WCA May 2014

From the Americas

models.” Now, researchers for the inspector general’s office (OIG) of the agency are making the case that the USPS can further help itself by pairing up with Bitcoin, a five-year-old network for issuing and moving money across the Internet. The OIG staff is urging that the service expand into financial services that may include turning local post offices into Bitcoin was introduced around 2008 by a programmer or group of programmers who have never been positively identified. While Bitcoin.org in mid-January published an estimated market value for the currency of about $10.6 billion, there is no central issuing authority and only a public ledger to verify encrypted transactions. “The Post Office might help address two major shortcomings that virtual currencies have today: lack of trust and lack of access,” Paola Piscioneri, a director of international research at the OIG, said in an interview with Bloomberg News in Washington (7 th February). “Today, when you transact with a virtual currency you don’t know who is on the other side.” Becoming a Bitcoin intermediary would mean that the Postal Service would have to take a business model that dates back to the 1770s and integrate it with a proto-currency that exists only on spreadsheets on the Internet. The question then becomes, would enough of its customers – accustomed to using post offices to buy money orders and stamps and send packages – switch over to trading in Bitcoins to justify the experiment?  Joseph Corbett, the service’s chief financial officer, told Bloomberg that the USPS is biding its time, waiting to see if the volatile Bitcoin market becomes more stable. Also, he said, “Lack of transparency in that market is something that is bothersome.” While the institution whose sole overhaul was in 1970 ponders whether or not to become a Bitcoin intermediary, it seems questionable how well the smoke-and-mirrors aspect of a virtual currency would go over with the founding father. It was Ben Franklin who cautioned, in his Poor Richard’s Almanac, “Never buy a pig in a poke.”  However, the matter of postal service losses is of some urgency. As pointed out in October of last year by James Gattuso, who handles regulatory and telecommunications issues for the Heritage Foundation, the status quo is not sustainable. The conservative think tank pointed out that the market for traditional mail has been shrinking rapidly, as Americans have fled “snail mail” for electronic alternatives. First-class mail volume plummeted 30 per cent since 2007, and it is projected to drop as much as another 40 per cent over the next seven years. brokers for the virtual currency. Legitimising a phantom?

Boeing said that it has supplied more than half of the jet planes in operation in China.

Economics

The US economy is seen to show ‘surprising strength’

According to an account released 19 th February by the US Federal Reserve, at its last meeting officials were surprised by the strength of the US economy. Resurgence in consumer spending, the main engine of domestic economic growth, was given as the reason for their growing optimism. While noting that households remained cautious, the minutes of the Federal Open Market Committee cited factors likely to underpin the gains in household spending, including higher house prices and growing confidence in the sustainability of the economic expansion. Despite recent disappointing job growth, the new Fed chairwoman, Janet L Yellen, offered her own generally optimistic assessment of the nation’s economic prospects. Ms Yellen acknowledged the concerns of investors about recent turmoil in developing countries, but said it posed no “substantial risk” to the global recovery. The Fed expects growth in the American economy this year of between 2.8 per cent and 3.2 per cent. The 225-year old US Postal Service considers reaching for an unlikely life preserver: a Bitcoin One of a very few government-enforced monopolies in the nation, the United States Postal Service is an important element of the general economy, accounting for up to seven per cent of GDP (gross domestic product). But the service inaugurated in 1775 under Benjamin Franklin, its first postmaster general, and which in the 21 st Century delivers more mail to more addresses over a larger geographical area than any other post in the world, is in trouble. Its difficulties have been candidly acknowledged by the USPS which in fact has made significant progress in overcoming them. For fiscal year 2013 the service posted a projected operating loss of $2 billion, following losses of $2.4 billion in 2012 and $2.7 billion in 2011. The improving trend is largely attributable to continuing efforts to increase revenue and reduce costs. But the USPS lost $354 million in the quarter ended 31 st December. Not sparing itself in its analysis of seven straight years of losses, the service cited “the persistent decline of higher-margin first-class mail, stifling legal mandates, and [our] inflexible business and governance

Dorothy Fabian Features Editor

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Wire & Cable ASIA – May/June 2014

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