Putin chides U.S. 'hooligan' for flooding dollars

Putin chides U.S. 'hooligan' for flooding dollars

af.reuters.com

MOSCOW, July 11 (Reuters) - The United States is acting like a hooligan by flooding the world with dollars, Russian Prime Minister Vladimir Putin said on Monday, underscoring emerging market concerns about the resulting speculative capital flows.

Addressing economists at Russia's Academy of Sciences, Putin lampooned the Federal Reserve's $600 billion bond-buying spree for flooding the world with cheap dollars. The Fed's second round of so-called "quantitative easing" has been dubbed "QE2".

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"Thank God ... we do not print the reserve currency. But what are they stirring up? They are simply acting like hooligans," Putin told the audience which included his veteran finance minister, Alexei Kudrin.

"They turn on the printing presses and fling them (dollars) over the entire world to resolve their immediate tasks. They say monopolies are bad but only if they are foreign -- their own are good. So they use their monopoly on printing money to the full."

The US is quickly becoming the next Zimbabwe. Investors are quickly starting to loose appetite to buy US treasuries and the rumor goes that OPEC countries, most notably Saudi-Arabia are starting to look for alternatives for the dollar. This would mean the US cannot continue printing without ending up with hyperinflation, which is a scenario I am convinced will happen either way. Bernanke keeps on flooding the world with dollars, putting depreciative pressure on the dollar while keeping the economy untouched. Quantitative easing (dollar printing in Zimbabwe style) is only a quick fix and we're soon reaching the point where the first aid kid runs out of bandage. Then what?

af.reuters.com
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And weren't we just being told by our "leaders and experts" that we have to raise the debt ceiling to protect our credit rating and reputation? Now those things have been lost for quite some time now. I've been wondering what will happen when the debt ceiling does get raised (and it will), and we'll thus show the world, once again, that we believe we can run whatever deficit we want and make the numbers mean whatever we want, because we're the USA and the dollar rules all.

I'm thinking this fiction might be nearing an end.

reply to post by Mdv2


It doesn't surprise me that Russia is pointing out solely one side of the issue. Which is global in it' proportions.

The US is driving down the dollar so that it can compete with China in the global market place. If and when China allows their currency to float as [they should have done already] then their products and services would be correctly priced so that other countries [Developed or not] can compete on a fair and level field. [Which it is not presently]. China is balking at this inevitable outcome. It knows that inflation [Which is already rearing its ugly head there] will undermine their drive to be the next "Super Power" Stay tuned....

Short term this could get ugly. In the long run though it will be easier for others to compete with China when they finally drop their present artificially low costs of products by holding down their currency's value.