What is An Cryptocurrency?

Cryptocurrency is a form of digital money that is designed to be secure and, in many cases, anonymous. 

It is a currency associated with the internet that uses cryptography, the process of converting legible information into an almost uncrackable code, to track purchases and transfers.

From the available sources, it is know that BITCOIN is the the first cryptocurrency since 2009. But we also hear that there have been 1000 types of currencies on the round while BITCOIN is still dominating the markets, it went all the way up to $20,000 a coin before crashing to $9000 a coin in Jan 2018.

  

What’s wrong with Great Indian Economy in the recent past?

Why is that Indian Rupee weakening against American counterpart?  Simple answers are, Current Account Deficit crisis; Global Economy owes; Central Government mismanaged the credits & debits!!! But I am skeptical about the reasoning therefore I tried to capture the larger picture of the current crisis.

Let’s learn what Current Account Deficit means. It’s an imbalance between country’s total imports and exports. Deficit do occur when total imports exceeds total exports of the country. This situation makes a country a net debtor to the rest of the world.

Substantial current account deficit is not necessarily a bad thing for certain countries. Developing counties may run a current account deficit in the short term to increase local productivity and exports in the future.

So what is Fiscal Deficit? Apparently Fiscal Deficit is also a catalyst to the economic cues. When government’s expenditure exceeds its revenue then there is a possibility for deficit and this can be accumulated over the years. Obviously, financial accumulation becomes a burden for the government.

Petrol, diesel & cylinder subsidies, social welfare schemes and rural employment guarantee programs are not only the reason for the recent fiscal deficit. There are few other factors involved too.

Both external & internal influences bombed the current meltdown.

a.       Syrian Civil War and proclaimed chemical weapons against its own people triggered Western war against Syria. So what? Fear of US war against Sriya, creates instability to India’s oil import from Arab countries. Therefore the oil imports soaring and a barrel crude oil breaching $120 which is abnormal.

b.      US Government’s announcement of withdrawing economic package boosted the investor around the globe to venture into US markets rather than debt driven Indian markets.

c.       India’s exports taken a beating due to declining markets for textile and jewelry especially polished diamonds.

d.      Raising inflation is one another factor; spending patterns were realigned to invest in the gold which is a good hedging tactics against soaring inflation. Therefore very less investors/risk takers in the market which is causing liquidity crunch.

So what is the way out? The options available to us are very limited.

a.      Economic package by the government will help reduce the liquidity crunch. But this is again a burden.

b.     Revalue the Indian Rupee. Is it viable?

c.      Make alternate for the crude oil and explore other possible options. Reduce dependency on oil import which is a major chunk, approx. 40% India’s import.  

d. Remove subsidies for petrol, diesel and LPG. No government will dare to do this unpopulous  measure.

Can the options work out? So the fate hangs. God only knows!!!

"Tortoise Economy"

 

An economy that is growing slowly or not at all over time. The classic example of a tortoise economy is the Japanese economy during the Lost Decade in the 1990s. During that time, interest rates remained near 0% while economic expansion was non-existent.

The phrase "tortoise economy" was first popularized by Robert Reich in his description of the U.S. economy during the financial crisis that began in 2007-08. In the years following the recession, U.S. growth remained slow, and interest rates were very low.