http://www.businessweek.com/articles/2013-03-28/bitcoin-may-be-the-global-economys-last-safe-haven

Bitcoin May Be the Global Economy's Last Safe Haven

Interesting fact about Bitcoin: Nobody knows the real name of the creator (or creators). We have no clue who did it, other than the person goes by Satoshi Nakamoto. Bitcoin is still very small in comparison to other companies. Yes, an entire "currency" has a smaller market value than many single companies. The value of one Bitcoin is about $78 dollars (March 2013) and in March there were 10,952,975 Bitcoins in circulation. A thought behind the Bitcoin is an interesting one, with the entire world using the Internet, isn't the Bitcoin a step towards a global currency? 

What makes the Bitcoin different from PayPal? Bitcoins are purchased using the U.S. dollar, the Euro, or whatever the currency in an area is. The same thing happens on PayPal. PayPal keeps track of things in terms of the currency being used. Everything is not done in the U.S. dollar on PayPal. With Bitcoins, everybody is using the same currency even if they purchased something with euros or dollars. One person in Brazil can buy something from a person in Pakistan that is selling something for two Bitcoins.  There wouldn't be an issue with exchange rates. The person simply now has two more Bitcoins. People tend to question the legitimacy of the Bitcoin. It was created by an anonymous person. No one knows who it was, but let's face it, Bitcoin works. There has been speculation that Bitcoin was just a joke that was meant to satire the global economy, but that joke has made people seriously consider its possibilities. the technology to back it has been flawless, so if it was in fact a joke, it's gotten a little more serious. The ideas of global currencies have been explored before with much rejection, but this seems to be working. What do you think?

- David Gerhart

http://www.forbes.com/sites/quora/2013/11/18/why-isnt-bitcoin-interesting-to-leading-economists/

Why Isn't Bitcoin Interesting To Leading Economists?

I think that the entire concept of the Bitcoin is perplexing. Cyber currency wasn't even an idea just a few decades ago, and now here it is, valued as a 5 billion dollar piece of our economy. The author of the article steps back and looks at the Bitcoin and why it has not been researched much by our respected economists. The author states that the answer to that question is simple: 5 billion dollars isn't a lot of value. If you think about it, that is the same size as a single mid-cap stock. One company. Bitcoin is as valuable as one decently sized corporation. That's why economists don't focus on Bitcoin that heavily YET. Economists are more interested in all of the firms instead of just one, moderately large corporation. 

Bitcoin is, however, a currency market. Currency markets are usually looked at by economists. Economically, Bitcoin is no different than any other currency. It will have inflation just like any other currency, in fact, the inflation is actually easier to predict than the value of the dollar because every transaction is so easily monitored. But, it is hard to study Bitcoin transactions from an economic standpoint because the transactions are anonymous in the sense that we don't know what demographic is buying the product. Economists study who buys and sells, with no method of determining that, how can they see what's going on? Bitcoin is still relatively small in terms of the entire economy, but who's to say it can't make an impact someday? That day just hasn't come yet. 

- David Gerhart

http://www.bbc.co.uk/news/technology-24899396

Brazil debates internet law in wake of NSA scandal

GOOD FOR YOU BRAZIL. We finally have that country that says stop trying to be a policeman and let us handle our own business. Brazil officials describes their feelings towards the NSA scandal as outraged. They should be. I guarantee you if the tides were turned the United States would not be sitting back doing absolutely nothing about a foreign nation stealing the information of our people. There is not a chance that we would ever let that slide. We would preach how our country was founded off of freedom and that privacy needs to be maintained. As soon as things are reversed we are the first ones to say that privacy can only be pushed to a certain limit, and that we are protecting our people.

Many Brazil citizens are talking about taking their web usage away from US infrastructure. I can't blame them. Would we continue to use a Russian internet if we knew that our information was being compromised? No. What is even worse is the fact that our relations with thought to be friendly nations are now on thin ice. You can't steal information from unknowing citizens and expect to get away with it. I also think it is ridiculous that the NSA ever expected this to stay secretive. When a violation of privacy and promise is happening on this large of a scale, a red flag is bound to be raised in someone's mind. But instead the NSA is sitting idly thinking they would've gotten away with it too if it wasn't for that meddling Snowden. In a time when international relations are so important, why would we jeopardize our ties with our allies simply to have "access" to everybody. Everybody isn't your threat.

- David Gerhart 

The NSA overreach poses a serious threat to our economy

http://www.theguardian.com/commentisfree/2013/nov/20/jim-sensenbrenner-nsa-overreach-hurts-business

The NSA overreach poses a serious threat to our economy

"I don't care if the NSA steals my information because I have nothing to hide." This is a typical quote from a huge amount of Americans regarding the recent NSA information scandal. The National Security Agency basically told all of our nation's information giants that they needed to hand over private consumer information to the government for "security reasons." With this force applied by the government, our tech giants had no choice but to hand out private information about not only American consumers, but also foreign consumers. Apple and Google are not restricted to just America. Users all over the world buy, use, and trust our companies, until now. This serious lack of trust that will come from the NSA scandal will most certainly impact not only our nations information pioneers, but also our workers and eventual consumers. People getting paid by these giant companies are many times consumers of technology products.

In foreign nations, if a consumer "does not like" the product from America they often have another option. Other than a few circumstances, our American companies produced a superior technology product in comparison to one produced by Russia or Brazil. Now that the people heard about the NSA scandal and know that A FOREIGN NATION is looking at all of their information through these products, the foreign consumer may be less willing to buy that product. In fact, with Cisco Systems we have seen just that. Cisco is projecting that revenue will drop up to 10%. Cisco has also seen new orders decline by 25% in Brazil and 30% in Russia. This market increased by 8% in the previous quarter, so it is no coincidence that the drop and the NSA issue were synchronized. With this huge projected decrease in revenue, the company will have less money. With less money, the amount of employees that can be paid to work decreases. When people are out of work, they have less money. When people have less money, they don't buy as many things. When people don't buy as many things, businesses have less money. Attention businesses and consumers: don't have less money. By not allowing the NSA to continue its power search, we can protect big business and save billions of dollars and thousands of jobs.

FYI - Yes, that was a very bad attempt at a Geico advertisement in case you caught on.   

- David Gerhart

NSA Eavesdropping Hurting U.S. Economy

http://www.washingtontimes.com/news/2013/oct/9/wyden-nsa-eavesdropping-hurting-us-economy/

NSA Eavesdropping Hurting U.S. Economy

"If a foreign enemy was doing this much damage to the economy, people would be in the streets with pitchforks." That quote was said by Oregon Senator Ron Wyden (D) in regards to the NSA scandal. Some companies working in global technology and communications were forced to adhere to the rules and regulations the NSA administered concerning what work they would be doing. Companies like Microsoft, Google, and Facebook were among many others in the NSA's army of information collectors. Based on opportunity costs, one can see that this is already a hindrance to the companies because their work is focused on something that isn't making them ridiculous amounts of money. The time and effort is taken away from what the companies do best, and it is put towards government responsibility. However, the other economic impact is even larger than the lack of production issue.

Foreign nations don't trust us anymore. Our own citizens don't trust us anymore. Look at the cloud computing industry; the Cloud preaches great security to all participants, but in reality, all of the information can be accessed. When this fact was released to the public, citizens were mad, and they stopped using the cloud. Some estimates predict a decrease of $35 billion in the cloud computing industry. As for foreign citizens, they simply don't want a foreign nation looking at their personal information. They lost trust in companies like Google and Facebook, both of which get 50% of their revenue from foreign consumers. If these consumers lose trust and stop using the products, it is easy to predict what will happen to the revenue of these companies. With the impact that the NSA has on tech companies, it is almost guaranteed that the rest of the economy will be on the receiving end of the financial burdens that may follow.

- David Gerhart

NSA Revelations Kill IBM Hardware Sales in China

http://www.nakedcapitalism.com/2013/10/wolf-richter-nsa-revelations-kill-ibm-hardware-sales-in-china.html

Wolf Richter: NSA Revelations Kill IBM Hardware Sales in China

When many Americans are asked about the NSA issues they respond with "I have nothing to hide, so I don't care if they see my information." Well let's pose this question... If China or Russia were to steal and look at your personal information, would you reconsider the "I don't care" response? In recent years, the National Security Agency has been taking private information from millions of people throughout the world. Citizens in the Middle East, Asia, Russia, and various other areas were targeted. At this point you may be wondering where the economic impact arises. There is a profound impact on the American economy due to this recent "scandal" per se.

For example, tech companies are going to see dramatic issues arise in their sales and earnings reports. Two weeks after this article was written, IBM, a huge tech company, announced a poor earnings report to their shareholders, and reported yet another loss. The CFO of IBM announced the earnings, and in a series of questions as to why the poor numbers were back, alluded to the fact that he didn't know why sales of hardware in China were down 40 TO 50 PERCENT. Experts looked at the information reported by IBM and concluded that a dramatic drop of that sort doesn't just "happen." What the CFO of IBM was most likely not telling the public is that they were partnered with the NSA to collect information. When Edward Snowden leaked the information regarding the invasion of privacy, citizens in foreign nations were appalled. Governments of these nations began to tell citizens to not use "Gmail" and to not use products from companies mentioned in the reports (including IBM). Foreign sales have a HUGE impact on the financial prosperity of a company, and to destroy these foreign sales destroys profit, earnings reports, and consequentially, stock prices. This impact reverberates to executives, employees, and shareholders of the company. When the NSA decided to step over its bounds, the economic impact was felt by thousands of people across the country in the company and in the stock market.

- David Gerhart

Minimum wage increases to £6.31 across the UK

http://www.bbc.co.uk/news/business-24340661

I found this article very interesting because it introduced a new idea to me.  Have different age brackets earn different amounts of money. It is true that a vast majority of teenagers that earn minimum wage live with those that do not.  Why not pay them less? They're just kids. They don't have as many expenses as an adult may have. Pay the adults $0.25 more and just subtract that from the kids pay. There are probably a similar amount of teenagers earning minimum wage as there are adults earning minimum.

Also, maybe the US needs to explore what the UK calls the living wage. If we explored what it actually took to live in an area without many luxuries, then maybe our wage would actually get its value from something. Now it's just a number that tries to keep people out of poverty. I think we would obviously find that by getting a living wage and doing it by geographical location like in the UK, our wages would drop in some areas, and rise in others. These drops would allow the overall amount of money being paid to people to stay the same, but the minimum earners in high cost of living places would be better off, and the minimum earners in low cost areas wouldn't have as much ability to buy luxuries.

I'm not saying that these policies are great or should be enacted tomorrow. I'm simply providing food for thought.

- David Gerhart

Will California’s $10-per-hour minimum wage push other states to act?

http://www.csmonitor.com/USA/Politics/2013/0926/Will-California-s-10-per-hour-minimum-wage-push-other-states-to-act

It is no coincidence that California has one of the highest unemployment rates of any American state. They have increased the minimum wage to  $10 per hour. If an individual can make $10 an hour working at a fast food restaurant, then the incentive to ever achieve higher education decreases. Also, lets remember that in order for an individual to benefit from those wage increases, he or she must be employed. Since California's unemployment rate is so high, its increase in minimum wage is less beneficial to the poor working Americans than an increase in many other states would be. If there is less incentive to get a good education, isn't the law simply making our future population less educated?

Also, the skills of workers are remaining the same. Workers in California are simply being paid more for low skill jobs. Those with high skill positions did not see an increase in wages. It is a push to cut the income gap, but by cutting the income gap, eventually you will cut the skills gap, and then everybody will be the same. Who wants that? The article does say that a minimum wage job brings in a yearly salary of $15,080, which is $50 below the poverty level FOR A FAMILY OF TWO. First of all, if it is a family of two adults, even two positions at minimum wage puts them well over the poverty line. If it is a single mother (or father: equal rights equal rights) with a child, she/he receives tax credit that equates the wage to around $9.75 per hour. So how many minimum wage workers are really living in poverty?

- David Gerhart

The Record is Clear: Minimum Wage Hikes Destroy Jobs

http://www.forbes.com/sites/realspin/2013/04/17/the-record-is-clear-minimum-wage-hikes-destroy-jobs/

The Record is Clear: Minimum Wage Hikes Destroy Jobs

While being very similar to the first article, this article was a much more aggressive style, and targeted the remarks of a specific individual. Both articles come to the same exact conclusion; raising the minimum wage would not decrease the poverty rate or unemployment, in fact, it might do the opposite. A few months ago, Obama Admin. economist, Betsey Stevenson, released a statement regarding the minimum wage issue using a bunch of false facts and skewed statements. This article basically rips a part what Stevenson had to say in a well deserved manner. In fact, 85 percent of research points to a loss in jobs after an increase in minimum wage. Stevenson also manages to say that an increase in the minimum wage will get rid of poverty. This simply can not be true because 60 percent of those living in poverty do not work, therefore an increase in minimum wage will have no impact on them. For those that do earn minimum wage, a study found that majority of minimum earners do not live in poverty, so therefore they cant be brought out of poverty. Surely with an increase in minimum wage small businesses will have to  cut mass amounts of employment hours or possibly entire jobs. A study finds that with these cuts, people will be pushed closer to poverty because the lack of hours will not be alleviated by the increased wage. 

Another argument for the increase in minimum wage comes from the topic of inflation. Just remember that the value of the dollar can go up and down. So while Obamanists can say that with inflation minimum wage should be 10 dollars or more, an economist can realize that over the years, the value of the dollar has gone up and down, and with some mathematical calculations can deduce that if minimum wage were to be directly based of inflation, then it would be $4.12. Apparently "many" minimum wage earners are "stuck" at the "pathetic" $7.25 an hour, but a recent study showed that MOST (most and many are very very different) minimum wage earners receive an increase in 1-12 months after being hired. Even more intruiging to me is the fact that a single parent with two kids making minimum wage gets a tax credit worth around 5200 dollars, which theoretically increases his/her wage to $9.76 per hour. Interesting right? Have thoughts?

Please comment what you think about this topic below. 

- David Gerhart

http://articles.latimes.com/2013/mar/10/opinion/la-oe-hassett-the-case-against-the-minimum-wage-
20130310

The Minimum-Wage Debate  -  Los Angeles Times

Minimum wage has been ignited once again as a controversial topic in the United States. Let's remember one thing about minimum wage: It was formed to eliminate the exploitation of sweatshop laborers, not to provide workers with a middle class lifestyle. Minimum wage is also defined as the lowest rate that workers can sell their labor. With that in mind, those that do not currently work will have more incentive to go get jobs and therefore the demand for a set number of positions will increase, creating even more job scarcity by definition. Also, with the increase in minimum wage, a company will be forced to reduce the number of its positions or the number of its working hours because they simply won't have enough money to pay employees. With a reduction in jobs and hours, plus a higher demand for those available positions, job scarcity becomes even worse and unemployment rises, because remember unemployment is the state of being without a job but looking for work.

In addition to the aforementioned issue, the majority of people earning minimum wage do not come from poor households.Since majority of the minimum wage earning population does not come from a poor household, how would increasing the minimum wage even have a chance at "alleviating poverty" throughout the nation? Minimum wage is not intended to be a living wage. It is intended for retired people who may want a part time job for some vacation money, or for a kid living at home trying to save money to go to college. In fact, about 50% of workers earning minimum wage are under the age of 25. So for these kids to earn an extra $1.50 would surely help them pay for college or gasoline for their vehicles, but it would not bring their families out of poverty.

Minimum wage does not need to be raised because it would benefit those that are lucky enough to keep their jobs, but it would also cause those that are not so lucky to lose their jobs, adding to the number of people looking for work, and BY DEFINITION increasing the job scarcity in the United States. We all understand that when job scarcity increases, the economy suffers.

For those that would argue for the increase in minimum wage after reading this post and the respective article, please leave your comments below as to why you think that way.

- David Gerhart