These Are The World's 100 Smallest Countries

 From Zero Hedge:

National borders may be mere human constructs, but they are powerful ones.

Russia, Canada, the U.S., and so on - it’s easy to focus on the countries with the largest landmasses and seemingly endless borders. Their sheer size makes them hard to ignore, and their natural resources are often vast.

But with the graphic below from TitleMax, we can focus on the power of small.

As Visual Capitalist's Therese Wood notes, from economic might to religious influence, many of the smallest countries in the world are surprisingly powerful. Let’s take a closer look at the world’s 100 smallest countries and their spheres of influence.

Although several of the national borders shown above may be contested, the graphic gives us a clear overview of the globe’s smallest nations.

The Power of Small

Small size doesn’t mean less power. In many cases, it’s the contrary.

The Vatican—the smallest country on Earth at 0.19 square miles—is renowned for its leader and main inhabitant, the Pope. As leader of the Catholic Church, the pontiff and his papal staff make up a sizable part of the country’s tiny population of 825. Most of the Church’s 219 Cardinals, its leading dignitaries, live in their respective dioceses.

With more than 1.2 billion Roman Catholics in the world, the Vatican’s sphere of influence is of course far larger than its small physical size. Although the walls of the Vatican are situated inside the city of Rome, Italy, its centuries-old influence spans continents.

Nearly 40% of Roman Catholics live in the Americas, while the fastest-growing Catholic population can be found in Africa—home to more than 17% of the world’s Catholics.

Purchasing Power

Where the Vatican’s power lies in religion, plenty of spending power is held by the tiny country of Monaco, the second smallest country on Earth.

Situated along the French Riviera, Monaco is surrounded entirely by France—but it also sits fewer than 10 miles from the Italian border.

At 0.78 square miles, Monaco could be compared to the size of a large farm in the U.S. Midwest. Despite its small size, Monaco has a GDP of nearly US$7.2 billion, and boasts over 12,000 millionaires living within one square mile.

Along with Luxembourg and Liechtenstein—both of which are included in the smallest countries list—Monaco is one of the only countries globally with a GDP per capita higher than $100,000.

Switzerland and the Netherlands, both found in this graphic at ranks 63 and 64, also hold large shares of the global economy given their size. These two nations rank 20th and 17th in the world in economic output, respectively.

Similarly, Singapore is the 20th smallest country on the planet, but it ranks in the top 10 in terms of GDP per capita ($65,233) and sits in 34th place globally in terms of nominal GDP.

Perspective is Everything

To give us a better idea of just how small the tiniest countries are, let’s take a look at some simple size comparisons:

• Monaco could fit inside New York City’s Central Park, with room to spare

• Brunei is roughly the same size as Delaware

• Nicaragua, the largest country in Central America, is similar in size to the state of Mississippi

• Nauru is the smallest island nation, and smaller than Rhode Island

• North Korea is roughly the size of Pennsylvania

• “Small,” of course, is a qualitative factor. It depends on your vantage point.

As of September 2020, there are 195 countries on Earth. Although this graphic shows the smallest countries in the world, it is worth noting that a list of the world’s 100 largest countries would also include some of the same countries on this list, including North Korea, Nicaragua, and Greece.

Is It A Small World Afterall?

Viewed from space, there are no borders on our tiny blue dot. But from ground level, we know how much power national borders hold.

Although globalization may make our world feel smaller, our nations significantly impact our lives, societally and economically.

And, as this chart shows, power comes in all sizes.

Bitcoin Investors Are Worrying That Trump Will not Get Re-Elected

 From Zero Hedge:

Well election season is here again and everyone is wondering what potential outcomes may mean for markets, and especially Bitcoin.  To get straight to the point, a Trump re-election will likely be positive for Bitcoin, and here’s why.  During a series of political maneuvers, Trump has effectively nationalized the Fed, in policy terms.  This was first observed in November of 2019  right here on Zero Hedge:

 

…the cumulative evidence increasingly points to an unholy alliance between Donald Trump and the US Federal Reserve with the Fed succumbing to political pressure and delivering Donald Trump what he needs most: A soaring stock market to ward off political problems and to help ensure a 2020 re-election.

 

What that means exactly, is that Trump has pressured the Fed to lower rates and create more US Dollar supply, known as “Quantitative Easing” in Fed language.  This was an ongoing operation until COVID-19 came and then the charts just exploded. The Fed created tens of trillions in digital US Dollars in March & April of 2020. 

 

Remember that Bitcoin cannot be created by a central power, so it is not an inflationary asset.  Like Gold, investors flock to Bitcoin whenever there is a shift in new money creation.

 

According to CryptoPotato, crypto news and analysis outlet, a survey was done asking the following question:

*500 people have completed this survey.  20% of the survey's participants were Americans and 43% (from the 20%) voted for the first answer.

 

The results are clear.  However, they don’t mention if the impact will be positive or negative, in the survey.  In our opinion, assets will have a positive effect on Trump re-election as investors will see a continuation of the last 4 years:  unprecedented job growth, soaring stock market, booming economy. 

 

The results show that with all the hype about Gold and DeFi, the political elections still have much more weight in markets, especially in Bitcoin.  That’s with good reason, because political ramifications can have a big impact on Crypto.  DeFi’s votes in the survey are very surprising, because the term DeFi has exploded in popularity over the last few months, according to Google Trends:

Trump has brought in unprecedented deregulation that has made Crypto more attractive.  The Office of the Comptroller of the Currency has announced that chartered banks can hold Crypto assets:

 

The OCC issued an interpretive letter in July confirming that bank custody services could include holding cryptographic keys and other crypto-related assets, in response to a query from an unnamed bank.  This clarification applies to federally chartered banks. Currently, companies that receive Wyoming’s special-purpose depository institution charter and trust companies in some states can offer digital asset custody services.  “The OCC is trying to get in front of cutting-edge issues by clarifying that national banks can offer services related to crypto where the states have already provided such clarification to state-chartered banks,” said Paul Clark, partner at Seward & Kissel LLP, which has offices in New York and Washington.

 

Banks have been slow to seize on this – but the point is in reference to an election, Trump means further deregulation and Biden means more regulation, higher taxes, and bigger government.  Banks are planning to make a digital dollar in some form.  The mechanics are up to debate, but the global ‘upgrade’ is going to happen whether we like it or not:

 

Sooner than you realize, paper money will be replaced by a “digital-USD”.  Money is already digital.  Your bank and brokerage accounts are book entries in a digital database.  These book entries are claims that can be exchanged for paper money or paper stock certificates.  Governments, including the US government, will be mandating the exchange of all paper money for its digital “upgrade.”  

 

But overall, Crypto is not a partisan issue.  The reason the survey is as it is, likely is due to perceived volatility.  Social instability of any kind, can be a factor for the price of Bitcoin.  Bitcoin in particular has become a safe haven for assets when things get dicey.

Bitcoin has been a wildcard asset in markets that has triggered great debates but reached no real conclusion.  We still don’t know who the real creator is, although we see fingerprints of the US government, especially the NSA patent SHA-2 and other hash encryption algorithms used.  Further adding to the mystery are large whale accounts that have remained dormant or otherwise inactive.  Another sign that the US Government is involved is how USA in particular has embraced the technology, and is even leading a push to accept Crypto at traditional banks.

 

So based on this, it’s logical to see how a political election could affect Bitcoin.  For example, many countries have outlawed the use of any Cryptocurrency.  We’re not insinuating that can happen in the USA, however, like the FX markets - politics has a huge role to play in this dark market.  The reason is because it’s unregulated.  There is no central place, no authority, where you can buy Bitcoin or trade in Crypto.  As explained in the book Splitting Bits - nothing with Crypto is as it seems.

But there is an interesting phenomenon that should also be mentioned here.  Unlike FX markets, Crypto markets have sparked a global educational interest.  There are thousands of vendors selling courses on Crypto, and even Coinbase has their own training on how to use and be wise with your new money (digital crypto).  Why did that never happen for FX?  In fact, the opposite happened.  Big banks invest in anti-education programs or as one book has described it, the ‘dumbing down’ of America.  The reason is clear; if the average person understood how badly they were losing from inflation and other factors, there would be a revolution.  The powers to be don’t want smart, savvy investors.  They want slaves just smart enough to operate the factory robots but dumb enough not to mind or understand how a small group of people continues to grow their wealth and increase their influence over our lives.  

Perhaps Crypto is going to change all that.  Sites like CryptoPotato.com are growing in popularity, even in countries outside their origin.  The only reason information based sites grow in popularity is when there is an interest - it can’t be artificial.  People have a genuine interest to learn about Cryptocurrency.

 

Another question:  Will Trump issue in a new era of Crypto positive regulations (or lack thereof?) - this is something for speculation.  But his track record in dismantling the power of the Federal government is strong.  He has deregulated markets and the SEC under his watch has changed the rules of accredited investors:

 

The Securities and Exchange Commission today adopted amendments to the “accredited investor” definition, one of the principal tests for determining who is eligible to participate in our private capital markets.  Historically, individual investors who do not meet specific income or net worth tests, regardless of their financial sophistication, have been denied the opportunity to invest in our multifaceted and vast private markets.  The amendments update and improve the definition to more effectively identify institutional and individual investors that have the knowledge and expertise to participate in those markets.

One thing is for sure, the next 18 months are going to be good for traders, because volatility creates risk and opportunity.  

An Emerging Markets "Doom Loop" Time Bomb Emerges, And Inflation Could Set It Off

 From Zero Hedge:

While both we - and most other analysts - have been focusing on soaring debt and QE since the covid pandemic, DB's Jim Reid correctly points out that this has been mostly in the context Developed Markets. But how have Emerging Markets funded themselves in the pandemic? The answer, as Reid writes in his Friday "Chart of the Day" note, is "via leveraging its banking system by a combination of moral suasion, liquidity provision from central banks, steep yield curves (encouraging carry trades), regulatory policies (reserve requirement cuts and easier accounting rules), and falling loan-to-deposit ratios (higher savings/weak demand) freeing up balance sheets."

This, according to some other analysts, is called "shadow" QE.

It's also a major problem: as the DB strategist explains, "if you’re looking for future potential crises this is another sovereign-bank nexus similar to that grappled with in the Euro sovereign crisis."

In other words, a Doom Loop for emerging markets.

Of course, an EM doom loop is just the start, as they are many more serious problems for emerging markets, with inflation the most likely one. As Reid explains, "a return [of inflation] could force central banks to sharply raise front-end rates, or to withdraw cheap liquidity. This would change the incentives for shadow QE which is inherently price sensitive, unlike the central bank QE mostly used in DM countries."

In a separately note by DB economists  Mallika Sachdeva and Oli Harvey, the duo discuss the role that shadow QE has played across Asia, CEEMEA and Latam this year in helping governments to finance deficits and central banks to (mostly) avoid large official QE programs.

While CE3, Brazil & Mexico in Latam, and Malaysia in Asia stand out as countries where banks have played a particularly large role in absorbing issuance, a key condition of "shadow" QE has been muted inflation trends.

"If this changes, so could the calm in EM debt", Reid concludes adding that "increases in debt usually bring future crises so this is an interesting development to watch."