From: AFP August 02, 2011 12:00AM RUSSIAN Prime Minister Vladimir Putin has accused the United States of acting as a ''parasite'' on the world economy by accumulating massive debts that threaten the global financial system. ''The country is living in debt. It is not living within its means, shifting the weight of responsibility on other countries and in a way acting as a parasite,'' Putin told a group of pro-Kremlin youth in central Russia overnight. US President Barack Obama on Sunday announced an 11th hour debt deal that will allow the country to avoid its first default in history while pushing ahead with a painful austerity plan designed to slash Washington's swelling debt. The deal was met initially with relief on global financial markets and saw Moscow's two stock exchanges open the day up about two per cent but investors then began to have doubts about the plan and gains were reversed sharply. Putin has repeatedly criticised the United States' recent foreign exchange policy and its propensity to cover budget deficits with treasury bills and bonds held by sovereign clients such as China and Russia. The value of that paper will shrink if US debt is downgraded by a major Western ratings agency and Putin was insistent overnight that the world should be seeking new reserve currencies for trade and savings. ''If the US encounters a systemic malfunction, this affects everyone,'' Putin told the Seliger camp gathering. ''There should be other reserve currencies.'' Putin added that the debt agreement announced by Obama ''was not that great overall because it simply delayed the adoption of a more systemic solution''. Russia's de facto leader was attending the pro-Kremlin lakeside youth camp as part of a continuing series of public appearances that are being closely watched by political observers as December parliamentary elections approach. Putin's United Russia party is hoping for a strong performance in December that can catapult their leader into presidential elections scheduled for March. The current Kremlin chief Dmitry Medvedev has found strong backing in some Washington circles and who has worked more closely on a ''reset'' in relations with Obama's team. src: http://www.news.com.au/world/russia...my/story-e6frfkyi-1226106330731#ixzz1ToaCxoN8
He's correct. The US reserves the right to print dollars at whim to make a claim on goods and services internationally, without any backing other than their word and they've abused it to the point of criminal intent, creating endless war, suffering and far reaching fascist ideals for the sake of a few. That said, the rest of the global powers (including Russia) made a grave error in staying with the dollar standard as agreed medium of trade the moment Nixon took them off the classic Gold standard. Right now, it's simply the pre-emptive squabbling before the next great war with a lot of finger pointing and no real solution. Rather than make statements which are inflammatory, Russia should simply play their hand and stop international trade with US dollars from their country. Request Yuan, Swiss Francs or GOLD as the only accepted mediums and let the rest work itself out from there. These statements will really do nothing more than just piss off the flag wavers in the US and promote international unrest as a prelude to violent responses world wide.
yes, he is correct, but I remember reading a few decades ago that the Russians have NEVER actually repaid, in cash, a Bond issued by them. But, it is a world wide problem and the result will be world wide. OC
Russia has low debt and a half trillion of foreign reserves credit Socialism can never work economically.Another example is China. No regulation and a unrestrained market is the only way.
Dunno about violent responses, but I think this is a veiled call for a global reserve currency basket. After the BRICS countries got together and agreed to trade in their local currencies back in April, I don't think the IMF's Special Drawing Rights would necessarily work because they carry a lot of weight in USD. If someone wanted to create a representative basket of currencies that could be used as an accurate benchmark, they'd need to include a more diverse mix of currencies. Methinks Putin is agitating for "something other than the USD" so that people start looking at what to include in such a currency basket.
The IMF gets most of its cash from the USA. It has about 2000+tons of gold and that is about it, so an SDR would not be strong enough or backed by enough to be the Reserve Currency. JMNHO OC
A currency basket doesn't actually have to be used as a reserve currency where you actually pay someone in SDRs. All you have to do is use it for working out what the currency you're dealing in is worth compared to the benchmark. For example, if you're a Chinese company doing business with a Russian company, you might be trading in Chinese RMB but you need to know what 1 RMB is worth in the marketplace. If the Chinese company is comparing it back to the same currency basket that the Russian company is using to work out how much they can sell the RMB they receive for then everyone can skip over the USD and use an aggregate reserve rather than the American one. Since the BRICS countries have already said they'll do deals in each other's currencies instead of USDs, they need to know what those currencies are worth everywhere else and "less crappy than the USD" isn't really the best way of determining value.
Putin is also aware that he is going to get a SMALL suitcase full of US$1,000,000 notes in full payment of his holdings. Soon! OC
