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| February 24, 2018

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Some Fed officials raised concerns about higher inflation as tax cuts took effect

February 21, 2018 |

Some Federal Reserve policymakers raised concerns last month about the potential for higher inflation and financial instability because of stronger economic growth triggered by the recently enacted tax cuts, according to an account of the meeting released on Wednesday.

Early signs that the effects…

L.A. Times – Business

Judge orders Trump administration to put energy efficiency standards into effect

February 19, 2018 |

A federal judge in San Francisco ordered the Trump administration Thursday to implement energy-use limits for portable air conditioners and other products — standards that were adopted during the last days of the Obama presidency.

The U.S. Department of Energy was required to put the energy efficiency…

L.A. Times – Business

Japan’s GDP Grows Due to Bitcoin Wealth Effect

January 2, 2018 |

Japan’s GDP Grows Due to Bitcoin Wealth Effect

Analysts Yoshiyuki Suimon and Kazuki Miyamoto claim bitcoin will assist Japan in a Gross Domestic Product (GDP) boost of 0.3% heading into the first three months of 2018. At the end of 2017, the cryptocurrency boasted a ¥12 trillion market capitalization, and if trends continue into early this year, that could translate into lifting Japanese personal consumption by anywhere from ¥0.2 to ¥0.4 billion, they explain, referring to the phenomenon as the bitcoin effect.

Also read: Bitcoin’s Value — Like Beauty — Is in the Eye of Beholder

Japan’s Bitcoin Effect as 0.3% of GDP

Yoshiyuki Suimon and Kazuki Miyamoto of Nomura offer a slightly different take on the Japanese relationship to bitcoin. Nomura is one of the world’s largest independent investment banks, and was known to have sponsored mathematical techniques for use in finance research.

The usual reporting goes similar to a recent study put out by Deutsche Bank AG. In it, the bank notes they believe Japan’s “retail investors are shifting from leveraged foreign-exchange trading to leveraged cryptocurrency trading,” analyst Masao Muraki was quoted by Bloomberg. And indeed, the same study offered a Nikkei telling of the Japanese taking up half the world’s foreign-exchange trades, and so it seemed only natural a global currency like bitcoin would get at least 40 percent Japanese participation, and climbing, by the final quarter of this year.

Japan’s GDP Grows Due to Bitcoin Wealth Effect

The more profound, real-world case is hidden within those numbers. It appears Japanese consumers and retail businesses will also benefit from the country’s crypto craze. Mr. Suimon and Mr. Miyamoto posit something akin to a wealth effect happening. A famous historical example occurred in the late 60s United States after a double-digit tax increase. Most economists expected consumer spending to slow, a belt-tightening in response. However, due to the stock market’s precipitous rise, the average American ‘felt’ wealthier, and spent accordingly.

The last three months of 2017 just might carry the country’s GDP 0.3% higher (GDP is a measure of all final goods and services produced) into early 2018, according to the Nomura analysts. They’ve pegged a formula as follows: every jump in asset value wealth of ¥10 billion yields consumption to rise in proportion by ¥0.2 to ¥0.4 billion.

¥96 Billion in Personal Consumption

Spring of 2017 saw the country’s relative embrace of bitcoin, as the Payment Services Act formally allowed crypto trading. Yen has followed. With the Chinese government making its Yuan impotent in crypto circles, the land of the rising sun has filled that vacuum. And by the end of last year, the world’s most popular cryptocurrency reached  ¥12 trillion in market cap, well-triggering the bitcoin effect.

Japan’s GDP Grows Due to Bitcoin Wealth EffectThe two analysts believe the island nation to be sitting on ¥5.1 trillion in the digital asset. And though that wealth doesn’t “feed straight through” to the street, the wealth effect of its kind could “drive ¥96 billion in personal consumption,” according to Value Walk.

“Cryptocurrencies are going to offer different benefits for different people,” Value Walk quotes Arizona State University professor Geoffrey Smith. “Some like the institutional backing and may gravitate to a utility coin offered by the major banks while others might value the ability to transfer money from one geographic region to the next efficiently,”

To what extent major Bitcoin holders who have increased their assets through the end of the year will bolster consumer spending through the beginning of year remains to be seen, but we should keep in mind the possibility that spending will exceed expectations as a result of this factor.

There does indeed seem to be something different about the wealth accumulated through crypto. That it might lead an important world economy to grow 0.3% is a sign whatever is happening is more than mere speculation.

Do you think the bitcoin effect is real? Tell us in the comment section below! 

Images via Pixabay, Nomura.

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The post Japan’s GDP Grows Due to Bitcoin Wealth Effect appeared first on Bitcoin News.

Bitcoin News

Supreme Court Lets Trump Travel Ban Take Effect for Now

December 5, 2017 |

The Supreme Court said the Trump administration for now can implement all parts of its latest ban on travelers from certain countries while litigation challenging the restrictions continues. What’s News Asia

Effect of Trump’s Obamacare subsidy cuts is blunted in California — for now

October 14, 2017 |

Unable to get Congress to “repeal and replace” the Affordable Care Act, President Trump this week took matters into his own hands.

Late Thursday evening, the White House announced it would stop paying key subsidies, known as “cost-sharing reductions,” that compensate insurers for providing discounts…

L.A. Times – Business

Will the ‘Southwest Effect’ lower the cost of Hawaiian flights?

October 12, 2017 |

Since Southwest Airlines began to challenge the established major airlines in the 1990s, the low-cost carrier has forced its competitors to lower fares in what industry insiders call “the Southwest Effect.”

Fans of Hawaii are hoping that “the Southwest Effect” happens next year when Southwest Airlines…

L.A. Times – Business

What Trump effect? Airlines are adding routes to handle growing cross-border travel demand from Mexicans and Americans

August 14, 2017 |

The cushy business-class seats that Rosario Marín books on her regular flights between Los Angeles and Mexico are a far cry from those on the two-day bus journeys she took as a teenager to visit relatives in Mexico City.

A consultant for companies that want to do cross-border commerce, Marín says…

L.A. Times – Business


The ‘Trump effect’ looms large at Mexico’s southern border

July 25, 2017 |

In the wake of Donald Trump’s presidential victory, the number of migrants from Central America who are choosing to stay in Mexico is growing. – RSS Channel – Regions – Americas


The helium shutoff — a side effect of the Qatar confrontation

July 12, 2017 |

The recent diplomatic dustup between Qatar and many other Gulf nations caused some nervousness for some of the world’s most cutting edge scientists. – RSS Channel – World