MoneyWeek 1104

“If you really want to survive this, you need to beat inflation – not be beaten by it” This week we learnt something I suspect most of us already knew: inflation is high and rising. UK data for April has the consumer prices index (CPI) rising at an annual rate of 9%, a 40-year high. Measured by the retail prices index (which CPI replaced) it’s 11.1%. It was last 11% in February 1982, having breached 11% for the first time since January 1952 in January 1974. In short, 11% really doesn’t happen very often. However, here is something that has never happened: 11% RPI and 1% bank rate. In early 1974, the rate was 12.7%. If you’d had cash in the bank, you’d have made a real return (ie, beat…

The news that McDonald’s is to sell its 847 Russian outlets and leave the country after more than 30 years is “the final nail in the coffin of the Golden Arches theory”, says Ross Clark in The Spectator. In 1996, New York Times columnist Thomas Friedman argued that two countries that both had McDonald’s franchises would never go to war, because the presence of the burger chain signified that these societies had become too consumerist to risk economic stability for a war. At the time, “it was a lovely idea, born of the age of liberal-democratic triumphalism”, albeit obviously nonsense: there were McDonald’s branches in Belgrade when Nato bombed Serbia in 1999. Now we can clearly see the real lesson is that McDonald’s won’t hang around once a country goes…

Pub owner David Gorton found a 364-year-old coin worth an estimated £12,500 under the floorboards during renovation work, says The Sun. Gorton, who runs the Grade II-listed Old Cottage pub in Margate, initially thought he had vacuumed up an old penny, but later discovered that it was an Oliver Cromwell silver shilling dating back to 1658. Rock band Coldplay (singer Chris Martin pictured, right) have already grossed $40m in ticket sales for its world tour, despite pricing tickets at least 25% lower than any major peer, says Bloomberg. The group is charging an average of $77.80, roughly the same as on the last tour five years ago, which has helped sell more tickets than any other act over the last two months.…

Three Hong Kong burglars who stole a HK$2.3bn (£230m) scroll written by Mao Zedong and sold it for just HK$200 (£20) have been jailed for two and half years, says the South China Morning Post. Ho Yik-chiu, Ng Wing-lun and Hui Ping-kei, who took artworks valued at a total of HK$5bn (£500m) from the apartment of a collector in 2020, had no idea of the value of their haul. El Salvadorian president Nayib Bukele’s bets on cryptocurrency are backfiring badly, says The Wall Street Journal. Bukele made bitcoin legal tender, spent $200m on rolling out bitcoin ATMs and e-wallets, and bought 2,301 bitcoin that are now worth $74m, down from the $103m he paid. El Salvador’s bonds due in January are trading at 80 cents on the dollar, indicating a…

Cryptocurrencies have gone “into a full meltdown… in a sell-off that graphically illustrated the risks of the experimental and unregulated digital currencies”, says The New York Times. Bitcoin prices slumped as low as $26,000 at the end of last week, down 60% since a peak in November. The overall cryptocurrency market has seen its market capitalisation slashed from $2.9trn at last year’s peak to about $1.2trn now. The sell-off was triggered by the meltdown of stablecoin TerraUSD. A stablecoin is a cryptocurrency whose value is pegged, typically to the US dollar. “There are basically two kinds of stablecoins: asset-backed and algorithmic,” says Jack Denton in Barron’s. Some stablecoins – such as Tether, the biggest – back up their value with collateral. By contrast, algorithmic stablecoins such as TerraUSD “aim to…

“Cryptocurrencies, blockchains, NFTs and the constellation of hyped-up technologies known as web3 have been celebrated as a way to liberate the internet from the tech giants who control it now”, says Farhad Manjoo in The New York Times. Instead, these new technologies are “doing the opposite: polluting the digital world in a thick haze of errors, swindles and expensive, largely unregulated financial speculation that ruins whatever scrap of trust still remains online”. Non-fungible tokens (NFTs) are unique digital tokens. Like cryptocurrencies, NFTs exist on a blockchain (most commonly the Ethereum blockchain). Unlike cryptocurrencies they are “non-fungible”, meaning that they are not interchangeable for each other. Where bitcoin aspires to be digital cash (or digital gold, as its advocates call it), an NFT is supposed to be the digital title deeds…