- Biden Team Prepares $3 Trillion Support Package
- ‘Norges Bank’ Drop in Bitcoin
- Oil Falls on Demand Concerns
Biden Team Prepares $3 Trillion Support Package
US President Joe Biden, whose $1.9 trillion incentive package, which is aimed to mitigate the effects of the coronavirus pandemic in the economy, has entered into force. According to the information obtained from three people close to the subject who spoke to Bloomberg, he is preparing a new long-term package of up to 3 trillion dollars to boost the economy, reduce carbon emissions and narrow economic inequality, beginning with a giant infrastructure plan that may be financed in part through tax increases on corporations and the rich.
Speaking to Bloomberg, a source stated that the package, which includes infrastructure investments and tax increases, will be announced by Biden this week. Stating that the package foresees a green investment of 400 billion dollars against climate change, the sources stated that the plan also includes support for education and health.
White House advisers are expected to present a two-part, $3 trillion jobs and infrastructure proposal to President Joe Biden as soon as this week, according to two people familiar with the plan.
The proposal, which Biden’s top advisers have been deliberating over for weeks, would be segmented into two separate parts — one focused on infrastructure and clean energy, and a second focused on what’s being termed the “care economy” with a focus zeroed in on key domestic economic issues.
Following the news that Biden is preparing a new package in the USA, attention turned to the presentation to be made by the US Treasury Secretary Janet Yellen. Fed Chairman Jerome Powell and US Treasury Secretary Janet Yellen will present to the US House of Representatives Financial Services Committee on the Coronavirus Aid, Support and Economic Security Act (CARES) package.
Mr. Powell will speak on Tuesday before the Senate Banking, Housing and Urban Affairs Committee and on Wednesday to the House Committee on Financial Services, along with Treasury Secretary Janet Yellen. The pair will address measures taken by the Treasury Department and the Fed to support the economic recovery.
“While we’re seeing signs of recovery, we should be clear-eyed about the hole we’re digging out of: The country is still down nearly 10 million jobs from its pre-pandemic peak,” Yellen said in her opening remarks, which were released Monday evening.
Fed Chairman is expected to emphasize that the economy is gaining strength, but supports are still needed. Powell and Yellen will also address the US Senate Banking Committee on Wednesday.
‘Norges Bank’ Drop in Bitcoin
Bitcoin prices fell after Norwegian Central Bank Norges Governor Oystein Olsen said cryptocurrency is costly and unstable.
Norway recently emerged as the world’s most cashless society, but its central bank governor says people shouldn’t start turning to Bitcoin as an alternative. Bitcoin prices lost more than 7% after the announcement, declining from almost $58,000 to $53,559.
Norwegian Central Bank Governor Oystein Olsen said it was inconceivable that Bitcoin could replace money controlled by central banks.
Bitcoin is “far too resource-intensive, far too costly and most importantly, it doesn’t preserve stability,” Olsen said in a phone interview. “I mean, the basic property and task for a central bank and central-bank currency is to provide stability in the value of money and in the system, and that is not done by Bitcoin.”
Olsen’s criticism of Bitcoin comes just days after Kjell Inge Rokke, one of Norway’s most powerful businessmen, supported the cryptocurrency, saying that it would eventually be on the right side of monetary history. He even speculated that a single Bitcoin could be worth ‘’millions of dollars’’ in the future.
Norwegian oil billionaire Kjell Inge Rokke stated that the best defense for some of the problems facing the financial sector and central banks is investing in cryptocurrencies. Aker Holding, which is owned by Rokke and includes many companies ranging from oil to renewable energy companies, said that it plans to enter the Bitcoin industry by establishing a new venture called Seetee.
In a note shared by Seetee on his website, Rokke said, “Bitcoin may still be at the core of a new monetary system, although it has the possibility to go to zero,” and emphasized that it is not impossible for Bitcoin to reach millions of dollars one day.
Meanwhile, central banks are racing to create their own digital currencies in response to the growing cashlessness before cryptocurrencies take over. Norway has become the world’s most cashless country, according to Norges Bank Deputy Governor Ida Wolden Bache, who stated in November that only 4% of all payments are made with bank notes and coins.
However, when it comes to developing central bank digital currencies, Norway isn’t among the front-runners. Instead, Sweden and China are leading the world’s biggest economies, as policymakers collaborate with technology experts to figure out how to best develop something that central banks can regulate.
Oil Falls on Demand Concerns
Oil prices fell in Asian transactions, amid concerns about uneven recovery and short-term demand. Oil prices dropped on Tuesday, hit by concerns that new pandemic curbs and slow vaccine rollouts in Europe will slow a recovery in demand, while producers cut prices in a sign of plentiful supply.
Futures are trading on the New York market at $61 a barrel, down 0.9% after rising for two consecutive days.
While coronavirus cases are increasing rapidly in India, the economic recovery in the country is also in danger. In South Asia, on the other hand, there is no change in the demand for oil. While some countries in Europe decided to extend their quarantine measures, the mayor of New York in the USA warned that reopening could stop.
The maturity range of Brent oil fell to its lowest level in the last two months, which is a sign that the bullish structure is rapidly approaching a bearish contango, a signal of oversupply.
“There is now no chance that OPEC+ adjusts its production cuts lower next week,” said Jeffrey Halley, an analyst at Oanda Asia Pacific “I had expected a pullback to cull the speculators, just not this deep. In the short-term, I am expecting oil to range with a bias to the downside.”
Although the rise of oil has recently stalled, confidence in oil continues with the application of Covid- 19 vaccines in the long term.
“Global travel is still looking like it could be a while away,” said Matt Stanley, a fuel broker at Star Fuels in Dubai, adding that a second-half recovery in oil demand looked doubtful as lockdowns remain the order of the day.
Germany, Europe’s biggest oil consumer, is extending its lockdown until April 18 and asked citizens to stay home to try to stop a third wave of the Covid-19 pandemic.
West Texas Oil for May futures fell 55 cents to $61.01 a barrel in the Nymex market. Brent for May settlement fell 0.8% to $64.09 a barrel on the London ICE Futures Europe market, after gaining 9 cents in the previous session.