Here’s what we have for you today:
• Twitter co-founder on Elon
• Weakening dollar
• Bill Gates on China
US consumers may have to live with high prices due to a falling dollar
What’s happening: The greenback is extending losses in January, after sliding almost 8% last quarter in the worst three-month slump in over 12 years. A weaker dollar raises the cost of imported goods, which would eventually feed into consumer prices in the US.
The reason: Changes in currency rates can have an inverse impact on a country’s inflation in subsequent months, according to a recent research note from Goldman Sachs. In other words, declines in a country’s exchange rate can raise the cost of imported goods and lead to increased inflationary pressures.
What else? The US is a net importer of materials such as lumber and semiconductors that are crucial in manufacturing supply chains, and these would become costlier due to dollar weakness. The price of overseas travel would also increase, adding costs for American consumers.
Twitter co-founder on Elon Musk
Who? Biz Stone a co-founder of Twitter said Elon Musk “doesn’t seem like” the right person to own Twitter.
Why? According to Biz, improvements to morale and content policies at the business have been reversed under its new owner.
What else? “I don’t know that Twitter as a company is going to succeed forever but the idea of Twitter I think will be around,” said Biz, pointing to the success of alternative platforms such as Mastodon.
Bill Gates admits he does not agree with U.S. politicians in regards to China’s economy
Gates’ opinion: Recently, at the Lowy Institute in Sydney, Australia, Gates talked about the global response to covid and then touched on some of his thoughts about China’s relatively recently thriving world economy.
“China has gone from in 1980 being incredibly impoverished, poorer than India. I mean literally, with starvation, malnutrition, to being the most wealthy middle-income country in the world, and it’s 1.4 billion people,” said Gates. “It’s incredible, and it’s great for the world.”
In comparison: “Countries like Australia, U.S., we have per capita GDPs five times what the Chinese have, so we have a disproportionate share of the world’s economy.”
Gates’ suggestion: “I do think the current mentality of the U.S. to China, and which is reciprocated, is kind of a lose-lose mentality,” he suggested. “That if you ask U.S. politicians, ‘Hey, would you like the Chinese economy to shrink by 20% or grow by 20%?’ I’m afraid they would vote that, ‘Yeah, let’s immiserate those people,’ not understanding that for the global economy, the invention of cancer drugs, the solution of climate change, you know, we’re all in this together.”
“We’re humans, we innovate together and we have to change the modern industrial economy together in a pretty dramatic fashion,” Gates added.