Trends in the Global Economy

Economic Trends That Rule the World Today

It’s hard to keep up with changing trends.  Some facts are familiar to anyone who reads the news. Unemployment is high. Growth is slow. Shale gas is a big deal. But beyond the caps-lock headlines, subtler, but no less significant, shifts are changing the U.S. economy and reshaping the global financial order.  Below is a list of things to consider that have a global impact on our economy

How is the Value of Currency Calculated?

Overview

There are various factors that determine an exchange rate. Trade value, inflation, and interest rates, to name a few. These are basic principles to help understand the concept. Increased demand for a currency is due to either an increased transaction demand for money, or an increased speculative demand for money. The transaction demand for money is highly correlated to the country’s level of business activity, gross domestic product (GDP), and employment levels. The more people there are out of work, the less the public as a whole will spend on goods and services. Central banks typically have little difficulty adjusting the available money supply to accommodate changes in the demand for money due to business transactions.

Interest Rates

Interest rates are determined normally by a Reserve Bank governor that determines economic policy for a currency. Interest rates can also be manipulated to stimulate an economy by strengthening or weakening a currency.

The VC Market in Chile

Chile is a sophisticated market for venture capital transactions, thus almost all types are present in the Latin America jurisdiction, including direct M&A (both as corporate acquisitions and minority investments) and convertible debt. Nevertheless, the investment in venture capital through investment funds, created by the uprising of third parties’ funds are administrated by a fund manager is a widely used structure.

Investors have been acquiring businesses and making minority investments in privately held companies since the dawn of the industrial revolution. However with a few exceptions, VC in the first half of the 20th century was the domain of wealthy individuals and families.

The VC Market in Norway

Norway Flag

Startups in Norway whose business is not related to the oil-and-gas industry struggle, The Wall Street Journal reported–that industry sucked up nearly a third of the venture capital that Norway attracted last year.

With a population of less than five million people, Norway isn’t large enough to support a tech startup, which needs to be global, but that’s not the Scandinavian attitude,  It goes slowly turning over one stone at a time. For those who follow Europe’s tech scene, naming startups from the Nordic/Baltic region wouldn’t be too hard.

The VC Market in Silicon Valley

US Flag

When you live and work in Silicon Valley, it’s easy to get caught up in trends billowing from within the echo chamber. Around Silicon Valley, the availability of capital resources helps trends popularize and commercialize faster than anywhere else in the world. From the outside, it seems today’s latest trend is tomorrow’s IPO practically overnight (discounting, conveniently, the 10+ years of persistence required of entrepreneurs along the way).

When it comes to VC-backed exits, Silicon Valley is far ahead of other markets.  Efraim Landa is one of America’s premier venture capitalists and agrees with this statistic.   Silicon Valley is the 800 lb. beast when it comes to exit activity, taking 52% of the largest exits since 2012.  Trailing behind the Valley are New York, Massachusetts, Southern Cal, and Illinois, which collectively account for 28% of the Top 50 exits since 2012.

Types of Stocks

Securing capital is a primary concern for today’s entrepreneur and small businessman. There are many options available such as venture capital or angel investors. These professionals offer the funds the business may need in order to grow or create a new line of products. The primary purpose of these types of capital is to help the business achieve a level of success until it can be traded publicly. Publicly traded stocks can fall into different categories and offer investors different levels of returns. It might be a lot simpler if there was only one kind of stock, but it would not allow for as much versatility either. Even though most companies trade common shares, there are other classes of stocks as well.