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.”
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.”
Robert Reich: “Wage increases have not caused prices to rise. Price increases have caused real wages (what wages can actually purchase) to fall. Prices are increasing at the rate of 6.8% annually but wages are growing only between 3-4%.
“The most important cause of inflation is corporate power to raise prices.
“Yes, supply bottlenecks have caused the costs of some components and materials to rise. But large corporations have been using these rising costs to justify increasing their own prices when there’s no reason for them to do so.
“Corporate profits are at a record high. If corporations faced tough competition, they would not pass those wage increases on to customers in the form of higher prices. They’d absorb them and cut their profits.”
The Fed wants to raise interest rates and coronavirus support programs are ending. Millions of families stand to suffer
“Inflation has a unique power to kneecap a presidency. Incumbent presidents and their parties do not do well at all when inflation (and attempts to cure it) are on voters’ minds come election time. The gas pump, the supermarket check-out counter, the heating bill, the sticker on the windshield, provide — or seem to provide — powerful indictments against the party in charge.
“If that’s not enough to unsettle the White House and its allies, consider this: Presidents have almost no power to ease the pain of inflation, and the voting public cuts presidents no slack at all because of that impotence. Look into the toolbox of our country’s chief executive and you’ll find it empty of effective tools, filled instead with devices now obsolete or laughable or meaningless or politically destructive.”
Presidents have little power to bring down rising prices. History shows the public doesn?t care.
The NYT: “The same congestion at U.S. ports and shortage of truck drivers that have brought the flow of some goods to a halt have also left farmers struggling to get their cargo abroad and fulfill contracts before food supplies go bad. Ships now take weeks, rather than days, to unload at the ports, and backed-up shippers are so desperate to return to Asia to pick up more goods that they often leave the United States with empty containers rather than wait for American farmers to fill them up.”
A crisis at a property company exposes deep, dangerous, and often unrecognized weaknesses in the Chinese economy.
From the New York Times: “Just In Time has amounted to no less than a revolution in the business world. By keeping inventories thin, major retailers have been able to use more of their space to display a wider array of goods. Just In Time has enabled manufacturers to customize their wares. And lean production has significantly cut costs while allowing companies to pivot quickly to new products.
“These virtues have added value to companies, spurred innovation and promoted trade, ensuring that Just In Time will retain its force long after the current crisis abates. The approach has also enriched shareholders by generating savings that companies have distributed in the form of dividends and share buybacks.
“Still, the shortages raise questions about whether some companies have been too aggressive in harvesting savings by slashing inventory, leaving them unprepared for whatever trouble inevitably emerges. …
“And many businesses have combined a dedication to Just In Time with a reliance on suppliers in low-wage countries like China and India, making any disruption to global shipping an immediate problem. That has amplified the damage when something goes awry — as when an enormous vessel lodged in the Suez Canal this year, closing the primary channel linking Europe and Asia.”