Weekly Selection 9 August 2019

George Magnus, Yuan’s Slide Is Gold Standard Moment for China

(Bloomberg Opinion, August 6, 2019)

This is an important read (5-6 min.) to understand the significance of China’s recent decision to let the yuan slide below 7 to the dollar – a watershed moment for currency markets with important implications for the global economy. It is too early to assert that China is “weaponizing” its currency, but it is nonetheless a political decision. A cheaper yuan will support Chinese exporters and will prop up growth, but the negative implications are more severe: it will hurt Chinese consumers, will hinder the transition to a more consumer-oriented economy, will increase the credit risk of Chinese assets and will encourage capital flight.

Raghuram Rajan, Central Banks Are the Fall Guys

(Project Syndicate, July 31, 2019)

The former governor of India’s central bank and Chicago University professor worries about the vanishing freedom of monetary policymakers: for decades they could make difficult decisions without having to worry about political blowback – something indispensable to macroeconomic stability. Now this is changing: they have to ease monetary policies in response to populist mistakes for which they themselves will be blamed (reads in 6-7 min).

Christopher Flavelle, Climate Change Threatens the World’s Food Supply, United Nations Warns

(The New York Times, August 8, 2019)

A new UN report asserts that the window to address the threat of climate change on food supplies is closing rapidly. A half-billion people already live in places turning into desert, and soil is being lost between 10 and 100 times faster than it is forming. Climate change is exacerbating these threats, as floods, drought, storms and other types of extreme weather threaten to disrupt, and over time shrink, the global food supply. The report also lays out pathways to address the looming food crisis (reads in 6-7 min).

Rowan Jacobsen, This Is the Beginning of the End of the Beef Industry

(Outside Online, July 31, 2019)

This article makes the case that ’Alt meat’ isn't going to stay alt for long, and that cattle are looking more and more like stranded assets. Its argument: “Beef is the most wasteful food on the planet” and part of the appeal of the new burgers is their smaller environmental footprint. An Impossible or Beyond Meat Burger uses 87 percent less water, 96 percent less land, and produces 89 percent fewer greenhouse-gas emissions. As the shift towards new burgers accelerates, the beef industry will lose its last advantage – price (reads in 7-8 min).

Porlando, Do We Create Shoplifters?

(Unintended Consequences, August 6, 2019)

Technology always subtracts humans, or at least moves them from one legacy task to another new one. It also shifts responsibility (from the human to the machine, but not always). As an example, self-checkouts result in more shoplifting, inspiring people who might not otherwise steal to do so. This is a short reflection on how technology can provoke unethical behavior. If, when we deal with machines, we tend to behave less honestly, how will our social contract evolve? (Reads in about 7-8 min).