Biznomics Note Pad 0 643

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By Biznomics Research Team

Monetary Policy Dilemma Everywhere

Global Financial markets have turned their attention to the emerging split among monetary policy makers towards policy rate cuts. The Federal Reserve Bank of the United States reduced its policy rate by 25 basis points, but indicated further rate reductions could be on the card as members split on what to do next. Reduced its benchmark overnight lending rate range from 2-2.5 PCT to 1.75-2 PCT

The US President Donald Trump has gone on record that Federal Reserve Bank is risking US competitiveness by keeping interest rates substantially higher than most of the developed countries.

Oil Prices Back to near normal

BiZnomics-note-spad-1Brent Crude price which soared to near USD 70/bbl after the attack on Aramco oil facility declined to near USD 60/bbl when Saudi Arabia announced that they will ensure no shortage in medium term. In the background of slowdown in global economy, the attack on Aramco oil infrastructure facility did not reflect sustained pressure on the market demand.  The surprised drone strike at the Saudi oil facility on 14th September halt the oil production impacting nearly 5 million barrels of crude processing a day which is 5 PCT of world’s daily production. The US blamed Iran for the attack.

 

US-China Trade Tension

Us and China delays further tariff increase pending high level talks between the two countries.

The Wall Street journal on 19th September reported that the World economic growth remain low in 2020 and possibly beyond if trade conflict spills over into other aspects of two country economic relationships. OECD expressed its worry over sliding economic growth among major trading partners. Slowing trade flows and business investments are signs that the trade disputes are taking a toll on global growth. The US-China official are due to meet in the third week of September to hold talks ahead of high level trade talks in October. Several rounds of tariffs have been levied by two countries on a larger percentage of commodities traded between two countries.

 

US Hit USD 1 trillion budget deficit

The US budget deficit passes USD 1 trillion mark for 2019. Reuters reported that the US government posted a USD 200 Bn budget deficit in August 2019 raising the eight-month budget deficit towards USD 1 trillion.

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Why Hydroponics? 0 629

By: Cameron Blake

Sources:  Oklohoma State University/ Life Easy blog/ The Lanka Salad Company

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Hydroponics is a system of soilless cultivation using water-based nutrients.

Hydroponics, by definition, is a method of growing plants in a water-based, nutrient-rich solution. Hydroponics does not use soil, instead, the root system is supported using an inert medium such as perlite, rock -wool, clay pellets, peat moss or vermiculite.

The hydroponic system offers farmers the ability to grow crops in areas where traditionally it would simply not be possible (like mountain lettuce at sea level in Sri Lanka). Growing hydroponically (as with vertical farming, aquaponics, aeroponics etc) also saves a lot of land space.

Many growers believe that growing in a soilless medium requires about the same effort as growing in soil. Not as fast as full Hydro-Growing in a soilless medium will get faster growth rates in soil, but cannabis plants will not grow as fast as a hydroponic medium that is able to get more oxygen to the roots.

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Well managed hydroponic set-ups are also highly energy-efficient and their existence places less strain on the environment than many traditional ‘monoculture’ farming systems. Water is recycled throughout the hydroponic system, greatly reducing the overall volumes required. As a general benchmark, it is considered that the hydroponic system use as little as 10% of the water required for soil-based agriculture.

BiZnomics--Why-hydeoponics-3With the global population growing steadily, it is imperative that a new form of agriculture develops alongside traditional methods to meet increasing food needs with lower impacts.

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Traffic Jams 0 1411

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BY T.V. PERERA

At the turn of the century, chaos and anarchy ruled the streets of Colombo, and that was not because city traffic was a mess then as it is now. Everyone will agree that traffic in Colombo has worsened in recent times; slow moving on all main trunk roads into the city not only during rush hours but also at normal times, and getting worse in the heart of Colombo. If Colombo is to accommodate the growing number of vehicles on its roads, the road network would have to be increased by three-fold in the not too distant future.

Colloquially known as traffic jams or traffic snarlups, traffic congestion is a transport condition characterized by slow speeds, longer trip times and increased vehicular queueing. When traffic is great, interaction between vehicles slows the speed of the traffic stream which results in congestion. Likewise, as demand approaches the capacity of a
road or its intersections, extreme congestion sets in. Traffic congestion also occurs when a column of traffic generates demand for space greater than that available, when vehicles are fully stopped for periods of time and also due to incidents such as a crash or roadworks which may reduce road capacity below normal levels.
According to the Time magazine, Sao Paulo in Brazil has the world’s worst daily traffic jam with over 300 kms of cummulative queues around the city during the evening rush hours. Last year, Mumbai was the worst city for traffic chaos where drivers can expect to spend an average 65% extra time stuck in a gridlock.

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Individual incidents such as accidents or even a single car braking heavily could cause congestion, yet traffic research still cannot fully predict under which conditions a traffic jam as opposed to heavy but smoothly flowing traffic may suddenly occur. Of the over 4.4 million vehicles registered, around 2.7 million are on the roads causing the Colombo roads to be full with traffic congestion as an average 250,000 vehicles made up of 15,000 buses, 10,000 trucks and 225,000 private vehicles enter the city daily.

A man-made menace, traffic congestion has a number of negative effects such as being detrimental to the development of a country, killing productivity, and is a national waste. Not only does productivity and the sense of well-being go astray, it also leaves people angry, exhausted and depressed. To get stuck in a traffic jam of stress is really frustrating. Vehicle numbers increasing without any plan to expand road conditions and manage road discipline, is plainly visible.

The increasing vehicles contribute to long lines on the road yet no one seems to be interested in taking any positive and effective action other than the police which is responsible for controlling this mess. Successive governments have indicated intentions of taking corrective measures but nothing has been done to control road traffic which besides being annoying, is costing us billions of rupees and a massive financial and manhour loss as a result of no vehicular control in the Greater Colombo areas. Statistics reveal that there are 130 vehicles per 1000 people out of which 66% are motor cycles while three-wheelers and cars make up 45 vehicles per 1000 people. Very soon the number of vehicles on the road could grow to 5 million and there will be 250 vehicles per every 1000 persons which may concentrate around the city. This is contrary to the country’s needs of fewer vehicles carrying more people.

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