Trump Tariffs & Retaliations: What could happen to Canada if it Lasts
1409
Even more inflation and a general depreciation of the Canadian market. If Canada increases tariffs on US imports, Canadian companies will have to borrow more to buy what they need to produce, therefore increasing the money supply and driving Canadian inflation higher. The vast majority of the borrowing will be directed to buying supplies not increasing salaries.
Tariffs on Canadian products in the US will likely lower the demand for them. Which means Canada will have a surplus of products that they might not be able to sell. The US is after all the number one market for Canadian products and for some companies the only one. This in terms will lead to a lowering of production which coupled with increased borrowing will likely increase inflation even higher.
So why not sell in Canada? Canada has a very high GDP / Capita but the size of it's market is not comparable to the US. Canada has also accumulated a high number of regulations that prevent economic growth and turn one of Canada's biggest advantage (its size) into one of it's biggest disadvantages. Canada is the second biggest country on earth, a fact that comes with a unique set of economic challenges, chief amongst them is the transport of goods. Canadian economy mostly relies on trucks to ship good from *A Mare Usque Ad Mare*. Canadian trucks are subjected to different laws in different Provinces. Some cannot event drive at night. In the second biggest country on earth it means a huge increase in shipping time and therefore cost needed to ship goods. Canadian energy costs are high, due to carbon taxes and various laws and regulations that prevent the growth of its oil industry. Canadian provinces also have specific taxation laws that effectively act as tariffs within the country, driving the competitiveness of the inner Canadian market lower. Canada taxes on employment and consumption are also general higher, driving cost of labor and therefore the cost of everything higher.
All this means that until now, it was cheaper to sell to the US than within Canada. For some, it was even cheaper to drive to the border and send a package with USPS than to send from Canada using Post Canada.
Why not Europe then? Europe is far, which means higher logistical and shipping costs. Europe is also extremely regulated, which means that Canadian companies would have to undergo massive restructurations to make their products fit the European market from a regulatory perspective. Canadian market is so intertwined with the US market that a lot of what it produces is in inches and feet. Not what Europeans are looking for. Europe is also suffering from a serious inflation meaning that their capacity to buy Canadian surplus is not that high. Europe is not an homogeneous market. Selling in Europe means dealing with many languages and tax regulations like VAT that are specific to each country. This drives the cost of compliance even higher.
In short, If the tariffs war lasts, Canadian economy will produce surplus that it will not be able to sell, leading to a downsizing of the economy, and Canadian companies will have to increase their borrowing to maintain production. These will lead to higher inflation in Canada that will be accelerated by existing consumption taxes. This in turn will lead to an increase in salaries, therefore of borrowing and an acceleration of inflation due to existing labor taxes, which will lead to an increase of unemployment. This is the road to a Canadian recession that could lead to a massive defaulting on debt in Canada (especially in the housing market) and a general divestment from the Canadian economy.
The only viable option for Canada to soften the blow is to increase the competitiveness of its inner market: lower taxes and lower government spending (to reduce inflation), remove regulations (starting with the ones hindering inter-provincial economy), lower energy costs.
Edit: Canada just cut interest rates to 2.75% increasing money supply (link bellow).
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The US creates a Strategic Reserve of Digital Assets, and a Wake up Call for Morocco
1483
Finally, the world realizes that Bitcoin is not a currency but an asset. Those who understand the technology knew it from the beginning, isn't Bitcoin "digital gold", and isn't gold an asset. In 2017 Morocco decided to ban the use of digital assets, back then a Bitcoin was worth 8K dollars. This decision stemmed from a misunderstanding of the technology and a fear propagated that Bitcoin was only good for criminal activities. Interesting how things changed, and so quickly.
To understand Bitcoin, you need some background in Economy and Energy, but you absolutely need a very strong understanding of Maths, and Computer Science. Without it you cannot understand what Bitcoin is, how it works, and why it is such a strong ledger of value. Bitcoin works Mathematically not on opinions or regulations.
Arguably, the decision to ban digital assets cost Morocco billions of dollars. In the long run it will perhaps cost more than any other in the history of the country. The very hard anti digital stance (that was reinforced in 2022) dissuaded legitimate business from using the technology. Something that would have modernized the banking and financial system, facilitated payments and potentially captured billions worth of digital assets in Morocco. The country could have owned a significant amount of those assets that would have boosted its economy.
Yes Bitcoin fluctuates, it does so because it is an asset. However, it is also a very liquid asset, it is so valuable that it is easy to exchange for Dollars or Euros. A reserve of digital assets would have guaranteed the country's access to other currencies, and would have paved the way towards the only viable long term monetary strategy for Morocco (if it wants to keep it's currency): a strong Dirham.
It is of course not too late to change course, and for Morocco to become a digital assets friendly country. It was not the only country to adopt a timid approach to a misunderstood technology: this means that the market for digital assets friendly territories remains largely untapped. However, the solution to enjoy a digital assets boom, is not CBDCs (Central Banks Digital Currencies) and not Stable-coins (Digital currencies indexed on FIAT currencies). The solution is a freer digital assets market and currencies that may be, in due time indexed (in-part) on those assets.
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The near future of AI Economics
4226
The near absolute domination of Nvidia in AI hardware is not going away anytime soon. Despite efforts by major hardware companies and startups alike, supplanting Nvidia is just too costly. Even if a company is able to create better hardware and supply chains, it would still need to tackle the software compatibility challenge. Major AI frameworks like pyTorch and Tensorflow are all compatible with Nvidia, and little else. These are all open source, and although supported by major companies, like all open-source software their foundation is their communities. And communities can be notoriously hard shake. All this suggest that the price of Nvidia GPUs will keep increasing, fuelled by the rise of ever bigger LLMs.
So where does that leave us for the future of AI economics. Like anything valuable, if the current trend continues, GPU computation time will see the apparition of derivatives. More specifically, *futures* and *options* on GPU computing hours could be bought and sold.
The other coming trends are in energy trading, modern AI is extremely hungry for electricity, to the point of needing dedicated power-plants. If the current trends continue in AI, with major companies and countries building and investing into bigger and more power hungry datacenters, this could lead to a trend of significant disruptions in some parts of the energy sector. Again the markets for energy derivatives (*futures* and *options*) could be significantly affected. Finally, *bounds* markets and inflation are also poised for some disruption, as the building of the extremely expensive facilities necessary for AI is likely to result in more borrowing.
When it comes to AI: Nvidia GPUs and Electricity are king.
Link Below: google is buying nuclear power.
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How Many Scorpions Do You Need To Make $100,000 Annually?
2199
Starting a business in the specialized field of scorpion venom extraction can seem appealing because of the high prices that medical and research industries pay for this potent substance. However, making a lucrative income from milking scorpions is more complex than it might initially seem. I personally believe that understanding the numbers and logistics is essential before entering this unique venture.
Understanding Venom Value
Firstly, it’s important to acknowledge the market value of scorpion venom, which is among the most expensive liquids by volume. Depending on the species and the quality of the extraction, the venom can fetch anywhere from $8,000 to $12,000 per gram. The high cost is due to the venom’s use in medical research, including cancer treatment studies and antivenom production, making it highly sought after in specific scientific communities.
Practical Yields and Species Considerations
Not all scorpions are created equal when it comes to the value of their venom. Species like the Deathstalker (Leiurus quinquestriatus) are particularly coveted due to their potent venom, which is rich in compounds useful for medical research. However, even with a valuable species, the amount of venom each scorpion produces is minimal — typically around 0.5 to 2 milligrams per milking session, and you can safely milk them about twice a month.
The Math Behind the Venom
Let’s break down the numbers. To set a realistic income goal, suppose you aim to make $100,000 annually from venom sales. Assuming you can sell the venom at an average price of $10,000 per gram, you would need to produce 10 grams of venom each year. Since 1 gram equals 1,000 milligrams, you would need a total of 10,000 milligrams of venom annually.
Each scorpion might give you 1 milligram per milking, and if milked twice a month, that’s 24 milligrams per scorpion per year. To meet your income goal, you would therefore need about 417 scorpions. This figure highlights the scale of what might initially seem like a small operation.
Considerations and Challenges
Beyond just the numbers, there are significant challenges and considerations in setting up and running a scorpion venom extraction business:
Setup and Ongoing Costs: Initial costs can be quite high, as specialized equipment and facilities are needed to house and safely milk scorpions.
Legal and Ethical Issues: There are often stringent regulations governing the use of animals for commercial purposes, including licensing and welfare considerations.
Market Demand and Stability: The market for scorpion venom is niche and can be volatile. Establishing reliable connections within the industry is essential for success.
Personal Thoughts
I personally think that while the potential for high income is alluring, the scorpion venom extraction business requires a deep commitment and a robust understanding of both the science and the market. It’s not merely about having a large number of scorpions; it’s about creating a sustainable and ethical operation that can consistently produce high-quality venom in a market that is inherently limited and highly specialized.
Feel free to reach out if you’re interested in starting this business!
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