Inflation in the USA has gone up to 8.5% in March, the highest in 40 years. And Biden is blaming Putin for all the ills of the USA. China will be next. They never blame themselves.
Inflation in USA was relatively low when Biden came into the White House. It started rising even before the Ukraine War started, so Republicans are not buying into Biden's take on the issue, by trying to push all the blame on inflation to Putin and the Ukraine War.
Earlier in his term, Biden had been talking about adding trillions to the USA debt to fund the fight against COVID and his Build Back Better plan, printing banana money by the trillions, which as anyone knows, will eventually cause massive inflation. This is the exact consequence if any other country does the same. But the USA thinks it is exceptional and can just export the surplus banana notes printed, and together with it, it's inflation, all over the world as they always did.
It works very well over the decades when demand for US$ around the world was instrumental in absorbing their inflation caused by their unrestrained printing of US$. But then the trade war came, and the USA cuts trade with China, so how much lesser US$ would the Chinese side be absorbing out of the surplus fiat money the USA have been printing? That is why now there appears to have been a roll back and more trade seems to have taken place between the USA and China. This also applies to other countries caught by Trump's trade war. Moreover, the higher tariffs imposed on Chinese goods are contributing to inflation as well. China is not paying for the tariffs, but USA consumers are paying for more expensive stuff from China.
On top of that there was the massive trade deals of hundreds of billions done between China, Iran and Russia among others, bypassing the use of the US$. What does all this mean? They are not inconsequential issues for the US$.
If all those US$ fiat money printed year after year, and the bulk remains in the USA, what do you think it will do? Whatever exceptionalism they have cannot defeat the inflation it will create. That is what is happening now. The Russian sanctions and the demand by the Russians to do oil in Rubles is adding one more nail in the US$ coffin by trimming world demand for US$ and boosting demand for Rubles instead. Inflation will get worse in the USA going forward.
In fact the unrestrained printing of more US$ has given the impression that there is only a small fall in the percentage share of the usage of the US$ in world trade. The reality is more severe. The last I know was the US$ had a 59% share of usage among all the major currencies, like the Euro and Yen in world trade.
Of course other countries are facing the same problem as they still need US$ for trade with the USA and is sharing the inflation trap exported by the USA.
Anonymous
PS. Trillions to fight Covid, trillions to build infrastructure, trillions to fight wars, plus pay more for imports because of higher tariffs, higher oil prices, reduction in petrol dollar trades.....
6 comments:
Russia tells China it can pay in either Yuan or Ruble for oil and coal. That must be the start of a new favourable trading partner arrangement going forward. I am sure it will also apply to commodities soon.
Now, trade between Russia and China, and by extension India, are growing and where does the US$ stand? Without the big trade deals that should be done in US$ by Russia, China and India, there is now a growing gap of demand for the US$ and they just keep printing trillions waiting for it to be soaked up. By who? It would be myopic, just looking no further than the nose, to say exceptionalism is going to save the day.
India told the USA, in no uncertain terms, that India has the right to look after it's own national interest first and buy oil that is cheaper and discounted. As it is, even without discount, Russian oil, gas and commodities going to India by land will be cheaper than the USA, more so once the pipeline between Russia and India is ready. The USA is not going to be able to compete on price against Russian oil and gas. No way!
And now there is some talk that the USA is going to sanction India. I think the confrontation is imminent and the QUAD, a nonsensical grouping, is going to break up. It serves no purpose for India, unlike Australia the lapdog with no backbone, and the Japanese with lots to pay back for the atrocities it committed against China during the opium war and WW2.
There is no way back for the USA. Inflation is one issue that Biden should be concentrating on instead of the war in Ukraine. I think Biden knows that the problem at home is unsolvable and is instead trying to garner support with the war in Ukraine.
Unfortunately, he and his administration and the EU geniuses have been out manoeuvred by Putin and even the Ukraine war is not going to save him.
Here comes the Russian New Global Financial System:
'Currently, the US is fighting to maintain its dominance, but just as Britain previously, which provoked two world wars but was unable to keep its empire and its central position in the world due to the obsolescence of its colonial economic system, it is destined to fail. The British colonial economic system based on slave labor was overtaken by structurally more efficient economic systems of the US and the USSR. Both the US and the USSR were more efficient at managing human capital in vertically integrated systems, which split the world into their zones of influence. A transition to a new world economic order started after the disintegration of the USSR. This transition is now reaching its conclusion with the imminent disintegration of the dollar-based global economic system, which provided the foundation of the United States’ global dominance.'
https://www.unz.com/pescobar/exclusive-russian-geoeconomics-tzar-sergey-glazyev-introduces-the-new-global-financial-system/
What goes up, will come down.
"... and the Japanese with lots to pay back for the atrocities it committed against China during the opium war and WW2."
These blood debts the Japanese will have to pay, one good old day, when their chips are down.
Blood debts have to be paid by blood. There is no two-ways about it. The blood of the Chinese have to be paid by the blood of the Japanese. That's all.
LKY's Right Eye.
All debts are cleared. Now shut up and drink up. 乾杯
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