The Concerns of The Central Bank of Nigeria

 

The Central Bank of Nigeria is facing a series of challenges. The new tax reforms going into effect next year have generated controversy. Nigerians could find that their bank accounts are going to be subject to more taxation. The wave of tariffs continues to disrupt the economies of various countries. The CBN in April had to sell a total of $200 million to protect the naira. During that month, crude oil prices dropped, which made for a more precarious crisis. Nigeria is reliant on crude oil for foreign exchange. The CBN has not formulated a policy to address tariffs, debts to the IMF, or the decline in oil prices. CBN this year also sold $197.71 million   to banks to secure Nigeria's position in the foreign exchange market. To certain economists, this appears to be a massive transfer of wealth out of  Nigeria. The oil wealth and the CBN's banking system have not translated into financial security for the population. Concerns about liquidity and regulations are growing. The recommendations made were to use commercial papers to manage possible risk. The commercial paper is a temporary debt tool designed to manage future payments. The CBN began using cash stuffing to manage the situation. While budgeting physical cash was the responsible course of action, the result was increased costs on deposits for consumers. The debt to World Bank is estimated to be $18.2 billion. The CBN's biggest concern is the growing debt from international banking institutions.     

The Influence of Jacob Rothschild

 

The founder of RIT Capital Management  Jacob Rothschild passed away at age 87. Part of the prominent banking family that has influenced governments for centuries, the press presented him as a humanitarian philanthropist. The billionaire class only performs charity for the sake of tax cuts. Most of the time funds are given to influence politics or business practices on their behalf. Jacob Rothschild was an advocate for Israel and financed many projects in the country. While Israel pushes forward in plans of annexation of Arab lands, the Zionist state has a powerful backer. Jacob Rothschild explained in an interview that the Zionist movement started in Eastern Europe. His family played a major role in the establishment of Israel. The Balfour Declaration was the basis for the establishment of a future Zionist state in West Asia. This explains why Jacob Rothschild for most of his life invested in Israel. This was not about Jewish identity or culture. The support for Israel was a financial project. The country survives by being backed by the West and a upper class elite. Now that Jacob Rothschild is no longer living, legal challenges are emerging among his family members for control of his investments and estate. Hannah  Rothschild might end up getting most of Jacob's assets. The daughter of the billionaire also is the chair of the Israeli organization Yad Hanadiv. This demonstrates how British imperialism never left West Asia. Hannah and her late father are citizens of the UK, but their wealth has immense influence in Israel. The degree in which Jacob Rothschild was influencing the UK's policy related to the Middle East remains a mystery.   

A Major Goal of The New Development Bank

 

The New Development Bank has outlined major objectives in the coming years. The focus will be on Africa. The NDB founded by BRICS wants to see changes in the global economy. The New Development Bank will finance infrastructure and digital projects. Investments will also be made in education. Such a policy makes sense considering the jobs of the future will require more skills and knowledge. A fourth industrial revolution is coming and the Global South should not be left behind. The African continent has large amounts of natural resources. This means it is a significant force in the world market. NDB President Dilma Rousseff  noted that direct foreign investment in Africa went from 4.9% in 2010 to 8.8 % in 2021. Rousseff described African nations as  quality partners. The challenges that remain are related to expanding payment mechanisms Rousseff added. Cooperation, stability of the continent, and banking procedures remain persistent obstacles. Economic growth is not slowing down in Africa. The result of this is that the New Development Bank's importance will be elevated. 

The Story of The Freedmen's Bank

 

The Story of The Freedmen's Bank is a documentary presentation produced by the US Department of the Treasury. The Freedmen's Bank was the creation of abolitionists, philanthropists, and business leaders. The formerly enslaved and African American veterans needed a secure place for their money. Those who had been enslaved so long never made a wage or obtained a bank account. Much of the foundation of racial inequality was that wealth was concentrated in white communities. Labor exploitation through slavery and the working class created the basis of economic inequality in America. The bank was created in 1865 and one of the last important acts done by the Abraham Lincoln administration. According to records the total amount of deposits were estimated to be about $57 million ( today that would be $115 billion ). The wealth was lost due to government corruption and a change in the Freedmen's Bank's charter. The banking panic of 1873 and mismanagement resulted in the bank's demise. The failure of the Freedmen's Bank demonstrates the weaknesses of capitalism and the US government's dishonesty when it comes to confronting economic inequality.   

The Status of FTX

 

The FTX scandal is not over. Further fallout is happening with the crypto exchange business. FTX has recovered a total of $7.3 billion. Former CEO Sam Bankman-Fried faces multiple charges and insists his innocence. Current CEO John Ray stated the major problem under Bankman-Fried was poor accounting and improper fund transfers. The rescue plan with Binance did not come through. Simultaneously, traders removed a total of $6 billion from FTX. That development forced the crypto exchange to file for bankruptcy. At the moment, FTX appears to be in disarray. FTX might be resurrected in some form. Customers and investors might not be so trusting of the new FTX brand. Due to the bankruptcy case, customers cannot get access to their deposits. Japanese customers can get to their deposits, because there are more regulations for cryptocurrency.  A relaunch would require a significant capital investment. FTX has an obligation to repay all its customers effected by the scandal. The FTX scandal reveals that there is a need for more regulation for crypto exchange. Otherwise fraud will become prevalent. Cryptocurrency was suppose to be a means of challenging the private central banking system. This form of currency is struggling to be widely accepted. The FTX scandal has caused skepticism about cryptocurrency. FTX intends to implement a Chapter 11 plan. Under this law of the Bankruptcy Code  a company must reorganize and pay creditors overtime. The process has not yet been approved. Criminal investigations are ongoing related to fraud. FTX might not be revived with a combination of criminal charges and financial instability.  

The Collapse of Silicon Valley Bank

 

The collapse of Silicon Valley Bank represents a negative turn in the economy. One of the top US banks had its assets confiscated by regulators. These actions and bank failures seem very familiar to the 2008 global financial crisis. The collapse of  Silicon Valley Bank is one of the biggest bank failures in US history. The bank mostly provided services to workers in tech and and start-up companies. Some longtime tech companies also had investments in the bank. The assertion that this was just one case and should not be deemed disturbing is misguided. The banking sector is becoming unstable under the lack of regulation and mismanagement. The assets of Silicon Valley Bank are being transferred to  a newly created institution. The Deposit Insurance Bank of Santa Clara will pay for insured deposits. SVB had an estimated $209 billion in assets. The violation according to the FDIC was that accounts exceeded the $250,000 limit. The technology sector will be negatively impacted by the collapse of SVB. A combination of CEO avarice and layoffs have made the situation worse. Simultaneously, the Federal Reserve has failed to counter inflation. The Silicon Valley Bank has been active since 1983, but after 39 years it could not survive. The government has made a promise to ensure that depositors would get their money back. SVB demonstrates a combination of corruption and the hardship that start-up companies face. Large corporations can survive and new businesses are at a disadvantage.  

The IMF World Economic Outlook

The International Monetary Fund has predicted a very challenging global economy. There has been a sharp decline in economic growth. Such a dramatic change has not been seen since the Great Depression. The world economy suffered a major collapse in 2008 causing unemployment and a decline in living standards. Conditions are so poor that the UK may have to delay leaving the European Union once more. Some economists believe that this is only a minor recession and should stabilize once lock downs and quarantines end. This may not be the case for people who become unemployed when the public health crisis occurred. A depression may have happened regardless of the COVID-19 pandemic. Neoliberal capitalism and supply side economics has created an erratic global market. The poorest countries will be effected the most. Many are still in debt to the IMF with little benefits coming from loans. The US and EU countries will not be entirely spared. Fiscal austerity measures and structural adjustment could be used to ensure the system remains intact, It will come at the expense of the working public. The decline in social services, adequate pay, or a banking panic would result in civil unrest. At some point new solutions will be require to prevent complete breakdown of the global economy.    

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.