May 28, 2021
Israel is joining the global cryptocurrency race. More than 50 monetary authorities around the world are looking into the use of digital currencies. The Bahamas have already launched a digital currency, China has started a pilot for an electronic yuan and the European Union hopes to launch a virtual euro by 2025. The United Kingdom has established a task force and the United States, the world’s financial hegemon, is inspecting ways to create an e-dollar. On May 20, Federal Reserve Chairman Jerome Powell announced the agency was ramping up efforts to develop a digital dollar.
On May 11, the Bank of Israel presented the model it recommends for the digital shekel. According to this model, the digital shekel will be issued by the central bank, and transferred to payment service providers (banks, credit card companies and fintech structures). These in turn will provide the public with the digital coins.
Inflation Jumps in April
Through 2020, in the midst of COVID-19, the inflation rate fell below 1% â a sign that the economy was operating under capacity and more could be done to encourage job growth. In response, the Federal Reserve (the Fed) dropped interest rates to encourage the flow of capital. The Fed has stated that this easy-money policy will be maintained until the long-term inflation rate is at 2% and full employment is reached.
This change in monetary policy seemed to have its desired effect, as the overall rise in consumer prices as of April this year was the largest 12-month increase seen since 2008. One indicator of inflation, the Consumer Price Index, rose 4.2% year-over-year. Alongside a 6.4% increase in GDP in the first quarter of 2021 and increased consumer spending, all signs seem to point toward a recovering U.S. economy. As a result, the Fed should be expected to raise interest rates again. However, this has yet to be seen.
Inflation Jumps in April
Through 2020, in the midst of COVID-19, the inflation rate fell below 1% â a sign that the economy was operating under capacity and more could be done to encourage job growth. In response, the Federal Reserve (the Fed) dropped interest rates to encourage the flow of capital. The Fed has stated that this easy-money policy will be maintained until the long-term inflation rate is at 2% and full employment is reached.
This change in monetary policy seemed to have its desired effect, as the overall rise in consumer prices as of April this year was the largest 12-month increase seen since 2008. One indicator of inflation, the Consumer Price Index, rose 4.2% year-over-year. Alongside a 6.4% increase in GDP in the first quarter of 2021 and increased consumer spending, all signs seem to point toward a recovering U.S. economy. As a result, the Fed should be expected to raise interest rates again. However, this has yet to be seen.
Elon Musk Dons a Bitcoin Mining Hat, and Fed Downplays Inflation Risk
On 5/25/21 at 2:07 PM EDT
Bitcoin seems to have pulled out of its steep nosedive, and behold! The Oracle of SpaceX may be preparing to give his blessing to Bitcoin mining.
Bitcoin plunged below $32,000 Sunday following Elon Musk s announcement that Tesla wouldn t accept the cryptocurrency as payment for its electric cars. Then, in a tweet that many misinterpreted, Musk appeared to say that Tesla had sold some of its Bitcoin holdings. It hadn t.
Earlier, Musk s announcement that Tesla had invested $1.5 billion in Bitcoin sent the crypto higher.
Next, Musk expressed doubts about the energy used in Bitcoin mining, the computer-driven solving of complex hexadecimal puzzles to keep the blockchain fresh and earn new Bitcoins as reward.
US Inflation Surge Is Harbinger of What s to Come cato.org - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from cato.org Daily Mail and Mail on Sunday newspapers.