So does money.
Views: 37
The NYT: “To help Russia evade sanctions, China would have to offer a viable substitute to the American dollar. But Chinese money — the renminbi — is barely used outside of China. Only 3 percent of the world’s business is done using the redback. Even Russia and China conduct their trade mostly in U.S. dollars and euros.
“What’s more, the risks of helping Russia avoid economic ruin may be greater for China than any possible reward. Much of China’s own economy depends on the U.S. dollar and the financial edifice that underpins it. Chinese companies are active around the globe, using the American financial system to pay employees, buy materials and make investments. China is the world’s largest exporter, and is paid for its goods mainly in dollars.
“Should Beijing run afoul of the sanctions against Russia, China’s own financial stability would be put at risk at a time when its leaders have emphasized caution. And besides, the few lifelines that Chinese leaders could feasibly offer Russia would not be strong enough to help the country survive a financial blackout from the United States and its allies.”
Views: 43
From the NYT: “The reopening of the economy after the initial lockdowns brought a surge in demand, which was bolstered by the trillions of dollars in aid that the federal government provided to households and businesses. But supply chain bottlenecks, labor shortages and other issues meant that businesses could not fully meet that demand. Strong demand plus limited supply is a recipe for inflation.
“What happens next is less clear. If companies are able to hire more workers and pick up production, then supply will be able to meet demand. …
“But if supplies can’t rebound, then either we will continue to burn off excess demand in the form of inflation, or demand will have to fall. Either scenario would make it harder for the economy to rebound fully from the shock of the pandemic.”
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