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I'm not so sure the US pulled itself out of the 2008 recession by printing more money. Printing more money causes inflation, i.e. worthless money. This is something the USSR never understood. The US seems to solve economic problems by going further into debt.
Going into "debt" for a sovereign currency issuer is printing money. If you look at the detailed mechanics of public debt issuing in the US (or any other sovereign currency issuer), money to buy the debt are "printed" (or better say, generated) first. It cannot be otherwise, it is an accounting impossibility.
Last edited by saturno_v; 02-09-2020 at 05:24 PM..
If you have foreign central banks in key US trade partners buy US treasuries, it boosts US financial assets and the US dollar which boosts exports to the US and holds down commodity prices. It stimulates inflation in goods and services consumed by the top 1 percent. That's why you see very high prices for high quality goods, but junk quality for low- and moderate-priced goods and food. They shifted the QE from the Fed to Japan and Europe just as crude oil hit $110-115 in 2014. The stronger dollar in addition to the ramp up in shale production caused crude oil to lose about two-thirds. You don't have central banks buying up crude oil to prop up the price.
Very true....the US dollar position as world reserve currency (outflow of dollars from the current account deficit are recycled into US government debt) protects the US more than other sovereign currency issuers running current account deficits as well from the effect of exchange rate.
Inflation calculation has been deformed so much during the years that no longer reflect real cost of living.
You made an excellent point mentioning that inflation for luxury goods, prime real estate, etc.., all items bought by the small group of people at the receiving ends of the central bank printing spree, runs very high but even regular real inflation is significantly higher than the official numbers.
When it comes to printing money, if you do it properly, meaning channeling at least some money towards productive activities, infrastructure, etc..it can help holding inflation down, if you do it Latin American style (or Zimbabwe style), just handing money down to the masses, high inflation or even hyperinflation will occur.
If you have foreign central banks in key US trade partners buy US treasuries, it boosts US financial assets and the US dollar which boosts exports to the US and holds down commodity prices. It stimulates inflation in goods and services consumed by the top 1 percent. That's why you see very high prices for high quality goods, but junk quality for low- and moderate-priced goods and food. They shifted the QE from the Fed to Japan and Europe just as crude oil hit $110-115 in 2014. The stronger dollar in addition to the ramp up in shale production caused crude oil to lose about two-thirds. You don't have central banks buying up crude oil to prop up the price.
Another good point. Russia doesn't have this advantage.
And someone mentioned the vastness of the country, plus the fact that much of it is far enough north to have permafrost. Infrastructure is more costly to build. I wonder how Canada manages. But also, Russia has been playing catch-up, infrastructure-wise, after the neglect of the Soviet period. Putin started building roads, hydroelectric stations and railroads during his first administration. This, for a country that hadn't bothered with roads where there were rivers that froze over in winter.
Another good point. Russia doesn't have this advantage.
And someone mentioned the vastness of the country, plus the fact that much of it is far enough north to have permafrost. Infrastructure is more costly to build. I wonder how Canada manages. But also, Russia has been playing catch-up, infrastructure-wise, after the neglect of the Soviet period. Putin started building roads, hydroelectric stations and railroads during his first administration. This, for a country that hadn't bothered with roads where there were rivers that froze over in winter.
It's also a death spiral for a country to both print money and export crude oil. Venezuela is a case in point. The collapse of the currency makes it difficult to dig their way out. Putin is smart to direct the economy to be self-sufficient in agriculture to insulate the general population. I believe Venezuela has to import food and gasoline from the US.
Putins own stated goal was for Russia's economy to grow faster than the global GDP. Otherwise Russia's share of global economy will continue to shrink. He hasn't come close to this since 8 years ago. With continued sanctions (which are affecting investment), a declining population and lower demand for Russian energy exports it isn't going to happen anytime soon.
The energy exports need customers and alienating key customers in Europe hasn't done much to help. It seems he is trying to do it again with Belarus and Turkey.
What is going on in Turkey is a strategic standoff. Russia and the SAA are pushing the terrorists (your buddies) back from the Aleppo/Damascus highway and cutting them to pieces. There was an agreement reached Jan 1 in which Turkey said it would get the terrorists away from the highway. Erdogan did not deliver as of February so now your friends are getting their asses handed to them. There's Turkish forces in the area in force.
Somebodies playing chicken I guess and it could get ugly, Russia and Syria are getting impatient.
Remember that Pantsir that was destroyed back in 2018? It's official, the crew screwed up. They ran out of ammunition and instead of leaving the firing point as they were supposed to they stayed in place. A Pantsir cannot defend itself without ammunition. They had already shot down 4 missiles, expending their whole load.
Putins own stated goal was for Russia's economy to grow faster than the global GDP. Otherwise Russia's share of global economy will continue to shrink. He hasn't come close to this since 8 years ago. With continued sanctions (which are affecting investment), a declining population and lower demand for Russian energy exports it isn't going to happen anytime soon.
The energy exports need customers and alienating key customers in Europe hasn't done much to help. It seems he is trying to do it again with Belarus and Turkey.
You need links to hear what Putin says? Obviously you aren't paying attention if you don't know what Putin said about Russia's economic goals. I agree, what he says is bullchit anyway. Russia hit 1.3%in 2019, underperforming for the 7th year in a row.
They can't do anything. Turkeys military is far superior in that region. At least now I understand the reason behind Turkeys surprise declaration of military aid to Ukraine.
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