El Salvador Becomes First Country to make Bitcoin Legal Currency

El Salvador has become the first country to adopt bitcoin as legal tender. Officials in the Salvadoran congress voted in a “supermajority” of 62 out of 84 votes. This fulfills president Nayib Bukele’s promise to make bitcoin legal tender alongside the US dollar. 

 

“The purpose of this law is to regulate bitcoin as unrestricted legal tender with liberating power, unlimited in any transaction, and to any title that public or private natural or legal persons require carrying out,” the law reads. Furthermore, the law enables prices to be shown in bitcoin. Taxes can now be paid in bitcoin, and exchanges in bitcoin are exempt from capital gains tax. The government will also be partnering with digital wallet firm Strike to provide an easy and simple to use financial framework based around the cryptocurrency. Jack Mallers, founder of strike, claims that adopting bitcoin could help countries like El Salvador avoid some of the pitfalls of traditional fiat currency, such as excessive hyperinflation, that developing economies are sometimes prone to. 

 

This decision is unprecedented, as no country has yet …

Read More →

We need to clear our bonds, ensure there are retail offerings.

Ireland has been downgraded by Standard and Poors, we are on a ratings watch with Fitch and Moody’s as well. The last bond issued by the NTMA was not subscribed as widely by the international financial community as they were previously and the Irish stepped up and bought up 55% of the bond, we saved the day ourselves. Now we are at a crossroads, we need to raise money, it will be more expensive given our national outlook and at the same time investors are shying away from our sovereign debt, equally we can’t cut back spending enough to bridge the gap and impressing the international investor market with taxation will hurt our national economy.

There is enough money in this country to clear all of the bonds required, and it is held in ready cash format. …

Read More →

The Irish Tax System

Suppose that every day, ten men go out for pint and the bill for all of them comes to €100. If they split their bill the way we pay our taxes, it would go something like this:

The first man (the poorest) would pay nothing, [he’s unemployed] The next three would pay nothing  [they have jobs but don’t earn above the minimum threshold of c.€18,300 for tax.] The fifth man would pay €1. He does pay some tax when he passes the minimum threshold. The sixth would pay €3. (lower industrial wage earner) The seventh would pay €6. (average industrial wage earner c.€35,400) The eighth would pay €12. (above average industrial wage earner – more than c.€35,400) The ninth would pay €30. (earner who is well into the 41% tax band) The tenth man (the richest) would pay €48. (spends almost all of their tax paying time in the 41% tax band)

So they split the bill in this way, satisfied that they were all paying to their …

Read More →

Whats the fuss about the U.S. Dollar?

The federal reserve is expected to cut rates next week in an effort to alleviate a credit market in crisis. In the meantime there are other developments which may be coming to the rescue, last week Abu Dhabi Investment Authority bought a $7.5 billion stake in Citigroup helping Americas largest bank, who incidentally have massive exposure to those nasty sub-prime loans that are at the root of the present credit crunch. Perhaps Abu Dhabi Investment Authority see an opportunity to pick up assets at a bargain from amongst the wreakage? The other surprise is that China Investment Corporation have expressed a desire to invest in stocks ‘rocked by sub-prime defaults’. The chairman of China Investment Corporation said that the $200 billion fund he directs will be a ‘stabilizing force in the international capital markets’. Perhaps they are seeking credibility in the business world.

Why would it be any other way? If the U.S.A. goes down it will seriously hurt China. Why? For a start the fact that for the near future most of the worlds commodities are in $USD it …

Read More →