Putin: U.S. Monetary Policy Is ‘Hooliganism’!
- Russian Prime Minister Putin is correct! The FedRes’ policy of massive creation of money out of thin air is stoking inflation worldwide. It is already leading to rampant food price inflation and will cause starvation worldwide. It is destabilizing the entire world!
Putin: U.S. Monetary Policy Is ‘Hooliganism’
By Ira Iosebashvili , WSJ blogs
Russian Prime Minister Vladimir Putin slammed expansionary U.S. monetary policy, calling it “hooliganism”, in remarks that followed more veiled criticism from China after Standard & Poor’s Corp. cut the outlook on its U.S. debt rating this week.
“We see that everything is not so good for our friends in the States,” Putin told lawmakers Wednesday. “Look at their trade balance, their debt, and budget. They turn on the printing press and flood the entire dollar zone — in other words, the whole world — with government bonds. There is no way we will act this way anytime soon. We don’t have the luxury of such hooliganism,” he said.
Even as Putin blamed the U.S. for printing money — something for which Russia was criticized during periods of hyperinflation in the 1990s — other Russian officials said there is no alternative to the U.S. dollar and declined to discuss cutting the country’s dollar holdings.
Russia has the world’s third-largest international reserves after China and Japan, with the biggest part in U.S. government debt. However, Russia appears to have cut its direct Treasury holdings significantly in recent months, according to data from the U.S. Treasury. Russia can be seen as benefiting from the recent policy of the U.S. Federal Reserve, linked to higher commodity prices. But an increase in dollar supply and low interest rates could also lead to a commodities bubble that could wreak havoc on Russia’s finances if oil prices later collapse.
Moscow is also battling inflation, which the International Monetary Fund sees hitting 9.3% in 2011. In remarks to the lower house of parliament Wednesday, Putin said he sees inflation remaining below 7.5% if the country has a good harvest, following last year’s severe drought.
China earlier this week called on Washington to adopt “responsible” measures to protect its bond holders, in a cautiously worded response to the S&P decision that reflects Beijing’s awkward position as the U.S.’s biggest creditor.
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