Dosani Blog

Imagine that five people (Persons A, B, C, D and E) have $100 each and they ask me to store this money for them.  They trust me and want to ensure their money is kept safely. I take their money and on my website I make an account for each person, showing how much money I have stored for them.  Person A checks his account online and sees $100, and he's happy.  Person B to E do the same and find $100 in their accounts. I decide that I could put this money to good use.  I take the $500 that is entrusted to me, and buy some 1-year term deposits with the government.  After 1 month, I earn interest of $5.  Now I have $505, but only $5 cash is mine, the remaining $500 belongs to Persons A to E. After 1 month, Person A checks his account online and still sees $100, and he's happy.  Person B to E do the same. Then it gets interesting. I advertise that I will be giving out loans to businesses in need.  ZZ Manufacturing, a business in my neighborho...

INTRODUCTION I have always been fascinated by the concept of money and the power it gives to individuals and societies. Not surprising then that the individual who can afford more stuff is generally more influential in society. Similarly, nations with higher GDP are generally the ones that boss others around. So where does money come from? And where is it going? MONEY IN THE PAST In Grade 9 Economics, we learned that money evolved in three steps: 1) Barter  Cavemen back in the day used to barter by exchanging goods and services. For example, a farmer growing corn would trade some of his corn in exchange for milk from a shepherd. 2) Commodity Exchange  Because barter was so inconvenient (the shepherd may not want the corn), people found certain commodities that everyone was willing to accept, and started using them as a medium of exchange. These commodities had to be rare and not perishable, and had to have inherent value (for example, gold). The farm...

I can't stand inflation. Looking back over the last ten years, prices of pretty much every thing has gone up. Some more than others. The first time I filled gas in my own car, it cost around 50 cents per liter. Today we're edging close to triple of that. So why do prices go up? Below are three observations I'd like to share. I have small kids, and like all kids, they are eager to learn, so I like to keep things simple and easy-to-explain. 1) To understand inflation, we need to understand the concept of money. I hope to write something next time about the evolution of money (for the layperson of course). But in short, if we lived in an economy with no money (barter economy) where people exchanged one item for another (example strawberries for milk), there would be no inflation! The "real value" of strawberries in comparison to the milk would forever remain the same. If it was accepted practice to exchange 10 strawberries for 1 litre of milk in 1984, it would...

On March 8, 2018, President Donald Trump imposed tariffs of 25% on imports of steel and 10% on imports of aluminium, but made an exception for Canada and Mexico. This exception was removed effective May 31, and  all imports of steel and aluminium from Canada  became subject to these tariffs. On June 15, 2018, President Trump approved a plan to impose 25% tariffs on imports of goods from  China , worth approximately $35 to $40 billion. He has also  threatened  to impose tariffs on imports of automobiles and auto parts into the US from Canada and other countries. So what exactly are tariffs? And what does President Trump intend to achieve? Finally, what is Canada's plan to retaliate? In simple terms, tariffs are taxes levied on products entering a country from a foreign country. So the US government will charge 25% tax on any steel entering US from Canada. For example, if steel made in Hamilton, ON was originally sold for $600/tonne, the producer will have ...