November 2030 submitted by
Well, uh, this sucks. Just a few short months after the Arab States of the Gulf finally unified, the world economy decided to explode
. This is what we in the business of economics call a very bad thing.
The effects across the FAS have been relatively disparate. The United Arab Emirates, easily the most diversified economy in the region, has been the least heavily impacted (though it's still bad
). Diversification programs in Oman and Bahrain have also helped to stave off some of the worst impacts of the crisis, though they haven't been as successful in avoiding the effects as the UAE. Qatar and Kuwait, still almost entirely
reliant on hydrocarbon exports, are not
happy with this turn of events. Falling global oil prices, though propped up a little by a sudden increase in demand from China
, have left their economies struggling much more than the rest of the country, and in desperate need of assistance from the better off parts of the country.
One major pain point in this crisis has been the FAS's economic ties to the United States. While most of the FAS's trade is with Asia, Africa, and Europe, the US financial system still plays a crucial role in the FAS. The stability of the US Dollar has long been used to protect the economies of the Gulf using their vast Forex reserves (earned from oil sales) to peg their currency to the US Dollar. With the US Dollar in complete collapse, the value of the Khaleeji is plummeting right along with it, causing a significant degree of harm to the FAS's economy.
To help offset this harm (and to decouple the FAS's economy from a country that the FAS is starting to view as maybe not the most reliable
economic partner), the Central Bank in Dubai has announced that the Khaleeji will switch its peg from the US Dollar to a basket of foreign currencies (the Euro, the Pound Sterling, the Swiss Franc, the US Dollar, and the Japanese Yen). The FAS hopes that this will help to salvage the Khaleeji's value, better protecting the economy from the collapse of the dollar-based international financial system. Rumor has it that the Central Bank is discussing the idea of unpegging the Khaleeji entirely and allowing it to float freely, but so far, the Central Bank has made no moves towards floating the Khaleeji. Crises suck. They shatter the status quo and throw established norms and procedures into chaos. No one really wins during a crisis.
But in another sense, they're a double-edged sword. The status quo is often a repressive entity, reinforcing existing hierarchies and preventing dramatic shifts in the order of things. Chaos breaks that apart, giving the ingenuitive and the entrepreneurial on opportunity to better their lot in ways they otherwise could not.
Put differently: chaos is a ladder, and the FAS intends to be the one climbing it. As the largest economy in the Arab World (and one of the world's 20 largest economies) by both nominal GDP and GDP per capita (by a significant margin--it's probably either Saudi Arabia or Egypt in second place in nominal GDP, and definitely Saudi Arabia in second place in GDP per capita, but the FAS more than doubles the country in second place in both categories, so it's sort of a moot point), the FAS hopes to cement its place as the regional economic power.
The FAS has announced a new slate of policies intended to attract rich investors, manufacturing firms, and financiers fleeing the new nationalization program of the United States. New free trade zones have been created throughout the country--especially in the struggling, undiversified regions of Kuwait and Qatar--with the goal of convincing fleeing American manufacturers to set up shop in these areas. Attractions include wildly low tax rates (as low as zero percent in some instances), a common law framework (as opposed to the Sharia-based legal system in most of the FAS), highly subsidized land prices (sometimes free), relaxed financial restrictions (making it easier to move money in and out of the FTZ), and, for large enough firms moving enough operations into the country, preferential visa treatment (making it easier for them to relocate foreign employees into the country). Sitting at one of the major crossroads of global trade, moving operations to the FAS offers easy access to both the world's established consumer markets (like the EU and East Asia) as well as to some of its largest growing markets (South and Southeast Asia, East Africa, and MENA). Pair this with wildly high standards of living (for people who aren't
slaves Asian or African migrant workers) and established expatriate communities, and the FAS becomes an incredibly attractive option for American and other foreign firms looking to relocate.
In addition to manufacturing-oriented FTZs, special attention has been paid to attracting service-oriented firms to new and existing FTZs in the vein of Dubai Internet City, Dubai Design District, Dubai Knowledge Park, and Dubai Media City, with the goal of developing a robust service economy that can capture growing markets in the MENA, South Asia, and East African regions. In advertising these zones, the governments of the FAS have highlighted the success of previous ventures in Dubai, which have attracted the regional headquarters of giants like Facebook, Intel, LinkedIn, Google, Dell, Samsung, Microsoft, IBM, Tata Consultancy, and more.
Perhaps one of the most substantial pushes, though, is to attract American financial services and FinTech firms to base in the FAS (particularly Dubai, Kuwait City, Doha, and Abu Dhabi, the traditional centers of regional finance). New financial industry free trade zones have been set up in the four cities, structured in the vein of the Dubai International Financial Centre (DIFC). These financial FTZs boast an independent and internationally regulated regulatory and judicial system, a common law framework, and extremely low taxation rates. All government services in these regions are available in English (the lingua franca of international finance), and in events where ambiguity exists in the legal and regulatory systems, the systems are set to default to English Common Law (except for the Kuwait City International Financial Centre, which is hoping to better tailor itself towards American financial firms by defaulting to American Civil Law from pre-2020 rather than English Common Law). Much like in the DIFC, these new FTZs will also run their own courts, staffed in large part by top judicial talent from Common Law (or in the case of Kuwait City, American Civil Law) jurisdictions like Singapore, England, and (formerly) Hong Kong. Using these FTZ, the four cities hope to raise their profile as financial centers. Dubai in particular is hoping to break into the top ten global financial centers--and it stands a good chance of doing so, too, as it sits at number 12, just behind cities like LA, SF, and Shenzhen--while the other cities are just hoping to boost their profile into the 20s or 10s (according to Long Finance, Dubai is number 12 in the world and 1 in the region, Abu Dhabi is number 39 in the world and two in the region, Doha is number 48 in the world, and Kuwait City is number 91).
(Post is a work in progress)
Hi, so this is a quick starter list of investment ideas for anyone looking to get into investing. I'm also hoping to grow this post (and this subreddit) as time goes buy
Long Story Short
- Platform to get started:
- Easy Equities: A affordable, low cost way to get started investing. Allows you to invest in South African, Australian and United States Markets. Basically that is everything from Naspers to Google
- The beauty of this platform is that you can invest with airtime money. Even a R10 can buy you something.
- Link is over here Easy Equities
Some Notes (work in progress)
- Investment styles:
- You will have to research into the style of investing you'd like, of course a combination of these is also possible:
- Trader : Doesn't hold stocks for long, heavily reliant on technical analysis
- Fundamental Investor : Holds stocks for long, basis investments primarily on fundamentals such as income, debt ratios, etc)
- Passive Investor: Hands off investment style, let someone else manage your money (unit trusts, private solutions, etc)
- Asset Classes
- Look into the type of assets you'd be investing in. Of course diversification is also a good idea to spread your risk
- Equity/Stocks (i.e companies)
- Impact Investments (solar panels, etc)
- Crypto Currency (if you into that sort of thing)
- Remember failure to plan is planning to fail
- Create a strategy. (When will you invest? When will you sell? What are your profit expectations?)
- Understand the markets & asset classes you dealing with
- World events affects prices (Covid-19 caused a market crash, A certain ex SA president also caused havoc on our markets and our economy)
- Read a lot
- The Intelligent Investor: Benjamin Graham (Value investing)
- Rich Dad Poor Dad: Robert Kiyosaki (not an investment book, but interesting perspective)
- Open a practice account (easy equities has that as well as most brokerages). Practice your strategy. See how much you make with dummy money.
- Mistakes to avoid
- Listening to your friends for a hot stock (especially if they not serious investors)
- Assuming the price will always go up
- Not paying attention to fees
Disclaimer: This is for informational purposes only, this is not financial advise, the writer is not responsibility for any of your investment decisions and consequences.*
It's another one those “let's have a rational discussion about Bitcoin” posts.
As something of a believer I am not interested in trashing Bitcoin, but it's clear that not everyone's vision of the future for Bitcoin is the same, so here is mine.
First the negative.
Bitcoin is terrible for in person transactions, and I suspect it always will be. What Bitcoin excels at is being “Internet Money”. No average Joe wants to wait 10 minutes for a confirmation whilst buying a cup of coffee. The main arguments against this are a mixture of “zero confirms is good enough” and “services on top of Bitcoin facilitating off chain transactions”.
Merchants do care about small value losses, the CCTV cameras in most small convenience stores prove this, whilst the Satoshi client does not let you double spend easily with zero confirms, in terms of the protocol it is trivial. If Bitcoin adoption grows and zero confirms start to become common we should assume we will see alternate clients designed to make double spending as easy as possible.
As for services facilitating off chain transactions, what is the difference from the consumers point of view between this and a Credit Card?, add in the fees for this off chain service and you are likely at the same cost as a CC payment. Bitcoin adds little value over cash or CC in the real world, fiat currencies for transacting locally are difficult to beat.
The enthusiasm for Bitcoin is impressive, but Bitcoin's future does not lie in Subway, bars, coffee shops, etc.
Bitcoin has also conclusively proved that not everybody is ready to be their own bank, here are some examples.
- MtGox gaining new customers despite their banking problems being well publicised.
- People complaining about the price rising after they sold coins, expecting the exchange to make up the difference (yes I have come across this on IRC and it didn't appear to be joke).
- BFL pre order customers forcing refunds from PayPal, despite BFL having a poor reputation before they began accepting ASIC orders.
- People losing coins because they don't understand how change addresses work.
- People forgetting passwords to their wallets. *People losing coins due to insecure wallets, poor passwords, brain wallets, web wallets, etc.
The last point about security is important, I consider myself to be fairly technical but find the task of securing Bitcoins daunting. The most difficult scenario is where someone has a lot of coins but needs to spend some of them frequently. The community could really do with a dedicated guide about security listing the options and trade off's, the Bitcoin wiki page currently is a bit too focussed on the Satoshi client.
Note that simply blaming the user isn't good enough, CC and cash offer a much better consumer experience (lost your credit card?, call your bank and get it cancelled and re-issued).
Now the positive.
I see lots of scenarios where Bitcoin is incredibly successful but the average Joe knows nearly nothing about it.
- Buying things over the internet (duh), particularly internationally. Bitcoin gels very well with the increasingly globalised and smaller world that we live in.
- Allowing unbanked people to participate in the global economy cheaply.
- A stable and liquid reserve currency which could become a kind of meta currency. For example currently if you try to convert two disparate currencies through FOREX, say Singapore Dollar and South African Rand, the money will likely be converted into USD in between. Bitcoin could be well suited to this intermediate step.
- B2B transactions, Bitcoin is great way for companies to settle with each other.
- Savings, Bitcoin is a great way to diversify, whilst nothing is guaranteed in life, Bitcoin being widely adopted means it is likely to hold it's value.
The last point is also important, one common theme I see in the Bitcoin community is that of banks hating Bitcoin. For investment banks in particular this is likely to false, they currently trade and speculate on a large number of commodities every day and would welcome a global instrument like Bitcoin.
Retail banks don't have much to fear either, as previously mentioned even Bitcoiners love to be able to reverse payments in some circumstances (BFL pre orders).
I suspect the reason the banks are not all over Bitcoin yet, is due to a combination of regulatory worries and inertia. Banks have become risk averse since the 2008 financial collapse and it would be disingenuous to suggest that Bitcoin is without risk.
One final point about inflation versus deflation, roughly speaking most western countries were on the gold standard for about a 100 years, and we have been off it for nearly as long. What is often ignored by newcomers to Bitcoin (but I have seen raised in the community) is that a monetary system is not independent of the world it exists in. The last hundred years have seen a huge increase in the planets population and this will inevitably bring with it resource scarcity. There may be a perfect one size fits all monetary policy, I doubt Bitcoin will be it, but Bitcoin may be exactly what the world needs to get the world through leaner times.
So to summarise, I find it hard to envision Bitcoin replacing fiat completely, if Bitcoin is really successful fiat could be commonly measured against Bitcoin.
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