Archive for October 24, 2013

Canadian Economic Outlook

If you live in Europe, there is a tendency to doom and gloom when you are talking about economics.  However slowly but surely the expectations are beginning to rise, the word upgrade is starting to be used more often in the IMF assessment reports.

The latest economy to be revised upwards is that of the Canadian economy, with a small increase in the growth expectations for this year and next.  Canada was never quite as affected by the global financial problems having to some extent ‘put it’s house in order’ some years ago.  The growth rate is only expected to be around 2-2.5% but this comes on the back of consistent if unspectacular growth over the last few years.

Canadian TV - CTV

The IMF continue to emphasize the global situation which is dragging back many economies including Canada.   Growth around the world is expected to be around 3%, although this should rise significantly over the next few years.

Countries like Canada have based their economies on slow, consistent growth and limiting public expenditure and debt.  The lessons of European and the US appear to have strengthened this resolve.  Although Canada has not suffered any significant GDP falls, there is an air of austerity to the policy making.  If you watch regularly the Canadian finance and news shows you will see this being reflected in day to day life.  Here’s how I watch the Canadian broadcaster by the way – , although I haven’t figured out how to watch on more TV yet.  If you prefer a video explanation that can bring Canada into your living room – here’s another method – right here.

The IMF of course are not always correct in their growth figures.  The Bank of Canada has a much more optimistic expectation for 2014, of nearly three percent in 2014.  We will have to see who comes out closest in next years economic data.

Credit Repair Anyone Can Easily Do For Your Debt

In today’s day and age, it is not uncommon to hit “rock bottom” and be in need of credit repair advice. Reaching this point can make you feel like there is no where to turn, and no way to get back on track again. That’s really not the case, and following a few simple steps can help you along the way. Pay down your debt. Aim for reducing all of your debts to about 10 percent of available credit. You should pay off the high interest accounts first, and then start on the less expensive accounts. Don’t accumulate any new credit. Focus solely on paying down the credit you already have. Do what you can to increase your income levels to help improve your brænde scores. Your debt to income ratio is a big factor in determining your credit score. Most people will advise you to pay down your debts to better the ratio. The other way to help it is by increasing your income. Either method will help your debt to income ratio become much more appealing.

An important tip to consider when working to repair your credit is to always consider credit counselling before making any drastic decisions. This is important because you may not know what is always best for you and it is sometimes best to leave it up to the experts. There are many free and government provided debt counseling agencies. If you are trying to raise your Brænde credit score, there are many factors that help to determine your score. The factors include payment history, amount of debt, length of credit history, the type of credit used by services like briketter or træbriketter, and the number of recent credit applications or credit report pulls. Contact the creditors of small recent debts on your account. See if you can negotiate having them report your debt as paid as agreed if you can pay the balance in full. Make sure that if they agree to the arrangement that you get it in writing from brænde for backup purposes. If you are serious about repairing your credit, take measures to reduce your spending. Most of us buy things we do not really need and eat out more often than we should. Cutting back on your spending will free up money to put towards reducing your debt, which will lead to better credit.

After bankruptcy, look over your credit report to be sure that the bankruptcy is appearing as it should. Make sure that the things that are on it that were covered with the bankruptcy are properly noted. You want any future creditors to know that those lines of credit are no longer your debt. Avoid using credit cards. This is helpful when you are in debt and can’t pay back what you already owe. It is also good to avoid charging things to a credit card that you can’t immediately pay off. This will help you from acquiring any other debts that you can’t pay. Hitting “rock bottom” does not have to mean the end of your financial future. By using some common sense, and following the simple steps outlined in this article, you can greatly improve your financial forecast like brænde or briketter. The road might not be a short one, but the end result will most certainly be worth the effort.

Source: kvalibraende

HIPC – Heavily Indebted Poor Countries Initiative

Way back in 1996 the IMF launched an initiative together with the World Bank. It’s aim was to ensure that no country faced a debt burden that it would be unable to manage.  Since that date it has worked with  the financial community on a global level to reduce debts in poor countries to sustainable levels.  Some may think it is unfortunate  that the rich countries were not included in this initiative of debt reduction.

The whole initiative was reviewed in 1999 and improvements were made based on experience.  This was then supplemented in 2005 when the HIPC was supplemented by more acronyms – the MDRI (Multilateral Debt Relief Initiative).  This actually allowed a country to get relief of 100% of it’s debts from funds controlled by the IMF, the World Bank and the African Development Fund.

The conditions for eligibility were as follows –

  1.  be eligible to borrow from the World Bank’s International Development Agency, which provides interest-free loans and grants to the world’s poorest countries, and from the IMF’s Poverty Reduction and Growth Trust, which provides loans to low-income countries at subsidized rates.
  2. face an unsustainable debt burden that cannot be addressed through traditional debt relief mechanisms.
  3. have established a track record of reform and sound policies through IMF- and World Bank supported programs
  4. have developed a poverty Reduction Strategy Paper (PRSP) through a broad-based participatory process in the country.

It’s good news really as out of the 39 countries eligible or close for HIPC aid currently 34 are receiving full debt relief. Several are coming close to achieving their debt relief criteria and decisions are pending. There are still many issues in some of these countries regarding human rights but poverty is likely to act as a barrier to solving these.  It is advised in many of these countries to use a fake IP address ( check here for some advice – ) when visiting as their ISPs are often heavily logged or filtered.

This is particularly one area that developing countries should focus on as the internet offers employment and entrepreneurial opportunities for lots of the population when the infrastructure is improved.

European Debt is Not Germany’s Fault

I’m not German so I can only imagine what they feel like, as one after another Eurozone countries are falling into huge pits of debt.  Of course then comes the bail outs where the country in question comes cap in hand for money to bail out the mess that their economy has got into.  We are seeing it in real time now with the Cyprus Government where of course the remedy is even tougher than normal by forcing Cypriots to bail out their banks.

It’s the next bit that always annoys me, the Anti German banners, placards with pictures of Angela Merkel sporting a Hitler style moustache.  You’ll hear talk of bullying, of Germany imposing strict controls and trying to dominate smaller countries.  Of course Germany invaded Greece many years ago but the German taxpayer would much rather not be involved with Greece’s problems at the moment.

The problem is that Germany has to help, but it shouldn’t be forgotten that these bailouts are partly funded by taxpayers in Germany.  One by one the basket cases of Europe announce that they are about to go under, and expect loads of cash to solve their problems with no strings attached. It’s simply not going to happen, at least not until there is a central European taxation system.

The reality is that the reason the German economy is able to help is that it has practised for years the sort of austerity that is suddenly forced on these countries.  Germans did not retire in their mids 40s on fat Government pensions like many Greek citizens did, and thus they are able to finance rescue plans using surpluses.  The woes of the Eurozone were not inflicted on anyone by the Germans, although it has to be said they have benefited from a currency which is much more competitive than the German Mark would ever be in todays world.

If you look at German media and especially check in with some of the German TV stations that broadcast online you can see the growing resentment.  Check out some of the main German TV station and you’ll see for yourself – you can look at them online, you just need to invest in a German proxy such as this – to access some of this content.  This shields your real IP address to enable you to watch geo-restricted content using a German IP address instead.

You can see that patience is running thin with some of the abuse that Germany is getting whilst trying to help these economies survive.  It’s not something we see when you’re outside the country particularly being bombarded with Anti-German companies.

China Moves to the Slow Lane

No economy can grow at the rate of the China forever, it’s simply unfeasible and a slowdown is an inevitable result at some point.  The growth story has been huge and some measure of rebalancing is not only inevitable it is desirable too.   China has followed the tried and tested growth template pioneered by other Asian economies, Japan, South Korea and Taiwan are just a few examples.  These countries were always described as ’tigers’ in global economic terms however China is much, much bigger than these.

The worry of course for the rest of the world is simply the scale of the Chinese economy now.  The tigers had far less of an effect on the global markets than China did and many of these economies have suffered in the downturn particularly the Japanese.  The issue in a world beset by recession is of course that all these growth stories were focused on exports.  The extensive investment in manufacturing, education and infrastructure created the funnel to supply an export driven market.

This strategy raises huge amounts of foreign currency, which is essential to purchase the raw materials to supply the manufacturing plants.  However this growth model is simply unsustainable in the current climate particularly due to heavy subsidisation required to manipulate exchange and interest rates, plus keeping wages low to minimize costs.

The problem is that the market for the goods China produces is falling, growth cannot come from outside any more whilst the recession hits it’s main markets – saturation point has been reached.  The difficulty China has is moving to a new model, it needs to be genuinely competitive not just at the expense of it’s own people.  Investment in infrastructure can help but the unused developments and white elephants strewn across China demonstrate that this is not the long term answer.

China faces many problems with being genuinely competitive in a global market. It’s difficult for entrepreneurs to prosper in such a tightly controlled and monitored society.  Just taking the internet as an example – the infrastructure available should mean the country is a world leader.  However this isn’t the case as the country is handicapped by surveillance, internet filtering and censorship.

The IT tools and infrastructure used by many  global companies simply don’t work in China.  Whilst individuals worry about the lack of online anonymity – see this for instance – secure proxy, especially in a heavily monitored network, companies have extensive difficulties in simply operating.  The numerous stories of paid hackers and state sponsored industrial espionage also make many of the biggest brands wary of setting up at least on the Chinese mainland.

The restrictions that are put in place obviously are primarily targeted at the Chinese citizens themselves.  But they too are becoming well used to bypassing these, by using technology freely available on the web.  Take for instance accessing specific media sites, this video for example illustrates a method used by people to access Netflix a popular media streaming site.

These problems will severely hamper the Chinese economy, as it seeks to modify it’s model.  The problem is that the World needs China to succeed to some extent, and in many ways Chinese domestic demand could be a great boost to Western economies too.


Improvement Unlikely to Ukraine Credit Rating

The credit rating of any country is obviously vastly important, if you want your economy to grow – credit is essential and the cost of that is determined by the ratings assigned by the various credit agencies.  Last month Ukraine was hoping for some small improvement in their overall standing however Standard and Poor reiterated the current Junk credit rating.   Worse still the respected agency modified the economic growth prospects  of the former Soviet republic which could mean there is worse news to follow.

The rating for Ukraine currently averages out at ’B’, which is over four steps below investment grade.  While the outlook is negative there is only downward pressure on the rating and hence the investment prospect for Ukraine.  Experts predict there’s probably a one in three chance of a further downgrade in the rating unless the Government can bring in some foreign currency to service Ukraine’s substantial debt.

It’s not all bad news, there have been frequent discussions with the IMF on the possibilities of a substantial loan to secure the country’s economy.  Ukraine even recovered from recession in the first quarter of this year and GDP actually rose half a percent.  This recovery has already weakened though, this is partly due to many parties awaiting the proposed IMF bailout.

So what’s the problem with Ukraine?  There are many positives in the economy and certain sectors which are beginning to boom. Ukraine has many digital and technology businesses which are doing very well.  If you get yourself a Ukrainian proxy like this to access the main digital sites you’ll see some impressive success stories.

It’s opportunities like this which perhaps will help a lot of countries like Ukraine. The global digital economy can be a significant factor in bringing employment and opportunities, many of the old USSR countries have extremely high levels of education which benefit this sort of development particularly.  You can see other options in this video which explains how to bypass geographical blocks online.

The problems are unfortunately all too familiar, weak foreign demand for it’s major exports are at the core.  The metals and machinery which Ukraine companies are famous for are simply not required with the rest of Europe in similar recessionary situations.