Banking System and Macroeconomic Effects †MyAssignmenthelp

Crypto currencies are forms of digital currency. These currencies use encryption techniques in order to regulate the generation of currency units. Bitcoin is one such crypto currency. Crypto currency is not yet considered as a legal tender in most countries. In fact, at present most of the central banks of the world are putting efforts to ban the trade of crypto currencies. Over the last few years, certain crypto currencies like Bitcoin have garnered immense attention from across different traders owing to their volatile nature. Bitcoin was introduced in the year 2009. The currency is traded without a middleman and with zero bank involvement. It is a peer to peer network through which this currency is traded and transactions are made directly to the parties. Bit coin can be used to trade in goods and services, some use it as a form of investment and some are using it for making payment of businesses (Popper, N., 2015). However, most countries have yet not accepted it as a legal payme nt methodology. It is similar to digital cash transaction as Bitcoin can also be sent through mobile applications and puters. Bitcoin is stored in a digital wallet. These wallets are used as a virtual bank account that allows users to save, send and receive their payments. These wallets are not recognised by the FDIC as methods of paying for goods or services. Bitcoin works as a medium of exchange for goods and services in four countries at the moment which are Japan, Canada, Germany and Holland. Bitcoin is considered to be a form of currency as it can be stored for future investments (Forrester and Solomon, 2013). Bitcoin investment of an individual can also reflect upon the purchasing power of consumer. Consumer have the option to buy the currency, hold it in their accounts or book profits as they deem profitable depending upon the volatility in the market (Bit coin, 2018). Merchants who accept Bit coin as a payment can convert it into standard currency that is in Dollars, Euros etc. Bitcoin has some advantages as it introduces a new payment mechanism; tipping system, automated payment solution, time locked payment management, public asset tracking, low trust escrow services, micro payment channels and more such facilities (Bit coin, 2018). Another advantage of Bitcoin is that its high volatility in the currency market makes it a ‘high risk and high return’ asset. Pegging any currency against the dollar refers to the act of fixing the currency value with respect to the value of Dollar. In other words we can say that the value of US dollar against the other currency is fixed and will not move irrespective of how the market functions. The process of pegging currency with US dollar is often conducted in oil extracting countries as US is the largest importer of oil. GCC economies are the third largest economy. The growth of this economy is highly dependent on selling oil (The Economist, 2018). By pegging the GCC against Dollar has several advantages and disadvantages. Pegging of currency eliminates the risk of currency fluctuations and the risks associated with it. This provides stability to the currency in the international currency market. Pegging encourages the regional currency valuation as the dollar is considered to be the standard currency and by pegging with dollar, currency of other country does not fluctuate (Brooking, 2018). In countries like Saudi Arabia and Venezuela pegging with US dollar has been done in order to protect the countries from the risk of currency fluctuations because US is the major importer for oil. Various countries opt for pegging in order to increase external trade in the country. As external trade increases, the GDP of the country also increases. When pegging of a currency is done to a higher value currency then the value of the country enhances in the public opinion making it an attractive destination to invest. Therefore investment b es easier in that country. This process also protect country from speculation Pegging also gives freedom to set rules and economic policies, interest rates and help to control inflation in the country. Therefore countries must peg their currencies to dollar in order to limit their risks. If a country currency is pegged with the US dollar then the country can take more loan as it will have a more stable environment and economy. Pegging also helps in getting better deals for international loans and interest rates provided the economy’s inflation is in control. The loan taken in the dollar value is harder to pay off because dollar has the high value as pared to the other currency. Therefore in the longer run, pegging would result in rising cost of capital and increased import prices (Espinoza and Prasad, 2010).   The country which pegs it’s currency with the USD has to maintain a high reserve of dollars. It means central bank of that country has to hold a high amount of reserves in US dollars (Financial Times, 2018). Holding of foreign currency reserve (dollar) indulges a cost which adversely affects the economy. Pegging also leads to an increase in inflation. Growth and development of a country is dependent on the performance of dollar. Monetary policies are restricted in every country and are wholly dependent on the performance of the currency to which the currency is pegged. Similarly in the case of US dollar and countries pegged with it, it means that if the value of US dollar falls the currency of other country will also fall and vice versa. Bitcoin, 2018. ‘Bit coin for developers’. [Online]. Available at:   https://Bit coin.org/en/Bit coin-for-developers [ACCESSED ON 30 th march 2018] Bitcoin, 2018. ‘Bit coin for individual’. [Online]. Available at:   https://Bit coin.org/en/Bit coin-for-individuals. [ACCESSED ON 30 th march 2018] Brooking, (2018). ‘Sustaining the GCC currency pegs: The need for collaboration’. [Online]. Available at: https://www.brookings.edu/research/sustaining-the-gcc-currency-pegs-the-need-for-collaboration/. [ACCESSED ON 31 th march 2018] Espinoza, R.A. and Prasad, A., 2010.  Ã¢â‚¬ËœNonperforming loans in the GCC banking system and their macroeconomic effects (No. 10-224)’. International Monetary Fund. Financial Times, 2018. ‘Gulf’s dollar peg makes sense’. [Online]. Available at:   https://www.eiu /industry/article/1725886356/will-the-gulf-co-operation-council-currency-pegs-survive/2017-09-13. [ACCESSED ON 31th march 2018] Forrester, D. and Solomon, M., 2013.  Ã¢â‚¬ËœBitcoin explained: Today's plete guide to tomorrow's currency’. CreateSpace Independent publishing platform. Popper, N., 2015.  Digital gold: Bitcoin and the inside story of the misfits and millionaires trying to reinvent money  (pp. 156-197). New York: Harper. Tanha, H. and Dempsey, M., 2017. Derivatives usage in emerging markets following the GFC: Evidence from the GCC countries.  Emerging Markets Finance and Trade,  53(1), pp.170-179. The Economist, 2018. ‘Financial Services’. [Online]. Available at:   https://www.eiu /industry/article/1725886356/will-the-gulf-co-operation-council-currency-pegs-survive/2017-09-13. [ACCESSED ON 30 th march 2018]. The National, 2018. ‘Why GCC states should ditch the dollar peg and switch to a currency basket’. [Online]. Available at: https://www.thenational.ae/business/economy/why-gcc-states-should-ditch-the-dollar-peg-and-switch-to-a-currency-basket-1.700668. [ACCESSED ON 31 th march 2018]

Contract & Purchase Negotiation Creating a Deadlock Flinching Essay

Contract & Purchase Negotiation Creating a Deadlock Flinching - Essay Example Deadlocks in negotiations can be overcome through the set aside tactic; changing the mood from competitive or resistive to cooperative; introducing deadlines; changing the negotiating team to find conforming match to other party or to ease emotional baggage etc. Flinching is a manipulative tactic used by offerees in contract negotiations. No matter how sweet an offer is, offerees would act indignantly to conceal their joy as way to convince the offerors that their offer or proposal is not sufficiently good. Flinching can take such forms: gasping for air suddenly, shaking of the head and visible expressions of shock, disappointment, and surprise. However, as offeror you can overcome flinching technique by sticking to your initial request and avoiding statements such as, lets now look the costs because they can force you into concessions. On the other hand, offerees can neutralize ‘flinching’ by using questions to get to the bottom of the proposed terms to determine if the other party is trying pulling a fast one or is being honest with the stated

Critical Review Essay Example | Topics and Well Written Essays - 750 words - 1

Critical Review - Essay Example In general, there is a strong relationship between the oil prices in the world market and the number of registered vehicles in each country (Kenworthy). Basically, when oil prices in the world market suddenly increases, the urban transport systems within the U.S. will be negatively affected. To avoid sudden disruption in the U.S. transport system, the U.S. government is being challenged to promote the efficiency with the excessive consumption of crude oil on vehicles. Aiming to solve the vehicle problem related to energy wastage, air pollution and traffic congestion, a list of recommended strategies that can reduce the U.S.’s automobile dependence will be thoroughly discussed. There is a strong relationship between the high cost of maintaining private vehicles and the use of public transportation. (Kenworthy and Laube) Since the U.S. urban cities consume a large volume of gasoline for transportation use as compared to other developed countries like Canada and Europe (Kenworthy; Kenworthy and Laube; Khisty and Ayvalik), government internvention is necessary to effectively control the number of private and public transportation that travels around the city each day. As recently proposed by Gov. Arnold Schwarzenegger, there should be a US$0.50 cents increase in transportation sales taxes in order to solve the problem related to highway congestion (McGreevy and Vogel). Aside from increasing sales tax from the costs of public transportation, there was also a plan to increase the state excise tax on the sales of gasoline (Riphagen). Because of the added tax on gasoline, more people with private vehicles would eventually consider the use of public transportation like AC Transit or BART. On top of increasing the costs of gasoline through excise tax, increasing the number of metered parking places throughout each state is another way to encourage the people to reconsider taking the public transportation, the use of bicycle, and/or walking (De Turenne;