The Voice of God's Economist

5 minutes read. Food for thought:             If you knew there was an investment you could make right now that could give you a financial guarantee forever, would you not be willing to risk any and everything to make that investment?            Whilst there is an actual investment like that called, perpetual bonds , that would not be our focus in this blog.  Image source  What is a Bond? ‘A bond is an investment security where an investor lends money to a company or a government for a set period, in exchange for regular interest payments ’ (Napoletano and Curry, 2020). What are Perpetual Bonds? A perpetual bond, also known as ‘perp’ or ‘consol bonds’, has a steady stream of interest payment  forever without a set maturity date (Chen, 2020). The issuers of these bonds are not forced to repay the bond purchaser’s principal amount . The principal amount is the initial amount that was paid to the...

Food for thought In Year 1, Emma and Tochi earn $40,000 each. Emma chooses to spend hers on things she enjoys without making any investments, while Tochi chooses to invest $2,000 in a bond that gives 0.5% interest per year. Suppose they both have a balance of $700 by January of the following year. Tochi has $700 plus her return on investment, which is $2,710, making her financial state better off than Emma's. Would you say they were unequal? Inequality is the difference in social status, wealth, or opportunity between people or groups.  There are different types of inequality, gender, race, age, class, financial, etc. It is caused by different reasons, circumstances, and the choices we make are not excluded. No matter how much we try to make everyone equal, unfortunately, that is unrealistic because no two people are the same.   Biblical perspective Before Jesus died, although God loved us the same, we didn't all have the right and means to access Him beca...

What is a liquid asset? "A liquid asset is an asset that can easily be converted into cash within a short amount of time" (Chen, 2024).  A company with high liquid assets has a low chance of experiencing liquidation. What is liquidation? ‘Liquidation is a legal process that applies to companies or partnerships in which a liquidator is appointed to "wind up" the affairs of a company. At the end of the process, the company ceases to exist.’ (Department of Economy, 2015) During liquidation, a company must shut down and sell all its assets to generate money, which is used to pay back its creditors and investors. A company with low liquid assets might be forced into liquidation if it cannot meet its financial obligations. The main reason firms liquidate is insolvency, which means they cannot pay their debts or meet their financial obligation as they become due.  In simpler terms, they don’t have enough cash reserved to keep them going. Unfortunately, this...

3 minutes read. Imagine you enjoy canoeing so much that you go at least four times every summer. The initial price was £40 per ride. However, you decide to book a slot for next summer and realize that the price has increased to £80. What will you do? According to the law of demand, if the price of canoeing increases, you are likely to either reduce the number of times you go canoeing or potentially stop canoeing altogether because higher prices lead to lower demand.  "The  law of demand  holds that demand for a product  changes inversely to its price  when all else is equal." (Fernando, 2023) Photo Source Suppose you own a canoeing company, and you notice that the market price has increased from £40 to £80. What will you do? According to the law of supply, you would want to offer more services because a price increase typically leads to higher potential revenue.  "The  law of supply  relates price changes for a product to the quantity supplie...