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Hi All,
I am so excited to be on this journey, as well as thankful to John Hargrave, Mati Greenspan and the entire team for this awesome opportunity. Without further ado, let's look at the big picture.
As inflationary pressures continued to persist, minutes from last month's Federal Reserve policy meeting showed that the central bank was firming up its plans to reduce stimulus and conclude its bond buying program next year.
This shouldn't come as a shock, as many other central banks have started changing their use of liquidity injections, making them more slowly.
In the last few years, central banks have pumped a staggering $9 trillion into the economy in an effort to shore up economic conditions amid the pandemic.
The chart below shows the amount of quantitative easing (QE) used by the world’s four major central banks, courtesy of Atlantic Council. Since the beginning of 2020, the asset purchases made by these banks have caused their cumulative balance sheet to increase by approximately 60%.
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| A number of countries have already started to reduce, or taper, their asset purchases, while others, such as South Korea, Brazil, and most recently Norway, have raised interest rates. The impact that this tapering will have on the global economy continues to be unknown. |
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But where did they go? Labor issues are a driving force behind central bank policy, as they play a key role in when and how these financial institutions will reduce QE. However, there seems to be a bigger issue at hand.
From forced retirement, to child-care issues and a desire for a better quality of life, COVID-19 has set in motion a new dynamic in the workforce.
In the U.S. alone, labor markets are missing around 4.3 million workers since the beginning of the pandemic. Unemployment rates in America are at their lowest rate since the pandemic began, and they are also falling across Europe.
Labor shortages are impacting businesses all over the word, from farms in the U.K. to factories in China. Not being able to find enough employees, owners are boosting wages, which is shifting the balance of power. But how long will this situation last?
Forced to do more with less, businesses are looking to innovate and increase automation. Servers have been replaced with digital tablets used to order food.
Automated warehouses can improve inventory management. And “human-in-the-loop” machine learning software solution automates the process of classifying, capturing, detecting, and analyzing financial documents.
Automation may end up replacing more than just hospitality and warehouse jobs. Other vulnerable sectors include administration and financial services.
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Global shift in Bitcoin mining
As for bitcoin, it seems that China's recent crackdown on cryptocurrencies has made the U.S. the top destination for miners. More than 35% of Bitcoin's hash rate is now in the nation as of July, representing a 428% increase from late last year. In contrast, China's has gone to zero.
Meanwhile, Russian President Vladimir Putin believes cryptocurrencies have value—just not for settling trades in one of the nation's key commodities.
Hope you have a wonderful rest of your day!
Evamarie Augustine Director of FinTech at quantumeconomics.io @EvamarieAugust1 linkedin.com/in/evamarie-augustine/ |
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Bitcoin Market Journal is a daily newsletter focusing on blockchain and crypto investments. It is written and edited by Charles Bovaird, Mati Greenspan, John Hargrave, and Alex Lielacher.
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