Author: CensorBiz

Chinese President Xi Jinping pledged this week to help advance four economic powers, despite pandemic problems at home and knock-on effects from Russia’s war in Ukraine. Analysts expect the pledges to take time, with no immediate results.

Xi made his remarks Thursday at the virtual BRICS Summit hosted by Beijing.

The other countries are Brazil, Russia, India and South Africa, which together with China make up the grouping known as BRICS. These large emerging economies see themselves as an alternative to the U.S.-led world order.

The leader of China advocated BRICS cooperation in cross-border payments and credit ratings, the official Xinhua News Agency in Beijing reported Thursday. The report says he further recommended “facilitation” of trade, investment and financing.

Xi as host of the group’s 14th summit said he would work with the BRICS countries to support global development that is “stronger, greener and healthier,” Xinhua added.

The leader urged more countries to join the New Development Bank, a concessional lender founded by BRICS countries in 2015. He called, too, for improving the group’s emergency balance-of-payments relief mechanism, the Contingent Reserve Arrangement, Xinhua added.

View toward future deals

Substantive progress on these goals will likely take time, analysts say, as the member countries do not always get along with one another and China’s ambitions may take time to evolve given issues at home and abroad.

“At the highest level, there’s a little bit of a discussion, then that may lead to further opportunities to be further engaged down the road,” said Song Seng Wun, a Singapore-based economist in the private banking unit of Malaysian bank CIMB.

China’s economy has outgrown the others after decades of export manufacturing for much of the world. But the keeper of a $17.5 trillion GDP has teetered this year amid lockdowns to contain a COVID-19 surge — which snarled world supply chains originating in China.

BRICS member Russia faces economic sanctions from the West over its war in Ukraine, which has sparked food shortages and inflation. China still faces tariffs on goods shipped to the United States, fallout from a bilateral trade dispute.

India and China have their own differences. The world’s two most populous countries contest sovereignty over mountain territories between them, and China bristles at India’s geopolitical cooperation with the West.

Developing countries, including those among the BRICS, can easily turn to Japan, the European Union and other alternatives to China for economic support, said Stuart Orr, School of Business head at Melbourne Institute of Technology in Australia. Those choices will slow China’s ambitions to sow BRICS cooperation as developing states prefer not to over-rely on Beijing, he said.

“There’s a lot of talk but probably not so much real progress in that regard and I suspect things will probably end up sort of getting pushed back to the next BRICS meeting for further progress once the dust has settled,” Orr said.

China still “struggles with health issues” while its historic political rival the United States is finding new suppliers and customers for soy exports, Orr said.

Officials in Beijing want to expand cooperation with other countries as the United States sanctions Russia over the war and China over trade, said Huang Kwei-bo, associate professor of diplomacy at National Chengchi University in Taipei.

The BRICS countries might reassure one another over energy and food shortages linked to the war, Song said. Later, he said, they could “flesh out” substantive agreements.

Anti-West position

China regularly offers economic aid, investments and COVID-19 vaccines to friendly developing countries from Africa into Central Asia. Its flagship is the Belt and Road Initiative, a 9-year-old, $1.2 trillion list of foreign infrastructure projects aimed at opening China-linked trade routes.

Chinese officials feel the BRICS nations will welcome their support, and in turn, accept some of their political views, analysts say. Of the BRICS states, only Brazil voted against Russia’s invasion of Ukraine at the United Nations earlier this year. China, India and South Africa abstained.

India, despite its West-leaning political activity and reservations about China’s Belt-and-Road, still takes Russian oil.

“India-China relations are very sensitive, but outside these existing relations, like in the Caribbean and Latin America, those spots are where India and China wouldn’t have clashes of interest,” Huang said.

Brazil in particular is looking for more international support to overcome the “devastating impacts” of COVID-19 in the country, Orr said.

“There should be some other countries that would think about joining this kind of regime,” Huang said. “Then, if a lot of those countries don’t have such good relations with the U.S. side, doesn’t that mean it’s one more thing causing a headache for the United States in terms of geopolitics?”

A declaration issued at the summit Thursday says the five countries support talking further about expanding their group. 
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President Joe Biden’s proposed Indo Pacific Economic Framework with key Asian nations signals a new approach for U.S. trade policy in the region. As VOA’s Kane Farabaugh reports, U.S. farmers are optimistic the Framework will provide new markets for their goods.
Camera: Kane Farabaugh Producer: Kane Farabaugh
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Cameroon’s President Paul Biya has for the first time sent a delegation to Europe to try to encourage well-off Cameroonians living there to invest back home. But members of Cameroon’s diaspora say undemocratic practices and corruption in Biya’s government put off investors.

Government officials say a delegation led by Youth Affairs and Civic Education Minister Mounouna Foutsou was dispatched to Germany this week to ask Cameroonians there to invest in their country of origin.

Foutsou said his wish is for all Cameroonians in the diaspora to put aside their differences and help develop Cameroon.

“The head of state reiterated his call to the Cameroonian diaspora to come and build Cameroon. We seize this opportunity to come and exchange with the whole Cameroonian diaspora here in Europe so that we can present the different opportunities offered by the president of the republic and his government so that the Cameroonian diaspora can come back and participate in the development of the nation,” said Foutsou.

Foutsou said the government will offer tax exemptions of up to 40 percent for diaspora investments in Cameroon, and loans of up to $10,000 with no interest rates for diaspora youths who return to invest in agriculture and livestock.

Kennedy Tumenta is a Cameroonian investor who lives in Germany. He said many in the diaspora find it hard to trust promises made by their government.

He said corruption, high taxes and a lack of confidence in President Biya, who has been in power for 40 years, scare investors.

“Freedom is restricted and they are afraid to move around in Cameroon and do their businesses and speak freely. Most diasporans believe that there is widespread corruption when it concerns opening businesses in the country or the Northwest-Southwest crisis is not being taken into consideration seriously by the government in place. It makes them frustrated and the only way to express this frustration is either to withdraw their investments in the country or attacking the head of state,” said Tumenta.

Separatists have been fighting to carve out an independent English-speaking state in mainly French-speaking Cameroon, since 2016. The U.N. says 3,300 people have died in the fighting.

Some disgruntled Cameroonians in the diaspora have become hostile to the government, and at least seven Cameroonian embassies have been attacked or ransacked since January 2020.  

Felix Mbayu is a top official with Cameroon’s Ministry of External Relations. He said Cameroonians taking part in such protests are hurting the country’s image.

“Those who left Cameroon unhappy and have not been able to make it there are those who would speak ill of Cameroon. Those who left Cameroon to better their lot in life and have made it there are those who come back to invest in Cameroon. That is why you see medical doctors who have built hospitals, built clinics, who bring back home medical supplies. You don’t see them in the idle marches abroad. In fact, when you talk ill of your own home, you tarnish your own image,” said Mbayu.

An estimated five million Cameroonians live abroad. The government says the largest diaspora population is in Nigeria where about two million live.

There are also high concentrations in Belgium, France, Germany, the United Kingdom and the United States.
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U.S. tariffs on Chinese goods offer a key element of leverage over Beijing, something Washington should be reluctant to relinquish, the top American trade official said Wednesday. 

Progress with China’s unfair trade practices has been elusive, which makes the tariffs an important tool, U.S. Trade Representative Katherine Tai told lawmakers. 

“The China tariffs are, in my view, a significant piece of leverage and a trade negotiator never walks away from leverage,” she said in testimony before the Senate Appropriations Committee. 

“The United States has repeatedly sought and obtained commitments from China, only to find that lasting change remains elusive,” she added. 

President Joe Biden has said he is considering lifting some of the tariffs imposed by his predecessor, Donald Trump, and also plans to talk with Chinese leader Xi Jinping. 

White House press secretary Karine Jean-Pierre said Wednesday that no decision has been made on the tariffs. 

“The president has been discussing this with his team,” she told reporters, adding that there is no timeline for an announcement. 

But any decision would likely have to come soon, as some of the tariffs are to expire starting July 6 unless they are renewed. 

Successive rounds of tariffs imposed by Trump eventually covered about $350 billion in annual imports from China in retaliation for Beijing’s theft of American intellectual property and forced transfer of technology. 

Treasury Secretary Janet Yellen is among those arguing that removing the tariffs could ease inflation, which has reached a 40-year high and is squeezing American families. 

“The tariffs we inherited; some serve no strategic purpose and raise costs to consumers,” Yellen said on Sunday. 

The administration is looking at “reconfiguring some of those tariffs so they make more sense and reduce some unnecessary burdens,” Yellen said. 

But Tai said there is a limit to what can be done to address rising prices in the short term. 

Meanwhile, U.S. homebuilders issued a statement urging the administration to remove tariffs on Canadian lumber to ease the pressure on homebuyers. 

“If the administration is truly interested in providing U.S. citizens relief from high inflation by removing costly tariffs, it should ensure that Canadian lumber is among the tariffs it targets for elimination,” Jerry Konter, chairman of the National Association of Home Builders, said in a statement. 

Washington lowered lumber tariffs in January to 11.64%, but NAHB calculates the duties have added more than $18,600 to the price of a new home since last August. 

Tai told lawmakers she regularly discusses the issue with her counterparts in Ottawa to try to resolve the issue. 

But she added: “That requires the Canadian government to be willing to address the fundamental challenges that we have with respect to an unlevel playing field for our industry with respect to how they govern their harvesting in their industry.”
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The war in Ukraine is causing disruptions around the world, from what President Joe Biden terms a “Putin price hike” for American petroleum consumers to an impending global food crisis. On Wednesday, Biden said he was taking steps to try to offset the effects, something he said he’ll be focusing on ahead of two key summits and a Mideast trip. Anita Powell reports from the White House.
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Drivers around the world are feeling pain at the pump with fuel prices soaring, and costs are surging to heat buildings, generate power and operate industries.

Prices were elevated before Russia invaded Ukraine on February 24. But since mid-March, fuel costs have surged while crude prices have increased only modestly. Much of the reason is a lack of adequate refining capacity to process crude into gasoline and diesel to meet high global demand. 

How much can the world refineries produce daily?

Overall, there is enough capacity to refine about 100 million barrels of oil a day, according to the International Energy Agency (IEA), but about 20% of that capacity is not usable. Much of that unusable capacity is in Latin America and other places where there is a lack of investment. That leaves somewhere around 82 million to 83 million bpd in projected capacity. 

How many refineries have closed? 

The refining industry estimates that the world lost 3.3 million barrels of daily refining capacity since the start of 2020. About a third of these losses occurred in the United States, with the rest in Russia, China, and Europe. Fuel demand crashed early in the pandemic when lockdowns and remote work were widespread. Before that, refining capacity had not declined in any year for at least three decades.

Will refining pick up?

Global refining capacity is set to expand by 1 million bpd per day in 2022 and 1.6 million bpd in 2023.

How much has refining declined since before the pandemic? 

In April, 78 million barrels were processed daily, down sharply from the pre-pandemic average of 82.1 million bpd. The IEA expects refining to rebound during the summer to 81.9 million bpd as Chinese refiners come back online. 

Where is most of the refining capacity offline, and why? 

The United States, China, Russia and Europe are all operating refineries at lower capacity than before the pandemic. U.S. refiners shut nearly 1 million bpd of capacity since 2019 for various reasons.

Nearly 30% of Russia’s refining capacity was idled in May, sources told Reuters. Many Western nations are rejecting Russian fuel. 

China has the most spare refining capacity. Refined product exports are allowed only under official quotas, mainly granted to large state-owned refining companies and not to smaller independent companies that hold much of China’s spare capacity.

As of last week, run rates at China’s state-backed refineries averaged around 71.3% and independent refineries were around 65.5%. That was up from earlier in the year, but low by historic standards.

What else is contributing to high prices? 

The cost to carry products on vessels overseas has risen because of high global demand, as well as sanctions on Russian vessels. In Europe, refineries are constrained by high prices for natural gas, which powers their operations.

Some refiners also depend on vacuum gasoil as an intermediate fuel. Loss of Russian vacuum gasoil has prevented certain refineries from restarting certain gasoline-producing units. 

Who is benefiting from the current situation? 

Refiners, especially those that export a lot of fuel to other countries, such as U.S. refiners. Global fuel shortages have boosted refining margins to historic highs, with a key spread nearing $60 a barrel. That has driven big profits for U.S.-based Valero and India-based Reliance Industries. 

India, which refines more than 5 million bpd, according to the IEA, has been importing cheap Russian crude for domestic use and export. It is expected to boost output by 450,000 by year-end, the IEA said. 

More refining capacity is set to come online in the Middle East and Asia to meet growing demand.
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Sri Lanka’s debt-laden economy has “collapsed” after months of shortages of food, fuel and electricity, its prime minister told lawmakers Wednesday, in comments underscoring the country’s dire situation as it seeks help from international lenders.

Prime Minister Ranil Wickremesinghe told Parliament the South Asian country is “facing a far more serious situation beyond the mere shortages of fuel, gas, electricity and food. Our economy has completely collapsed.”

While Sri Lanka’s crisis is considered its worst in recent memory, Wickremesinghe’s assertion that the economy has collapsed did not cite any specific new developments. It appeared intended to emphasize to his critics and opposition lawmakers that he has inherited a difficult task that can’t be fixed quickly, as the economy founders under the weight of heavy debts, lost tourism revenue and other impacts from the pandemic, as well as surging costs for commodities.

Lawmakers of the country’s two main opposition parties are boycotting Parliament this week to protest against Wickremesinghe, who became prime minister just over a month ago and is also finance minister, for not having delivered on his pledges to turn the economy around.

Wickremesinghe said Sri Lanka is unable to purchase imported fuel, even for cash, due to heavy debt owed by its petroleum corporation.

“Currently, the Ceylon Petroleum Corporation is $700 million in debt,” he told lawmakers. “As a result, no country or organization in the world is willing to provide fuel to us. They are even reluctant to provide fuel for cash.”

Wickremesinghe took office after days of violent protests over the country’s economic crisis forced his predecessor to step down. In his comments Wednesday, he blamed the previous government for failing to act in time as Sri Lanka’s foreign reserves dwindled.

The foreign currency crisis has crimped imports, creating severe shortages of food, fuel, electricity and other essentials such as medicines, forcing people to stand in long lines to obtain basic needs.

“If steps had at least been taken to slow down the collapse of the economy at the beginning, we would not be facing this difficult situation today. But we lost out on this opportunity. We are now seeing signs of a possible fall to rock bottom,” he said.

So far, Sri Lanka has been muddling through, mainly supported by $4 billion in credit lines from neighboring India. But Wickremesinghe said India would not be able to keep Sri Lanka afloat for long.

It also has received pledges of $300 million-$600 million from the World Bank to buy medicine and other essential items.

Sri Lanka has already announced that it is suspending repayment of $7 billion in foreign debt due this year, pending the outcome of negotiations with the International Monetary Fund on a rescue package. It must pay $5 billion on average annually until 2026.

Wickremesinghe said IMF assistance seems to be the country’s only option now. Officials from the agency are visiting Sri Lanka to discuss a rescue package. A staff-level agreement is likely to be reached by the end of July.

“We have concluded the initial discussions and we have exchanged ideas on various sectors such as public finance, finance, debt sustainability, stability of the banking sector and the social security network,” Wickremesighe said.

Representatives of financial and legal advisers to the government on debt restructuring, Lazard and Clifford Chance, are also visiting the island and a team from the U.S. Treasury will arrive next week, he said.
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U.S. President Joe Biden is due to speak Wednesday about gas prices and economic effects of Russia’s war in Ukraine as he considers whether to support suspending the nation’s federal gas tax. 

Biden has said he would make his decision by the end of the week. 

The gas tax is set at 18.4 cents per gallon, with most of the money going toward road construction projects. 

Average gas prices in the United States are at about $5 per gallon. Fuel prices around the world have risen in recent months, with rebounds in demand, refining capacity challenges, and sanctions against major oil producer Russia among the contributing factors. 

White House press secretary Karine Jean-Pierre told reporters Tuesday that the issue is a top priority for Biden and “all options are on the table.” 

“He’s going to do everything that he can to make sure he relieves some pain and some pressure that Americans are feeling at the pump,” Jean-Pierre said. 

Opponents of suspending the tax, including some Democratic lawmakers, say the move would not address supply problems and would take money away from infrastructure needs. 

Some information for this report came from The Associated Press and Reuters.
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A group of U.S. solar energy project developers on Tuesday said they would jointly spend about $6 billion to support expansion of the domestic solar panel supply chain. 

The U.S. Solar Buyer Consortium, which includes developers AES Corporation AES.N, Clearway Energy Group, Cypress Creek Renewables and DE Shaw Renewable Investments, said in a statement that the funds would address current supply chain issues. 

Since the start of the pandemic, companies that buy solar panels for large power plants have struggled with global supply chain disruptions that have driven up costs, as well as potential U.S. tariffs on imported panels from Asia. Duties on those products, which supply most U.S. projects, would make solar energy more expensive and less competitive with power produced by fossil fuels. 

The consortium will invest $6 billion as it recruits solar panel manufacturers in a long-term strategic plan to supply up to 7 gigawatts (GW) of solar modules per year from 2024 — which could power nearly 1.3 million homes. 

“Our joint commitment to procure at this scale can provide the certainty suppliers need to ramp up capacity and overcome current supply chain constraints,” David Zwillinger, chief executive of DE Shaw Renewable Investments, said in a statement. 

The United States installed 23.6 gigawatts of solar capacity in 2021, according to industry trade group the Solar Energy Industries Association. 

Asian imports account for most U.S. panel demand from solar facility developers. In response, the tiny domestic manufacturing sector in recent years has sought tariffs on Asia-made panels repeatedly, saying their products cannot compete with cheap overseas-made components. 

U.S. President Joe Biden this month waived tariffs on solar panels from four Southeast Asian nations for two years and invoked the Defense Production Act to spur solar panel manufacturing at home. 

In their statement, the panel consortium said more needed to be done and called on Congress to pass proposed legislation to support domestic solar manufacturing. 

 
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A British subsidiary of mining and trading giant Glencore on Tuesday formally pleaded guilty to seven counts of bribery in connection with oil operations in Cameroon, Equatorial Guinea, Ivory Coast, Nigeria and South Sudan.

At a Southwark Crown Court hearing in London, Glencore Energy admitted to paying more than $28 million in bribes to secure preferential access to oil and generate illicit profit between 2011 and 2016. The company will be sentenced on Nov. 2 and 3, the U.K. Serious Fraud Office, or SFO, said.

Glencore, a Swiss-based multinational, has already said it expects to pay up to $1.5 billion to settle allegations of bribery and market manipulation and three subsidiaries in the United States, Brazil and Britain have now pleaded guilty to criminal offenses.

U.S. authorities will see the bulk of those funds after Glencore agreed to a $1.1 billion U.S. settlement last month to resolve a decade-long scheme to bribe foreign officials across seven countries — and separate charges alleging a trading division manipulated fuel oil prices at U.S. shipping ports.

But the guilty plea by a corporate heavyweight in London is a much-needed boost for the SFO, which has faced sharp criticism and awaits the outcome of a “forensic” government-ordered review after senior judges overturned two convictions in its Unaoil bribery investigation because of disclosure failings.

“The SFO’s success with Glencore will certainly not protect it from any flak that comes its way,” said Syed Rahman, a partner at Rahman Ravelli. “But the result it has in this case is an indicator of what the agency is capable of when it does not make mistakes.”

Helen Taylor, a legal researcher at pressure group Spotlight on Corruption, urged the SFO now to investigate and prosecute senior executives who had condoned the wrongdoing.

The SFO said only that its Glencore investigation was ongoing.

Glencore is also paying $29.6 million directly to state-run Brazilian oil company Petrobras in compensation for defrauding the company and roughly $10 million to authorities in civil penalties, prosecutors have said.
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British rail workers launched their biggest strike in decades on Tuesday. 

Last-minute talks to avoid the stoppage failed Monday, with the rail management and the Rail, Maritime and Transport Workers union unable to resolve a dispute about pay and job security. 

Union leaders say pay has failed to keep pace with inflation. 

British Transport Secretary Grant Shapps warned the strike would cause “mass disruption.” 

The union of more than 40,000 workers plans to strike on Thursday and Saturday as well. 

Some information for this report came from The Associated Press, Agence France-Presse and Reuters.
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“I’m in a cryptocurrency chat group at work,” software engineer Adam Hickey of San Diego, California told VOA.

Over the last few days, Hickey said, members of the group have been writing things like, “Bloodbath” and, “Are we still good?”

“It shook me, honestly,” he admitted. “I just had to stop looking at my balance. At one point, months ago, my investment in crypto had tripled. Now I’m down 40%.”

Hickey is far from alone. Serious and casual investors across the United States have seen the value of their investments in the publicly available digital asset known as cryptocurrency shrink dramatically in recent months, with steep plunges recorded in just the last week.

The value of bitcoin, the most popular form of cryptocurrency, has dropped more than 70% since its peak in November of last year, erasing more than 18 months of growth and causing many investors to wonder if this is the bottom, or if the worst is still to come.

“I have to remind myself that when I got into bitcoin in 2017, it was more of something I just kind of hoped would be the next Amazon.com,” Hickey said. Like many others, Hickey dreamed cryptocurrency could be a way to get rich in the long-term, or at least would be a part of his retirement savings.

“I’ve always seen it as a long-term investment. Still, this is the most nervous I’ve been about it,” he said. “You hear people on social media saying this is all a Ponzi scheme. Now I’m having thoughts like maybe those warnings are right – that the people pushing bitcoin so hard are the ones who bought it at the earliest low prices. Of course they want people to buy and drive the value back up. It’s good for them, but is it good for me?” 

Getting in 

Those skeptical of cryptocurrency point to its lack of regulatory oversight from government as a major reason for concern, making it susceptible to scams and wild price fluctuations.

“I’ve always seen it as a highly speculative investment,” said Marigny deMauriac, a certified financial planner in New Orleans, Louisiana. “This isn’t something any individual should have the majority of their wealth in unless they’re looking to take a significant amount of unnecessary risk.”

“I tell my clients to stay clear of investing any significant portion of their wealth in cryptocurrency, or any other highly speculative investment type,” deMaruiac told VOA. Many of the most ardent cryptocurrency supporters, however, invest precisely because it isn’t tied to governments as traditional currencies are. Digital currency’s demonstrated capacity for meteoric rises is a big part of its appeal. 

Steve Ryan, a self-employed poker player living in Las Vegas, Nevada, began investing in digital currency nearly a decade ago. “I’ve been in it for so long, I understand this stuff much better than your average person who only read about it on the internet a year or two ago,” he said.

Ryan invested on the advice of entrepreneurial friends; back when a single bitcoin sold for only a couple of hundred dollars as opposed to the tens of thousands they sell for today.

“Most of my money is in crypto, and I wish I had kept more in there rather than selling some of it,” he told VOA. “Even after this downturn, I’d be a multimillionaire had I kept it all in.”

Losing value 

U.S. inflation at 40-year highs has caused the Federal Reserve to raise interest rates, sending jitters throughout financial markets. At the same time, some Americans have lost their appetite for riskier investments.

Many have sold their cryptocurrency holdings and reinvested in safer, more stable assets. At the end of last week, the value of one share of bitcoin dropped below $18,000 from a high late last year of more than $64,000. The total crypto market value dropped from a peak of $3.2 trillion to below $1 trillion. 

“I’m definitely worried today,” Ryan said on Saturday as bitcoin reached its lowest point since December 2020. 

Still, Ryan maintained he still believes in bitcoin.

“I’m worried because we’ve got a war going on in Europe, huge amounts of inflation, we’re trying to recover from the impacts of a pandemic, and governments might try to regulate bitcoin,” he said. “But I’m not worried about bitcoin itself – I think it’s as solid as ever. That’s how cycles work and this could prove to be one of the best times in history to get into crypto.”

Casual cryptocurrency investors may not be so sure, but many seem willing to hold on to what they have in the hopes of a rebound. “Of course, when it rose to over $60,000, I had big dreams that I could earn enough money to go on a big trip or to make a down payment on a property,” said Joe Frisard, a semi-retired resident of Atlanta, Georgia.

The downturn has lowered Frisard’s ambitions, he acknowledged, but he still planned on hanging on to the cryptocurrency he hadn’t already sold when it was closer to its peak. “I’ve lost a good bit of money in the stock market, too,” he said, “but I’m not looking to dump my stocks. They’re a long-term investment and I see bitcoin in a similar way.”

Weathering the storm 

Gordon Henderson, a retired collegiate marching band director from Los Angeles, California, is also not panicking.

“I’m much more concerned about my stocks in my retirement fund than in my relatively small crypto holdings,” he said. Henderson remembers his father, at age 69 in 1987, converting his retirement fund to cash before a recession temporarily decimated the stock market.

“He was pretty proud of his timing,” Henderson recalled, “but in reality, he would have ended up with eight times more money if he had weathered the storm and kept his money in the stock market for another two decades. That’s how I look at cryptocurrency. I’ll hang onto it and maybe it will pay for college for my kids. If not, I was prepared for the loss.”

Colin Ash, an urban planner in New Orleans, Louisiana, has owned bitcoin for years, but said he thinks of it as “a fun gamble.”

“Of course, I wish I would have timed it perfectly and sold it all at the peak,” he said, “but it’s not realistic to think you can ever do that with any kind of investment. I think of it as something separate from the rest of my money. If something comes of it in the long run, then great. If not, at least I already sold some and paid off some debt.” 

For Hickey in San Diego, as well as many other investors, the key is to not invest more than you can afford to lose, particularly with an asset as speculative as cryptocurrency.

“Under the current circumstances, with everything falling so far down, I’ve decided to halt my weekly recurring purchase of bitcoin,” he said. “I think I’m done investing for now.”

He paused for a moment, and then said, “Now, that’s kind of hard, because if you want to make money you should buy low and sell high. Bitcoin prices are low, so I’ll probably be back in before you know it.”
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An International Monetary Fund (IMF) team arrives in Sri Lanka on Monday for talks on a bailout program, but time is short for a country just days from running out of fuel and likely months from getting any relief money. 

Sri Lanka is battling its worst financial crisis since independence in 1948, as decades of economic mismanagement and recent policy errors coupled with a hit from COVID-19 to tourism and remittances, shriveling foreign reserves to record lows. 

The island nation of 22 million people suspended payment on $12 billion debt in April. The United Nations has warned soaring inflation, a plunging currency and chronic shortages of fuel, food and medicine could spiral into a humanitarian crisis. 

The IMF team, visiting Colombo through June 30, will continue recent talks on what would be Sri Lanka’s 17th rescue program, the IMF said on Sunday. 

“We reaffirm our commitment to support Sri Lanka at this difficult time, in line with the IMF’s policies,” the global lender said in a statement. 

Colombo hopes the IMF visit, overlapping with debt restructuring talks, will yield a quick staff-level agreement and a fast track for IMF board disbursements. But that typically takes months, while Sri Lanka risks more shortages and political unrest. 

“Even if a staff-level agreement is reached, final program approval will be contingent upon assurances that official creditors, including China, are willing to provide adequate debt relief,” said Patrick Curran, senior economist at U.S. investment research firm Tellimer. “All considered, the restructuring is likely to be a protracted process.” 

Waiting for guess, for 

But the crisis is already overwhelming for average Sri Lankans, like autorickshaw driver Mohammed Rahuman, 64, who was recently standing in line for gasoline for more than 16 hours. 

“They say petrol will come but nothing yet,” he told Reuters. “Things are very difficult. I cannot earn any money, I cannot go home and I cannot sleep.” 

Snaking lines kilometers long have formed outside most fuel pumps since last week. Schools in urban areas have closed and public workers have been asked to work from home for two weeks. 

Bondholders expect the IMF visit to give clarity on how much debt Sri Lanka can repay and what haircuts investors may have to take. 

“This IMF visit is very important – the country will need every help and support it can get,” said Lutz Roehmeyer, portfolio manager at Berlin-based bondholder Capitulum Asset Management. “For many international bondholders, this will be a key requirement to ensure they come to the table and talk about a debt restructuring in the first place.” 

Prime Minister Ranil Wickremesinghe said this month an IMF program is crucial to access bridge financing from sources such as the World Bank and Asian Development Bank. 

Representatives from Sri Lanka’s financial and legal advisers, Lazard and Clifford Chance, are in Colombo.
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U.S. President Joe Biden is considering declaring a federal gas tax holiday and curbing some tariffs on imported Chinese goods to help Americans cope with the surging cost of consumer goods, Treasury Secretary Janet Yellen said Sunday. 

“President Biden wants to do anything he possibly can to help consumers,” Yellen told ABC’s “This Week” show. “Gas prices have risen a great deal and it’s clearly burdening households.” 

U.S. gasoline prices are at an all-time high of about $5 a gallon (3.8 liters), up more than 48% over a year ago. She said eliminating the 18.4-cent-per-gallon federal gas tax for a time was “an idea that’s certainly worth considering” and that Biden was willing to work with Congress to enact it. 

Biden last week called on major oil refinery companies to take “immediate actions” to increase supply, telling them in a new letter that “historically high” profit margins were unacceptable as prices at service station pumps for Americans continued to soar. 

American Petroleum Institute Chief Executive Mike Sommers rebuffed Biden’s complaint, saying, “The administration’s misguided policy agenda shifting away from domestic oil and natural gas has compounded inflationary pressures and added headwinds to companies’ daily efforts to meet growing energy needs while reducing emissions.” 

‘Caught unaware’

Yellen, on ABC, said, “What’s happened is production has gone down. Refinery capacity has declined in the United States and oil production has declined. I think producers were partly caught unaware by the strength of the recovery in the economy.  High prices should induce them to increase supply.” 

But she called the higher prices “a medium-term matter,” stressing the need to continue to move to renewable energy sources. 

Food prices, monthly rental payments, airline fares, housing and other costs of daily life in the United States have risen sharply, up 8.6% in May compared with a year ago, the fastest increase in 40 years.  

Analysts point to a variety of causes for the inflation: strong consumer demand, Russia’s invasion of Ukraine, worldwide supply chain disruptions and sizable government payments to most American consumers that put extra cash in their pockets as the coronavirus pandemic swept into the country.  

Yellen said Biden was also reviewing the tariff policy toward China because some tariffs imposed by the previous administration of former President Donald Trump served “no strategic purpose and raise costs to consumers.” 

“Inflation really is unacceptably high,” Yellen said. Part of the reason, she said, is that Russia’s war on Ukraine has boosted gas and food prices. 

She said American consumers cannot expect immediate relief, but “over time, I would certainly expect inflation to come down.” 

Yellen said she expected the American economy, the world’s largest, to slow in the coming months, but added, “I don’t think a recession [two successive three-month periods of declining growth] is at all inevitable.”
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The price of bitcoin fell below $20,000 Saturday for the first time since late 2020, in a fresh sign that the sell-off in cryptocurrencies is deepening. 

Bitcoin, the most popular cryptocurrency, fell below the psychologically important threshold, dropping by as much as 9% to less than $19,000 and hovering around that mark, according to the cryptocurrency news site CoinDesk. 

The last time bitcoin was at that level was in November 2020, when it was on its way up to its all-time high of nearly $69,000, according to CoinDesk. Many in the industry had believed it would not fall under $20,000. 

Bitcoin has now lost more than 70% of its value since reaching that peak. 

Ethereum, another widely followed cryptocurrency that’s been sliding in recent weeks, took a similar tumble Saturday. 

It’s the latest sign of turmoil in the cryptocurrency industry amid wider turbulence in financial markets. Investors are selling off riskier assets because central banks are raising interest rates to combat quickening inflation. 

The overall market value of cryptocurrency assets has fallen from $3 trillion to below $1 trillion, according to coinmarketcap.com, a company that tracks crypto prices. On Saturday, the company’s data showed crypto’s global market value stood at about $834 billion. 

A spate of crypto meltdowns has erased tens of billions of dollars of value from the currencies and sparked urgent calls to regulate the freewheeling industry. Last week, bipartisan legislation was introduced in the U.S. Senate to regulate the digital assets. The crypto industry has also upped its lobbying efforts — flooding $20 million into congressional races this year for the first time, according to records and interviews. 

Cesare Fracassi, a finance professor at the University of Texas at Austin who leads the school’s Blockchain Initiative, believes Bitcoin’s fall under the psychological threshold isn’t a big deal. Instead, he said the focus should be on recent news from lending platforms. 

Cryptocurrency lending platform Celsius Network said this month that it was pausing all withdrawals and transfers, with no sign of when it would give its 1.7 million customers access to their funds. Another crypto lending platform, Babel Finance, said in a notice posted on its website Friday that it will suspend redemptions and withdrawals on products due to “unusual liquidity pressures.” 

“There is a lot of turbulence in the market,” Fracassi said. “And the reason why prices are going down is because there is a lot of concern the sector is overleveraged.” 

The cryptocurrency exchange platform Coinbase announced Tuesday that it laid off about 18% of its workforce, with the company’s CEO and co-founder Brian Armstrong placing some of the blame on a coming “crypto winter.” 

Stablecoin Terra imploded last month, losing tens of billions of dollars in value in a matter of hours. 

Crypto had permeated much of popular culture before its recent tumble, with many Super Bowl ads touting the digital assets and celebrities and YouTube personalities routinely promoting it on social media. 

David Gerard, a crypto critic and author of “Attack of the 50 Foot Blockchain,” said the recent meltdowns show a failure by regulators, who he believes should have put more scrutiny on the industry years ago. Many nascent investors — especially young people — invested in crypto based on a false hope that was sold to them, he said. 

“There are real human victims here that are ordinary people.” 
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After all-night talks, members of the World Trade Organization early Friday reached a string of deals and commitments aimed at limiting overfishing, broadening production of COVID-19 vaccines in the developing world, improving food security and reforming a 27-year-old trade body that has been back on its heels in recent years.

WTO Director-General Nzogi Okonjo-Iweala, after a pair of sleepless nights in rugged negotiations, concluded the WTO’s first ministerial conference in 4 1/2 years by trumpeting a new sense of cooperation at a time when the world faces crises like Russia’s war in Ukraine and a once-in-a-century pandemic that has taken millions of lives.  

“The package agreements you have reached will make a difference to the lives of people around the world,” said Okonjo-Iweala, landing what she called an “unprecedented package of deliverables” after 15 months in the job. “The outcomes demonstrate that the WTO is in fact capable of responding to emergencies of our time.”

The agreements could breathe new life into a trade body that faced repeated criticism from the administration of former U.S. President Donald Trump, which accused the WTO of a lack of fairness to the United States and was caught in a growing economic and political rivalry between the U.S. and China. In recent years, Washington has incapacitated the WTO’s version of an appeals court that rules on international trade disputes.

The WTO operates by consensus, meaning that all of its 164 members must agree on its deals — or at least not get in the way. The talks at times took place in backrooms or inside chats because some delegates didn’t want to be in the same space as their counterparts from Russia — as a way to protest President Vladimir Putin’s invasion of Ukraine, which has had fallout far beyond the battlefield, such as on food and fuel prices.

Among the main achievements Friday was an accord, which fell short of early ambitions, to prohibit both support for illegal, unreported and unregulated fishing and for fishing in overtaxed stocks in the world’s oceans. It marked the WTO’s first significant deal since one in 2013 that cut red tape on treatment of goods crossing borders — and arguably one of its most impactful.

“WTO members have for the first time, concluded an agreement with environmental sustainability at its heart,” Okonjo-Iweala said. “This is also about the livelihoods of the 260 million people who depend directly or indirectly on marine fisheries.”

The WTO chief said the deal takes a first step to curb government subsidies and overcapacity — too many operators — in the fishing industry.

More controversial was an agreement on a watered-down plan to waive intellectual property protections for COVID-19 vaccines, which ran afoul of advocacy groups that say it did not go far enough — and could even do more harm than good.

“The TRIPS waiver compromise will contribute to ongoing efforts to concentrate and diversify vaccine manufacturing capacity so that a crisis in one region does not leave others cut off,” Okonjo-Iweala said of the waiver of intellectual property protections.

U.S. Trade Representative Katherine Tai hailed a “concrete and meaningful outcome to get more safe and effective vaccines to those who need it most.”

“This agreement shows that we can work together to make the WTO more relevant to the needs of regular people,” she said in a statement.  

Her announcement a year ago that the U.S. would break with many other developed countries with strong pharmaceutical industries to work toward a waiver of WTO rules on COVID-19 vaccines served as an impetus to talks around a broader waiver sought by India and South Africa.

But some advocacy groups were seething. Aid group Doctors Without Borders called it a “devastating global failure for people’s health worldwide” that the agreement stopped short of including other tools to fight COVID-19, including treatments and tests.  

“The conduct of rich countries at the WTO has been utterly shameful,” said Max Lawson, co-chair of the People’s Vaccine Alliance and head of inequality policy at Oxfam.  

He said the European Union, United States, Britain and Switzerland blocked a stronger text.

“This so-called compromise largely reiterates developing countries’ existing rights to override patents in certain circumstances,” Lawson said.  

Indian Commerce Minister Piyush Goyal, whose tough negotiating stance had frustrated some developed countries during the talks, said the ministerial meeting was a “big boost for multilateralism” and showed progress on issues — like fisheries — that have been lagging for decades.

“India is 100% satisfied with the outcome,” he told reporters in Geneva. “I am not returning to India with any worries.”  

The meeting also agreed to lift export restrictions that have weighed on the U.N.’s World Food Program, which is trying to offset the impact of rising food prices and fallout from the war in Ukraine on shipments of wheat, barley and other food staples from the country that is a key producer.
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