Latest news with #hyperinflation
BBC News
05-08-2025
- Business
- BBC News
Preston City Council helped cover soaring cost of museum revamp
A £3m increase in the bill for refurbishing a historic Lancashire museum was partially subsidised by a city council, despite earlier reassurances rising costs would not be met by taxpayers, it has been Grade I-listed Harris building is due to reopen on 28 September after four years and what has turned out to be a £19.2m final cost was 17% more than the £16.2m budget set out for the project, which Preston City Council councillors ascribed to "hyper-inflation" and the cost of materials rising "enormously".The additional required funding was split between the city council and the National Lottery, according to the Local Democracy Reporting Service (LDRS). The LDRS understands Preston City Council contributed a further £1.41m for the revamp, while the National Lottery Heritage Fund contributed £1.5m, with £62k coming from other unidentified sources. 'Hyper-inflation' Details of the authority's additional contribution have emerged almost 12 months after councillors were told the money would not come from local taxpayers.A meeting of the council's overview and scrutiny committee last year heard from deputy chief executive Sarah Threlfall that the ballooning bill was the result of "hyper-inflation" and the cost of materials soaring "over the lifetime of the project".The extent of the rise was not made public at the time, but when asked by committee chair John Potter about how the shortfall would be bridged, Ms Threlfall said "the vast majority is not being met by…taxpayers, because there is external funding being put in place". The meeting was told an application had been made to the National Lottery Heritage figures obtained by the LDRS show a significant cash injection did ultimately come from the council – suggesting either less was received from the lottery funding pot than was required, or that costs continued to rise.A Preston City Council spokesperson said: "The additional costs reflect the programme impact of extending the scope of the project, funded through additional external funding, and the results of the previous fit-out contractor going into administration."The council's [extra] contribution accounts for less than 10 percent of the total project costs, demonstrating value for money in preserving the Grade I-listed building and establishing a cultural hub for Preston and Lancashire."It brings the total contributed directly by Preston City Council to more than £3.5m, while Lancashire County Council – which leases 40% of the Harris from the city authority to house the largest of Lancashire's libraries – has contributed around £1.4m. The National Lottery Heritage Fund provided an initial £4.5m grant, with £1.9m sourced from Preston's share of the last government's Towns in 2018, the overhaul was originally envisioned as a £10.7m scheme to create the country's first "blended" museum, art gallery and library. But the ambition for the building was subsequently expanded, leading to a rise in pre-planned addition, more asbestos was discovered after refurbishment began, leading to extra spending on its is hoped, The Harris will attract about 500,000 visitors a reopening, in September, will be marked with a special Wallace and Gromit-themed exhibition, entitled 'A Case at the Museum'. Listen to the best of BBC Radio Lancashire on Sounds and follow BBC Lancashire on Facebook, X and Instagram. You can also send story ideas via Whatsapp to 0808 100 2230.
Yahoo
04-08-2025
- Business
- Yahoo
Paul Krugman Warns Of ‘Bad Things' To Come After Trump's Firing Of Top Stats Official
Famed economist Paul Krugman has warned why Donald Trump's firing of Bureau of Labor Statistics Commissioner Dr. Erika McEntarfer ― after the president accused her (without evidence) of manipulating jobs data, following a weak jobs report ― could be a sign of 'bad things' to come for the U.S. economy. The BLS may not be a 'household phrase but it is absolutely critical' to the functioning and decision-making of the U.S. government because 'everything that we know about what's happening to the economy in the last couple of months' comes from it, Krugman told MSNBC's Ari Melber. 'If you start to corrupt those numbers, if you start to report those numbers as being what makes the president look good instead of what's actually happening, then bad things start happening,' the 2008 winner of the Nobel Memorial Prize in Economic Sciences continued. Krugman explained how countries have historically suffered hyperinflation because officials start 'ordering the statistical agencies to report nothing but puppies and rainbows.' By the time they finally admit they may have a problem, they're already 'at 80% inflation,' he added. 'This is the playbook,' Krugman noted. 'We've seen it many, many times. And now I have to say, faster even than I expected, it's come to America.' Listen from the 24-minute point here: Related... Ex-Prosecutor Says Probe Into Jack Smith Is Actually 'Last Thing' Trump Should Want Trump's Latest Boast Breaks Math Brains Across The Internet 'Oh, F**k That S**t!': John Oliver Absolutely Shreds Megyn Kelly Chuck Schumer Flips White House's Controversial Meme Into A Trump Takedown
Forbes
08-07-2025
- Business
- Forbes
After Countries Go Broke
Ray Dalio, one of the most successful macro hedge fund managers of our era, released a new book this year, How Countries Go Broke. This is an interesting topic, but an even more interesting topic is: What countries should do after they go broke. It might be important someday. For a country like the United States, with debt denominated in a local currency, 'going broke' normally means that continued deficit spending can't be financed by the bond market. Governments could, at this moment, reduce spending dramatically and basically balance their budgets. Ha ha ha! Of course this never happens. General Douglas MacArthur chats with Detroit banker, Joseph M. Dodge at the Haneda Airport in Tokyo ... More while awaiting the arrival of U.S. Secretary of Treasury, John Snyder, for talks on Japan's economy. Mr. Dodge drew up the blueprint for Japan's budget-balancing economy. What they do instead is: print the money; or, one way or another, have the central bank buy the bonds or at least support the bond market somehow. Actually there is not so much of a clear delineation here. The US dollar has already been losing quite a lot of value vs. its old benchmark, gold. The Federal Reserve hasn't been 'printing money' to any degree, but the effect is similar – the existing debt is inflated away. This has already been happening. This money-printing is fun at first, but soon becomes unpleasant. Basically, it is hyperinflation, to a greater or lesser degree. Eventually, this becomes intolerable. Then, a government is truly 'broke.' Then what? It is good to have a playbook for that day, because it will be a time when you have to act quickly and decisively. It is not a time to debate various hypotheses and proposals. Both Germany and Japan found themselves in this condition in 1949. It was already well after the end of the war. Both countries were under US military occupation. But the focus was shifting toward preventing local communist movements (happens when the economy is in shambles), and containing Soviet Communism. The US decided that it had to help Germany and Japan recover. One aspect of this was the Marshall Plan of 1948. But, it went beyond that. In 1949, a Chicago banker, Joseph Dodge, was dispatched to help the German government get its act together. Working together with local leaders such as the exemplary Ludwig Erhard, Dodge made a simple plan. The government was to go cash-only. This is a little beyond a 'balanced budget.' The government would spend nothing unless it had previously received payment of tax revenue. This relieved the central bank from government financing pressures, and allowed the German mark's value to be fixed to gold. The hyperinflation ended immediately. Then, taxes were reduced dramatically. This did not take the form of a reduction in tax rates (although Erhard argued for cutting rates by 50%), but rather, by boosting the tax brackets by multiples higher. The highest tax rate of 95%, which was reached at an income of 60,000 marks, was boosted to 250,000 marks, more than 4x higher. The income for the 50% rate was boosted from 2,400 marks to 9,000. Erhard continued with this theme afterwards. By 1958, the top rate was 53%, and this was paid on income over 110,000 marks. The tax-free exemption tripled. With a sound currency fixed to gold, and lower taxes across the board, Germany's economy boomed. Tax revenues rose from 6.6 billion marks in 1949 to 36.3 billion in 1963 – all measured in marks fixed to gold. You can read about it in my book, The Magic Formula. This went well, so Dodge headed over to Japan to do the same thing. Ikeda Hayato was made Minister of Finance on February 16, 1949. On March 7, he announced the 'Dodge Line." Japan's government was to go cash-only – a policy that it actually maintained until 1965. This relieved the Bank of Japan from financing needs. The yen was fixed to gold. Just as in Germany, Japan's leaders reduced taxes dramatically. In consultation with US advisor Carl Shoup, a national sales tax was abolished completely. The top income tax rate fell from 85% to 55%, while the income at which the tax applied was bumped higher from 300,000 yen to 500,000 yen. By 1957, the threshold of the 55% tax rate had risen to 10 million yen – thirty-three times higher. In 1960, Ikeda Hayato ran for prime minister. He promised to 'double incomes" in ten years – and won. The actual result, during that decade, was even better than promised. During every single year of the 1960s, taxes were lowered. So we see a simple and proven strategy. It is: The government goes 'cash only.' This might mean huge spending cuts, and it might have to be done in a matter of a couple weeks – not after months of debate. Today, the sensible way for the Federal Government to accomplish this is to simply chainsaw all welfare-related programs, including Social Security, all healthcare, all means-tested Federal welfare programs, and a variety of other welfare-related programs such as in education. The Federal budget would be immediately in surplus. All welfare-related programs would be delegated to the State governments, to do as they see fit, which is the actual mandate of the Constitution today. Of course this is not politically possible today. But, it would be possible in a hyperinflationary crisis, as Germany and Japan faced in 1949, or as Argentina faced recently. Then, taxes should be reduced dramatically. In 1949, Japan threw out its national sales tax, and kept the income tax. Today, I think it would be best to do the opposite – throw out the Federal income tax, repeal the 16th amendment, and instead introduce a single Federal value-added tax of about 10%. This would be more than enough to pay for all the Federal Government's spending, after the welfare-related spending was terminated. Just one 10% tax would be easy to administer. And, nobody would evade it, since who wants to become a criminal just to avoid a 10% tax? Businesses would pay the tax (including self-employed), but regular employees would face no direct taxes at all. With the Central Bank now relieved of government financing pressures, it would be time then to again fix the dollar's value to gold – just as Germany and Japan did in 1949. (China also had hyperinflation in 1949, and also went to gold in 1950.) In more recent times, we've seen countries do almost exactly the same thing. In 1994, Estonia ended hyperinflation by fixing the value of the currency to the German mark (later euro) via a currency board – very similar to fixing the value of the German mark itself to gold in 1949. The government also introduced a 26% Flat Tax, which seemed radically low at the time. It later fell to 20%. Estonia's economy boomed, and others noticed. Latvia, Lithuania, Bulgaria, Slovakia and others followed close behind, ending hyperinflation by fixing the currency's value to the mark/euro (typically), and introducing a Flat Tax. Bulgaria has a 10% Flat Tax today, and so does Mongolia. The Flat Tax was a great idea for the 1990s, but today I think a wholly indirect tax, such as the Value Added Tax, is even better. Then we could eliminate Income Taxes entirely, returning to the original pre-1913 Constitution with no direct taxes at all. Technically, a 10% VAT and a 10% Flat Tax are almost the same thing. But politically, it makes a big difference to eliminate the Income Tax altogether. Drive a wooden stake through its heart so that it will never return.
Forbes
30-06-2025
- Business
- Forbes
The Difference Between Bitcoin Mortgages And Bitcoin-Backed Loans
Salvadoran artisan Crisanta Cruz sells souvenirs with the B of bitcoin and also receives payments in ... More that cryptocurrency in the park of Berlin, El Salvador on January 20, 2025. Bitcoin enthusiasts seeking to turn a mountain town in El Salvador into a cryptocurrency haven hope that US President Donald Trump's return to the White House will boost their cause. (Photo by Marvin RECINOS / AFP) (Photo by MARVIN RECINOS/AFP via Getty Images) Financial innovation often comes out of necessity– that's how my family and I got into bitcoin. Growing up in a hyperinflationary economy, I learned that on Friday afternoons, you had two jobs: the one that earned you money from 9-5, and a second job converting your paycheque into something that wouldn't be worthless by Monday. I also learned that being good at your 'second job' was infinitely more consequential to your financial success. Today, bitcoiners face a similar challenge. They're sitting on substantial wealth, but when it comes to buying a home, should they sell the asset that built their wealth? Traditional banks look at a buyer's employment income, credit score, and expect to transact in local currency. If bitcoiners sell for USD, they'd likely trigger massive tax bills and watch from the sidelines as their former holdings appreciate faster than the house they just bought. Here's an interesting stat: In 2022, someone buying a house would've needed to sell about $188,000 worth of bitcoin (accounting for capital gains tax) to make a $160,000 down payment. That bitcoin would be worth over $1.25 million today. When you factor in capital gains taxes (15-40% depending on jurisdiction) plus the opportunity cost of bitcoin's foregone appreciation, that "cheap" 3% mortgage becomes the most expensive money you'll ever borrow. There is a better way for bitcoin holders to access their own wealth without destroying it. The FHFA News The Federal Housing Finance Agency ordered Fannie Mae and Freddie Mac to consider cryptocurrency holdings in mortgage risk assessments so that crypto assets could be counted towards a borrower's assessment without conversion to U.S. dollars—a landmark acknowledgment that modern wealth doesn't always sit in traditional bank accounts. But here's the reality check: most mortgage qualification criteria are still limited by income tests. The asset test is often a secondary factor. You might have significant bitcoin holdings, but if you don't have W-2 or taxable income that fits their ratios, you're still out of luck. For many bitcoin holders, selling their crypto to help qualify for a mortgage means incurring massive capital gains taxes and giving up future upside. In contrast, borrowing against their bitcoin preserves wealth, provides flexibility, and avoids the gruelling process of traditional underwriting. We've seen firsthand how this empowers people globally—from early adopters to entrepreneurs—who now have access to financing on their terms. Banks Don't Get Bitcoin (And That's Their Problem, Not Yours) Traditional mortgages are built for people with predictable and taxable salaries. But that's not the reality for most successful people today. Entrepreneurs, self employed professionals, and early bitcoin adopters have wealth, just not in the neat little boxes banks require for a mortgage. Borrowing against bitcoin takes this one step further than the FHFA proposal—not just using bitcoin as one of the qualification criteria for the mortgage, but basing the credit worthiness entirely on the bitcoin asset itself. This simplifies the process versus a traditional mortgage which requires income and other types of verification to qualify. This is where bitcoin shines as pristine collateral. A bitcoin in Colombia is identical to a bitcoin in Canada. It trades 24/7, has deep liquidity, and doesn't care about borders or banking hours. The Beauty of Not Selling When you borrow against your bitcoin instead of selling it, there's no credit check, your bitcoin is your credit worthiness. You don't trigger any capital gains tax in most jurisdictions. You keep the upside when bitcoin appreciates. Taking a loan against your bitcoin happens in hours, not months like traditional mortgages. Bitcoin-backed loans open up new investment possibilities. You can keep your loan and gradually repay it over several years. Collateral appreciation can offset the interest accrued while your bitcoin stack keeps growing. It's true that major banks are finally waking up to bitcoin's value proposition, and that U.S. regulators are signalling stronger support for this industry. We're at an inflection point. But here's what really excites me: This isn't just about the wealthy getting wealthier. When I discovered bitcoin mining in Venezuela, it wasn't just the technology that blew my mind; it was watching how anyone could convert electricity into hard money that could be used to opt out of a corrupt and unfair system. The regime's tyrannical efforts to control and extinguish their savings were futile against their newfound freedom money. That same democratization is happening with financing. The person taking a sliver of their paycheck to buy bitcoin and build their stack now has access to the same financial tools as Michael Saylor. That's revolutionary and empowering. The New Playbook With bitcoin-backed loans, there should be no reliance on made up tokens and complex underwriting. Bitcoin is the innovation. Bitcoin is the credit worthiness. These new loans make financing very simple: You borrow against your own assets. Your bitcoin is collateral. No income verification– you already own it. No employment history– you already own it. No geographic restrictions– it's the same everywhere. The lending market is about to get very competitive, and that's fantastic for consumers. As more banks enter the space, rates will come down. Bitcoin-backed loans will become as normal as home equity lines of credit, but this time, the entire world has access to owning Manhattan real estate on the internet– not just New Yorkers! In the old world you had to choose between your digital bitcoin wealth and your real life dreams. In the new world, bitcoin can enable those dreams, without having to sacrifice your stack. For someone who's seen bad money die, and who's watched families lose everything to currency debasement, Bitcoin is hope. Now, with proper lending infrastructure, that hope is transforming into opportunity. Welcome to the new economy. One where your bitcoin will be your credit score, and your jet fuel.
Coin Geek
09-06-2025
- Business
- Coin Geek
BSV blockchain micropayments: Stabilizing economies in crisis
Getting your Trinity Audio player ready... Economic crises, whether sparked by natural disasters, political turmoil, or global pandemics, reveal the vulnerabilities of traditional financial systems. Hyperinflation, currency devaluation, and disrupted banking services often leave populations struggling to access basic necessities, especially in developing economies. BSV, with its highly scalable blockchain and ultra-low-cost micropayments, offers a transformative solution to stabilize economies during such crises. By enabling fast, secure, and inexpensive transactions, BSV supports financial inclusion, streamlines humanitarian aid, and enhances government responses, fostering resilience in vulnerable regions. This article explores how BSV's micropayment capabilities can stabilize economies in crisis, leveraging its technical strengths and real-world applications. The impact of economic crises Economic crises severely disrupt access to essential goods, services, and financial systems. In hyperinflationary scenarios, such as Venezuela's 1.7 million percent inflation rate in 2018, local currencies lose value rapidly, eroding savings and purchasing power. Banking infrastructure often collapses, leaving the unbanked, approximately 1.4 billion people globally, without viable alternatives. Traditional remittance services, vital for many developing economies, become costly, with fees averaging 7% per transaction. These challenges disproportionately harm low-income communities, deepening poverty and inequality. BSV counters these issues with its high-throughput blockchain, which is capable of processing millions of transactions per second at fees as low as $0.00001. Unlike traditional financial systems, BSV operates without intermediaries, ensuring instant, irreversible transactions on an immutable ledger. This makes it ideal for delivering aid, facilitating essential transactions, and restoring economic stability in crisis-affected regions. Micropayments: Empowering the unbanked Financial inclusion is critical for economic stability, and BSV's micropayment capabilities are uniquely positioned to serve the unbanked. Banking services often become inaccessible during crises, forcing reliance on cash or informal networks. BSV's digital wallets, such as RockWallet, require only a smartphone and internet access, enabling anyone to send and receive funds instantly. This is particularly impactful in regions where physical bank branches are unavailable, or currencies are unstable. For instance, in a crisis like Zimbabwe's hyperinflation in the 2000s, BSV could enable individuals to transact in stable-value tokens pegged to assets like the U.S. dollar, bypassing volatile local currencies. Micropayments facilitate small, frequent transactions, such as purchasing food or paying for utilities, without the high fees of traditional systems. This ensures that individuals can meet their daily needs, preserve economic activity, and reduce dependence on unreliable markets. Remittances, which exceed $700 billion annually and are critical for developing economies, also benefit from BSV's low fees. High costs from providers like Western Union (NASDAQ: WU) often erode these funds. BSV's near-zero transaction fees ensure more money reaches recipients, directly supporting families and local economies. For example, a worker in a crisis-hit region could receive $50 from abroad without losing a significant portion of the fees, increasing their ability to afford essentials. Streamlining humanitarian aid Efficient delivery of humanitarian aid is vital during crises, yet traditional systems often face high administrative costs, delays, and fraud risks. BSV's transparent ledger and micropayment system enable direct, trackable transfers to recipients, minimizing intermediaries. Non-profits can distribute micro-donations, as little as a cent, ensuring funds reach those in need quickly and transparently. The Charity Wall platform, built on blockchain technology, illustrates this potential. During the COVID-19 crisis, it facilitated transparent donation flows, allowing donors to track contributions in real time. BSV's scalability supports high volumes of micro-donations, enabling rapid emergency response. In a refugee crisis, for example, aid organizations could send small, frequent payments for food, medicine, or shelter directly to digital wallets, reducing waste and ensuring accountability. BSV's immutable ledger minimizes corruption risks, fostering trust among donors and recipients. Enhancing government response and transparency Governments in crisis often struggle to distribute welfare benefits efficiently due to bureaucratic inefficiencies or fraud. BSV's micropayments enable direct, instant transfers to citizens, bypassing costly intermediaries. In a natural disaster, governments could send micro-stipends for essentials like food or housing directly to digital wallets, ensuring rapid relief. A U.K. pilot project explored blockchain for welfare tracking, demonstrating how transparent ledgers can monitor fund usage while preserving privacy through anonymized data. BSV's scalability makes this approach feasible on a national scale, reducing fraud and administrative costs. Additionally, BSV can stabilize economies by supporting digital currencies or tokens backed by stable assets. In hyperinflationary crises, governments could issue BSV-based tokens pegged to commodities like gold, providing a reliable medium of exchange. This could restore confidence in local economies, encouraging spending and stabilizing markets. Challenges and the path forward Despite its potential, BSV faces challenges in crisis settings. Though increasingly widespread, Internet access remains limited in some regions, requiring infrastructure investment. Digital literacy is another barrier, necessitating education campaigns to teach users how to use blockchain wallets. Regulatory uncertainty may also hinder adoption, as governments may resist decentralized systems. Collaboration between BSV developers, governments, and NGOs is essential to address these issues. Security and privacy are critical considerations. While BSV's ledger is secure, protecting users from scams and ensuring privacy in welfare tracking require robust protocols. Advances in anonymization techniques can help balance transparency with data protection, ensuring regulation compliance. A new foundation for stability BSV's micropayment capabilities provide a powerful tool for stabilizing economies in crisis. By fostering financial inclusion, streamlining humanitarian aid, enhancing government efficiency, and supporting economic participation, BSV addresses the root causes of economic instability. Its low fees, high scalability, and transparent ledger make it a transformative solution for regions where traditional systems falter. BSV offers a blueprint for resilience as economic volatility increases globally, empowering communities to navigate crises with greater security and equity. The future of economic stability lies in decentralized, accessible, and efficient systems—and BSV is paving the way. Watch: Micropayments are what are going to allow people to trust AI title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen=""> Bitcoin SV BSV Blockchain Crisis Digital Wallets Micropayments Remittances
