Viswanathan K's Thoughts

How is China positioning itself to become the new reserve/international currency? China, writes Way Yuhl, has learned from and copied America.   Remember the New Silk Road project (aka Belt and Road), whereby China “financed roads, railways, ports, power plants, and telecommunications networks” across Asia, Africa and Latin America? Well, that’s not entirely about profits from interest on the loans. It is also how China has built financial leverage with much of the developing world. If their infrastructure projects all rely on China, well, they are likely to align/agree with China on economic and financial matters. On a side note, Yuhl mentions the Sri Lanka port that was handed over to China for 99 years when Sri Lanka couldn’t repay. While India’s concern was Chinese presence so close to our borders/waters, the West cited it as an example of Chinese predatory lending ( zamindar style). Guess what? “America used the same mechanism after WWI, converting Britain’s debt depe...

A few years back, I’d written a blog on Bitcoin, the digital currency. Yes, Bitcoin is like the dollar, pound, Euro or rupee. It’s a currency. Except it isn’t issued by any government. We won’t get into the technical details of who creates it, fraud prevention etc here.   Bitcoin’s exchange rate against the dollar (and every other government issued currency) keeps making headlines regularly. For both its sharp rise and for its sharp falls. Over 10-15% drops over a weekend aren’t unheard of.   Over the years, Bitcoin hasn’t taken off as a currency at all. As James Surowiecki wrote recently: “Almost from the beginning, only a small percentage of Bitcoin transactions have been for actual goods and services — and of those, many have been for illicit goods and services, like drugs and online gambling.” And today? “On average, there are now around 325,000 Bitcoin transactions — including trades — per day. There are roughly a billion credit card transactions per day.”...

All that news about the rupee crashing, the West printing money to bailout/restart their economies and the Euro in trouble due to its being the child of an economic but not political union makes you realize how easily your cash loses value because of incompetent or populist government policies. Not trusting the government is why the Internet came up with this virtual currency called the bitcoin. Yup, that’s currency as in the dollar, pound or rupee. Difference is that it was created by the Internet, not a nation. And guess what? It is accepted at many stores world over; and also traded by individuals. Some even use it to buy properties! Of course, such high value trades are a minority, but it gives you an idea that the currency isn’t anywhere as obscure as you might have thought at first. Also, bitcoin accounts can’t be frozen by some government authority. Which, of course, is a double-edged sword. So how do you get bitcoins? First you install the wallet software on your comp...