Yesterday we heard China’s economy expanded by 2.3% last year. Yes, EXPANDED, ie grew, ie actually got bigger. It was the only major economy in the world not to go backwards in the year of Covid-19. By contrast, US GDP contracted by 3.6%; the Eurozone economy by 7.4%. SA likely in double digits.
Also read: Alec Hogg: Knowing your Circle of Competence
That’s the ultimate irony. There is much about Covid-19 that we don’t know. But one thing experts do agree on, is the source: a Chinese penchant for exotic meat. This coronavirus jumped across to humans from animals, probably bats, at an informal abbatoir in Wuhan where livestock is sold and slaughtered – what they call a “wet market”, presumably because of all the blood.
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It was only a year ago that China discovered a mystery new flu virus spreading in Wuhan. Using the brute force of autocracy, the province was completely sealed off for months, quickly stopping the spread. Democracies, with the USA in the vanguard, did not have that option. Instead they have run their money printing presses overtime, injecting created cash into lockdown-damaged economies.
This has serious implications. Money behaves like any commodity. When you increase supply, its value falls. Creating of trillions of new US Dollars makes holding the currency less appealing. Indeed, ballooning supply poses a serious risk to the US Dollar maintaining its global currency reserve status. With China’s RMB waiting in the wings. Little wonder Covid conspiracy theories abound.
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