Posts Tagged ‘Economy’

Coal is still king in Svalbard

January 29, 2014

Svalbard, ranging in latitude from 74°N to 81°N,  is about as close as you can come to the “top of the world”. The mining of coal would not normally be thought of in the Arctic and that close to the North Pole but the Svalbard economy is dominated by coal mining. The population of Svalbard had increased by two percent, to 2,158 at the end of 2012.

CIA Factbook: The settlements on Svalbard are essentially company towns. The Norwegian state-owned coal company employs nearly 60% of the Norwegian population on the island, runs many of the local services, and provides most of the local infrastructure. There is also some hunting of seal, reindeer, and fox. Goods such as alcohol, tobacco, and vehicles, normally highly taxed on mainland Norway, are considerably cheaper in Svalbard in an effort by the Norwegian government to entice more people to live on the Arctic archipelago. By law, the Norwegians collect only enough taxes to pay for the needs of the local government. None of tax proceeds go to Norway.



Science Nordic reports:

The economy of Svalbard, the Norwegian arctic archipelago that lies between the country’s mainland and the North Pole, is still dominated by coal even as its value dwindles and employment in the mines drops. …

Tourism, a college and polar and space research activities have yet to make this community independent of coal. This has been verified by a recent analysis of Svalbard’s socio-economic status by the Norwegian Institute for Urban and Regional Research (NIBR).

“Coal mining has always been the mainstay here, and it still is,” says researcher Steinar Johansen, who wrote the report with his colleague Hild Marte Bjørnsen. ….. In addition to all who are directly employed by the local coal company, Store Norske, mining requires a number of sub-venders, and services need to be provided to family members who move to Svalbard’s little town, Longyearbyen, at the chilly latitude of 78° N. …

But can the Svalbard community surive without coal? Not without major changes, according to the researchers.

Tthe statue of the coal miner in the town of Longyearbyen is a reminder of who – or what – really dominates the economy. (Photo: Georg Mathisen)

Bitcoin still soaring

April 9, 2013

Updating my previous post, the Bitcoin value  continues to soar and had reached about $240 today. The Bitcoin hoard of 21 million is now worth about $5 billion.

Three months ago the value of a Bitcoin was less than $10. Simple arithmetic tells us that around an additional $4.8 billion has come into this market and  is now locked up as Bitcoins. Some of this enhanced value may be due to intentional circular trading but if that is the case this bubble will burst and some will make a killing and others are going to take a big hit. Anybody who has entered recently without a well thought out exit strategy is taking a big risk.

Last price:$235.70000, 

High:$240.11100, Low:$180.00000, 

Volume:108657 BTC 

bitcoin value 9th april 2013 in USD

bitcoin value 9th april 2013 in USD

Bitcoin value in US Dollars

Bitcoin value in US Dollars last 6 months to 7th April

China’s trade surplus in 2012 was 48% higher than in 2011

January 10, 2013

China’s role as a motor for the world economy continues.

In spite of sluggish world-wide demand, Chinese exports rose 7.9 percent in 2012 from the previous year, while imports climbed 4.3 percent year on year. Xinhua reports that “China’s foreign trade for 2013 will be better than that of last year despite uncertainties, a General Administration of Customs spokesman said on Thursday. Spokesman Zheng Yuesheng said global economies have launched stimulus policies to prevent growth rates from slumping, adding that China’s domestic efforts to boost the growth of foreign trade will have more visible effects this year”.

MarketWatch: China’s trade surplus soared to $31.6 billion in December, trouncing estimates and widening sharply from a $19.6 billion surplus in November, aided by a strong growth in the country’s exports. Official data released Thursday showed exports expanded 14.1% during the month from the year-earlier period, while imports grew 6%. A survey of economists by Dow Jones Newswires estimated a trade surplus of $19.6 billion, exports growth of 4.6% and a 3.3% increase in imports. The steep increase in December’s positive trade balance boosted China’s full-year trade surplus for 2012 to $231.1 billion, 48.1% higher than the level recorded in 2011, according to a Xinhua news report.


US going over the fiscal cliff is probably best for world economy

December 26, 2012

No doubt I have a simplistic view but the best thing in the long-term for the world economy would be for the US to start reducing its budget deficit and its burgeoning  public debt. Public debt has to be set to whatever level is sustainable. An economy in transition from one level to another can permit a changing level of public debt, but the current level of deficits (7 -9% of GDP) and ever-increasing debt is not sustainable. The problem is that even if the US did not avoid the fiscal cliff the US public debt would continue to grow – if a little more slowly than as at present. The cliff may in reality be more like a hill but it is still along the way to the wrong place.

US Public Debt

US Public Debt

Budget discipline and a stable level of public debt must – I think – come first. It is public profligacy – whether in Greece or Spain or the US – which is unsustainable and rampant profligacy will not end without some short-term pain. It is probably time for the US to bite the bullet.

I see that the US press is now beginning to expect that some kind of fall – whether over a cliff or a hill – is inevitable but that perhaps the fall can be cushioned by attaching a bungee rope or by aiming for a ledge part-way down!

NY Times: Until late last week, most observers had expected the president and Congressional Republicans to come up with at least a short-term compromise before the year-end deadline. But thefailure of Speaker John A. Boehner to win support for tax increases on the wealthiest Americans from fellow House Republicans has forced many economic observers to reconsider what might happen if political leaders remain deadlocked into 2013.

MSNBC: On the Sunday news shows, no one signaled a change of position that could form the basis for a short-term fix, despite a suggestion from Obama on Friday that he would favor one. The focus was shifting instead to the days following January 1 when the lowered tax rates dating back to the George W. Bush administration will have expired, presenting Congress with a redefined and more welcome task that involves only cutting taxes, not raising them.

“I believe we are,” going over the cliff, said Republican Senator John Barrasso of Wyoming. “I think the president is eager to go over the cliff for political purposes. I think he sees a political victory at the bottom of the cliff,” Barrasso said on Fox News Sunday.

Some Republicans have said Obama would welcome the fiscal cliff’s tax increases and defense cuts, as well as the chance to blame Republicans for rejecting deal. Obama has rejected that assertion.

WSJ: Lawmakers returning to town this week will see whether they can agree on a plan to avoid the full brunt of the fiscal cliff, the combined $500 billion in tax increases and spending cuts set to begin next week. Little if any progress was made in the talks before Congress and President Barack Obama left town last Friday for Christmas. The president plans to leave his vacation in Hawaii late Wednesday night, returning to Washington on Thursday, the White House said.

CNBC: Despite the $600 billion of tax hikes and spending cuts due to come into force at the end of this month unless U.S. lawmakers reach a deal, the S&P 500 index is not displaying signs of stress, says independent chartist Daryl Guppy.

The stock index is in fact trading upwards as investors increasingly take in the possibility that the U.S. economy might fall over the “fiscal cliff,” he told CNBC Asia’s “Squawk Box” on Thursday. “The fiscal cliff is a bungee jump. It used to be exciting. Now it’s just a tourist attraction. The market is absorbing that,” he said. 

While the S&P 500 index has dipped back towards the 1,380 to 1,400 range seen in August and mostly recently in November, stocks appear to be on their way up again, he added. The index closed at about 1,419 on Wednesday.


China steps in to support Greece (and the EU)

October 3, 2010
Wen Jiabao (温家宝), Chinese Premier

Image via Wikipedia

China is now too big a player to take lightly and I see the Euro strengthening.

Dagens Industri:

(My translation)

On Saturday China entered into an EU- country’s economy by promising strong financial support to crisis-hit Greece. “When Greece has problems, China is prepared to offer all the help it can” said the Chinese Prime Minister Wen Jiabao at a press conference in Athens together with his Greek counterpart, Giorgos Papandreou sfter they had held bilateral discussions.

China, according to Wen Jiabao, will help finance the purchase of
Chinese ships to the Greek shipping industry by creating  a
Fund worth five billion U.S. dollars (about 34 billion SEK). “China is willing to join together with the EU – as a passenger in the same boat – to strengthen cooperation to meet the financial crisis, said the Chinese Prime Minister. Crisis-hit Greece also had the promise of Chinese investment, including for the port of Piraeus and for import of Greek
goods. The Chinese also promised purchases of Greek government bonds.
“Greece has been effective in its handling of the debt crisis”, continued Wen Jiabao, who spoke through an interpreter at a press conference.

He also stressed that the EU and the IMF aid package to Greece had
yielded positive results and that he sees the Greek economy recovering in line with the global economy. Papandreou, for his part said that China’s plans to support Greece is an expression of confidence in Greece.

Wen Jiabao will speak to the Greek Parliament on Sunday before moving on to Brussels to attend a meeting between EU and Asian leaders. Then he goes on to Germany, Italy and Turkey.

Strong GDP growth in India but danger signals persist

September 1, 2010

India and China continue to grow and should be able to weather the storm of the coming second dip of the double-dip recession which is looking ever more likely in Europe and the US – notwithstanding the recent growth in Germany and the UK.

In India the sharp growth in the manufacturing and service sectors could overcome the demand side weakness that is also apparent. The April – June quarter has had the highest growth for 10 quarters. Bringing inflation down from the current 9+% becomes crucial. The good monsoon so far should help. The hotels and tourism sector should get a further boost in the 3rd quarter when the Commonwealth Games is held in Delhi – though the Games themselves seem to be mired in corruption scandals and the late completion of all the venues.

From the Hindu Business Line.

Powered by a manufacturing rebound, the Indian economy has recorded an 8.8 per cent growth during the first quarter of the current fiscal (April – June 2010)

The 8.8 per cent year-on-year increase in the real gross domestic product (GDP) compared with 6 per cent in the same quarter of 2009-10 has been largely due to robust industrial (especially manufacturing) growth from a low base.

The industry, as a whole, grew 11.4 per cent against 4.6 per cent in the corresponding period of the previous fiscal, when factories were struggling to emerge from the slowdown triggered by the global financial crisis of late 2008.

Within industry, manufacturing registered a 12.4 per cent year-on-year jump, against 3.8 per cent during April-June of last fiscal. But, it is not only industry that has done better relative to last year. Even the farm sector and services have notched up higher growth rates for the first quarter. While agriculture has benefitted from a decent rabi harvest that followed a drought-impacted kharif crop, in services, the impetus has come mainly from commerce (trade, hotels, transport and communication) and construction.

But as The Times of India points out, danger signals on the demand side still persist and could threaten future growth.

However, a closer look at the data, say economists and bankers, reveals that the upward trend may not continue for long. StanChart in a report, said that despite strong growth in Q1, slow growth in domestic demand and global slowdown raise doubts about growth in the next few quarters. A research report by Nomura also pointed out that the biggest surprise in India’s growth figures is the substantial divergence between the real GDP (gross domestic product) growth estimated at 8.8% (year-on-year basis) and the real GDP growth at market prices, estimated at 3.7%.

The report explained that the difference between the two is indirect taxes and subsidies offered by the government. Government’s latest figure suggests that taxes are falling while subsidy payments have risen substantially.

Germany: Highest growth rate since Reunification

August 15, 2010

The motor of the European economy is revving up again.

Der Spiegel reports:

Graphic: German growth forecasts for 2010

Germany just posted its strongest quarter of economic growth since reunification in 1990. During the second quarter, an exports boom, increased consumption and government stimulus helped the country chalk up growth of 2.2 percent. Buoyed by a surge in exports and continuing government stimulus programs, Germany’s economy is recovering at a faster pace than most economists expected. During the second quarter, gross domestic product increased by 2.2 percent on the previous quarter, the Federal Statistical Office in Wiesbaden announced on Friday, marking the largest quarterly economic growth since the country’s reunification in 1990.

There has been some criticism of the austerity package being introduced by the German government and of the ending of the stimulus packages. But perhaps the timing is right after all. But whether German growth can prevent a doubel-dip recession in the rest of Europe remains to be seen.

The 5 million unemployed in Germany in 2005 has now reduced and could soon be  less than 3 million.

In addition to benefiting the labor market, the German economic stimulus program also boosted consumer spending. Short-time workers have more disposable income than the unemployed, and as a result, German consumers were hardly forced to cut back during the crisis.

EU Idiocy: My “3 egg” omelette is to be banned

June 27, 2010

One would hope that idiots in Brussels would have better things to do.

Sorry — My mistake. They are only idiots after all…….

photo credit

“Shoppers are to be banned from buying eggs by the dozen under new regulations approved by the European Parliament. For the first time, eggs and other products such as oranges and bread rolls will be sold by weight instead of by the number contained in a packet. The new rules will mean that instead of packaging telling shoppers a box contains six eggs, it will show the weight in grams of the eggs inside, for example 372g. Or that a bag of white rolls has 322g inside instead of half a dozen. The rules will not allow both the weight and the quantity to be displayed”.

Breakfast in future will have to be a 106g omelette with a 52g bread roll!!!! But perhaps if we can get all hens to be the EU standard they can all begin producing eggs of a constant weight.
Read more:

High probability of La Nina: Good news for the Indian monsoon

June 26, 2010

Good news for the Indian monsoon

The Indian Meteorological Department has increased their rainfall forecast from being 98% of normal to being 102% of normal because of the La Nina conditions developing from the cooling of  the Central Pacific. The monsoon is expected to be “on time” and Northern India will get some relief from the sweltering temperatures they have been suffering.

Development of La Nina will also lead to global temperatures continuing to show the decline which has been apparent for the last decade.

The monsoon is formally defined to last for the 4 months of June to September every year and the onset and progress of the northern front of the monsoon is closely watched and can have a major impact. Even though the Indian economy is not as vulnerable to bad monsoons as it used to be, the importance of the monsoon to agriculture (and therefore also to related industries such as fertilisers, pesticides,pumps and even tractors) means that the difference between a “good” monsoon and a “bad” monsoon can be as much as 2% of annual GDP.

‘‘The latest forecasts from a majority of the dynamical and statistical models indicate continued and rapid cooling of the equatorial Pacific to below La Nina threshholds. There is a very high probablity (about 60%) for the La Nina conditions to develop during the monsoon season, which favours stronger than normal monsoon,’’ said IMD Director General Ajit Tyagi.

(photo credit:…/)

La Nina is also expected to bring more rain to Australia.

While La Nina will be welcomed in India and may disrupt the Ashes Tests in Australia it is not good news for the soya bean crops in Brazil.

23 B$ Broadband Bonanza for the Indian Government

June 11, 2010

(photo – )

Mobile subscribers are increasing by between 5 and 10 million every month in India !!!

Following the receipt of over $15 Billion ( Rs 67,700 Crores) from the auction of the 3G spectrum to mobile operators in May, the Indian Government has received over $8 Billion (Rs 38,300 Crores) from the 16 day auction of the Broadband Wireless Access (BWA) spectrum.

This is more than 3 times greater than the expected proceeds and provides the Indian Government with an unexpected $15 Billion to improve the fiscal deficit for the current financial year.–Govt-gets-38-300-cr

As with 3G, Mumbai and Delhi received the highest bid amounts. The BWA auction had two slots of 20 MHz of spectra across India.
At least 11 companies, including Bharti Airtel, Reliance, Idea Cellular, Aircel, Vodafone and Tata Communications Internet Services, participated in the auction for Broadband Wireless Access spectrum. The state owned bodies – BSNL and MTNL, which had received BWA spectrum allocations in advance of the auction will have to pay the equivalent of the winning bid in each service area.

BWA spectrum enables high-speed Internet access as well as Internet telephony and TV services. It can also be used for voice and high-speed data services.

%d bloggers like this: