Experts Observed That The Hong Kong Financial Market Is Surprisingly Stable
At the moment it does not look like that investors are pulling their capital out of the city in droves.
“The Hong Kong dollar has been trading on the strong side of the spectrum since April – at a rate of 7.75 Hong Kong dollars per US dollar. This means that there is a constant inflow into the city, “ — Vincent Tsui, Asia analyst at the international analysis house Gavekal Dragonomics in Hong Kong, the Handelsblatt.
The Hong Kong dollar is pegged to the rate of the American dollar and can only range between 7.75 and 7.85 per US dollar.
When it became known at the end of May that the government in Beijing wanted to extend its powers in the Chinese Special Administrative Region significantly with a security law for Hong Kong, the Hong Kong stock exchange had plummeted and foreign companies had expressed concern according to FX brokers like igcom,
The New Security Law in HongKong
The new security law marks a turning point in the financial metropolis. In contrast to mainland China, Hong Kong has had a functioning and independent legal system to date, from which investors have also benefited. However, under the pretext of preserving national security, the new security law creates considerable possibilities for Beijing to intervene in Hong Kong. Just one week after the controversial Security Act came into force, the National Security Authority in the financial metropolis was opened.
The security bureau should oversee that the new law is being implemented by the Hong Kong government. If there were a significant outflow of capital, it would largely go to the Asian metropolis. Singapore is the obvious alternative for wealthy bank customers and investors who distrust the Hong Kong financial cente. All business related to mainland China would remain in Hong Kong.
This is the bulk of Hong Kong’s financial transactions.
“No either-or situation”
Previously, a surge in foreign currency balances in Singapore had sparked speculation that it was linked to Hong Kong’s political turmoil. Already last year, when street protests paralyzed Hong Kong, Singapore’s leadership rejected the impression that the city-state could emerge as a beneficiary of the crisis. “In Singapore, we thrive best when the region is stable and other countries we do business with are doing well,” said Prime Minister Lee Hsien Loong, referring to the situation in Hong Kong. Observers see several reasons why the Hong Kong financial market has so far been unaffected by the significant changes in the metropolis.
Predicting an end to Hong Kong’s hedge fund industry is premature. “There are currently some IPOs in the pipeline, so the demand for Hong Kong dollars is likely to increase,” says Merics expert Zenglein. Chinese institutional investors are not bothered by the National Security Act, said Zenglein.
The strong Hong Kong dollar and capital inflow to the financial metropolis could be due to the interest rate differential and the positioning of foreign investors for the upcoming major IPOs, Tsui said.
Where does Your Tax Money Go?
We are all paying taxes. But where does the federal government puts the tax money they have collected? Basically, federal government is collecting taxes in an effort to fund different public services. In fact, in the fiscal year of 2019, the federal government has spent over 4.4 trillion dollars, which amounted to 21% of the GDP of the country.
Out of that money, over 3.5 trillion dollars was financed by the federal revenue while the remaining 984 billion dollars was financed via borrowing. This includes lending people money to open a startup business and assisting them to grow it. So if you want to have better understanding of this matter, les mer om lån her.
Public Services Funded by the Government
As mentioned before, the government is funding several public services. What kinds of public services if you may ask?
Social Security
In 2019, 23% of the budget or a trillion dollars were paid for Social Security. This has provided monthly retirement benefit that’ll average at $1503 to 45 million retired workers in December of 2019. Social Security provided benefits as well to around 3 million children and spouses of retired workers, 6 million surviving spouses and children of deceased workers and 10 million disabled workers as well as their eligible dependents in last year of December.
Healthcare
The 4 health insurance programs of the country namely Children’s Health Insurance Program or CHIP, Affordable Care Act or ACA, Medicaid and Medicare have contributed 25% of the budget in 2019 or around 1.1 trillion dollars. Almost 3/5 of the amount or 651 trillion dollars all goes straight to Medicare, which provided health coverage to approximately 61 million Americans who have disabilities or over 65 years old. The rest of the amount was divided across CHIP, ACA and Medicaid.
Under normal circumstances, CHIP and Medicaid are providing long-term care or health care to 82 million low-income parents, elderly people, people with disabilities and children more or less. Both CHIP as well as Medicaid are requiring matching payments from the state. In fact in 2019, 9.6 out of the 11.4 million people have enrolled in health insurance via the ACA marketplace collected subsidies that lower out-of-pocket costs and premiums can offer. That is an estimated cost of 56 billion dollars.
Defense and International Security Assistance
697 billion dollars or 16% of the budget have gone for security and defense related international activities. This is to maintain security and safety of Americans against threats both local and international.
NY Gov Calls McConnell’s State Bankruptcy Bill a Dumb Idea
Angered by Republican Senator Mitch McConnell’s move to pass a bill for states to declare bankruptcy, NY Gov. Cuomo called it the dumbest idea ever.
Actually, McConnell made his remarks in connection with his and other Republican allies’ refusal in giving financial aid to Democratic States. Rather than receive bailouts coming from the $2.2 trillon coronavirus relief fund approved by Congress, McConnell wants states with steep shortfalls consider declaring bankruptcy while facing the Covid-19 crisis.
The Republican Senate leader referred to Democrats, who after pushing to spend tens of billions of dollars in helping residents in their states, namely in California, New York and Illinois, are now banking on financial aid coming from the stimulus fund in addressing their shortfalls. His statement appeared under a press release captioned as “Stopping Blue State Bailouts.”
McConnell, who apart from being senator of Kentucky is also the senate majority leader, whilst branding himself as the grim reaper of Congress. He stated the controversial remarks in response to an interview conducted by radio host Hugh Hewitt.
According to news sources, McConnell’s statements have fueled bipartisan backlash from several state governors.
NY Governor Lashes Back
In his Friday briefings about the present state of the Covid-19 crisis in New York, Gov. Andrew Cuomo (D) berated McConnell’s support of a bill that will force states to declare bankruptcy during the ongoing pandemic crisis. Apart from calling the passing of the bill as a “really dumb idea,” the NY Governor dared McConnell to pass the law, saying
“Your suggestion, Sen. McConnell, pass the law, I dare you to do that.” “Then go to the president and ‘say sign this bill that allows states to declare bankruptcy.’ …”I dare you to do that if you want to send a signal to the markets as well as send an international message that the U.S. economy is in turmoil.”
NY Republican Representative Peter T. King came out with a tweet last Wednesday, calling McConnell’s suggestions and remarks “shameful and indefensible,” whilst branding McConnel as the Marie Antoinette of the U.S. Senate.”
Republican New Hampshire Governor Chris Sununu came out with a press statement in which he called McConneell’s statements ridiculous because it means allowing a state to go bankrupt, and forego all the programs and benefits that a state has to institute, manage and operationalize for citizens.
How American Billionaires Put Their Political Agenda On The Country
In January 2015, brothers Charles and David Koch announced that they would donate nearly $ 900 million, or about € 760 million, to the 2016 US election campaign, a small injection of money for Republican Party candidates. However generous – the Koch brothers are not fans of the Republicans. On American television, older brother Charles defined his relationship with the party as follows:
“I see it this way: the Democrats drive 160 things over the financial cliff into a broken society, the Republicans only drive 110.”
Charles Koch on the millions spent on politics, influence
The Kochs’ political ideas can also be summarized as follows; The state should stay out of it. They don’t believe in general health insurance or a minimum wage, they want less taxes and no environmental protection requirements – because they only disrupt their business. The Kansas brothers own Koch Industries, the second largest privately held company in the United States. The group includes chemical factories and cattle farms, oil refineries and thousands of kilometers of pipelines; Around 120,000 employees manufacture a myriad of products, from asphalt and fertilizer to toilet paper.
With an estimated net worth of over 41 billion euros each, Charles and David Koch are among the richest people in the world. And they use their money to shape the United States according to their libertarian agenda – not just with generous campaign donations. Since the 1970s, the Kochs have built up a huge network that disseminates their market-radical ideas. Critics call the confusing network of lobby groups, think tanks, sponsored chairs, foundations, and associations the “cooking top”, ie an octopus. One tentacle builds political activists – the Kochs have pumped millions into the right-wing tea party movement – the other tentacle produces research results that benefit them. The Kochs not only managed to sow doubts about the existence of man-made climate change but also ultimately contributed to the United States withdrawing from the Paris climate protection agreement. Over the years, the Republican Party and the Koch brothers have come closer and closer together.
They are by no means the only Americans who exert political influence with their wealth. But the dimensions of the Koch brothers’ influence are unique; there is no comparable organization on the part of the Democrats. In general, most multimillionaires and billionaires tend to support the Republicans. However, the Democrats also have extremely wealthy large donors, such as the investor George Soros.
How much power people with a lot of money have in American politics is also evident from who actually holds the important offices. President Donald Trump has gathered a cabinet of millionaires and billionaires around him: bankers, investors, hedge fund managers. When Trump named the first 17 candidates for his government in December 2016, an American online magazine calculated that the elect would total $ 9.5 billion in assets. That is more than the poorest 43 million US households put together who desperately take out loans from private companies like Loose Lending (https://looselending.com/). The Center for Responsive Politics also showed three years ago that members of Congress have long been much wealthier than the average American, and in 2013 more than half of them were millionaires for the first time.
The Real Picture Behind Trump’s Claims of Being the Greatest President in the History of the U.S.
President Trump often basks in the glory of boasting about job growth during his presidency, which his supporters readily believe.
Yet time again, economists and analysts point out that economic and job growth did not start during Trump’s presidency. His showing was only a continuance of the progress made by the Obama administration, after pulling the U.S. economy out of the “Great Recession” that lasted between December 2007 and June 2009.
Fortunately, it was President Obama who was at the helm of the government’s efforts to bring the country on the road to recovery. The financial crises of the Great Recession were wrought by toxic mortgages, breakdowns in corporate governance and excessive credit card borrowings. All of which stemmed from poor financial regulations and ineptitude by those handling the Federal Reserves.
Upon Trump’s assumption of office in the year 2017, the country was already well on its way to economic recovery. Yet even if job growth was sustained, the rate of job growth in America has not actually made an impressive change during Trump’s presidency.
Although Trump promised a GDP growth of 4%, his administration managed to post an increase of only 2.9% during the years 2017 and 2018, coming from an average GDP growth rate of 2.07% linked to economic recovery initiatives under Obama.
At the end of 2019, the rate of GDP growth plummeted to 2.00% – 2.01%; even lower than the GDP growth rate before Trumped assumed office.
The drop was largely expected in light of the trade wars that Trump initiated with other countries, particularly vs. EU-member countries and China. Many businesses, particularly the manufacturing sector were largely affected by the tariff increases imposed on raw materials being imported from China and other countries. Apparently, Trump did not have a clear idea of how tariffs actually work, since the burden of paying the costs of importing the raw materials eventually falls on the American end-users or consumers.
The Real Picture about the Economic Growth During Trump’s 3-Year Presidency
A substantial portion of the tariff collected from Chinese goods imported by U.S. manufacturers and resellers, estimated at around tens of billions of dollars were paid by American consumers. Most of the funds collected from the increased tariff collections went to subsidies aimed at supporting U.S. farmers, being the hardest hit by the U.S.-China trade war.
Mainly because China suspended all importation of agricultural products being supplied by American farmers, instead of caving in to Trump’s trade demands and threats.
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