Giants Tighten Grip on Internet Economy. Today : Friday 6 November 2015 By Don Clark And Robert McMillan Computing hardware has long served as the critical backbone of business operations. Today, the Internet economy is powered by an infrastructure that has become virtual, and is controlled by a small handful of tech giants. These companies are delivering online search, messaging, advertising, applications, computing and storage on demand--which has positioned them not only to empower business but to extract extraordinary value as it grows.
The latest evidence comes in the form of record earnings and towering stock-market valuations. Facebook Inc., for example, on Wednesday reported a 41% surge in quarterly revenue that was propelled by a dramatic rise in advertising on mobile devices. The social network's shares rose 5.4% Thursday, reaching an all-time high and pushing its valuation above $300 billion. Anyone building a brand, for example, can't ignore Facebook's highly engaged daily audience of 1 billion. Cost of Living. The truth is out: money is just an IOU, and the banks are rolling in it - David Graeber. Back in the 1930s, Henry Ford is supposed to have remarked that it was a good thing that most Americans didn't know how banking really works, because if they did, "there'd be a revolution before tomorrow morning". Last week, something remarkable happened.
The Bank of England let the cat out of the bag. In a paper called "Money Creation in the Modern Economy", co-authored by three economists from the Bank's Monetary Analysis Directorate, they stated outright that most common assumptions of how banking works are simply wrong, and that the kind of populist, heterodox positions more ordinarily associated with groups such as Occupy Wall Street are correct. In doing so, they have effectively thrown the entire theoretical basis for austerity out of the window.
To get a sense of how radical the Bank's new position is, consider the conventional view, which continues to be the basis of all respectable debate on public policy. The central bank can print as much money as it wishes. Government debt: How much is too much? THE popularity of austerity policies has waned over the past several years thanks to evidence that it may have been counterproductive. But many are still worried by the fact that, relative to national income, government debt is now larger in many countries than at any point since WWII. Moreover, for most nations, government debt is projected to grow relative to income for years to come.
This is why policymakers across the rich world have been scrambling to slow the growth of public spending while simultaneously increasing tax revenues. (America’s budget fights should be understood in this context.) Does their urgency make sense? The sovereign bond markets in America, Japan, Britain, and the euro area’s “core” do not seem to think so. It is important to remember that there is an absence of evidence that governments with their own currencies are too indebted.
Why would private investors want to buy more sovereign debt? Individuals may also be under-invested in government fixed income. How Banks Create Money. The money that banks create isn’t the paper money that bears the logo of the government-owned Bank of England. It’s the electronic deposit money that flashes up on the screen when you check your balance at an ATM.
Right now, this money (bank deposits) makes up over 97% of all the money in the economy. Only 3% of money is still in that old-fashioned form of cash that you can touch. Banks can create money through the accounting they use when they make loans. The numbers that you see when you check your account balance are just accounting entries in the banks’ computers. In the video below Professor Dirk Bezemer at the University of Groningen and Michael Kumhof, an IMF Economist explain where money comes from in less than 2 minutes: Every new loan that a bank makes creates new money. “Commercial [i.e. high-street] banks create money, in the form of bank deposits, by making new loans. “When banks extend loans to their customers, they create money by crediting their customers’ accounts.” Intereconomics : Austerity Measures in Crisis Countries ? Results and Impact on Mid-term Development.
Forum Austerity Measures in Crisis Countries - Results and Impact on Mid-term Development Vassilis Monastiriotis, Niamh Hardiman, Aidan Regan, Chiara Goretti, Lucio Landi, J. Ignacio Conde-Ruiz, Carmen Marín, Ricardo Cabral Since the onset of the sovereign debt crisis, the crisis-stricken countries in Europe have been pushed to take drastic steps to consolidate their finances and reduce their budget deficits. Despite strong public opposition and largely damaging short-run effects, the countries have undertaken many of the internationally recommended/mandated reforms and spending cuts. In this Forum, authors from Greece, Ireland, Italy, Spain and Portugal report on the fiscal consolidation achieved in their respective countries - and the sacrifices that have made it possible. Furthermore, the authors detail what remains to be done to resolve the crisis.
Vassilis Monastiriotis, European Institute and Hellenic Observatory, London School of Economics, UK. J. Carmen Marín, FEDEA, Madrid, Spain. Trading Economics - 300.000 Indicators from 196 countries. Industry secrets from reddit.