What you may have missed in the business news last week:
1. The Rise and Rise of Bitcoin
As of Saturday, Bitcoin was trading as high as $473 on Bitstamp (this morning, it was up over $512). Here’s a chart:
To be clear, on January 1st this year, Bitcoin was trading at $13.22 to the USD. Making it a return of 3873% this year.
Astonishing. And probably helped by the US Department of Justice and the SEC telling a US Homeland Security senate committee that bitcoins are legitimate financial instruments (which they have to be, by definition – whether they’re desirable for homeland security or not is an entirely separate question).
The great thing about bitcoin is that you can’t really argue with it too much. You want to say “but it’s not backed by anything!” – but neither is “real” money. Or perhaps something like “but it’s digital, so it can be counterfeited!” – and yet, so can real money (both the physical and digital varieties).
2013: The Year Of Bitcoin. I’m calling it.
2. The Curiously Convenient Changes to South Africa’s Trade Deficit.
South Africa has revised its trading figures for the last nine months, to include imports and exports from Botswana, Lesotho, Namibia and Swaziland: moving the trade deficit from R127 billion to R65 billion.
My question: how have nine months of trade with these countries been excluded?
Oh – but wait. It seems that SARS has forgotten those countries since 2010. Meaning that, under “the new accounting method”, South Africa was in trade surplus in 2010 and 2011, and the trade deficit from 2012 dropped from R116.9 billion to R34.6 billion.
In all fairness, South Africa is part of a customs union with those four countries, meaning that there is free flow of goods and services between them. But still – it makes no sense that these trade figures haven’t been included previously.
My next question (which is a tiny echo of what the rest of the analysts are saying): why did SARS elect to revise the figures now, just ahead of a general election?
The Party has met, and announced that Xi Jinping’s term will see greater market reforms, an easing of the one-child policy, and something about more room for the market.
Frankly, I think the important part is the easing of the one child policy. That policy has been in place since 1979, making it a generation in the making. As of 2007, around 36% of the Chinese population was subject to a strict one-child policy.
Apart from the common stories of infanticide, just consider the social burden that is being imposed:
- You have two people
- They have one child
- When those two people get older, they will have to be supported by that one child
- Extrapolate that over a population of 1.3 billion people.
