For an economy to flourish, the inflation rate needs to sit at about 2 per cent, according to most economists.
If inflation is too low, we risk a sluggish economy and weak wage growth, while if it is too high, people’s savings and purchasing power shrink.
Right now, we are facing the latter scenario, with inflation sitting at an astonishing 8.6 per cent in the US — the highest rate recorded in four decades.
Globally, inflation is now creeping up the driveway of almost every person. The question on everyone’s mind is: how can one protect their purchasing power in the face of rapidly rising prices?
A true gauge of inflation
The first step is to understand what the rate of inflation truly is. The way that inflation is calculated has not changed for more than 100 years and so there are a number of gaps and inaccuracies.
As such, we need a radical rethink of how we collect and collate data. US inflation is running much closer to 11 per cent, according to the Truflation index, a blockchain-based inflation data aggregator.
This extra 2 per cent makes a huge difference in the lives of average Americans. With basic groceries now running into hundreds of dollars during each supermarket visit, people are already cutting back on services beyond their basic needs.
At some point, the average consumer will be forced to choose between energy and groceries, or transport and new shoes. At that point, the economy will begin to suffer.
How loose monetary policy affects inflation
The founders of cryptocurrencies have had their eyes on inflation for a long time.
The first “genesis” block of the Bitcoin blockchain contains code that refers to an article from The Times in 2009, which reported on how George Osborne, then chancellor of the exchequer, was planning to issue a second £1 billion ($1.19bn) bailout for banks during the financial crisis.
Satoshi Nakamoto, the anonymous creator of Bitcoin, understood that rampant money printing by central banks in 2008 and 2009 was going to create a dangerous inflationary environment.
That was before the Covid-19 pandemic, which has driven money printing to heights no one could possibly have imagined.
Since January 2020, the US Federal Reserve has added $5 trillion to its balance sheet as part of its monetary stimulus package. This adds to the $4tn accumulated in large part between 2008 and 2020. (A fully accurate figure is not available as the Fed stopped publishing its balance sheet on its website in 2020).
Questions are now being asked whether this enormous level of borrowing can ever be recouped and how much damage it could cause the economy and citizens.
The small rate increases in recent weeks that have led markets into bear territory could simply be the beginning of what the Fed would need to do if it plans to balance its books.
A call for industry collaboration
Cryptocurrencies are now in one of the sharpest downturns the industry has ever seen, thanks in large part due to increasing inflation and subsequent interest rate increases that have scared away investors accustomed to easy money.
The recent blow-up in TerraUSD also didn’t help, with the loss of $60 billion almost overnight, making “algorithmic stablecoins” a dirty word.
However, such innovations have a vital role to play in a cryptocurrency ecosystem that could beat inflation.
While fiat-backed stablecoins have proved a lifeline during recent bouts of volatility, a truly decentralised stablecoin that can deliver a regular and consistent yield in a safe and stable way — one that matches or perhaps even beats inflation — is the holy grail everyone in this industry should be chasing.
The more volatile cryptocurrencies will always appeal to risk-hungry investors, but for the rest of the world, we need something a little less risky.
We need something similar to what cash savings used to do and help the average person to preserve the value of their money.
If the cryptocurrency industry works together in this bear market, we can achieve this.
Stefan Rust is the founder of Laguna Labs, a blockchain development house, and former chief executive of bitcoin.com
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
Normal People
Sally Rooney, Faber & Faber
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
ETFs explained
Exhchange traded funds are bought and sold like shares, but operate as index-tracking funds, passively following their chosen indices, such as the S&P 500, FTSE 100 and the FTSE All World, plus a vast range of smaller exchanges and commodities, such as gold, silver, copper sugar, coffee and oil.
ETFs have zero upfront fees and annual charges as low as 0.07 per cent a year, which means you get to keep more of your returns, as actively managed funds can charge as much as 1.5 per cent a year.
There are thousands to choose from, with the five biggest providers BlackRock’s iShares range, Vanguard, State Street Global Advisors SPDR ETFs, Deutsche Bank AWM X-trackers and Invesco PowerShares.
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
COMPANY%20PROFILE
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UAE currency: the story behind the money in your pockets
ESSENTIALS
The flights
Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.
The hotels
Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.
The tours
A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages.
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MATCH INFO
Uefa Champions League semi-finals, second leg:
Liverpool (0) v Barcelona (3), Tuesday, 11pm UAE
Game is on BeIN Sports
Cryopreservation: A timeline
- Keyhole surgery under general anaesthetic
- Ovarian tissue surgically removed
- Tissue processed in a high-tech facility
- Tissue re-implanted at a time of the patient’s choosing
- Full hormone production regained within 4-6 months
Janet Yellen's Firsts
- In 2014, she became the first woman to lead the US Federal Reserve
- In 1999, she became the first female chair of the White House Council of Economic Advisers
