Cryptocurrencies' free fall

Since the start of 2018 Bitcoin has lost more than 60% of its value, and other cryptocurrencies have done almost the same during last the five weeks. Meanwhile, some Governments in East Asia, such as China and South Korea, have introduced tougher regulation, and India's policy makers want to ban all use of  cryptocurrencies. With regard to the latter announcement, Bitcoin fell by 12.7 % on Friday, 2nd February. 

We mainly know that Bitcoins is a particular implementation of the blockchain technology, the world's leading software for digital assets, which allows market participants to keep track of digital currency transactions without central record keeping. Each computer connected to the network is considered a node that gets a copy of the blockchain, which is downloaded automatically. Consequently, Blockchain's participants can transfer funds and setting trades without the need for a central authority. The network of nodes validates the user's status and the transaction using known algorithms, and combine the latter with other transactions to create a new block of data, which will be added to the existing blockchain.The major innovation is that the technology allows market participants to transfer assets through the internet without the need  for a centralized third party.
Within the context above mentioned, some experts are talking about similarities between cryptocurrencies and other coins. This is not correct, because when we are speaking about the Euro, the Yen or the Dollar, we are referring them to strong economies, efficient taxation systems and central banks, which allow them to create a particolar value. On the contrary, with regards to Bitcoin and other cryptocurrencies we have no idea who bake them, and who is behind the their value.

As mentioned by Matin Baccardax, from TheStreet.com, when we own a share of a public company, which is freely traded on a stock exchange, just we have a piece of paper which gives us a small portion of the profit going forward. Neverthless  when we own Bitcoin we don't have anything in terms of dividends or profit. Bitcoin's value only increases when more people participate, and when fewer people  participate the value decreases. This is a structure which create a great deal of risk.

World richest people's economic agenda

It seems that one of the most important topic at World Economic Forum, last week in Davos, was the trend of increasing disparity on the job front, and the need to provide a fair work environment for women and minorities. The political leaders, who gathered at World Economic Forum in Davos, also focused on  jobs in danger of being displaced by technology, but they didn't mention the very big disparities in global wealth and global income. 

In a report published last week, an international confederation of twenty NGO  working to end the injustices that cause poverty, Oxfam International (www.oxfam.org), said that the 82% of the global wealth generated in 2017 went in the most wealthy 1% of the population. Although the World Economic Forum participants announced a target of one million workers over the next three years, we have no choice but to raise tax on richest people in the aim to finance job transition opportunities, new tech-reskilling, education, healthcare, transport services, and so on. What we need to be done, first of all, is to ensure that the richest 1% of world population stop using the global political establishment to further advance its own economic agenda.
A few years ago a French economist, Thomas Piketty, said in his book that as long as the return on capital is bigger than the economy's growth, we will continue to claim that wealth disparity is on the rise. In this prerspective,  an apparently small gap between the return on capital and rate of growth can on the long run have powerful and destabilizing effects on the structure and dynamics of social inequality.

So, if global political leaders  shared the need to reform the financial system, the new wealth wouldn't continue to go to the pockets of the richest 1% of world population. Actually, a progressive tax on capital and income would be a good response to the problem of private capital and its return. A progressive levy on individual wealth would reassert control over capitalism in the name of the general interest while relying on the forces of private property and competition.
Unfortunately, with election of President Trump we have heard very clearly that the US will go backwards on all regulations, all rules, and all tax policies: if richest people become richer, the middle class will disappear. And When super-riches grow unchecked, no one wins, not even the super-rich themselves, in the long run. 

P.S.: according to global inequality report, Jeff Besoz is the world's richest man with a fortune of $ 100 Billion, and only one out of ten of the world's billionaires are women. 

Iran's 2015 nuclear agreement under threat

With regard to the Iran nuclear deal, signed by six global powers and Theran in 2015, US Administration has recently demanded  more sanctions and changes. During a meeting held in Brussels one week ago, the EU Countries reaffirmed their support for the Iranian deal that President Trump has rejected. 

So European States have shown they want to preserve Iran's 2015 nuclear agreement with world powers, which is seen under  threat from the United States. 

But, according to Iran, this is not enough: if US permanent restrictions on Iran were implemented, Theran would be ready to see how the EU would protect their companies dealing in transactions with Iran. It they take actions, Iran will go long with Europeans.

How 2017 is going to an end

Since President Trump decisions on status of Jerusalem, most tourists kept away from the occupied West Bank city of Bethlehem: Palestinians have celebrated Christmas amid tensions because of protests across the West Bank and Gaza Strip against the US flagrant violation of the UN Charter, of Internatinal Law and  of the relevant UN Resolutions.
During the last UN general Assembly, 128 countries voted against Trump's recognition of Jerusalem as Israel's capital, and only eight stayed with it. On the one hand,  four of the eight countries that stood with the US are tiny Pacific Islands. On the other hand, US allies, such as France, Britain and Germany voted for the UN resolution.

So to sum up, the last month of 2017 confirms, once again, that the US is no longer credible as mediator in the peace process. That's why so many believe that President Trump has isolated the US. Actually, with regard to climate change he recently did the same.   

Yemen and Syria, in addition to Palestinian people,  are still paying a terrible price for the Saudi-Iranian rivalry. And some expert say that tensions may escalate into a major regional conflict including Lebanon.   

From 10 to 20 December 2017 in the Middle East

During the second decade of December two main events affected the Middle East: the U.S President's decision to recognise Jerusalem as the capital of Israel, and the Houthi rebels' ballistic missile targeting  the Saudi Arabia's Royal Palace in Riyadh. At the same time stock markets rose steadily! It's easy to understand how human rights abuses and violations of international law are strictly related to the increase of stock markets around the world. At first glance, it seems that the two facts contradict each other. But it isn't always the case.

 

Sale of weapons and stock markets booming

It seems that a lot of people, such as investors, individual traders, market experts and columnist have been waiting for a new periodic crisis of the markets. Actually, we could see a "rotation" in terms of money which may flow out from the stock markets. In particular,  technology stocks have been on a all time high for a long time, thanks to the sharp development of networks and nodes both related to the world's system on transactions.       

Unfortunately, there are also some geopolitical uncertainties in the Eastern emisphere which may affect the markets:   

• Saudi Arabia leadership accepts to partially normalise relation with Israel in exchange for an alliance against Iran.
• Rohinjy people are still brutally oppressed while the developed world holds its inaction in the face of genocide and example of ethnic cleasing.
• The EU has been cutting funds allocated to Turkey due to the deteriorating situation in terms of democracy, rule of law and human rights.
• U.S. President is considering recognising Jerusalem as capital of Israel, although 330,000 Palestinians, who make up 37 percent of the city's population, have been living there since Israel captured and annexed the Eastern Sector.
• Conflicts in Yemen and Syria haven't still gone to an end.
• Sale of weapons to Saudi Arabia, Myanmar and Iran has increased sharply since 2016.

It seems that there is a relationship between the rise of stock markets and the frenetic and uncontrolled sale of weapons and munitions in the Asian continent. 

In addition to this, China and Russia call on U.S. to reduce military exercises in East Asia Region of the World. In particular, Russia foreign minister have questioned U.S. tactics on East Asia, considering the U.S. secretary of state pushes diplomatic options on North Korea.

In this perspective, while secretary of State Tillerson was consistently calling for dialogue, Trump responded to North Korea missile tests with insults on Twitter ... He called Kim Jong "Little rocket man" and "Sick puppy".

 

The most prosperous EU's regions claim the right to form a new state

With regard to Catalonia's independence declaration, which was passed by the Parliament of Catalonia on 27 October, most experts say there's no doubt that, on the long term, an independent Catalonia may be a good thing in terms of competition and regulation. Actually, Catalonia is one of the most prosperous of EU's regions.

Catalans only accounts for about 16% of the Spanish population, and 19% of Spain economy comes from Catalonia, which contributes $ 263 Billion a year to the overall Spanish economy.

Although Catalonia is bigger than many EU Member States, a very important condition for independence, to be an economic success, is that it happens peacefully. Unfortunately, Spanish government does not agree with Catalonia independence, and from a political point of view this is very different from the Scottish case, where the British Prime Minister said Scotland would hold a legal referendum. As it is known, in 2014 Scottish people voted to stay in the UK, but against Brexit in 2016. That's why Scotland should hold another referendum in order to leave the UK.

Catalans are not alone in the desire to form a new independent state and there are longstanding independence claims in other EU's regions, such as Wallonia, South Tyrol and Silesia, where people want more flexibility.  

This shows why populist movements in Europe are able to give an answer to the feel people are losing control of their own fate. As we have seen, during the last twenty-five years some countries grew enormously after they had become independent. Take for example the huge economic development of Slovakia, which split from Czech Republic in 1993.

In this perspective, Switzerland political system, in the hearth of Europe and outside the European economic area, may be a model: the Confoederatio Helvetica's decentralised entities, the Cantons, are allowed to be flexible in terms of taxation. Actually, Switzerland's federal legislation leaves a respectable amount of self-determination to the 26 Cantons, which may collect income taxes to finance their affairs, such as education system, universities, armed police forces and hospitals. And this helps to keep the country togheter.  

View of a pedestrian area in Barcelona (Catalonia)