange Commission and its commodity equivalent, the Commodity Futures Trading Commission, to assume responsibility of these financial instruments.

Since Trump became the president and since he began to talk about deregulation, the shares of the six major banks saw their price rise by more than a third, lead by the Bank of America with a spectacular 48.8% in one quarter. The exceptional debt of US non-financial corporations rose to more than 13 trillion dollars, including around $3 trillion in debt since this act was passed in July 2010, though not all of them come from bank loans.

As the Fed has trimmed down interest rates to zero, the cost of borrowing became extremely low in the capital markets, so that situation encouraged makes use of ready money available. However, even if some of these debts come from the bond market, the guarantee of the debt in itself is often controlled by the biggest banks.

There are several things that occurred this month that lead to wrong conclusions regarding plans of Trump’s administration that does not act like nation-state and that is unwilling to correct their own mistakes, creating an apprehension of huge self-destruction. There is also a fear that, as it is the case in many other developed countries, the middle class will be furthermore downgraded especially because the growth is based on indebtedness, so there are only credit sellers who actually see the benefits of such “potential” where thousands of billions have been unsuccessfully redistributed.

From Fed’s standpoint there is a change in the approach where, instead of using the speed up tools in order to stimulate the economy, they now let it step up, limiting it with the point where it completely holds up the accelerator. This practice still allows a sufficient amount of control, as well as the possibility to exploit market potential in order to strengthen financial sector rather than really stimulating growth. It is yet unclear what at what phase of this process American economy is at the moment, but it unquestionably took one more step towards the ultimate devastation when it started to practice Quantitative Easing programs and everything that was later meant to be the substitute.

The situation after those programs ended was lead with fictive increase of interest rates, which have caused even more confusion since the lower the rate – the more credit is available, while at times of higher rates, the fewer ready money is available, allowing only banks to recover. Those credits were primarily given to institutions significant for Fed’s success, combining the policies of the U.S. government and the leading banks, who then redistribute it to their partners at higher or lower prices, such as multinational corporations with top credit rating, oil producers, other banks and other governments etc.

In a situation where Congress is not in a position to balance the budget or cut spending substantially it is not even possible for Fed to let monetary policy return to standard, since a huge amount of artificial credit facilitated by this monetary system flooded all tools of regulations, making them dysfunctional. Years of development of a financial system as such allowed cheap credit to go first to those with debt capability, such as the richest subjects, big corporations and Wall Street magnates, instead of to those whose wealth stimulates spending, i.e. consumers, since an average worker gives one hour of their limited time, where only 25 dollars could be brought, while a Wall Street insider could get an unlimited credit at the price that is under the actual rate of inflation.

A huge concentration of these credits made them become bad debts which have significant reflection on Fed’s balance sheet, and in order to solve that problem there is a taught that they should be putted back on the market, which created a remarkable concern, since the collection of credit up to that point grew relatively fast. In case of the situation where Fed revisits debt selling, it continues in return for the money and therefore the amount of credit or currency diminishes instead of growing constantly. By doing so, the Fed risks the explosion of the bond bubble, since there will be fewer buyers for bonds so rates will go up.

One of the key arguments that Trump’s administration suggests is to withdrawing all or part of the Dodd-Frank Act, besides the fact that it was created by the administration of Barack Obama is that it reduces bank loans. For the current American administration this represents an obstacle to economic recovery, while, according to Fed, all loans and leases over the last three years granted by US banks increased by 6.9 percent each year, while during seven years before the crisis that rate was 7.9 percent. The central U.S. financial institution still preserves the option to restore a possibility for monetary discourse, indirectly showing that it will never take a chance of disturbing the markets.

There are several implications of such policies on the current financial policies of the U.S. that reflect on other central banks worldwide and the one is that the banks lent the companies about 80 billion dollars every year, where corporations had approximately two billion dollars of ready money that they could use to expand employment or growth, though instead they borrowed huger than ever amounts of money in order to convert their shares or to reimburse dividends. During this process companies supported by banks disfigured the market equity by not allowing it to boost through actual investment or reasonable assessment of their companies.

Conditionally, and if the Fed keeps on with these policies, the equity markets will witness distractions, since there are many cases where trading items have seen an upward march, so while the reforms and major investments are slow to occur, they could take the threats very seriously. There is also a fear about the decline of many debt-dependent economies, having in mind that central banks have established themselves as major consumers of all kinds of bonds, but also as backers of available credit, both for business sector and for governments, so if they give up this position, the whole situation will be very difficult.

Besides that, banks involved in this process are mandatory to maintain an assured quantity of reserve requirements with the Fed, having in mind that the quantity of reserves deposited with the central bank of the U.S. was close to the required reserves, but since the 2008 crisis, the amount of reserves overload deposited has reduced and it now stands at around two billion dollars, which means that it is not the Fed regulations on minimum reserves that bound bank lending, but that those are the banks that are limiting themselves because they fear future defaults.

This means that the Fed no longer performs quantitative easing officially in terms of not printing money to buy Treasury bills, though in reality, when a requirement it holds matures, they are buying another to roll the debt. Therefore, there is a possibility for Fed to reduce its financial statement, since its balance sheet would therefore be subject to an easier regulation and for the current U.S. administration that is not a satisfying outlook, because the Fed was certainly a shock absorber regarding its purchase of Treasury bills at times when the government became dependant on borrowing.

Another thing is that Fed figures demonstrate that business lending action has been stronger than it was supposed to be and that is why it is beginning to weaken. There was an immense credit spreading out cycle with low-priced money created by central banks and ultra-accommodative monetary policies, though the failures to pay and complexities in the credit sector were increasing.

At this moment it is Trump’s administration that could relieve tension by transferring supremacy and money from one section to another, which, of course, would not be sufficient to change the system and neither the Congress nor the Fed could stop the credit cycle at this moment. Unlike actual money, borrowed money is subject to the credit cycle that causes its boosts and falls, and at times when the reduction is acceptable, the whole system is under threat.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

6. Zero Rates – a Symbol of Inefficiency and Nonsense

The decision of the European Central Bank to keep interest rates during 2017 in Eurozone under their historical minimum, with the key reference rate at zero, as well as to leave their substantial public and private debts accumulated since 2015 operational was followed by this institution’s decision to leave the marginal lending rate at 0.25 percent, allowing banks to borrow for 24 hours.

There has been stated that with zero interest rates banks will be capable to fund themselves at no cost from the ECB, and should consequently lower the rates they apply to their customers who owe them. The low down rates of the ECB have an automatic influence on the short-term savings, since a bank cannot have enough money to pay cash at a high level, and thus since it cannot lend at a good price, because it would lower its margin. The ECB disclosed a set of monetary policy procedures, counting a turn down in its central rate to zero for the first time in its history, adding a new oversized long-term loan for banks, where the first part of the plan has continued its realization relatively as intended, considering that, since the ECB took out its financial plan, savings of citizens across the Eurozone have witnessed how the average salaries declined.

This means that if the ECB decreases its interest rate, it wants to promote credit activities and therefore enhance investment. Increasing it in this case means that there is a visible threat of inflation, since too much money is in cash flows, while prices are rising rapidly, so there is a need to be in charge of the situation. In a situation as such, political risk is one of the main challenges for this year and the ECB authorities are fully aware of that, so they are willing do everything they could to prevent market disorder, even though their action might make the situation worsen. There should not be any new proclamations of new decisions related to interest rates, though this is the beginning of monetary contraction that seems untimely if it happens sooner than key elections in several countries, alongside a conditions of increasing populist movements, so the ECB is not willing to witness additional uncertainties.

As ECB invested in very short-term products, it is the capital that is mostly affected by the zero rates, particularly commercial paper issued by corporations. By longstanding stagnation, there should be understood a situation of fragile growth marked for long by near to the ground and even zero interest rates. A recovery of growth and inflation is in progress, since the demand deficit is not unavoidable and since the additional savings are expected to overturn, efficiency is supposed to raise. Therefore the ECB has decided to initiate a wide-ranging asset purchase program, which has drawn together, but also surpassed the previously announced programs. The program of Quantitative Easing, which started in March 2015, consisted of purchases of private and public bond securities on the secondary market for a amount of 60 billion euros every month and has been decided due to the collapse of inflation and the risks of deflation to the Eurozone. Added to this, zero rates and especially the negative rates are a symbol of nonsense, since the zero point in a range of values sends the message that there are no other points.

Overnight deposit rates that were found in the negative area for the first time in June 2014 were maintained at -0.4% and they were strengthened last month, passing from -0.3% to -0.4%. A negative rate is supposed to support banks not to leave this money for the central bank but to loan it to their clients, which means that banks have to pay a fee to the ECB for surplus cash for 24 hours. There are big differences in assets between a rate that goes from one to five percent, measured up to to those that would go from zero to one percent, since zero point  is mainly due to the fact that dividing any number by zero is not possible. In practical translation, a rate of 0% allows an economic agent to borrow in theory an unlimited sum with a zero cost. Zero point suggests the perception of unwarranted action, increasing to a substantial psychological aspect visible in investors’ behavior. The turn down in borrowing rates used by the state has a straight collision with the income from funds on life insurance contracts, which are still mainly composed of government bonds.

At these times, when the outcome is round after a while as insurance companies maintain debt securities acquired several years ago higher than debt issued, the ECB introduced the scheme where the threat becomes zero or unreal and where the time value is zero. However, time has a value, shown through scoring, distance and having lack of it. The depository banks also increase its debt repurchase volume from 20 billion euros per month to 80 billion, extending the possibility of qualified securities for these procedures. There are no visible proofs that the aims of the ECB are really there, whether inflation, targeted at the rate of two percent, or economic growth in the Eurozone, which is an economic oddity that has never been explained in economic theory. At the same time the ECB was strengthening its comprehensive debt exchange program and for two years of its presence it has distributed 1,740 billion euros, so the range of securities entitled for debt repurchase has been comprehensive to consist of bonds issued by corporations in the Eurozone, apart from banks.

There was seen the recent rise in prices that is mainly owed to the rise in oil prices, which were noticeably lower at the beginning of last year, and to a boost in food prices, especially fruits and vegetables, caused by a very harsh winter in southern European countries. Taking unpredictable elements into account, such as inflation generated by wage increases will prevent it to remain too near to the ground to give explanation for any monetary contraction, though as often, the common sense of every decision-making reminds us that when a strategy does not work, it is because the institutions have not done enough. The securities purchased through the QE program may have a maturity of up to thirty years, which will be arranged under a rule of proportionality to the involvement of each government in the ECB scheme.

Securities purchasing practice should not provoke governments to budget lack of discipline, since all the procedures announced last month go beyond the potential of the markets, which were only waiting for a boost in the repurchases of debts and a decline of one of the deposit rate. It is comprehensible that in this procedure the liquidity increased by 1000 of cash in order to carry on playing, the banks recovered their positions completely and the ECB recovers the decomposed risk and the risk of default, so clearly this is how billions of euros are being created fictiously. In substitute for the debt in custody by various banks, ECB simply credits its bank account of 1000, just by notional inscription of 1000 more.

This is the situation where no more than this type of investments are supposed to be made, hypothetically, of adjustable monetary policy, so it has generated an incursion of ready money placed in various shares. Somewhat approximating to the fiscal deficits, that are supposed to enhance growth, when there was no visible growth, the shortages were not high as much as necessary, which is similar to the refinancing rate, in the sense that it applies when a bank requires liquidity, though these loans are on a daily basis and have to be repaid for the next day, different from the refinancing rate, which is weekly.

The ECB has managed the purchases of securities within the limits specified by central banks of Eurozone members so that the risk taking was covered 20 percent by the ECB in the structure of a cohesion principle, while the rest was under the responsibility of each central bank. Projected low rates were supposed to encourage investments that were planned to stimulate growth based on positive action of businesses and consequently their stock market appraisal. For the first time in four years, inflation in February 2017 reached the targeted rate of two percent, exceeding the ECB’s target of a slightly lower price boost, while at the same time economy of Eurozone has shown certain signs of strengthening. A crossroad in the ECB’s point is not to be anticipated before the meeting expected in June, which is enough time for opponents of current ECB’s policy to come up with different solution that would stimulate lending, investments and growth rather than zero rates that make fictive results.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

5. Understanding Blockchain: The Main Objective and the Initial Challenges

Blockchain and FinTech play a central part in the digital revolution that shakes the world of banks, insurance companies and more financial markets in general, therefore it is the reason why a new arrangement will allow the revision of the positive law in order to empower the issuance and the conduction of certain non-admitted financial securities to the operations of a central securities custodian by using this platform.

To understand the scope of FintTech and blockchain revolution it is necessary to recognize a speeding up of hi-tech innovation which includes the tendency towards better connection with related parameters, such as rules and their fulfillment, changes in banking practice, and increased rivalry with FinTech start-ups that take advantage of their quickness to have a strong impact on the outdated financial sector. If a majority of “minors” agree on the possibility of the transaction, then it is validated, time-stamped and entered in the common register. A new block is then added to the blockchain in chronological order and definitively. This approach, which is at odds with the current model, however, faces certain slowness and a high cost because of the computing power required to verify each transaction, limiting its development.

This practice has been developing since the crisis of 2008, both in the securities and in cash system. The key problem that was visible from the earliest days of blockchain development was that the current banking system that is planned to be improved is that it requires outsized technical resources, as well as huge number of people on each side involved in these parts of transactions, such as the institutions who play roles of the lender and the borrower. The key element of change introduction is openness, fundamentally through the exploit of a blockchain. One of the main principles is that the collateral must be revalued at standard time, such as daily or in every few hours, in the same way as the accumulation of contracts or open positions it is supposed to wrap, associated with the market price of the security on the market.

pastedGraphic.pngHaving in mind that the period without any constructive action has lasted too long, there is a strong decision of bitcoin enthusiasts to overtake the force and to encourage a new version of supplement to the blockcahin world, which competes the very first version and proposes an irreversible adjustment of the rules of the software that governs the bitcoin, in order to boost the control of the network and that it deals more transactions. For the achievable incorporation of additional protocols, the enthusiasts will be focused on bitcoin combination in conjunction with other fiduciary currencies.

This consists of more influential and consensus-based schemes that are related to a assured level of trust between participants. Since the blockchain usage raises less authorities or security concerns, it is not unanticipated that conditionally this technology is implemented to advance obtainable solutions. With the idea to face these fluctuations as well as the potential fractional return of securities, a margin call is considered among the two parties, where each of them is launching their own assessment, putting it side by side it with their counterparts. The usage of blockchain in financial sector could revolutionize the situation fundamentally, by reducing the significant amount of complexity of the reconciliation processes.

This platform intends to make this process straightforward by performing only one computation and submitting a harmonized representation to the stakeholders, consequently eliminating dissimilarities in theory. To make this transformation take place, a greater part of mining instruments will fall behind the idea that it should correspond to three-quarters of the computing power of the network for two weeks in order to reveal that it runs the engine correctly and can consequently enforce this new standard reasonably. Experiencing any kind of bugs at this time will lead to solving problems at the earliest stage in order to prevent any risky situation before broader implementation.

All of these shows that the users are hence reliant on its volatility, which is the spot on which bitcoin enthusiasts must not fail to turn down any liability, clearing up that the rate of conversion of the regular money into bitcoin may be dissimilar from what is relevant when we convert bitcoin into regular money. This does not mean that one might require bitcoin address in order to send money, since an e-mail or a phone number is as much as necessary, though the beneficiary does not have a digital wallet in some of major supported currencies they will receive bitcoins which could be exchange on other platforms.

Depending on how successful this overthrow will be in early stage, as well as on how soon bitcoin that we know today and some advanced type of it will differentiate we will see how their registers where the transactions are recorded develop and later in which sense they might confront. We have already seen how that altercation works with ethereum, which at this time benefits indirectly from all those slowdowns of bitcoin. Regarding the relationship between blockchain and ethereum, it consisted in increasing, as an experimental platform which engages certain types of smart contracts that can be defined as self-ruling processor code evolving in equivalent of the database and capable to fulfill the requirements of exchange if assured conditions are met. Over the past several years cryptocurrencies benefited mostly from the keenness, passion and trust among the members of global bitcoin community, which is the reason why many enthusiasts believe that this type of transactions represents the future of money, explaining that it would soon totally replace traditional currencies, which, of course, could not be the case in the short term.

When it comes to regulation, it will depend on how authorities of certain countries would be willing to adapt the regulatory framework to those subjects that will be offering this type of services, but, as it is the case with many payment services, we expect to see restrictions in electronic payments related to gambling etc. and they will have the right to put back or cancel these transactions without warning, as well to adjust the time limits for exchange and withdrawal. This new system would be the support for big cryptocurrency mining companies, and consequently the absorption and centralization of this movement into an oligopoly. More commonly, this divergence illustrates this background’s opposition between mining businesses and the group in charge of the improvement of the bitcoin network, that brings all important resources together.

Blockchain is in particular a technology of immediate synchronization of data, so the realization of transactions is not reduced to bringing together books of accounts, therefore it is necessary to perform a certain amount of tests in order to authenticate particular conditions and finally to make sure that the operation fulfills with the regulations in force, which means it still should involve some brains that the technology itself does not provide. Furthermore, it would be too optimistic and even unreal to expect that this technology could transform the payment industry in the next several years since the current technologic usage is not tailored to the performance of mass payment resources that require short-time responses, as it is the case with payment cards.

The formation of a private blockchain, shared with the smart contract tools, comes out to be the ultimate explanation to optimize the reconciliation procedures between financial institutions at the same time as lasting visible to the supervisory body. In any type of transaction services this is supposed to ease the automatic transmission of verified information, while automating the confirmation procedures and definite supervisory and that is the reason why these segments would take an advantage to a great extent of optimization, effectiveness and protection.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

4. Deflation – Yesterday’s Problem; Inflation – a Problem of Tomorrow

Over the past several years we have witnessed how hard it is for the European Central Bank to fight against the deflation, since fragile countries were unable to focus the borrowed funds to stimulate growth. However, particular governments are still having a bet on inflation. In 2017, if inflation proceeds, so there will be even more unemployed, and purchasing power, which is now much reduced by stagnation and taxation, will further be lowered. 

Since the financial debacle of 2008, caused by the monetary policy of these same central bankers, a real war against savers has begun to lower interest rates and consequently the recompense of savings, followed by the lower refinancing rate almost on zero level and Quantitative Easing programs.

There are many common disparagement with QE programs that need to be analyzed, since they remain significant in the European structure, which will require some additional comments given the particular European economy. First of all, the increase in liquidity caused by Q.E does not wash out the real economy, but is largely directed towards the financial sectors. The EU benefits less from the wealth effect of an increase in stock market assets than in the United States, where pension funds or inducements make income more responsive to market conditions. This is something that could be expected, since this is something to be pleased about by all those subjects who have recently seen inflation as a benefit, which is contradictory in many ways. In fact, the accumulation of public debts has reached such a level that monetary policies will have to transform, and inflation will make its return with its instruct of dislocations, unemployment and various types of injustices.

All these measures combined with tighter regulations and heavier taxation has led to an end of private investment and a deflationary spiral. Some might say that this could represent the beginning of the end of EU, or the end of the Eurozone, which is not untrue. Inflation is a lasting turn down in the value of money, leading to a extensive and persistent boost in the general level of prices, which is reflected in the expectations of economic representatives. Currency is not only an expression of the value of commodities like the indicator for the distance or the kilogram for the weight, but serves as a connection between the present and the future.

Price stability, which describes the situation where price fluctuations are very low or do not exist, does not concern the decisions of economic subjects as they are standardized across all economic areas. On the other hand, the behavior of economic subjects, responsive to inflation or deflation, influences the development of inflation. Individuals try to preserve their real cash balances because they are not fooled by the monetary illusion created by inflation and they require the maintenance of their purchasing power in real terms.

In economics, monetary illusion consists in considering the nominal value of money rather than its real value. This illusion has the effect of confounding money and its purchasing power, or confusing money and wealth; It is also believed that money has intrinsic value whereas its real value derives only from its ability to be exchanged for goods (purchasing power) or to be able to pay taxes. The extreme manifestation of this illusion, which has become pathological, leads states to inflation or hyperinflation through the abuse of the “printing press”. By extension, moneymaking subsequently designates any creation of fiduciary money at the discretion of a central agency, such as the central bank, without necessarily using the paper medium, because the mechanism is entirely virtual and computerized. Periphrases are used to hide the arbitrary and inflationary nature of the process.

Central banks are expected to contain inflation by raising interest rates and avoiding deflation by reducing them. This is called a counter-cyclical policy. We try to offset the economic cycle to make it more stable. The economic circumstances have been  horrific for several years, especially in Eurozone. The character of inflation is that it eases the weight of debts and fixed costs, so that it can even decide households to spend more and to restart guidelines. In contrast, price stability would have a depressive consequence, since it would go along with the policies of severity carried out by governments passionate about the balance of public finances.

A measure as is not sustainable over time with no the risk of bank run, or at least the outflow of deposits, which would expose the stability of the financial system. To avoid that governments must therefore first make the conversion to a totally electronic currency, consequently eliminating the possibility of disposing of money in the form of banknotes held outer the banking system. Also, public expenditure is funded by borrowing or tax. A possible assumption is that the establishment creates money directly or indirectly to finance public debt, while this solution is not possible if the money is tied to a standard, to a measure such as gold. In this case, the currency is autonomous of government policy. In the past, the gold standard restricted the power of the monetary authorities.

There are several Eurozone countries, including Germany, Spain and Belgium, where inflation rates were raising for more than eight months, while in Italy, Portugal and Greece they still below the inflation mark. It appears that the QE in EU was just another step in the current policy. The ECB has previously gone a long way in manipulating interest rates without any visible effect. In many of these situations the answer of national central banks is to hope inflation rates between countries will level off and consequently, by setting a rate for the whole of Europe, they do their job well. The main European central bankers consider that differentiated inflation rates within Europe are basically not their problem and for them, the Eurozone is complete.

ECB has played only on the conservative methods so far, that were acceptable by its statutes, so it is clear that the enthusiasm displayed by many national central banks contrasts with the European economic slowness. However, each country individually has very dangerous state of inaction. Some of them, such as it is the case with Spain, stuck in incredibly low interest rates and high inflation. The result of the ECB’s policy is exactly worsening the inflation in countries where inflation is high and strangles those where inflation is low and Spanish authorities are very aware that if they miss this opportunity to react, there will be a fake speculative bubble financed by the debt that will burst subsequently, as it was the case at the beginning of this century.

On the other hand, it seems that the method of spread of monetary policy is not working, or is at least detained. The spread means that the effects of changes in the key rate have a collision on the economy as a whole, down to the rate of inflation. This can be explained by the caution of banks to lend to the private sector as a result of recent stress tests and the rules set during 2010. The negative position for European growth prompts banks to transfer to the private sector, so all that has been discussed is not even done in the situation of a policy of quantitative easing by the ECB and yet some are pressing the ECB to take action, as if what has been done in recent years was of no advantage.

Unnecessary risk-taking must not be unobserved, and the risks of extending such policies must be taken into account, as the US example shows. The risks of deformation of price mechanisms and of return to hazardous situations must rise as a interment specter to avoid the drifts of the past. Besides that, the ECB could move up interest rates to fight inflation in Germany, Spain and Belgium, but Greece could not be in the group of countries who see any benefits of an action as such. This would strangle economic growth, and not to mention the government’s budget, which cannot have enough money for other interest charges, which represents an essential distinction. The truth is that the ECB has no way out, but we know that central bankers favor inflation to become out of control rather than deflation, and that is the narration of all currencies that ever existed, so that the euro is not an exception. Also, this situation offers outstanding investment opportunities, since the countries, including Germany, are experiencing the real estate boom they had missed a decade and a half ago, when interest rates were high, while the situation has changed so far. Many other governments of euro users cannot afford an increase of interest rates, since have too much debt. They are quite satisfied to see inflation biting this debt while the ECB keeps interest rates low.

If we take a closer look at government bond yields we see that the interest rate that the government has to pay to borrow more money and in this situation if the inflation has the actual rate, they are extraordinary.  However, those who buy government bonds lose money, while governments make money on their borrowings accustomed for inflation. As long as this trend maintains, governments will be satisfied to have high inflation and low interest rates, while the bubble enlarges as less than two decades ago. When inflation happens to be out of control in Europe’s flourishing countries, or an increase in interest rates will pose problems for ailing economies, countries will have need of restoring control of their own monetary policy, though it would be such a hard kick that the EU could not stand. It is therefore essential to keep an eye on the next inflation statistics and on the other the interest rates of the ECB. EU countries are heading straight for destroy whatever the pathway it takes.

In a more explicitly EU situation, many raise the inappropriateness of such a arrangement with the economic and financial destruction of all the countries of the Eurozone. As decades of deficit have collected, QE program would be in opposition to any true or fictive efforts to decrease deficits. The idea of an EQ program is a sovereign debt buy-back by the ECB, which gives the ECB more power to lend to the economy. It is also a means of reduce the pressure on some governments currently in difficulty, giving them a bigger boundary for tactic. In this situation the emerging countries blame their central banks for scam, since they are experiencing the biggest losses in this situation.

Besides that, declining rates are apparently an essential condition for the search of this solution. For example, if one repays a loan at 7% by borrowing at 4% then if they pay off the loan at 4% with another contracted at 1,5%, they can make an illusion, since each time one borrows again, they get just another balloon of hope. In the opposite case, when interest rates increase, everyone should understand that the rise crashes fast enough into the wall. Therefore, central bank actions have only one intention and that is to avoid rates from growing to make the growth last. In this situation European countries must reorganize their public finances when years of incentive spending have revealed enormous imbalances in their finances. Austerity budgetary policies, that are essential to correct this situation, would definitely run counteracts to the EQ and in that way cancels its supposed stimulus outcome.

Besides that, another practical concern is that the debts of the Eurozone are spotted among all its countries, and consequently there is a greater complication when the problem arises as to which securities of which countries may be subject to acquisition. This question arises from the political pledges within the Eurozone, especially between those countries whose situation differ drastically. However, even the simple announcement of an EQ could have negative effects, since it is difficult to see how the situation can recover, where this is only an effort to delay the reality.

It is true that many EU countries are facing several problems today and one among the biggest is that its monetary condition remains critical as the money supply growth remains virtually non-existent, despite already very accommodating ECB policy, for example when the rates are close to zero. This means that the spread mechanism of monetary policy is not working, since during the innovative regulations and stress tests, banks have become cautious, when it comes to lending to the private economy. Very slow growth with negative outlooks does not support them to lend more, while they are consequently encouraged to refill their margins in the markets and to provide risk-free to others.

Central banks of emerging countries are required to switch the work of their beneficiary citizens and the goods of those countries against debt denominated in a certain currency (US dollar or euro), while this is acceptable if this debt offers them something, such as upright interest, but this is not even the theoretical case since the rates are extremely low. A more forceful monetary situation could be provided by more opportunities for additional solutions in terms of both monetary and lending practices. In this situation it seems that a new monetary model must emerge less central bank policies and more innovative market solutions to stimulate the economic growth.

This is the reason why, after several years when the deflation has been the main problem, this will be the year when we will see the big return of inflation and all of its negativities, such as the increase of unemployment rate and the reduction of purchasing power, which will lead to the stagnation and tax collection and budget losses. This year will show a serious need to return to monetary strictness and the cutback of the public debt without repeating QE procedures, as well as without borrowing to pay off what has been borrowed in the past.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

3. Boom Supported by Nothing but the Debt Never Leads to Real Growth

In order to explain why markets have been caught up in a trap of what one might call the greediness of their governments and the other just a lack of sense to predict possible outcome, looking back at the data of the past three years all we could see is that there have been billions of share repurchases, while at the same time huge amount of money is being spent in order to lift up prices of corporate shares from the companies themselves.

The fact is that the reason for the governments to borrow was covering their operating costs, while companies have borrowed to increase, to develop new segments, as well s to buy their shares making up the prices.

However, none of them was able to follow the rule of selling or buying at lowest or highest since during the crises especially American companies have taken advantage of such a chance to buy back their own shares at a reduced prices. Those prices are high again, they give the impression almost each and everyone wants to buy, even though it must surely end. It is easier than ever to predict what will happen when stock prices will collapse.

After the crises governments have added billions of dollars to their public debt, and if we look at the previous data and at converted value of dollars from the historic to the current one we see that what has been done in the past eight years in most countries exceeds the amount of debt of the whole XIX and XX century.

There is an opinion that many governments had no other choice but to maintain to pump up the credit bubble. From this standpoint comes the comparison of this situation to that of a person who would take a hot air balloon journey and who unexpectedly realizes that the hot air does not bring balloon flyers exactly where they wanted to go, while at the same time there is no choice but to persist to bring in the air or, if he stops, the balloon will crash to the ground and he will die.

This comparison has been a subject of many debates during the past few weeks and has continued to involve other aspects of the problem. Those who oppose call this nothing but the demand for the credit boosts, hoping that they will increase growth and make debt more supportable. However, the economic boom that is supported by nothing but hot air is deceptive and it will never lead the government or the company to real growth until they meet the zero point by returning whole amount of debt to the creditor.

At the beginning credits grow and asset prices rise, but later the credit becomes too small and asset prices decrease, since they usually await consumer prices. As a result of this kind of credit inflation we could expect to see a deflation when the bubble bursts, as it always happen when spending stops creating the sense of wealth since its limitations create the sense of poverty. These occasions lead to the change of consumers’ behavior since they stop spending on what they think they actually do not need and create the deflationary effect. The reality is that a debt deflation does not generate bad debts or bad funds, though it basically drives people to recognize and accept their own mistakes in consumption. On the other side companies go bankrupt as they cannot have a loan of almost boundless resources at near-invisible yields.

The credit cycle has nothing to do with the ambiguity since the wealth created money that goes where credit is removed. It is clearly visible that the most serious errors have been made by the central banks of those countries whose private and public sectors are still willing to be more indebted, as companies still buy back their own shares while asset prices are still climbing. This could continue for a while, but sooner or later this must end and when it ends it will be too late to change habits.

It is unlikely that the new recessions could be fully eliminated and therefore the nature eliminates errors. Regardless the creativity, inventions and ideas for new businesses the capital is limited and if it is being used for bad projects and ideas, the people have no other way but to become poorer. The best way to define which projects are bad and which are good is to check what will happen after the next increase of interest rates that bad structured businesses cannot stand. That will not be agreeable but will bring the markets back to reality.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

2. The Danger Zone – Where Nominal Yields Do Not Effectively Reimburse the Risk of Collapse

From a certain point that the markets have already achieved, banks will no longer be capable to boost credit amount to reimburse for losses from their central bank, which might clarify the disintegration of the banking sector.

The situation with negative interest rates represents the inverse structure when the borrower is subtracting what he owes by an amount calculated according to the rate arranged between the two contract sides in a sense that the more one borrows, the less will repay.

There is a certain threat behind this emergence of negative interest rates and it is being increasingly visible in Europe, since it represents the risk to its financial independence and economic expectations.

While maintaining its rate at almost zero for more than seven years, the Federal Reserve of the United States finally announced the first increase in December 2015 and since then the world markets have entered a new segment of monetary policy, the exceptional one, implemented by almost all central banks in the world after the financial crisis from the previous decade.

The question is whether this new growing progress will restrain the slow economic recovery. Financial and economic subjects become dependent on easy money and it is uncertain whether they can accommodate higher rates, so that is why all onlookers are trying to figure out what might happen by the end of the year.

There are many markets in the world, and it is especially the case in Europe, where central banks are going in the reverse trend, launching for the first time a negative interest rate policy.

Gradually declining interest rates took another aspect and have shown that it allows many countries to decrease their indebtedness in a sense that the free liquidity provided to banks is a subject of their governments. In the case of the European Central Bank the thing is only to inject money into the financial system that will be more considerate towards indebted countries and it might be perceived as a clear path.

Many national central banks, while increasing their balance sheets by buying bank debt less highly rated, flooded the financial institutions with free money, but those are in distracted seek for yields and this is the point of entering the danger zone of having investments where nominal yield does not effectively reimburse the risk of collapse.

This is actually the scheme that would never have been traded in a financial system price close to their historical average, while the cash ready to be invested since many hope that it will increase growth. However, the amount compensated is not enough to eliminate the probability of breakdown of these kinds of funds.

Besides that, this was done with the expectation that banks will offer money at lower rates for at least one whole year and since in this case the interest rate is around zero it gives some of the returns it has created after being loaned to others, who paid an interest rate to some extent higher to have an access to that money, so the bank made different type of income.

The ordinary interest rate is one that reveals the intercession among the current and the upcoming, while there is an expectation of future prosperity, so this is particularly the reason why interest rates are the highest in the poorest countries, since the loss of time is negligible. On the other side, the rate of financial interest that directly or indirectly secured the guidelines of central bankers is the price of accessible money in a specified time and therefore, whichever dissimilarity to one of these two situations is noticed, it actually represents the cause of a crisis where the money is being offered without respecting economic rules.

The situation with negative interest rates is when one gives money to the bank to deposit their capital, which, actually, becomes a price, instead of a return and during times such as these when banks put off usual savings, since keeping them does not show any sign of  gain at all. It instead becomes much more striking to borrow, because the amount one has to pay is lower than that which one loaned.

In this situation, for a trader, an additional approach to discover yields is by taking on speculative dealings and transactions related to oil, gold etc. However, the situation of having zero or negative rates has bad impact on the worth of the investment in general and endorses negative rates on savings without performance. The fact is that the risk in banking balance sheets is too high and the price of their loss will be paid by the investors, regardless how risk-averse they are.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

1. There’s No Way to Be an Optimist while Zero Rates Appear

The whole atmosphere on global market, reactions of many subjects and the behavior of large majority show us that the world has mostly forgotten the 2008 and its crisis. The thing is that the new crisis threatens the world market again and that the indicators to confirm this are everywhere, but many subjects (pretend that they) do not see it.

The oil price fell below 30 dollars at the beginning of 2016. This decline has resulted in series of very pessimistic economic and financial forecasts in global media, while the mainstream ones welcomed the gain for the consumer, putting the impact on the global economy in the other plan. Therefore, many producers will be destabilized countries, such as Russia, Venezuela, Nigeria and Iran, though the connotation is that the destabilization of many vital countries can only upset the world economy.

At the same time on the other side of the financial world, the Bank of Japan announced that it has joined other central banks that introduced negative rates. The measure was proposed to restore lending by cheering banks not to leave their reserves inactive, as well as to reduce the savings rate in the population served, and consequently encourage them to consume. This distracted move by the Bank of Japan made many banks in that country to withdraw their mass of liquidity and retain their cash, causing a shortage of security.

If throughout the first two months of 2016 the correlation between the stock market and oil could put forward that the latter was leading the first, the recent turn down has been intensified by banking stocks in Europe and the United States. This is not encouraging because the reasons for such assurance are not well recognized. The boost in defaults from the energy sector, recession, flat yield curve for long are just a part of it.

The problem with the whole chaos is that many ignore the mixed impact of zero rates and the decline of the oil price on the global economy. When the IPO of Saudi oil giant Aramco has been announced, traders supposed that the company could increase oil stocks to continue the war on oil prices. It was also at that moment that we saw a lot of offers to withdraw. If the price of oil comes down to break the entry of 30 dollars, this could guide to some sales drop and it would become a real trouble.

On the other hand, wherever we look we see the indicators and the statements that th Quantitative Easings program of the ECB led to another situation that has been seen in 2008 already, but has been forgotten rooted in the thick haze of high stock prices, effects of switches increasingly strong and derivatives ever more bright. In all this confusion of financial innovation, the difficulty for banks, governments, investors and media is that the roots of the malevolence, which consists of indebtedness, inconsistency and unsuitable economic doctrines had still not been eliminated, and, especially since their income depended straight on their ability to delight, do not understand.

When the whole economy is flooded by inflationary cuts of the central banks, which offset deflationary barely pushed more and more violent and when, at the same time, figures related to bank ratios, unemployment, growth are more than just problematic, the reality is complex and hard. This decline has its exact equivalent in upbeat economies of the world, since the summation is lacking in one benefits the other. This should relieve us and possibly offer some aid to the populations concerned, although in this area it suspiciously fault in guaranteeing that the money is not abstracted.

The other complex reason to regret the oil price drop is that it will make easy the consumption and delay its replacement with carbon-free energy sources, but there is firstly a possibility of a carbon tax directly or indirectly through a better controlled than that market failing in Europe. Furthermore, away from this technical key, there is the need for some independence towards the producer countries, at least to keep away from some begging and there is hope that this require will play for real green ecological solutions.

However, the policy of negative rates of central banks aims to persuade banks to lend and thus encourage movement of negatively paying their reserves. The risk is that, at the low enthusiasm of borrowers and risks of default increase, banks choose to make them stand the cost of negative rates by increasing lending rates. For the moment, this risk does not appear in Europe since borrowing rates started to have a tendency of falling.

From a certain position we may have already reached, banks will no longer be capable to boost credit volume to pay off for losses from their central bank. This might explain the collapse of the banking sector traded. The law of unintentional consequences has hit again, though it was quite easy to predict what would be the behavioral reaction of Japanese introduction of negative rates.

Besides that, the banks have to lend long-standing at lower rates than their historical average, but the risk of an increase in these rates around these averages is far from zero. Their long receivables therefore lose much worth if rates rise towards these historical averages for some reason, and we could go through the months or years ahead to generate a banking crisis similar to the 2008 crisis.

To conclude, too low rate setting degrades the quality of the overall asset and promotes negative rates on investments without performance, including the deflationary effect is unfortunately counterbalance by money creation desperately coordinated by central banks.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

Introduction to “Dividing by Zero”

Although created as an alternative to the current financial system, which is characterized by an extremely high degree of institutional control of market processes, bitcoin has many elements of those approaches advocated by the leading proponents of libertarianism, as its way to the broader representation in the daily operations is more difficult, but not impossible.

Growing number of irregularities that occur on the global market, such as currency wars, illogical implementation of zero rate policies and expensive QE programs are another reason for growing trust in bitcoin, since it is not a subject to control of any single institution, having in mind that the level of its demand is the key factor that determines its price.

This research stems from the nature of bitcoin and blockchain platform, which establishes the basis the future of the global financial system, since a growing number of major banks around the world intends to adopt its principles and let them use this type of technology in their operations. Blockchain has proven to be an innovative, fast and reliable channel for the transfer of funds from a much smaller transaction costs compared to what current systems allow, for which financial institutions have shown interest in this model.

Cryptocurrencies, as key financial and technological phenomenon of today, allow the anonymity of transactions, as well as the possibility to make a profit from a change of their values. Since 2013, when the bitcoin become a subject to trade of a large number of participants, created a need to explain its functioning, and all information further contributed in eliminating ambiguities related to them.

The aim of this research is to analyze the possibility of using base which the bitcoin and platform blockchain provide for the creation of future cryptocurrencies and platforms, defining electronic money as a means of payment based on the properties of the physical currencies. The main tasks of this research are the analysis of the origin, essence and role of cryptocurrencies in the modern financial and technological world. The study of the phenomenon of digital money points to the growing need of financial institutions to eliminate the resistance that upon occurrence of cryptocurrencies that are manifested towards this phenomenon, as well as to see the possibilities of their application.

This publication offers the definition of the basic properties cryptocurrencies, their development with an emphasis on bitcoin, as well as its role in the money market. It also shows that the fact that the bitcoin users are directly guided by their confidence, which is the main reason for its success, since it offered the system that guarantees the reliability of transactions and the possibility of their implementation in the short term.

Katalonija ima resurse, ali i dio španskog duga

Građani Katalonije, najprosperitetnije od 17 španskih regija, glasaju danas na referendumu o nezavisnosti, gdje bi se pozitivan ishod u najvećoj mjeri mogao odraziti na ekonomske prilike nikad od krize oporavljene kraljevine i iz nje proistekle nove republike.

U nizu uzroka katalonskog separatizma posljednjih godina se, uprkos onima o kojima se nekad govorilo kao o tradicionalnim mimoilaženjima, izdavaja ekonomska neuravnoteženost između oblasti koja je pojedinačno snažnija od većine evropskih država i ostatka Španije, čiji je povratak na put rasta spor i isprekidan.

Snaga katalonske ekonomije daje toj regiji status lokomotive španskog rasta, a da je samostalna država, po broju stanovnika i obimu privrede mogla bi se uporediti sa Danskom, iako u privrednoj strukturi dohotku postoje značajne razlike. Katalonija ostvariuje više od trećine ukupnog španskog izvoza, a po gotovo svim ekonomskim parametrima koji su u Španiji ispod evropskog prosjeka, u Kataloniji su iznad, čak u rangu najrazvijenijih EU zemalja.

Startapovi, gejming, moda i fudbal

Barselona je godinama unazad u vrhu liste najatratkivnijih turističkih destinacija na svijetu, prihodi rapidno rastu u svim djelatnostima vezanim za turizam, a prati ih porast broja radnih mjesta, no, iako je u pitanju strateška, riječ je ipak samo o jednoj privrednoj grani u kojima je Katalonija izuzetno uspješna.

Među stanovništvom, u kojem je trećina visokoobrazovana, postoji izuzetno visok nivo svijesti o značaju razvoja preduzetništva. Industrijska proizvodnja Katalonije godinama unazad je iznad evropskog prosjeka, a industrijski se, poput uslužnog sektora, posebno orijentiše na izvoz. Poseban doprinos spoljnotrgovinskom bilansu ove regije daje tehnološki sektor, čiji izvoz proizvoda i usluga eksponencijalno raste, a čemu posebno doprinosi Svjetski moblini kongres MWC u Barseloni, koji je generator desetina hiljada radnih mjesta. Katalonska prijestonica smatra se jednom od najboljih lokacija za razvoj startapova čija ukupna snaga premašuje privrede nekih malih evropskih država, svrstavši se na peto mjesto u Evropi, odmah nakon Londona, Pariza, Berlina i Amsterdama. Poseban potencijal prepoznat je u razvoju video-igara, budući da u ovoj regiji postoji više od 100 kompanija koje posluju u gejmerskoj industriji, zbog čega je ova oblast magnet za investitore. Barselona se upravo zbog ovakve otvorenosti za inovacije smatra jednim od najboljih tehnoloških ekosistema u svijetu.

Industrija u Kataloniji premašuje petinu ukupne privrede, s posebnim fokusom na inžinjering, elektroniku, hemijsku i tekstilnu industriju. Svako četvrto špansko vozilo proizvedeno je u Kataloniji, a u sistemu automobilske industrije, koji obuhvata sve faze od proizviodnje, distribucije i popravke vozila, posluje 10.600 kompanija, gdje se posebno izdvaja Seat koji izvozi automobile na tržišta 75 zemalja.

Katalonija takođe ima i izuzetno jaku i konkurentnu tekstilnu industriju, prije svega proizvodnju odjeće, u kojoj je naprepoznatljiviji Desigual, ali i Mango, a koja na globalnom tržištu ostvaruje odlične rezultate zahvaljujući dobro razvijenom sistemu od nabavke do distribucije i mogućnost angažovanja domaće radne snage. Razvoj u ovoj oblasti dodatno unapređuje spoj sa inovativnim tehnološkim rješenjima, primjenom savremenih rješenja u dizajnu, kao i činjenica da se kreativci iz cijele Evrope interesuju da se upravo u Barseloni školuju, zbog čega ovaj grad iz godine u godinu postaje sve značajnije mjesto na svjetskoj mapi vizuelnih umjetnosti i mode.

U priči o Kataloniji nezamislivo bi bilo ne spomenuti FC Barcelonu, jer brojke koje djeluju više nego impresivno u svijetu fudbala i te kako stvaraju korist i za katalonsku ekonomiju. Ukupnom bruto domaćem proizvodu Španije FC Barcelona doprinosi čak 1,5 odsto.

Problem članstva u EU

Priča o prednosti nezavisnosti Katalonije se zbog svih oblasti u kojima je premašena španska dinamika rasta svodi na zaključke da bi ona samostalno mogla funkcionisati sa još većim šansama za razvoj. Međutim, neophodno je imati na umu činjenicu da razdvajanjem od Španije Katalonija po automatizmu prestaje da bude članica Evropske unije. Odgovor na pitanje da li dio teritorije koji istupa iz postojeće članice EU postaje nova članica ili ona koja u pregovarački proces tek treba da uđe dat je 2014. za vrijeme održavanja škotskog referenduma.

Dva člana Ugovora o EU, član 48 i član 49, na osnovu čijih tumačenja se često izvodio zaključak da su kontradiktorni, otvarala su pitanje mogućnosti pregovara za učlanjenje iznutra. Članom 48 omogućeno je da pravila EU mijenjaju postojeće članice kroz rad Evropskog parlamenta i Evropske komisije tako što upućuju predlog Evropskom savjetu i ako se, nakon konsultacija sa vrhovnim institucijama, odluči prostom većinom, razmatraju se predloženi amandmani, koji se potom prenose konvenciji sačinjenoj od predstavnika članica i EK. Članom 49 predviđeno je da zemlja kandidat treba da podnese zahtjev Evropskom savjetu, a da o tome obavijesti nacionalni i Evropski parlament. Prema članu 49 bi trebalo da budu dogovoreni i novi uslovi i naknadne korekcije ugovora između država članica i države podnosioca zahtjeva.

Budući da je članom 48 predviđen pravni put pojednostavljenja procese tranzcije, dopuštajući ugovorima EU dopunjavanje u običnom postupku revizije, moglo bi se konstatovati nepostojanje odredbe ugovora koji bi zahtijevao od Katalonije da po izglasavanju nezavisnosti napusti EU. Tako posmatrano bi se međutim, pravnim osnovom za učlanjenje u EU mogao smatrati i isključivo član 49 ugovora o EU. Postoji izizetno mala vjerovatnoća da bi se članice EU, od kojih bi se očekivalo da se usaglase o upotrebi člana 48 konsenzusom, kao i EK ili EP, koje je u ovom procesu neophodno konsultovati, mogle usaglasiti sa članom 48, s obzirom na to da član 49 izričito predviđa proceduru za učlanjenje u EU.

Ovo znači da bi drugo, pa i pravno mnogo jednostavnije rješenje, mogao biti uobičajen postupak proširenja EU, prije svega jer je cilj koji bi se sprovodio po članu 49 bilo utvrđivanje da zemlja koja podnosi zahtjev ispunjava obaveze proistekle iz evropskog prava, dok je sa druge strane član 48 sredstvo mijenjanja pravnog odnosa među članicama EU.

Raspodjela španskog duga

Procedura iščlanjenja i eventualnog ponovnog učlanjenja bila bi duga i skupa toliko da katalonska ekonomija ne bi mogla da je izdrži u postojećim okvirima, a da njen BDP ne opadne barem za petinu, s obzirom na posljedice koje bi nastale prije svega iz formalnog izopštavanja iz sistema eurozone, čak i u slučaju da se Kataloniji odobri da, makar privremeno, zadrži euro kao sredstvo plaćanja. Veliki gubici nastali bi prije svega jer bi čak 75 odsto ukupne proizvodnje postalo podložno evropskim tarifama. Ovakvo stanje na tržištu prisilio bi i veliki rboj banaka da posluju u potpuno drugačijim uslovima, budući da bi kreditna sposobnost i građana i privrede značajno opala kao posljedica nedovoljne likvidnosti zbog smanjene dostupnosti tržišta na kojima unutar EU nije bilo barijera. Ovakva klima destimulativno bi djelovala na investitore, pa bi nivo ulaganja mogao čak i da se prepolovi, jer niko od onih ko je Barselonu kao privredni centar doživljavao mjestom za relativno brzo umnožavanje kapitala više ne bi imao takvu percepciju. Mnoge banke koje posluju u Barseloni već su razmatrale troškove preseljenja u Madrid u slučaju da nezavisnost bude izglasana.

Konkretan razlog da se protive izglasavanju nezavisnosti imaju prije svega izvozno orijentisane kompanije kojima bi ovim bila nametnuta obaveza plaćanja carina kojih su unutar EU oslobođene, a izvoz na tržišta zemalja članica iznosi oko 70 odsto. Takođe, katalonski poslodavci bi se nerado odvikli gubitka jedinstvenog evropskog tržišta radne snage koje broji skoro pola milijarde ljudi, budući da unutar nešto više od sedam miliona stanovnika Katalonije ne mogu naći sve ono što njihova dinamična privreda traži.

Pitanje koje takođe ostaje otvoreno je i kako bi se španski dug prenio na Kataloniju, budući da je riječ o problemu od kojeg se Španija teže oporavlja u odnosu na većinu zemalja, jer je u prosjeku svaki stanovnik Španije dužan 22.857 eura. Udio katalonskog u španskom BDP-u je 19 odsto i shodno tome dug bi se mogao dijeliti proporcionalno, no udio ukupnog duga u odnosu na španski BDP je 106,8 odsto, što znači da proporcionalno preračunavanje ovdje ne bi imalo smisla.  Druga mogućnost je da se dug podijeli proporcionalno broju stanovnika, pri čemu bi, shodno činjenici da je udio katalonskog stanovništva u Španiji 16 odsto, ta opcija bila nešto povoljnija za Katalonce. Najpovoljnija za Kataloniju bila bi opcija po kojoj bi joj pripalo 11 odsto duga, ukoliko bi se od dijelio proporcionalno sa tekućim troškovima koje regioni imaju, no to bi dovelo do potpune neodrživosti refinansiranja ostatka španskog duga i gotovo da ne postoji vjerovatnoća za takav scenario o postizanju sporazuma o prenosu duga, budući da bi udio duga u Španskom BDP-u dostigao čak 125 odsto.

Odlazak najprosperitetnijeg regiona stvorio bi Španiji ogromne probleme, a samostalna Katalonija, opterećena svim novim nametima svakako ne bi funkcionisala na način na koji je to do sada slučaj. Postojanje unutar Španije za Barselonu je ograničavajuća okolnost, jer sa drugim regionima dijeli sve one probleme koji u drugim dijelovima zemlje nastaju zbog nedostatka inventivnosti, nezainteresovanosti investitora i prekomjernog zaduživanja, međutim, problem Katalonije ovdje ne nastaje zbog mogućeg prekida veza sa Madridom, već sa tržišnim prednostima koje joj omogućava članstvo u EU.

For Honor: Vještačku inteligenciju koristiti za vježbu

Ubisoftova igra sa srednjevjekovnim motivima i likovima For Honor od srijede je dostupna za PC, PlayStation i Xbox One i to u multiplayer, ali i verzijama za jednog ili dvoje igrača, što autor i preporučuje, prije svega u online co-op varijanti, a podijeljena je na tri poglavlja, od kojih svako prati heroja jedne frakcije.

Francuski gejmerski studio naglasio je da je beta verziju testiralo čak šest miliona igrača, koji su u igri proveli više od dvije milijarde minuta. Samo PC beta verziju igralo je 1,8 miliona gejmera, što je za Ubisoft rekordna brojka svih vremena.

Budući da će se igra dopunjavati, gejmerima je ponuđena sezonska propusnica za igre koja se može kupiti uz For Honor ili kao Gold Edition.


Igra sa srednjevjekovnim ratnicima na prvi pogled djeluje veoma jednostavno, no karakteriše je veoma složena kombinacija lakih i teških napada, odbrana, trikova, dugih i kratkih faza oporavka, iznenađenja, trovanja i jezivih pogubljenja. Animacije su bogate i odlično izvedene, zvukovi postojani, što igri daje gotovo stvaran ambijent. Razlog su zbog kojeg igra nosi oznaku 18+ upravo su brutalne scene borbe koje su izuzeto realistično prikazane.

Scena borbe u veoma malom broju slučajeva može biti završena bez odrubljene glave onoga ko izgubi bitku, a kako bi igrač spriječio da upravo on bude ovako poražen ponuđeno mu je mnoštvo opcija i režima igre u svakoj klasi. Prije početka igre moguće je pogledati tutorijale za početnički i napredni nivo, kao i mogućnost vježbanja uz elemente vještaćke inteligencije.


Kroz svaki mod u For Honoru igrač se bori protiv vještačke inteligencije. Igra protiv AI sistema može biti veoma dinamična, no nesumnjivo je bolje i donosi dodatna iznenađenja kada se igra protiv drugog protivnika online, što igrača tjera da koristi više dostupnih opcija i da dublje zaroni u sistem borbe koji se ne svodi samo na naizmjenične napade i odbranu.

Napredna borilačka taktika uključuje trikove pomoću kojih je moguće početi napad, a potom ga obustaviti. U ovakvoj situaciji protivnik koji uoči da je strijela bačena na jednu stranu kako kojoj se on kreće da je odbije može biti zavaran, a oružje može biti usmjereno na onu stranu na koju ne očekuje. Da bi se ostvario uspjeh zahvaljujući nespremnosti protivnika potrebna je određena količina vježbe, no kada se ova taktika razradi zavaravanje protivnika postaje više nego zabavno, dok će on teško moći razlikovati stvarni napad od lažnog.

Nivoi i napadi

Igru dodatno bogatijom čine različiti nivoi izdržljivosti, pariranja, prekida stražarenja i specifičnih poteza od kojih dalje zavisi opasna igra na ivicama litica i mostova.

Napadi se najčešće odvijaju bez prekida dok se izdržljivost igrača ne smanji, nakon čega postaju spori i otežani, što protivnik može veoma jednostavno da okrene u svoju korist. Manje vještog protivnika takođe je, osim lažnim napadima, moguće zavarati i mijenjanjem intenziteta i vrste borbe.

Da bi se ovo prelaženje s različitih stilova napada i nivoa energije usvojilo tako da za protivnika bude potpuno iznenađenje potrebni su vrijeme, posvećenost i strpljenje koje, svakako, nije karakteristika onih gejmera koji žele impresivne rezultate za kratko vrijeme, zbog čega i ovdje postoje velike razlike u dostignućima onih koji igru žele da imaju samo na listi gejmerskih iskustava i onih koji temeljno proprate svaku ponuđenu opciju.

Režimi igre

For Honor nije igra koju je moguće igrati kratko, jer da bi se ostvarili bolji rezultati potrebno je navići se na napredne režime igre. Jedan od moćnijih upravo je Revenge Mode, koji je takođe i moćno sredstvo praćenja pojačanja napada i njihovog održavanja neprekidnim, zahvaljujući kojih dok god ima izdržljivosti igrač neće biti oboren.

Opcija Guard Break omogućava a se sačeka protivnik i priredi mu se iznenadni napad, a ukoliko on dva puta zaredom odabere blok opciju biće ga mnogo jednostavnije pobijediti, ostavljajući ga bez mogućnosti igranja u istom režimu.

Mogućnost korišćenja vještačke inteligencije je dostupna svima tokom vježbe, no oni koji je preskoče otkriće koji sve teži načini postoje da unaprijede svog učesnika u borbi. Stoga ne treba da iznenadi ako već na početku budete bačeni s litice.

Jedno veoma važno sredstvo u borbi je čelik, kojeg je besmisleno tek tako trošiti mijenjajući ga za dodatne ponuđene stavke u igri. Nivo čelika obračunava se nakon postignutih ciljeva i završenih borbi, dok drugi elementi na koje se on, kao valuta trgovine tokom igre može trošiti, imaju značaj tek u kasnijim fazama igre, zbog čega se preporučuje da razmjena ne počne prerano.

Kako do igre

For Honor, koji je u prodaji od srijede, na Steamu je moguće kupiti po cijeni od 59,99 eura za osnovni do 99,99 eura za Gold Edition. Za ou igru Ubisoft je naveo koji su minimalni i preporučeni hardverski zahtjevi.


(rezolucija 720p, 30FPS)

OS: Windows 7, Windows 8.1, Windows 10 (samo 64-bit)

CPU: Intel Core i3-550 | AMD Phenom II X4 955 ili sličan odgovarajući

GPU: NVIDIA GeForce GTX660/GTX750ti/GTX950/GTX1050 s 2GB VRAM ili više | AMD Radeon HD6970/HD7870/R9 270/R9 370/RX460 s 2GB VRAM ili više



(rezolucija 1080p, 60FPS)

OS: Windows 7, Windows 8.1, Windows 10 (samo 64-bit)

CPU: Intel Core i5-2500K | AMD FX-6350 ili sličan odgovarajući

GPU: NVIDIA GeForce GTX680/GTX760/GTX970/GTX1060 s 2GB VRAM ili više | AMD Radeon R9 280X/R9 380/RX470 s 2GB VRAM ili više


iPhone 8 – šta očekujemo od “decenijske verzije”

Zaobljeni, fleksibilni ekran poboljšanog osvjetljenja, oko kojeg se neće vidjeti okvir, kućište izrađeno od nerđajućeg čelika, napredni laserski i infracrveni senzori za prepoznavanje crta lica i gestikulacije, veća osjetljivost ekrana na različite nivoe pritiska uz Touch ID, A11 čipset i veća otpornost na vodu i prašinu samo su neke od karakteristika koje će, upotpunjen novom iOS verzijom, donijeti iPhone 8, kojeg željno čekaju oni koji nastoje da ostanu vjerni najvrednijem IT brendu, ali ga već neko vrijeme doživljavaju manje inovativnim.

Način na koji kompanija Apple nastavlja lansiranje niza smartfona već odavno pokazuje da se svake druge godine uređaj donosi veliku promjenu. Ipak, nakon što je dizajn značajno promijenjen na prelasku sa iPhonea 5s na iPhone 6, od izlaska “šestice” nije bilo radikalnih zaokreta, čak ni na prelasku sa verzije 6s na “sedmicu”, zbog čega su čak i mnogi vjerni korisnici odlučili da sačekaju iPhone 8.

Decenijski model

Za razliku od “sedmice”, uoči čijeg predstavljanja ni najbolje upućeni Appleovi izvori nisu mogli da plasiraju naročito zanimljive glasine, vrijeme do predstavljanja “osmice” ispunjava mnoštvo prognoza i najava. Razlog više je što će se iPhone 8 pojaviti u godini kada Apple obilježava deceniju od predstavljanja prvog iPhonea, koje se dogodilo 9. januara 2007. godine.

Standardni i Plus modeli karakteristika su triju posljednjih generacija za mnoge najmoćnijeg smartfona na svijetu, najveća unapređenja proteklih godina napravljena su u 3D Touch tehnologiji i kameri, no od “osmice” se očekuje mnogo više. Aktivnosti vezane za dolazeći model počele su krajem prošle godine u Izraelu, odakle je Apple krenuo u jedan od do sada najvažnijih poduhvata.

Glasine i potvrde

Da bi iPhone 8 trebalo da donese mnogo veće promjene potvrdile su još krajem prošle godine prve glasine prema kojima bi na njemu trebalo da se pojavi Touch ID nove generacije. Nedavno je to izjavio i Timoti Arkuri iz kompanije Cowen and Company koja analizira tržišna kretanja u fintech oblasti. Uređaji koje Apple bude predstavio ove godine će, prema Arkurijevim riječima, imati novi Touch ID koji će biti integrisan u ekran, a ne samo u Home taster, kao i da će postojati opcija detekcije lica.

Slična očekivanja upravo je iznio i jedan od globalno najbolje upućenih izvora u Appleove aktivnosti Ming-Či Kuo iz analitičke kuće KGI Securities, koji, međutim, ističe da bi se novi senzor mogao pojaviti ispod displeja. Ukoliko se ovo obistini, biće potvrđene i glasine da Apple na “osmici” odbacuje Home taster, a razlog više da u to vjerujemo je slična tehnologija koju smo vidjeli na najnovijoj liniji MacBook računara.

Prepoznavanje lica

Glasina o opcijama detekcije lica i gestikulacije bilo je i ranije, a tehnološkim forumima su se od izvora koji doslovno nepogrešivo saopštavaju novosti o onome što Apple priprema ponovo pojavile najave da bi za ovu funkciju trebalo da budu upotrijebljeni laserski i infracrveni senzori, koji bi bili smješteni pored prednje kamere.

Opcija prepoznavanja lica prvi put je naišla na oštre kritike još kada je kartična kompanija Mastercard prošle godine najavila da bi mogla da je koristi kao način potvrde identiteta vlasnika platne kartice, budući da su najnepovjerljiviji isticali kako bi se pomoću ove opcije autentifikacija mogla obaviti pomoću fotografije. Upravo zbog toga što će ovu opciju, po svemu sudeći, Apple omogućiti na novom uređaju, postojaće i alternative, ali i mogućnost kombinovanja više faktora, pa će se najbolje zaštititi oni koji budu kombinovali prepoznavanje crta lica i otiska prsta. Senzor otiska prsta za ovakav model u partnerstvu sa Appleom na tržištu danas bi jedino mogla da kreira kompanija Synaptec.

Bez Home tastera

Sve ovo poklapa se sa dosadašnjim glasinama da će Apple na dolazećim modelima napustiti Home taster, budući da se očekuje da kapacitivni senzor bude zamijenjen optičkim. Ipak, riječ je o načinu proizvodnje koji je kompleksniji od bilo čega do sada, pa su se već javile i prve sumnje da to možda i neće biti izvodljivo ove godine.

Ono što je svakako moguće očekivati je veliko unapređenje postojećeg 3D Touch sistema, kojem bi trebalo da ponudi bolju responzivnost i mogućnost prepoznavanja dodatnih nivoa pritiska po ekranu.

OLED ekran

Tehnološkim kuloarima kruže i priče da bi “osmica” mogla da ima fleksibilniji OLED (organic light-emitting diode) ekran sa zaobljenim ivicama koji bi se sa strana mogao pomjerati reagujući na pritisak. Ovo, međutim, ne bi bilo moguće ukomponovati sa postojećim 3D Touch rješenjem koje funkcioniše kod ravne površine za 96 senzora smještenih između površinskog stakla i ekrana. Upravo ovo bi trebalo da bude razlog zbog kojeg iPhone 8 mogao da ima senzor poput filma koji bi omogućavao mnogo responzivniji ekran od sadašnjeg.

Za realizaciju ovakvog rješenja potrebno je osigurati strukturalni integritet, ali i spriječiti da se OLED deformiše, zbog čega bi čitavo kućište “osmice” trebalo da bude ojačano na mjestima gdje postoji opasnost od savijanja. Prednosti OLED ekrana već su nešto što je na tržištu prepoznato kao tražena karakteristika smartfona, jer nude bolju osvijetljenost i bogatiji prikaz boja, a ne zauzimaju previše prostora, pa uređaji u koje su ugrađeni mogu biti prilično tanki. Od informacija od izvora koji su do sada nepogrešivo izvještavali o Appleovim proizvodnim procesima do sada smo mogli saznati da su dobavljači komponenti obezbijedili veću količinu OLED panela namijenjenu upravo za iPhone 8 čija proizvodnja počinje.

Sasvim drugačiji izgled

Sve ovo najavljuje mogućnost velikog redizajna, što Apple fanovi željno očekuju, jer gledati slično vizuelno rješenje četvrti put zaredom i sa najmoćnijim novitetima ipak ne bi bilo toliko impresivno. Među mogućnostima koje “osmici” može da ponudi ovakav ekran je i ta da ona bude bez okvira koji sada vidimo.

Dijagonala osnovnog modela uređaja trebalo bi, prema najnovijim podacima koje su saopštili izvori upoćeni u proizvodnju, da bude 5,8 inča, nešto više od aktuelnih 4,7 inča, dok su se, međutim, ranije mogle čuti glasine da bi aktivna površina ekrana “osmice” trebalo da bude 5,2 inča. Stakleni panel trebalo bi da ima integrisanu slušalicu, kao i senzore za Face Time i Touch ID.

Kada je riječ o onome što će se naći unutar kućišta, najviše pažnje stručne javnosti zaokuplja čipset A11 koji bi trebalo da se pojavi u “osmici”.

Veća otpornost na vodu

Ono po čemu bi iPhone 8 mogao da bude napredniji od prethodnika je i poboljšana zaštita od vode i prašine. Poređenja radi, aktuelni iPhone 7 se zbog činjenice da nema audio jack, ali da ima fizičke tastere i slot za nano SIM karticu nalazi na nivou IP67 kada je riječ o mogućnosti zaštite od vode koja može naštetiti uređaju. Očekuje se da bi ovogodišnji model mogao biti sertifikovan na nivou IP68, što bi značilo da čak pola sata može da bude pod vodom na dubini od metar i po, što sada mogu jedino Samsungovi Galaxy S7 i S7 Edge uređaji.

No otvori nisu jedino što je potrebno da uređaj bude otporniji na vodu, pa bi jedna velika promjena u odnosu na prethodnike mogla biti izrada “osmice” od nerđajućeg čelika. Za realizaciju ovog plana pored tajvanskog giganta, kompanije Foxconn koja godinama unazad proizvodi sve ono što iPhoneu daje cjelinu, angažovana i američka kompanija Jabil, koja je takođe bila partner prilikom izrade iPhonea 4. Da, “četvorka” nam je najvjerovatnije i bila prva asocijacija na čelično kućište, no više sofisticiranosti na “osmici” postići će se i pomoću tehnologije kovanja koja to čini uz znatnu uštedu vremena i viši nivo stabilnosti u odnosu na ono što se odvijalo 2010. godine.

Kompanija iz Kupertina, po svemu sudeći, želi da deceniju svog najpopularnijeg proizvoda obilježi na način na koji svakako želi da vrati povjerenje čak i onih koji su se zbog “sedmice”, ili, tačnije, odsustva audio priključka, razločarali. Pojedine tehnologije koje očekujemo na “osmici” već smo vidjeli kod drugih proizvođača, no sve na jednom mjestu mogu ih spojiti samo Apple i njegovi partneri. Uz verziju operativnog sistema iOS 11, o kojoj ćemo sve što već znamo takođe uskoro predstaviti, a koja će debitivati na ovogodišnjim modelima novi iPhone biće najpoželjniji uređaj u ovoj godini.

Odakle Kini novac za pokretanje fudbalske revolucije

Traganje vrhunskih sportista za što boljom ponudom kojom bi krunisali karijeru nije nimalo nova pojava, no sve veći broj ugovorenih transfera fudbalera iz evropskih klubova za prelazak u kineske svojevrstan je fenomen. Sjedinjene Američke Države, u kojima fudbal nikada nije bilježio popularnost poput one koju ima u evropskim i južnoameričkim zemljama, bile su važno odredište za, na primjer, Bekenbauera ili Pelea, no trend ipak nije nastavljen. Razlozima se često smatraju relativno slabo interesovanje sponzora za oglašavanje tokom finalnih fudbalskih utakmica u poređenju sa ogromnim novcem koje se izdvaja za NFL ili NBA.

Glasine i transferi

Završnicu prošle godine obilježilo je nekoliko iznenađujućih najava transfera igrača u Kinu i to ne onih čija karijera je na zalasku, a ono što privlači najviše pažnje su ogromne sume koje se pominju kao ključni razlog kojim se igrači pokušavaju privući. Iznosi su toliko visoki da mnoge igrače stavljaju pred dilemu – nastaviti karijeru u tradicionalno fudbalskim zemljama ili otići i zaraditi mnogo novca tamo gdje ovaj sport tek pokušava da se približi široj publici.

Evropski mediji su prvobitne glasine da Oskar dos Santos Emboaba Žunior napušta Chelsea i odlazi u Kinu početkom prošlog mjeseca prenosili uglavnom uz znak pitanja, pokušavajući da protumače da li zaista novac koji je, kako su mnogi komentarisali “skoro nemoguće potrošiti” može nekoga kome je 25 godina navesti da se odrekne igre u Premijer ligi. Nakon što je potvrđena ova, kao i vijest da 26-godišnji Aleks Teišeira iz Shakhtyora, za kojeg se Liverpool nije uspio izboriti takođe odlazi u Kinu, britanski mediji bili su preplavljeni pitanjem “ko je sljedeći”, licitirajući imenima najvećih fudbalskih zvijezda.

Kineski klubovi

Imena klubova kao što su Guangzhou Evergrande Taobao, Shanghai SIPG, Shanghai Shenhua i Jiangsu Suning prije nekoliko godina nisu bila poznata ni boljim poznavaocima ovog sporta u zemljama gdje se on tradicionalno igra i prati, no do danas je za njih čula cijela planeta, jer se pominju u vijestima koje posljednjih mjeseci najviše iznenađuju javnost.

Najuspješniji od njih je Guangzhou Evergrande Taobao, petostruki pobjednik CSL, koji je dijelom u vlasništvu jednog od najmoćnijih kineskih preduzetnika svih vremena i drugog najbogatijeg Kineza današnjice, vlasnika kompanije Alibaba, Džeka Ma. Magazin Forbes procjenjuje da je vrijednost kluba više od 285 miliona dolara. Poređenja radi, Real Madrid procijenjen je na 3,6 milijarde dolara, Barcelona na 3,5 te Manchester United na 3,3 milijarde dolara, zbog čega je klub u koji tek odnedavno dolaze poznata imena uz ovu vrijednost mamac za sve sa fudbalom povezane biznise.

Fudbalsko tržište

Fudbalsko tržište i broj ljubitelja ovog sporta u Kini posljednjih godina eksponencijalno rastu. Utakmice na stadionima prati u prosjeku 24.000 navijača, čime  Kina prednjači u odnosu na ostale azijske zemlje. Novac koji je počeo da se okreće u Kineskoj super ligi (CSL) je ogroman, budući da je tokom 2016. samo od prava prenosa, ne računajući oglašivače, prihodovano 1,26 milijardi dolara.

Činjenica da fudbalski agenti žele da na ovaj način zarade na transferima i nije toliko začuđujuća koliko želja mladih evropskih igrača koji se opredjeljuju da karijeru, umjesto u najčuvenijim klubovima na svijetu, razvijaju u Kini gdje se nude zaista veliki honorari, ali gdje je kvalitet fudbala daleko ispod evropskog. Umjesto da pokušaju da makar djelimično objasne ovaj fenomen, evropski sportski listovi i portali radije biraju da ovim igračima dodjeljuju epitete pohlepnih i nedovoljno ambicioznih.

Desetogodišnji nacionalni plan

Sa druge strane, kineski klubovi imaju podršku vlade te zemlje da se za ono što ne mogu da nabave na domaćem tržištu izbore pomoću velikih sredstava. Vizija kineskih vlasti je da zemlju učine fudbalskom supersilom, za šta se posebno zalaže njen predsjednik Sji Đinping. Fudbalska revolucija u Kini počela je 2015. godine kada je predstavljen desetogodišnji nacionalni plan udvostručavanja kineske sportske privrede. Ideja je da do 2025. godine vrijednost fudbalskog tržišta u Kini dostigne vrijednost oko 730 milijardi dolara.

Pored kineske vlade, veliki dio novca koji služi kao podrška kineskoj fudbalskoj revoluciji izdvajaju biznismeni u toj zemlji koji u ovome vide priliku da jačaju političke veze i na taj način izdejstvuju promjene regulative vezane za sektore u kojima posluju, a koje bi im donijele dodatne milijarde.

Namjera je i da se u Kini obuči i usavrši minimum 100.000 igrača koji će donositi visoke prihode lokalnim klubovima, kao i da se otvori 20.000 novih fudbalskih škola. U međuvremenu, plan je da se do 2020. sagradi 70.000 fudbalskih terena. Ambicioznim desetogodišnjim planom obuhvaćena je namjera da se Kina kvalifikuje i postane domaćin Svjetskog prvenstva, a potom i da ga osvoji.

Ova zemlja se, međutim, za sada nalazi na 82. mjestu rang liste koju objavljuje FIFA, između Farskih ostrva i Svetog Kristifora i Nevisa. Iako su pokušali da se kvalifikuju šest puta, do Svjetskog prvenstva stigli su samo 2002. godine, kada im je trener bio Velibor Bora Milutinović, a iz grupne faze izašli su bez postignutih golova.

Reakcije stručne javnosti

Sportska javnost različito tumači kineski plan da unaprijede poziciju i postanu fudbalska nacija koja, da bi proizvela nove generacije igrača za koje želi da budu vrhunski, prvo planira da “uveze” veliki broj profesionalaca. Sa aspekta učinaka skupi transferi su opravdani, jer su strani igrači postigli više od 70 odsto golova tokom protekle sezone, dok se na listi deset najuspješnijih igrača nalazi samo jedan Kinez, dok na listi 20 najskupljih transfera u CSL u prvih 15 mjesta nema nijednog njegovog sunarodnika. Uprkos dostignućima stranaca, dio stručne sportske javnosti tvrdi da udaljavanje od Evrope šteti perspektivi igrača.

Kako bi se situacija ipak držala pod kontrolom kineske vlasti najavile su prošle sedmice da će iznosi koje klubovi izdvajaju za dovođenje stranih igrača ipak biti ograničeni. Odlučna u namjeri da suzbije mogućnost iracionalnog trošenja kineska administracija poručila je da će utvrditi maksimalni iznos zarade i odštete isplaćene fudbalerima, kao i sistem kazni od čije naplate će sredstva biti usmjerena na razvoj mladih igrača. Za učešće u profesionalnim šampionatima osim plasmana od klubova će se tražiti i solventnost, pa će oni sa finansijskim poteškoćama biti povučeni iz takmičenja.

Popularnost i TV prenosi

Popularnost fudbala u Kini ipak raste. Kultura navijanja i atmosfera na stadionima nije ni približna južnoameričkim ili evropskim spektaklima, međutim, televizijsko praćenje utakmica sve je popularnije. Tokom Svjetskog prvenstva 2014. gotovo svi mediji prenijeli su vijest o Kinezu koji je umro od premorenosti uzrokovane budnim praćenjem svih utakmica koje su se igrale u Brazilu, a koje su zbog vremenske razlike u Kini prenošene u kasnim noćnim satima.

Interesovanje gledalaca poseban je fenomen i upravo ona je ključni razlog zbog kojeg se velika ulaganja smatraju opravdanim, jer bi prihodi klubova od televizijskog oglašavanja svake godine u budućnosti mogli iznositi milijarde dolara. Zarada klubova CSL od televizijskog oglašavanja tokom 2016. bila je čak 22 puta veća nego 2015. godine, kada je prihodovano tek devet miliona dolara, naspram prošlogodišnjih 200 miliona. Iznos izgleda zanemarivo naspram oko milijardu i po funti koja svake godine pripadne klubovima Premijer lige, no stopa po kojoj raste i dinamika promjena koje se odvijaju najavljuju da bi po završetku desetogodišnjeg plana zarada mogla biti ogromna.

Šta najavljuje održivost

Mnogi postavljaju pitanje da li je, u finansijskom smislu, kineski fudbal održiv. Odnos biznisa i politike u toj zemlji ne daje nikakav povod za sumnju. Sa više od 250 kineskih multimilijardera baza onih koji su spremni da iz različitih interesa ulažu u novi nacionalni sport izuzetno je stabilna. Takođe, nakon Vladimira PutinaDonalda Trampa i Angele Merkel, kineski predsjednik četvrti je najmoćniji čovjek na planeti, a njegova zemlja tik iza SAD na listi ekonomski najsnažnijih, koja je povremeno sustiže po pojedinim parametrima.

Mišljenja o tome kakva situacija u kineskom fudbalu se očekuje nakon desetogodišnjeg nacionalnog plana i dalje su podijeljena, jer veliki novac ipak ne garantuje da će čak i uz potpunu popularizaciju ovog sporta biti stvorena nova generacija superuspješnih kineskih fudbalera, iako se zarada ne dovodi u pitanje. Ono u šta, međutim, niko ne sumnja je da će se stvoriti ogromna fudbalska publika, još veći broj oglašivača i nikada veći broj kineskih profesionalnih fudbalskih komentatora.

Kako kreirati Apple ID bez unošenja broja platne kartice

Kod kupovine poklona novi iPhone često se smatra nepogrešivim izborom, pa je vrijeme darivanja mnogima donijelo prvi iUređaj koji tek treba da aktiviraju. U standardnim uputstvima za kreiranje naloga za korišćenje Appleovih smartfona uvijek se navodi da je među ličnim podacima potrebno unijeti i broj kreditne kartice, no to ne mora biti prepreka. Apple ID je takođe moguće napraviti i iz zemalja kojih nema na spisku ponuđenih, poput Crne Gore, Srbije ili BiH.


Kreiranje novog naloga najjednostavnije je preko Windows ili Mac računara, a dovoljno je preuzeti iTunes softver sa www.apple.com/itunes/ adrese i pokrenuti ga klikom na opciju iTunes Store, koja se nalazi u gornjem desnom uglu.

Učitavanje može potrajati i nekoliko minuta, pa ne treba da čudi ukoliko se neko vrijeme ništa na ekranu ne promijeni. Ukoliko se ovo radi sa Mac računara da bi se kreirao novi nalog potrebno je izlogovati se sa onoga koji se koristi za taj MacOS.

Važno je da na uređaju za koji se pravi aktivacija korisnik ne bude logovan pomoću nekog drugog naloga. U suprotnom, uz ovaj ID kreirani su iCloud, Music App i drugi servisi, tako da povratak na početak nije moguć.

U dnu iTunes Store prozora nalazi se opcija pomoću koje se bira zemlja. Iako je moguće odabrati bilo koju zemlju poželjno je, u odsustvu svoje, odabrati neku izuzev SAD, kako prilikom budućih preuzimanja aplikacija ne bi bio zatražen broj kreditne kartice, a kako za različita tržišta pojedine stvari u iTunesu različito funkcionišu, ukoliko iz nekog razloga promijenite zemlju, biće potrebno i unijeti broj kartice.

U iTunesu potrebno je pronaći Apps sekciju, kliknuti na nju, a potom odabrati bilo koju pjesmu, TV show ili e-knjigu koja pored sebe ima oznaku „free“, odnosno „get“. iTunes će nakon toga otvoriti prozor sa pitanjem da li želite da uradite log-in ili da kreirate novi ID. Potrebno je odabrati drugu opciju. Potom treba prihvatiti uslove i pravila korišćenja te unijeti lične podatke koji se traže.

Nakon što se pojavi pitanje o načinu plaćanja, potrebno je odabrati opciju „none“. Ova opcija se neće pokazati ukoliko već imate Apple ID. Apple takođe koristi spam filtere za App Store, pa ako uoči povezanost između informacija koje su unjete i drugog korisničkog računa none opcije neće biti omogućena.

Ovo takođe neće biti moguće ukoliko već dugujete novac za doplatu neke aplikacije. Ograničenja takođe postoje ukoliko ste dio nekog Family Sharinga, kao i ukoliko imate mjesečnu pretplatu na servise kao što su Apple Music, Spotify ili drugi koji se nastavlja.

Litijum – investicija budućnosti

Koncept Interneta stvari (Internet of Things) – IoT razvija se godinama unazad, no ključni razlog zbog kojeg još nije našao širu primjenu je, prije svega, u baterijama, koje, uprkos naporima brojnih proizvođača elektronike i dalje nisu toliko malih dimenzija, a istovremeno i dovoljnog kapaciteta da bi omogućile autonomno funkcionisanje svih povezanih uređaja bez potrebe za svakodnevnim punjenjem.

Kompanija Tesla Motors proizvela je pretprošle godine električni automobil Model S, koji može da pređe i do 400 kilometara nakon jednog punjenja, no cilj kompanije je da do 2020. lansira vozilo koje će imati dovoljno akumulirane energije za najmanje 1.600 kilometara vožnje.


Inicijalni potez bila je investicija u gradnju fabrike Gigafactory u Nevadi, za šta je izdvojeno pet milijardi dolara. U Tesli su procijenili da je investicija opravdana, budući da je tadašnji godišnji nivo proizvodnje iznosio oko 35 gigavata kapaciteta baterija, čime je premašen ukupni kapacitet svih litijum-jonskih baterija proizvedenih za godinu.

Nakon što su prve Gigafactory baterije sišle s proizvodne trake, javile su se i inicijalne procjene o tome koliko će za ove potrebe biti izvodljivo nabaviti dovoljne količine litijuma, koji je njihov ključni sastojak.

Sve učestalije prodaje litijuma prerađivačima ovog metala i proizvođačima IT uređaja pokazuju koliko se kompanije, od kojih je najveći broj kineskih, utrkuju da obezbijede zalihe ovog metala koji je glavni sastojak litijum-jonskih baterija smartfona i, sve više, električnih automobila.

Dok industriju litijum-jonskih baterija za sada karakteriše ogroman neiskorišćeni potencijal, odluka kompanije Tesla Motors da investira u Gigafactory zapravo je preusmjerio fokus ulagača na nedostatak zaliha ovog materijala za novu tehnologiju skladištenja energije.

Električni automobili koje proizvode ne samo Tesla Motors, već i drugi, napajaju se baterijom baziranom na litijumu, pri čemu svako od do sada lansiranih nekoliko stotina hiljada vozila generiše tražnju između 5.000 i 8.000 tona ovog elementa uskladištenog u baterijama.


Litijum je već nekoliko godina unazad investicioni izbor onih koji se opredjeljuju za strogu alternativu. Iako se o promjeni njegove cijene ne izvještava u udarnim vijestima, niti je ona indeksirana na vodećim stranicama za praćenje dešavanja na robnim berzama, rastuće interesovanje uslovljeno je očekivanjem sve veće tražnje za potrebe energetski efikasne tehnologije.

Cijena tone litijuma u prvoj sedmici ove godine iznosila je 7.475 dolara, što je trostruko više nego sredinom 2015. godine. Zalihe litijuma već sada djeluju nedovoljno za ono što se u tehnološkoj industriji očekuje u narednim godinama i decenijama, zbog čega se ovaj element smatra potencijalno veoma isplativom investicijom. Prema podacima koje je objavila kuća Navigant Research koja prati tehnološka kretanja u energetskom sektoru tržište litijum-jonskih baterija bi do 2023. godine moglo da vrijedi 26 milijardi dolara, dok se u najoptimističnijim prognozama navodi da bi vrijednost od čak 33 milijarde dolara mogla biti dostignuta već 2019. godine.

Sada ih koriste neki od vodećih industrijskih giganata, među kojima su General Motors, Navistar, BMW, Daimler, Ford, kao i gotovo svi proizvođači smartfona i laptopova. Električni automobili koriste čak 4.800 puta više litijuma od smartfona, a upravo vozila kao što su Tesla Model 3 i Chevrolet Bolt, odnosno njihova masovna proizvodnja najavljuju interesantnu mogućnost za ulaganja.


Očekivanja analitičke kuće Morningstar su da će tražnja za litijumom godišnje rasti oko 16 odsto, odnosno da će sa 175.000 tona, koliko je iznosila 2015. do 2025. dostići 775.000 tona, što predstavlja brže rastuću tražnju za nekom berzanskom robom u odnosu na bilo koju tokom čitavog jednog vijeka. Morningstar takođe prognozira i da će se nakon 2025. tragati godišnje za još minimum dodatnih 100.000 tona litijuma.

Koliki će nedostatak litijuma na tržištu biti i koliko će se novim rudarenjem moći pokriti narednih godina u najvećoj mjeri zavisiće od odluka vlasti u Čileu koje sistemom kvota određuju koliko je moguće crpiti iz pustinje Atakama.

Kada je riječ o trgovanju, uprkos velikom optimizmu vezanom za njegovu očekivanu cijenu, kupiti litijum kroz hartije od vrijednosti veoma je teško.

Litijumom se ne trguje ni na jednoj velikoj berzi, ne postoje fjučers ugovori, niti swapovi, što od tržišnog učešća sada udaljava sve vodeće ulagače. Ovo, međutim, ne znači da nije moguće zaraditi na promjeni njegove cijene, s obzirom da postoji mogućnost trgovanja akcijama kompanija koje ga prerađuju ili proizvode prijeko potrebni li-ion baterije.

Bitcoin potvrdio status sigurne luke za vrijeme tržišnih turbulencija

Digitalna valuta bitcoin u prvoj sedmici 2017. dostigla je najveću vrijednost u osmogodišnjoj istoriji, nadmašivši cijenu od više od 1.000 dolara, koliko je iznosila krajem 2013. godine, da bi se u ovoj sedmici stabilizovao u rasponu od 930 do 970 dolara, u zavisnosti od platforme, od Krakena do Coinbasea. Razlog povećanja vrijednosti više od 30 odsto odsto u posljednjih 20 dana bile su informacije o kontinuiranom sve širem prihvatanju bitcoina u Kini, kao i u drugim dijelovima svijeta gdje su valute pod strogom kontrolom državnih vlasti.

mzl.bpcevawv.175x175-75Prethodno je cjenovni maksimum sa više od 1.000 dolara po digitalnom novčiću dostignut posljednjeg dana novembra 2013. godine, nakon čega je dugo stagnirao, a onda u vremenima prividnog oporavka u širim tržišnim krugovima gubio popularnost, a zbog manjka tražnje i vrijednost. Neposredno pred početak ove godine bitcoin je dostigao i istorijski najviši iznos ukupne tržišne kapitalizacije, premašivši 16,1 milijardu dolara.

Potez Narodne banke Kine

Kako bi se suzbio odliv kapitala iz Kine, poslovne banke u toj zemlji od početka ove godine su u obavezi da Narodnoj banci Kine (People’s Bank of China) – PBOC prijave sve gotovinske transakcije denominirane u juanima, čija je vrijednost 50.000 juana (oko 7.100 dolara) ili više, za razliku od dosadašnjih 200.000 juana koji su bili predmet procesa izvještaja. Pojačana kontrola kapitala u najmnogoljudnijoj zemlji u svijetu okrenula je ogroman broj tržišnih igrača ka bitcoinu.

Bitcoin iz godine u godinu postaje najprimamljivija alternativa tradicionalnom novcu, a svaki talas finansijske krize na pojedinim tržištima potvrđivao je ovaj status. Najočigledniji primjer bio je viđen u Grčkoj u ljeto 2015. kada je digitalna valuta predstavljala spasonosno rješenje za građane koji su imali ograničen pristup vlastitim sredstvima. Njegova popularnost ukazuje na rastuću tražnju za alternativom u svijetu novca, što je i namjera zbog koje je bitcoin osnovan.

Ova kriptovaluta je do prije nekoliko godina važila za sredstvo ulaganja koja je cirkulisalo tek među najvatrenijom grupom entuzijasta, no vremenom je prerastao u softverom podržani online platni sistem. Riječ je o virtuelnom novcu koji se u oba smjera može mijenjati za stvarni. Njime je moguće obaviti sve veći broj plaćanja usluga i proizvoda na brojnim sajtovima, moguće ga je čuvati u digitalnom novčaniku na računaru čekajući da mu se uveća vrijednost ili ga, prema signalima koji se dobiju sa tržišta, prodajom i kupovinom koristiti za manje zarade u kraćem roku.

Spasonosan u kriznim vremenima

Bitcoin nesumnjivo predstavlja jedan od budućih oblika ulaganja, generiše kapital sa drugih tržišta i služi kao alternativni oblik za ostvarivanje ekonomskog oporavka na pojedinačnom planu, no njegovi principi kose se sa načinima funkcionisanja krupnih finansijskih igrača koji su proizveli i koji održavaju postojeće stanje u američkoj ekonomiji. U SAD, a naročito u njihovom sjevernom susjedu, Kanadi, sve više je pogodnosti za korišćenje ove kriptovalute.

Posljednjih godina, pored finansijskih, političke krize, naročito u evropskim državama, ali i nagli preokret tokom završnice američke predsjedničke kampanje pokazali su učesnicima na tržištu da do sada korišćeni modeli više nisu pouzdani i da zakonitosti nije moguće tražiti samo kod odluka centralnih finansijskih institucija o, na primjer, promjeni referentne kamatne stope ili emisiji obveznica. Trgovanje valutama i berzanskom robom u ovakvim okolnostima postalo je rizičnije, preokreti učestaliji, a broj faktora koji utiču sve veći, pa je ono što se do sada tradicionalno smatralo sigurnim lukama za ulaganja, poput japanskog jena, švajcarskog franka ili zlata nakon niza događaja izgubilo taj status.

Inicijalno je na tržište pušten 21 milion bitcoina i taj se broj ne uvećava bilo kakvim potezom poput onoga koji kod tradicionalnih valuta predstavlja doštampavanje, što je jedan od prvih preduslova za nemogućnost suočavanja sa devalvacijom. Bitcoin je nezavisan od bilo kakve centralne vlasti. Države mogu da regulišu oblasti u kojima postoji njegov promet, no to ne znači da imaju direktan uticaj na bitcoin.

Preživio brojne pokušaje devalviranja

Postojanost ove digitalne valute potvrđena je preživljavanjem brojnih pokušaja njenog devalviranja i krahova tokom posljednjih nekoliko godina, budući da nije postojao niti jedan faktor koji je bio dovoljan da joj trajno obori vrijednost.

Razlog zbog kojeg je dugoročno ulaganje u bitcoin korisnije od ulaganja u valute i robu je, prije svega, u njegovoj decentralizovanoj prirodi, odnosno tome što ne pripada bilo kakvom sistemu. Količina bitcoina kojom se trguje uslovljena je u potpunosti matematičkim zakonitostima, što ga ne čini direktno izloženim negativnim posljedicama dešavanja kao što su nagli potezi centralnih banaka, drastične promjene u poreskoj politici ili okolnosti poput, na primjer, brexita.

Način na koji se na njegovu vrijednost odražavaju globalni ekonomski ili politički trendovi je, prije svega, u tržišnoj tražnji koja raste svakog puta kada turbulentna dešavanja najave da bi sve ono što je predmet kontrole bilo kog regulatora moglo gubiti vrijednost. Samo u prošloj, u političko-ekonomskoj smislu veoma nestabilnoj godini nivo ulaganja u bitcoin nadmašio je količinu kupovine bilo koje valute, akcija ili berzanske robe.

Godina za zaradu na promjeni cijene akcija Manchester Uniteda

Početak 2017. mnogo razloga za sreću donio je najpopularnijem fudbalskom klubu na planeti Manchester Unitedu, njegovim navijačima, ali i vlasnicima njihovih akcija. Iako ne u vrhu tabele, najprimamljiviji sportski klub za berzansko ulaganje indirektno je najavio vlasnicima akcija i onima koji zarađuju na promjeni njihove cijene da bi do kraja sezone vrijednost njihovih uloga mogla biti uvećana i više nego za petinu.

Rast cijene akcija kluba koji se na Njujorškoj berzi kotira pod oznakom MANU očekuje se do kraja sezone, do kada bi se mogle nadmašiti prošlogodišnji maksimum od skoro 18 dolara sa 14,25 dolara, sa koliko je zaključeno prošlogodišnje i početo ovogodišnje trgovanje. Iako su tržišta na vijest o dolasku Žozea Murinja nakratko odreagovala pozitivno, optimizam da bi do isteka njegovog ugovora, koji je potpisan do 2020. moglo doći do udvostručavanja vrijednosti ubrzo je splasnuo, budući da je klub već maksimizirao vrijednost, no i dalje predstavlja najbolju priliku za ulaganje u ovom segmentu.

Kartkoročna i dugoročna perspektiva

Ugovor sa televizijskim emiterima o prenosima i marketinški prihodi po tom osnovu već su uračunati u cijenu akcija. Takođe, klub je već drugu godinu zaredom vezan ugovorom vrijednim 600 miliona dolara za Chevrolet, dok je saradnja sa Adidasom dogovorena na 10 godina, tako da na dugoročnom planu neće biti drastičnih razlika na prihodnoj strani, osim ukoliko cijena ulaznica ne bude povećana u narednoj sezoni.

Ovaj klub je se prvo našao na Londonskoj berzi 1991. godine, ali je tada prodata tek polovina od predviđenih akcija. Manchester United izbrisan je sa Londonske berze 2004. godine kada je počelo preuzimanje vlasništva koje je okončano u maju 2005. godine kada je 98 odsto udjela pripalo porodici Glejzer, nakon čega je 2012. deset odsto akcijskog kapitala ponuđeno javnosti. Fiskalna godina MANU traje od 1. jula do 30. juna, a ulagačima do sada nije isplaćivana dividenda.

Za razliku od najvećeg broja kompanija koje se kotiraju na berzi, gdje najave novog proizvoda u koji se polažu velike nade nedvosmisleno ukazuju da će uslijediti rast prihoda, rezultat u igri i poslovni rezultat fudbalskog kluba nekada ne moraju ići u istom smjeru, zbog čega ulagači mogu biti obmanuti.

Prije svega, iako se čini da se već neko vrijeme u fudbalu baš sve vrti oko novca, iako ulaznice za utakmice Lige šampiona iz sezone u sezonu dostižu rekordno visoke iznose, kao i zarada od prodaje sve skupljih dresova i zastava, najveći broj klubova ima ogromne neto gubitke i njihova sudbina je dalje uslovljena spremnošću njihovih bogatih vlasnika na darežljivost kojom će finansirati potrošnju.

Istorijski pregled cijena 

Većina fudbalskih klubova je u potpunom privatnom vlasništvu, zbog čega do njihovih akcija nije moguće doći, međutim, neki su dostupni svima, a među njima su Manchester United, Arsenal, Celtic, Birmingham City, Galatasaray, Fenerbahce, Besiktas, AS Roma, Lazio, Juventus, Borussia Dortmund, Ajax, Sporting…

Bez obzira da li je trenutna cijena akcija nekog fudbalskog kluba niska ili visoka, neophodan je uvid u njeno istorijsko kretanje, odnosno načine na koje je i u kojoj mjeri dolazilo do oscilacija u trenucima kada su objavljivane vijesti o dolasku novog trenera ili potvrđene glasine o transferima igrača, poslije kojih na berzama dolazi do promjena.

Primjera radi, ako se akcije nekog kluba, koje koštaju između 10 i 20 dolara, od početka do kraja prethodne sezone nisu promijenile više od jedan odsto, odnosno ukoliko razlika između dviju sezona nije veća od tri odsto, ulazak u takvu tržišnu igru se ne isplati ukoliko nije riječ o kupovini velikog broja akcija, jer se, u suprotnom, pokrivaju tek transakcioni troškovi, a ulagač ostaje na nuli.

Ostvareni rezultat nije uvijek dovoljan signal. Akcije MANU najveću cijenu i to od 19,62 dolara dostigle su dok je klub vodio Luis van Gal nakon pobjede nad LA Galaksijem rezultatom 7:0, no dok se kasnije na tstadionima stvarao niz od pet uzastopnih pobjeda vlasnici akcija bili su u panici zbog približavanja minimumu koju je tržišna vrijednost dostigla u finansijski najmračnijim danima pod Dejvidom Mojesom. Uprkos dobrim rezultatima i pobjedama tada popularno zvanog “Vanchestera” nad Crystal Palaceom, Arsenalom, Hullom, Stokeom and Southamptonom izgubile su za nekoliko mjeseci skoro četvrtinu vrijednosti.

Ono što je važno znati je da je odluka većine fudbalskih klubova da akcionarima ne isplaćuju dividendu čak i kada ostvare veliku zaradu, jer se najveći dio dodatnih sredstava reinvestira u dalji razvoj. Ukoliko očekujete redovni povrat uloženih sredstava, bolje je na vrijeme odustati od kupovine akcija kluba i potražiti kompanije koje imaju drugačiju poslovnu politiku.

Najveći broj izlazaka na berzu bio neuspješan

Prvi fudbalski klub koji je izašao na berzu bio je Tottenham Hotspur i to 1983. godine, a zatim je to učinilo još nekoliko desetina vodećih, prvo engleskih, a zatim i ostalih evropskih klubova. Inicijalne javne ponude čak i najuglednijih i najuspješnijih klubova u početku bi pratio neuspjeh, zbog specifičnosti ciljeva ovih tržišnih subjekata – za razliku od kompanija, kod kojih su nastojanje za maksimizaciju zarade i minimizaciju gubitaka međusobno u skladu, ciljevi klubova da ostvare što bolji mogući rezultat, a da to ne podrazumijeva i ogromne izdatke najčešće su u suprotnosti. Takođe, za razliku od kompanija za koje IPO često znači i preporod, kod klubova se on odražava isključivo na izmjene u bilansu, ali ni u najmanjoj mjeri na rezultat koji klub postigne.

Fanshare – posebne povoljnosti za navijače

Kao što i se kod kompanija čija cijena akcije iznosi nekoliko stotina ili hiljada dolara većina ulagača odlučuje za kupovinu frakcija koje se odnose na onaj dio akcije koliko je njene novčane protuvrijednosti izdvojeno, tako i znatan broj evropskih klubova koji se kotiraju na berzi omogućava opciju „Fanshare“, doslovno – akcije fanova. Riječ je o šemama koje omogućavaju pristupačniju kupovinu vlasničkog udjela namijenjenu upravo navijačima koji žele da sa svojim klubom budu povezani i na ovaj način.

Budući da klubovi ne isplaćuju dividende, jedina šansa za zaradu novca ostaje kroz mogućnost da se akcije prodaju po većoj cijeni od one po kojoj su kupljene. Najveći uticaj na cijenu akcija uglavnom imaju glasine o preuzimanju, a najunosnije vrijeme za zaradu je između njihovog pojavljivanja u javnosti i zvaničnog potvrđivanja, odnosno demantovanja. Zato, od kupovine akcija klubova mnogo veću korist imaju kratkoročni špekulanti nego dugoročni investitori, ukoliko nije riječ o većinskim vlasnicima kluba.

Potpuno suprotno on MANU pozicioniran je Arsenal, za čije akcije je potreban veliki kapital, a ulazak u tržišnu igru praktično nemoguć bez 15.000 funti. Arsenal, međutim, nudi mnogo povoljniju Fanshare šemu, koja svakog mjeseca donosi određeni procenat zarade, što ovu mogućnost čini znatno unosnijom od kupovine akcija klubova poput MANU. Nakon što ulagač neprestanim reinvestiranjem dostigne vlasnički udio od jedne cijele akcije, on stiče pravo da bude pozvan na godišnju skupštinu akcionara, međutim, njegova mogućnost da pojedinačno utiče na donošenje odluka je zanemarljiva. Arsenal akcionarima nije isplaćivao dividendu više od 30 godina.


Uticaj vlasničke strukture na finansijski rezultat koji ostvaruju fudbalski klubovi se u potpunosti razlikuje od onog kojeg trgovanje akcijama ima kod kompanija na berzi. Da bi se ovo razumjelo neophodno je znati da jednako treba uzeti u obzir i sve ono što znate o fudbalskim šansama, ali i berzanskim prilikama i isto toliko, ma koliko paradoksalno zvučalo – zanemariti. Iako je oblast specifična, i ovdje važi da, kada se akcije jednom izdaju, one se mogu kupovati i prodavati na sekundarnom tržištu, pojedincima ili kompanijama koje žele da ih posjeduju. Ipak, ishod meča u kojem učestvuje klub na berzi ne mora da utiče da promjenu njihove vrijednosti, odnosno ona može biti neznatna, čak i kada su u pitanju situacije koje je predstavljaju velika pozitivna ili negativna iznenađenja na terenu. U mnogo većoj mjeri utiču informacije o kaznama, transferima i drugim stavkama koja direktno uslovljavaju izmjene bilansa.

Financial Times: 2016. je bila u znaku ovih pojmova

U godini koja je ukazala na rascjepe u društvu i okrenula građane protiv građana, generaciju protiv generacije, ideologiju protiv ideologije, riječi su igrale ulogu u preoblikovanju svijeta u kojem živimo. Uticaj koji su riječi imale na birače u 2016. preokrenule su na određen način svjetski poredak koji je važio 70 godina.

ft-pojmovi-2016Neke riječi iz 2015. gotovo da su se ustalile, pa je „ohi“, grčko „ne“ ustupilo prostor britanskom kriku u junu za „brexit“, a u novembru „brexit plus plus plus“ uz još glasniju grmljavinu Trampove pobjede na predsjedničkim izborima u SAD. „Unicorns“ (jednorozi) krahirali su u „unicorpses“ (corpse – leš).

U svijetu post-istine 2016. godine emocije su bile jači adut od činjenica. Razaranje koje je uslijedilo tokom rata u Siriji postalo je sinonim za masovna iseljavanja izbjeglica ka Evropi, a ove godine tome je dodato i uništavanje Alepa. Prošlogodišnji ghosting izvio se u korist snowflake milenijalaca, dok je, da ne zaboravimo, 2015. bila godina koju su obilježili “Edstone”, “trans” i “gig ekonomija”.

Ove godine su čitaoci, dopisnici i urednici dali stotine sugestija koje smo sveli na 12 od kojih smo sastavili ovu listu:

1. Unicorpse (imenica) – tehnološka kompanija koja je nekada vrijedila milijardu dolara ili više (sleng, vulgarizam).

2. ETF (akronim/imenica) – skraćenica za razmjenu u trgovanju, oblik niskobudžetnog fonda koji je izlistan na tržištu kapitala. ETF obično ulaže u akcije, obveznice ili druge hartije od vrijednosti koje spadaju u sastav indeksa kakvi su FTSE 100 ili S&P 500.

3. Brexit (imenica) – kovanica koja označava britanski izlas (British exit) iz EU. Upotrebljava se u različitim verzijama, kao što su meki, tvrdi, crveni, bijeli i plavi.

4. Snowflake (imenica) – pežorativni izraz za nekoga ko se smatra suviše ranjivim da se nosi sa stavovima onih koji njihove dovode u pitanje, posebno na univerzitetima i drugim forumima, nekada poznatim po velikim raspravama.

5. Post-istinski (pridjev) odnosi se na ili označava okolnosti u kojima su objektivne činjenice manje uticale na oblikovanje javnog mnjenja u odnosu na emocije i lična uvjerenja.

6. Burkini (imenica) kovanica koja je spojila burku i bikini. Ženska odjeća za plažu, koju je dizajnirala australijanska dizajnerka Aheda Zaneti. Burkini prekriva cijelo tijelo osim lica, šaka i stopala.

7. Protekcionizam (imenica) – zaštita domaće industrije od stranih konkurenata uvođenjem carinskih tarifa i/ili podizanjem drugih barijera slobodnoj trgovini.

8. Alt-right (imenica, skraćeni oblik) skraćeno od „alternativna desnica“, izraz koji opisuje labave krugove američkih nacionalističkih grupa koje odbacuju mainstream konzervativiyam.

9. Deplorables (imenica) – ljudi koje karakteriše napadno i podozrivo ponašanje, konkretno, pristalice Donalda Trampa. Može imati negativne i pozitivne konotacije.

10. MbS (skraćenica od ličnog imena) – Muhamed bin Salman, zamjenik prestolonasljednika Saudijske Arabije, ministar odbrane, predsjednik Savjeta za ekonomske i razvojne poslove i šef kraljevskog dvora. Ovaj 31-godišnjak omiljeni je sin kralja Salmana, koji je došao na prijesto u januaru 2015. godine.

11. Bundespräsidentenstichwahlwiederholungsverschiebung (imenica, njem.) – odlaganje ponavljanja drugog kruga izbora saveznog predsjednika.

12. Alep.

Washington Post: Online kupovina u posljednjem trenutku je veliki test za trgovce

Piše: Sara Halzek (Washington Post), prevod A.N.R.

Ako još punite kolica u digitalnoj kupovini tokom posljednjih sati uoči Božića, svakako u tome nijeste sami – a takođe ste i učesnik velikog testa namijenjenog prodavcima i prevoznicima o tome da li su njihovi lanci snabdijevanja opremljeni tako da bi mogli izaći u susret nama kojima se navike kupovine rapidno mijenjaju.

Prema podacima kompanije Adobe, čiji softver radi na mnogim maloprodajnim sajtovima, rast online kupovine nakon 15. decembra bio je veći od očekivanog, što ukazuje na to da potrošači odlažu značajan dio kupovine za posljednji trenutak. Zapravo, prodaja je intenzivirana tokom posljednjih dana toliko da su u Adobeu ocijenili da bi na kraju ovogodišnje praznične sezone online kupovina mogla premašiti ranije projektovani iznos od 91,6 milijardi dolara.

Trgovci su ove godine napravili strateške investicije samo kako bi se bolje opripremili za ovakve situacije. Cilj je, na primjer, ove godine bio povećanje kadra sezonskih radnika u sprovođenju online narudžbi iz magacina. Khol’s je pojačao sopstveni program na principu “isporuči iz prodavnice”, čiji cilj je da vrijeme od digitalnog zahtjeva kupaca do isporuke pred kućnim pragom bude što kraće.

J.C. Penney udružio se sa maloprodajnim partnerima dodajući “kupi online, preuzmi u prodavnici” usluge na svim svojim prodajnim mjestima. Sada će presjek ovakve praznične sezonske kupovine pokazati da li su ovakvi potezi isplativi ili ne.

Maloprodajna djelatnost, teoretski, ne bi u potpunost trebalo da bude zapljusnuta talasom kasne kupovine. Za godinu u kojoj su održani predsjednički izbori stručnjaci kažu da su kupci u prvom dijelu pretpraznične sezone bili rastrojeni: bili su prilijepljeni za vijesti, pa čak i kada bi se odvojili od njih ne bi izbjegli reklamni talas u kampanji. Za tako nešto namjeravali su da se iskupe kasnije u decembru.

Pojedini trgovci djelovali su kao da su uložili poseban napor kako bi se dodvorili onima koji odlažu ovu aktivnost. Walmart se, na primjer, opredijelio za to da kupci koji proruče robu do 23. decembra u 18h dobiju isporuku do 24. decembra u 18h.

U međuvremenu je Amazon agresivno promovisao uslugu Prime Now, koja je dostupna u manjem broju gradova, a omogućava isporuku poklona do 23:59h uoči Božića.

I širom čitavog univerzuma online kupovine Adobe je ustanovio da su cijene transporta između 16. i 19. decembra bile 10 odsto niže u poređenju sa istim prošlogodišnjim periodom. To ukazuje na podatak da su mnogi prodavci ponudili besplatnu isporuku kako bi namamili kupce koji u toj aktivnosti kasne.

Ukoliko trgovci budu uspjeli da upravljaju poplavom kupovine u posljednjem trenutku, to bi moglo poslužiti kao podloga za povlačenje ukupne prodaje ka lojalnim kupcima. No, nije potrebno gledati suviše daleko u prošlost kako bi se vidjelo kako se u javnosti prepoznaje ostvarenje noćne more kada kupcima ne budu na vrijeme isporučeni pokloni koje su poručili.

U 2013. svuda je bilo frustriranih kupaca kada UPS i FedEx nijesu uspjeli da na vrijeme isporuče milione paketa za Božić. Trgovci očigledno nijesu dobro procijenili koliko će pošiljki biti isporučivano prevoznicima u kratkom vremenskom razmaku, a zimska oluja svemu je dodala još poteškoća.

Prodavci su se nadali da će im okretniji lanci snabdijevanja, koji nude dostavu poručene robe pomoći da ovoga puta izbjegnu takav debakl. I prevoznici, takođe, rade na tome kako bi povećali kapacitete i omogućili da prime više paketa.

U Adobeu ističu da su tokom praznične sezone do sada prodavci zaradili oko 79,2 milijarde dolara od online kupovine, što je porast od više od 11 odsto u poređenju s prošlom godinom. To je značajno više u poređenju sa očekivanim rastom od 3,6 odsto za ukupnu ovu oblast u novembru i decembru.

Bloomberg: Rad je povezan s dostojanstvom

Piše: Noa Smit (Bloomberg), prevod A.N.R.

Ekonomisti vole da pričaju ne tako istinitu priču o Miltonu Fridmanu. Zagovornik slobodnog tržišta, boraveći u Aziji 1960-ih godina, bio je svjedok izvođenja javnih radova tokom kojih su ljudi pravili put motikama i lopatama. Kada ih je pitao zašto umjesto toga nijesu upotrijebili mašine za zemljane radove, lokalni zvaničnik rekao je da je cilj bio da se ljudima obezbijede poslovi. Ovaj ekonomista tada ih je pitao zašto se onda u ovom slučaju njihova vlada nije odlučila da radnicima omogući da to rade kašikama.

BloombergOvo poređenje mnogim ekonomistima izaziva osmijeh, a koriste ga kako bi suprotstavili beskompromisno razmišljanje usmjereno na efikasnost u svojoj disciplini naspram neefikasnih poslova birokrata sklonih pravljenju grubih grešaka. No za mnoge izvan ove profesije priča ukazuje na namjerno nepoznavanje važnosti koju imaju posao i ljudsko dostojanstvo. Nedavno sam napisao da bi vlade trebalo da se fokusiraju na to da ljudi dobijaju poslove, a ne da im samo obezbijede novac. Ideje za sprovođenje tako nečega variraju od državnih garancija za zapošljavanje u obavljanju javnih radova do poreskih olakšica za kompanije koje zaposle više radnika.

Neizbježno, ljudi koji se nasmiju tokom priče o “kašikama” skloni su nazivanju ovih programa nečim što stvara prividan posao. Ako tržište nije spremno da ljudima plati da obavljaju poslove, prema njihovim riječima, takvi poslovi nijesu vrijedni obavljanja. I već sam na to dobio nekoliko odgovora. Ljudi koji dobiju ove poslove mogu ih obavljati za novac, kažu oni, ali će znati da ono što rade u suštini nije potrebno i neće izvući dostojanstvo i samopoštovanje iz onoga što rade. Bolje im je samo poslati ček.

Mislim da je ovakav način razmišljanja veoma pogrešan. Da, ako date ljudima kašike da njima naprave put, oni će shvatiti da je to glupo, ali apsurdno je zaključiti da je svaki radnik koji je plaćen više nego što tržište može da podnese samo uživalac blagostanja sa izmišljenim poslom.

Ljudi shvataju da ih slobodno tržište nagrađuje različito, na osnovu onih stvari koje su van njihove kontrole. Domar na Filipinima radi isti posao kao domar u Teksasu, ali ovaj drugi je mnogo bolje plaćen. Recesije, stanje u lokalnoj ekonomiji, razvojna politika, vjetrovi globalnog tržišta i milioni drugih faktora igraju ulogu. To je glavni razlog zbog kojeg rezultati funkcionisanja slobodnog tržišta ne mogu uvijek izgledati fer. Mnogi od nas žele da budu vrednovani ne samo po tome koliko novca ćemo uspjeti da iscijedimo iz sistema, već i po tome koliko ćemo truda uložiti. Ekonomista Bred Delong je prigodno tome rekao:

“Ne volimo da se osjećamo ni kao prevaranti, niti prevareno. Umjesto toga, volimo da se osjećamo ugrađenim u mreže međusobnih recipročnih obaveza.”

Ako vrijedno radimo i proizvodimo nešto što ima opipljivu vrijednost, skloni smo da imamo osjećaj samopoštovanja, kada nas za to društvo nagrađuje pristojnim životom u srednjoj klasi. Ovo je bila suština Novog dogovora Frenklina Ruzvelta – ako radite, imate šta da jedete.

Nastavak snage ove ideje vidljiv je svuda. Svjedoči tome Albukerki u Novom Meksiku, gdje su gradske vlasti beskućnicima otvorile radna mjesta i učinile ih da se “ponovo osjećaju kao ljudi”.

Ili, pogledajte program “Korpusa poslova”, gdje zapošljavanje siromašnih povećava njihove šanse da stupe u brak. Ako date ljudima da rade sa opipljivom, vidljivom vrijednošću, dajete im dostojanstvo. Ovo je, naravno, razlog zbog kojeg je opadajuća stopa učešća radne snage zabrinjavajuća – toliko Amerikanaca je bez posla i nedostaje im dostojanstvo koje je povezano sa zaposlenošću.

Dakle, postoje li otvorena radna mjesta za poslove u SAD koja bi proizvodila opipljivu, vidljivu vrijednost? Naravno da postoje. Da bi se to razumjelo dovoljna je jednosedmična posjeta Japanu. Na mjestima na kojim su američki trotoari napukli i neravni, japanski su uredni i lijepi. U američkim Starbucks restoranima su stolovi puni mrvica i fleka, u japanskim Starbucksima ih prebrišu odmah nakon odlaska svakog gosta. Dok su američki gradovi poput Detroita i Čikaga puni polomljenih prozora i oštećenih fasada, japanski gradovi su čisti i moderni, uz dobro održavan i pouzdan javni prevoz.

Prije nego što počnete da se žalite na tako stvorene poslove, učinite da SAD izgledaju tako. Popravimo trotoare i renovirajmo ili strušimo sve ruinirane zgrade. Obrišimo svaki sto u Starbucksu, stvorimo kvalitetan sistem javnog prevoza i zaposlimo radnike koji će ga činiti tačnim. Pobrinimo se za naše ljude i gradove. Omogućimo brigu o djeci za zaposlene majke, kao i njegu za starija lica. Zaposlimo više nastavnika, kako broj učenika u razredima ne bi bio prevelik.

Sve su ovo poslovi koji stvaraju realne, opipljive rezultate. Kada obnovite zgradu ili sagradite željezničku stanicu vidite plodove rada zaposlenih. Kada se brinete o starijim osobama možete vidjeti stvarnu ljudsku korist. Vrijednost koju stvaraju ovi poslovi je mnogo opipljivija i jasnija nego vrijednost koja se dobija kroz one aktivnosti koje tržište mnogo bolje nagrađuje, kakvo je, na primjer, visokofrekventno trgovanje.

Vrijeme slobodnog tržišta učinilo je privredu efikasnijom, ali je time naglašena i njena dramatična cijena – toliko ljudi koji su izgubili dostojanstvo. SAD se odvajaju od ideje socijalne kompaktnosti koja u osnovi ima rad. Upravo to je omo što bi trebalo da bude obrnuto postavljeno.

Foto: Reuters