Pennies Are Ending Production

 

Pennies are no longer going to be produced. The United States has produced the penny since 1793. The reason for this decision was that pennies were getting too expensive to produce. This is according to the US Department of  Treasury. If legal tender is getting expensive to produce, then it indicates concerns about the economy. Increasing national debt means the ability to perform certain domestic tasks are limited. Currency production should not be a challenge for a high income country. Ending penny production is not going to save large amounts for the US. Pennies can still be used and will remain in circulation. An estimated billions of pennies still remain in stores, banks, and among the population. It will take time for pennies to become rare. Coin collectors might see an increase in acquisition as the supply becomes smaller. Retailers are trying to navigate the end of penny production. Making change could be an issue. One solution is to round down prices or ask customers to exchange pennies for rewards. Those who own large amounts of pennies should not dispose of them. The coins can still be used and as time passes more valuable. What would be helpful to consumers is to exchange pennies at your bank. Taking time to count the value, the banks will give cash for large amounts of pennies. The 230 year history of the penny will be of interest to numismatics and economics. The last penny was the Lincoln cent . Introduced in 1909 to commemorate  President Abraham Lincoln's birth, the currency itself became an icon.    

Zimbabwe's New Currency

 

Zimbabwe has introduced a new currency. The Zimbabwe Gold was introduced on April 5th. The motivation is to stop inflation and move away from the US dollar. This also is a way to circumvent sanctions imposed by the European Union and the United States of America. Zimbabwe's condition would improve if there were no attempts at economic warfare. The ZiG as it is known was not the first attempt at a new currency. Six attempts have been made since 2008. The gold currency might have a better chance of survival. Gold is still valuable and having a currency backed by it could  generate trust in the public. The majority of transactions continue to be done in US dollars. The difference now is that Zimbabwe according to its central bank has 2,1 tons of gold. Zimbabwe also contains diamonds. Natural resources are the key to economic stability and development. Getting membership to the New Development Bank could provide further solutions to economic challenges. Further changes have to be made if the multi-currency system is to be discarded. The 2019 ban on foreign currencies as legal tender was designed to challenge foreign influence in Zimbabwe's economic policy. Global market inflation forced Zimbabwe to reverse the policy in 2022. Zimbabwe has been under US sanctions since 2003. The European Council has renewed restrictive measures against Zimbabwe. the claim is that it is a mere arms embargo, but most EU countries do not want to do business with Zimbabwe. The direct development cooperation ceased and that directly effects the people of Zimbabwe. When a country is blacklisted by sanctions this makes other countries hesitant to invest. They fear retaliation from other powers. The world is gradually moving into an era of de-dollarization and Zimbabwe sees this as an opportunity. If the Zimbabwe Gold is successful other African nations might try to replicate a similar economy policy. 

Argentina's Economic Crisis

 

Argentina faces economic hardship. The country appears to be seeing a form of hyperinflation. The Argentine peso is losing value. This explains why some might exchange their pesos for US dollars instead. The government has in response limited the number of dollars citizens can by at the current exchange rate. Politicians pretend that the recent development was some random act, but there ahs been a pattern of economic instability. The 2001 crisis proved that it was a combination of institutional failures, deposit freeze, and a default on public debt trigged economic turmoil. IMF policies have not secured the economy of Argentina. Just like in 2001, the new economic downturn will generate more poverty. People who were financially secure will see themselves impoverished. Many were not able to recover their deposits from the 2001 crisis. The Argentine public has grown even more suspicious of the banking system and government. The fear of the devaluation of the peso is present. There is also an indication that Argentina lacks hard currency and is not taking in more money. The crisis has made it more difficult for business to operate. Without specific costs known, running an establishment is not possible. Inflation will harm or eradicate small business, before bigger corporations. Argentina plans to accept an IMF $ 3.9 billion deal. IMF agreements have never solved Argentina's economic concerns and the new deal has limited chance of success. The economic crisis has gotten so severe that President Alberto Fernandez will not seek another term. Argentina's crisis is a warning to the global economy and the fragile nature of the banking system.       

BRICS Is Developing A New Currency

 

BRICS has been planning on developing a new currency. This development indicates that the world might be shifting away from the US dollar. The motivations of some members of the emerging economies do vary. China seeks to be more competitive in the global market. Russia wants more economic connections in Asia and Africa seeing as relations in Europe are in decline. India wants to expand economic growth. Brazil has a desire to unlock more business opportunities. South Africa has been exploring ways to combat economic inequality. The motivations to move away from the US dollar differ among BRICS members. One currency among members of emergent economics could be useful. There markets would not be so dependent on the US or Europe. Tensions between members could cause such a project to be stalled. India and China have had border disputes. All members do not agree about Russia's invasion of Ukraine. If the currency is successful, questions remain about the chance of more countries becoming members. The global financial system is headed for a drastic change. Multipolarity will not just effect international affairs, but also the world economy. The name proposed for this new currency would be called the R5. Doing this could mean that sanctions could no longer harm Global South nations. It is not certain if the R5 would protect nations from a global financial collapse. The Global South appears to be asserting a type of economic independence. The measure of success depends on how economically secure citizens are and if the currency maintains a high value.  

Brazil and Argentina Are Creating A Common Currency

 

Brazil and Argentina are developing a new common currency. These preparations could mean a major economic transformation is happening in Latin America. The major objective is to increase  regional trade. It has been speculated that Brazil  would one day become an important economic power. Being a member of BRICS demonstrates a rise to international standing. The major obstacle to this was objection from Brazil's central bank. The intention also could be to extend the use of the new currency to other South American nations. The name that has been proposed is the sur. The situation  is different from 2019. South American countries are seeking economic stability in  a world torn by geopolitical confrontation. Two leftist governments are in power, which makes collaboration easier. President Alberto Fernandez would be classified  centre-left and Peronist. The election of President Lula Da Silva in Brazil makes bilateral economic ties more attainable. Argentina needs new solutions to deal with national debt and the damage caused by past recessions. Seeking aid from other Latin American countries would be a better solution. The International Monetary Fund has not been helpful in getting the South American country on a path to economic recovery. IMF programs have been active since 1991 and did little to reduce the economic crisis in 2001. Argentina continues debt negotiation to reduce suffering on the general public. The new currency must be backed by a commodity of value. Only then will  Latin America gain economic independence. Brazil and Argentina must prove to other nations of South America that the new currency is an important financial investment.  

Global Inflation Increases

 

The pandemic and the Russia-Ukraine war has caused an increase in global inflation. Consumer goods are rising in price due to these events. The other factor is that certain corporations are taking advantage of the situation. Intentional price hikes are being done and are not being challenged. World leaders will face the ire of citizens who cannot afford food or fuel. Food prices were previous increasing prior to the war in Ukraine. Global inflation will not effect all nations equally. The developing nations will struggle combined with debts owed by the International Monetary Fund and World Bank. The developed nations might do better, but the class structure means people in poverty are more vulnerable. It is possible that more people could fall into poverty. Inflation does happen in an economic system. The concern is about the rate of inflation, Since January prices have gone up. If this is not controlled, it is possible the world could see another economic crisis. The world have not recovered from the 2008 economic crash. The EU will see higher gas and oil prices due to the sanctions directed at Russia. Although the US is not dependent on Russian energy, the sanctions imposed will still effect American energy prices. This explains why Asian and African nations are not willing to impose sanctions on Russia. China doing lockdowns harms economic activity. A slowdown in economic growth has created fears of possible recession. While the future cannot be predicted, the condition of the global economy is weakening.  

Russia Wants Gas And Oil To Be Paid In Rubles

 

Russia  had sanctions placed on it for the invasion of Ukraine. The response has been to have nations it considers unfriendly to pay for gas and oil in rubles. This is designed to counter the effects of sanctions. The problem for EU states is that a majority of gas is purchased from Russia. The US intends to sell more liquified gas to Europe. Both the US and Russia were competing for the European energy market. The sanctions on Russia have caused some harm to the countries that have supported them. Gas prices have increased putting strain on the average citizen. All countries are not willing to sanction Russia. India, China, South Africa, and the Central Asian countries have not imposed sanctions. The sanctions will harm the Russian population, rather than the leadership. The EU might not have their energy needs met. The conflict in Ukraine has a dimension of economic warfare. Part of the reason for the conflict is to exploit Ukraine's gas reserves. The ruble is losing value, but the dollar could gradually lose influence. Economic warfare between the EU-US block and Russia could destabilize world markets.   

Facebook Will Launch a New Cryptocurrency

Facebook has become a social media phenomenon. It continues to define the standard of internet communication, with other imitators following. Now the company wants to get involved in cryptocurrency. From a point of business this makes logical sense. Getting involved in digital currency early may secure more profits and higher value for Facebook in the future. Facebook has given a name to its proposed cryptocurrency known as the libra. There are concerns about it development. Facebook has done a poor job at protecting user data. Privacy may not be guaranteed to users of the social media network. Facebook also found itself  answering questions about fake accounts connected to Russia attempting to influence elections in the United States. The spread of false information has also become a concern with a public that has limited media literacy. The fear about the use of the libra is that may enable massive financial fraud. When digital assets are traded it is done under a strong system of cryptography and firewall protection to ensure security. Facebook has difficulty or lacks the ability to protect user data, which makes the exchange of libra a risk. Other detractors have a concern that is not about Facebook in particular, rather they want to preserve private central banking. Beside the few nations that have national banks, cryptocurrency make to a serious threat. At the moment a large portion of the public is not doing financial exchanges in cryptocurrency. It may take some time before this type of money becomes available to most of the global population.    

West African Nations Adopt New Currency The Eco

It was agreed upon nations of West Africa in ECOWAS that a single currency be adopted by 2020. The Economic Community of West Africa States wants to strengthen economic and political ties among its members. This can be very positive news with Africans developing solutions rather than seeking advice form the International Monetary Fund or World Bank. Some may question what would currency do in the long term plan of development. It may make transactions easier with a single currency and may also encourage more collaboration among the 15 member states. If this can be successful then, it may serve as an experiment for not just a regional currency, but a currency for the entire African continent. It would make no sense for East Africa, Southern Africa, Central Africa, and North Africa to have single region based currencies. The African Union must consider in the future of having one currency for the entire continent. The challenge is development, employment, and a common political consensus among African nations. The eco  does have a level of risk, but at the same time it means West African nations will not be so economically dependent on France. Much of the success of the eco will depend on the policies of both Nigeria and Niger. President Mahamadou Issoufou  has succeeded  the office of Chairmen of ECOWAS form President Muhammadu Buhari. So far, he has not made any official policy statements about the monetary policy related to the eco.