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Janet Yellen Warns China on Russia and Creating a Bipolar Global Financial System

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63 comments on Janet Yellen Warns China on Russia and Creating a Bipolar Global Financial System

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Janet Yellen image clip from Youtube video

YouTube Video Clip

Those wishing to watch the Full Presentation can do so at the preceding link.

Video Statements of Note

  • She warned those countries that were still “sitting on the fence, perhaps seeing an opportunity to gain by preserving their relationship with Russia and backfilling the void left by others” that their motivations were short-sighted.
  • “The future of our international order, both for peaceful security and economic prosperity, is at stake,” she said. “And let’s be clear, the unified coalition … will not be indifferent to actions that undermine the sanctions we’ve put in place.”
  • Washington and its allies have sought to pressure India, China and other “fence-sitters” to take a clear stance opposing Russia and what it has called a “special military operation.”
  • In a question and answer session, Yellen said that the United States needed to work hard with China to avoid a bipolar global financial system that pits democracies against autocratic countries. China has benefited from the U.S.-led financial architecture but its reliance on state-owned enterprises and other economic practices puts U.S. national security interests at risk.

The above clips from Reuters. 

The comment on a bipolar global financial system kicked off a huge discussion on Twitter, most of it silly.

Even without playing the above videos, it was clear from the Tweet that Yellen was concerned over the failure of US sanctions to stop Russia, not the loss of US dollar reserve currency status, China backing the yuan with gold, hyperinflation concerns or any such nonsense. 

I engaged in the following Tweets before watching the video or reading the Reuters article.

Reserve Currency

Why Impossible?

Loren needs to give this more thought, not me. 

It’s impossible because short of ending fractional reserve lending it’s not possible to maintain convertibility of fiat currency to gold.

The system will always break down which is why Nixon ended dollar convertibility. 

There is no country willing to end fractional reserve lending. 

Energy as a currency is ridiculous for hopefully obvious reasons. And as I have stated many times China does not want to have reserve currency status nor does it want a strong yuan because neither is compatible with export mercantilism. 

 Hyperinflation Nonsense Yet Again

The discussion over reserve currencies led to another silly idea, hyperinflation. 

It’s really quite amazing how misconceptions on the meaning of “bipolar global financial system” led to discussion not about sanctions but reserve currency status and hyperinflation. 

To me it was obvious what Yellen was concerned over but I sought out the videos to prove it.

What Would It Take for the Yuan to Dethrone the Dollar?

  1. China would have to float the yuan.
  2. End capital controls
  3. Respect property rights
  4. Have a bond market big enough (China has virtually no gov’t bond market)
  5. Inspire global trust
  6. Be willing to have trade deficits
  7. Stop export mercantilism
  8. Have a currency market big enough

Perhaps China meets condition 8. It flunks the first 7.

The Yuan Will Not Replace the US Dollar, Nor Will It Be Backed by Commodities

For discussion of why China will not back the yuan by commodities, please see The Yuan Will Not Replace the US Dollar, Nor Will It Be Backed by Commodities

What Does China Do With a Dollar That’s No Longer Risk Free? Buy Gold?

To understand escaping the dollar in greater detail please see What Does China Do With a Dollar That’s No Longer Risk Free? Buy Gold?

Ramifications of US Actions

The main ramification of disastrous sanction policy started by Trump and escalated by Biden is that many countries including Russia, China, India, Iran, Pakistan, and Saudi Arabia are all damn tired of it.

Janet Yellen is very concerned over China working with Russia to avoid US sanctions.

Numerous countries will establish ways of avoiding the US dictating sanction policy for the world.

That will not cause hyperinflation nor the US its loss of reserve currency status. The latter needs a suitable replacement and none is remotely on the horizon. 

Weaponizing the US Dollar

To tie all of this together, please see US Sanction Policy Forces Russia to Default. Let’s Go Over the Ramifications

I view the ramifications as primarily a good thing. And although I would like to see a 100% gold-backed currency no country will accept the conditions, primarily fiscal and trade discipline, that commodity backing of currency requires.

Inflate at will remains the global mantra. Dollar hyperinflation is not possible in this setup.

This post originated at MishTalk.Com.

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Mike Shedlock

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63 Comments
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Oldest Most Voted
Mr. Purple
Mr. Purple
4 years ago
Russia has not defaulted. The sanctions are pure political theater. The $US is not weaponized in any way. Even if it were, all a nation has to do to de-weaponize the $US is refrain from engaging in aggressive war, a VERY low bar to meet.
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Mike 2112
Mike 2112
4 years ago
China makes a lot of Stuff. And Stuff is wealth.
We replaced making Stuff with Money Creation which we pretend is wealth.
Stuff is wealth. It’s a lesson many Americans are going to learn the hard way
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Lisa_Hooker
Lisa_Hooker
4 years ago
Reply to  Mike 2112
Information is stuff.
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Jackula
Jackula
4 years ago
Political instability will be the result of sustained 10% yearly inflation. What happens when a country with the world’s reserve currency goes unstable or has a civil war albeit unlikely here?
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Lisa_Hooker
Lisa_Hooker
4 years ago
Reply to  Jackula
“It’s not worth a Continental.”
Solution: Avoid using Continentals.
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vanderlyn
vanderlyn
4 years ago
USD was 65% of reserves of world only in 2015. now down to 58% and certainly heading lower.. i also must reiterate the chinese have already hedged all their USD reserves and savings, in very long term contracts around the globe to lease and purchase outright forests and mines and ports and much more, in USD to be payed for many decades to come. the chinese don’t really care about the US bad paper. they already bought hard assets they need for next century with it. i’ve only seen this point in FX trader blogs and economist newspaper. it’s quite a shrewd move. i think it’s a win / win for china. the forest owners……..might be miffed at getting all the paper dollars that won’t buy much over the next few decades. US empire is crumbling. on battlefield and in country here. in too many ways to list. the money is just another symptom of a very sick empire. get the doctors.
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GodfreeRoberts
GodfreeRoberts
4 years ago

In 2009, surveying the wreckage after helping rescue the US from the GFC, Zhou Xiaochuan, PBOC Governor said,

The world needs an international reserve currency that is disconnected from individual nations and able to remain stable in the long run, removing the inherent deficiencies caused by using credit-based national currencies.

Zhou proposed SDRs, Special Drawing Rights, a synthetic reserve currency dynamically revalued against a basket of trading currencies and commodities: broad-based, deep, stable, and impossible to manipulate. Nobelists Fred Bergsten, Robert Mundell, and Joseph Stieglitz approved: “The creation of a global currency would restore a needed coherence to the international monetary system, give the IMF a function that would help it to promote stability and be a catalyst for international harmony”. Here’s what happened since then:

2012: Beijing began valuing the yuan against a currency/commodity basket

2014: The IMF issued the first SDR loan

2016: The World Bank issued the first SDR bond

2017: Standard Chartered Bank issued the first commercial SDR notes.

2019: All central banks began stating currency reserves in SDRs

Mar. 14, 2022: In two weeks, China, Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan will reveal a new, independent, international monetary and financial system. It will be based on a new international currency, calculated from an index of national currencies of the participating countries and international commodity prices. [Sputnik News]. Russia and China will also reveal Unfriendly Nation Lists.

Once Eurasia, Africa, ASEAN, the Middle East, and Latin America committed, can afford not to join the world’s biggest, fastest growing, stablest, frictionless market. Most Global 500 corporations call it home because it’s the biggest, fastest growing market on earth.

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Counter
Counter
4 years ago
(1) The currently prevalent financial intermediation theory of banking says that banks collect deposits and then lend these out, just like other non-bank financial intermediaries. (2) The older fractional reserve theory of banking says that each individual bank is a financial intermediary without the power to create money, but the banking system collectively is able to create money through the process of ‘multiple deposit expansion’ (the ‘money multiplier’). (3) The credit creation theory of banking, predominant a century ago, does not consider banks as financial intermediaries that gather deposits to lend out, but instead argues that each individual bank creates credit and money newly when granting a bank loan. The theories differ in their accounting treatment of bank lending as well as in their policy implications. Since according to the dominant financial intermediation theory banks are virtually identical with other non-bank financial intermediaries, they are not usually included in the economic models used in economics or by central bankers. Moreover, the theory of banks as intermediaries provides the rationale for capital adequacy-based bank regulation. Should this theory not be correct, currently prevailing economics modelling and policy-making would be without empirical foundation…
The financial intermediation and the fractional reserve theories of banking are rejected by the evidence. This finding throws doubt on the rationale for regulating bank capital adequacy to avoid banking crises, as the case study of Credit Suisse during the crisis illustrates. The finding indicates that advice to encourage developing countries to borrow from abroad is misguided. The question is considered why the economics profession has failed over most of the past century to make any progress concerning knowledge of the monetary system, and why it instead moved ever further away from the truth as already recognised by the credit creation theory well over a century ago. The role of conflicts of interest and interested parties in shaping the current bank-free academic consensus is discussed.
A lost century in economics: Three theories of banking and the conclusive evidence Richard Werner
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John k
John k
4 years ago
I used to agree the us reserve currency status was stable…
The question now is, will China continue its mercantile past after us confiscated 300B Russian dollar credits? Does China really want more $ credits at the fed? What for?
Certainly they want to keep their workers busy, but they’re overdue in boosting local wages such that locals can afford to consume all they make, I.e. balanced trade. A higher yuan aids the shift to more imports/less exports. Certainly such a transition would take time, but China had already substantially cut dollar reserves even as we continue a major trade deficit with them.
I see a shift to holding currencies of countries with which you have a trade deficit, and away from a one reserve currency fits all. Saudi imports from China, logically yuan reserves makes sense for them and many others. In our case we would hold yuan and euro.
Individual savers might continue to favor $, though they would first have to buy what China and other central banks are divesting… seems likely our import prices would rise until we, too, go to balanced trade, which might force us to retreat from 100 foreign bases, stop wars, rebuild our mfg capacity, etc. high us inflation, of course, lower Chinese… higher standard of living in China should be popular, no?
Wonder what Pettis would say…
time will tell… we’ve seen how China can shift policy on a dime, e.g. now reigning in their oligarchs.
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FromBrussels
FromBrussels
4 years ago
This overaged (another one) , politicized , overpaid, clueless, yet usefull idiot, probably doesn t even know she s been contributing dramatically to the final, inevitable collapse of the financial system ! ….Well, at least it can be blamed on Russia ….again …..the crumbling US of A empire is so fn great , ain t it ? !
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Molly Sechrest
Molly Sechrest
4 years ago
What would be the ramifications for a country if it went on the gold standard? As a thought experiment, consider as an example, a small Central American country or an African country.
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dmartin
dmartin
4 years ago
Yellen to China–> please help us in punishing your friend so we can than better focus and concentrate on you later!
China to Yellen—> NO!
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Captain Ahab
Captain Ahab
4 years ago
Reply to  dmartin
Actually, I think China’s response ended with “… off!”
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Captain Ahab
Captain Ahab
4 years ago
I agree a peg of any currency to gold makes little sense in today’s world, although it might solve various other issues (inflating currency). However, a crypto-based unit-of-value based on gold (one gram, for example) used only for international trade/transactions makes a great deal of sense.
The ‘beneficiaries’ are 1) countries who hold gold above ground and 2) countries with gold underground. The losers are countries with inflating faux currencies, and a high trade deficit, since their gold reserves are quickly depleted.
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Captain Ahab
Captain Ahab
4 years ago
Reply to  Captain Ahab
In case the above is not clear…. China makes and sells a widget for 400 CYN. For the purposes of international trade, it is priced at one gram of gold (one Midas). The widget costs the US importer one gram of gold, say $63.
The trade occurs using crypto-gold. One gram is electronically transferred from US-GOLD-BANK to CHINA-GOLD-BANK, with the appropriate deduction and addition to the buyer and seller accounts in their country’s currency, based on the exchange rate at that time.
Every month, for example, a physical transfer of gold occurs. More often if gold deficits are an issue.
If the US dollar is inflating, and the price of gold becomes one gram = $80, then the buyer pays more. China still gets its 400 CYN.
Yes, the USA is disadvantaged in this system. Do you buy US bonds at 0%, or gold?
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RonJ
RonJ
4 years ago
“The system will always break down which is why Nixon ended dollar convertibility.”
Due to the cyclical nature of everything, systems break down. They couldn’t even get rid of the business cycle.
The FED has a duel mandate that fight with each other, such that they cannot achieve and maintain either.
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Tony Bennett
Tony Bennett
4 years ago
“For the US dollar to experience hyperinflation, the dollar would have to go to zero vs the Euro, the Yen, the Yuan, and even the Ruble.”
…
Yep. The nonsense I see here and elsewhere on “hyperinflation” is laughable.
Do they ever pay attention to the currency markets? $US riding high. DXY > 100. USDJPY 125 (close to a 20 year high).
Markets have been orderly so far. But I’m keeping my eye close on usdjpy … has to make Beijing very uncomfortable … (imo) China will devalue at some point … kicking off “orderly —> chaos”.
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Tony Bennett
Tony Bennett
4 years ago
“it was clear from the Tweet that Yellen was concerned over the failure of US sanctions to stop Russia,”
…
Well, DUH.
Sanctions were doomed to fail when primary concern crafting was not to harm Western financial markets.
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thimk
thimk
4 years ago
Reply to  Tony Bennett
Sanctions are old school , there effects are muted by globalization/internet/complex supply chains . Yellen is worried about the “boomerang” effect. Sheesh , I’m not sure Putin would have advanced on Ukraine without an Okie Dokie from backstopping china . This administration/feds are living in the past , an anachronism.
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Tony Bennett
Tony Bennett
4 years ago
Reply to  thimk
Yes. Putin went to Beijing for Winter Olympics. As much as the media portrays Putin as a fool, I think he’s the fox here (along with Xi). Sure, his military has underperformed, but the endgame will still have same result.
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KidHorn
KidHorn
4 years ago
The more we pressure China and India to impose sanctions on Russia, the less likely it’s going to happen. Neither want to look like they’re giving in to Washington.
I don’t know how you define reserve currency, but I think it’s certain USD foreign reserves are going to be going down as a pct of holdings. At what point USD loses reserve currency status, I don’t know.
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Casual_Observer2020
Casual_Observer2020
4 years ago
The main ramification of disastrous sanction policy started by Trump and escalated by Biden is that many countries including Russia, China, India, Iran, Pakistan, and Saudi Arabia are all damn tired of it.
—
I’m tired of them thinking they know a damn thing about liberty or freedom or human rights.
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whirlaway
whirlaway
4 years ago
Reply to  Casual_Observer2020
Well, when the comparison is with the US…
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Zardoz
Zardoz
4 years ago
Reply to  whirlaway
… where you’ve been locked up for expressing your political views on a public forum.
Crybaby Conservatism is mainstream, and uniquely pathetic among self declared victim groups.
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dmartin
dmartin
4 years ago
Reply to  Casual_Observer2020
I find it hilarious that we are now threating sanctions on India over human rights….like gee, are we actually trying to lose more friends and create more enemies? Trump never pulled this we are holier than thou sanctions on human rights crap that the Biden administration is doing. So dumb.
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Captain Ahab
Captain Ahab
4 years ago
Reply to  Casual_Observer2020
The USA has the highest incarceration rate in the entire world. Do not talk about liberty, freedom, and human rights until your own country has clean hands.
Two examples: Julian Assange; Freedom of the press, make me laugh!
Jan 6 trials are still going on after a year–most held without bail. Most did nothing but walk in after the doors were opened to them.
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Casual_Observer2020
Casual_Observer2020
4 years ago
China’s financial, economic and political system has more in common with Russia than the United States. The lockdown in Shanghai proves that China’s military is power hungry and willing to use any means necessary to quell its citizenry even at the expense of its own people. This is the problem with having an authoritarian government at heart. It is basically military authoritarian rule which is rule by putting a gun to the citizens head and getting them to comply. Russia and China are going to have to learn the lessons (again) the Soviets never learned. It will take a few years provided we all aren’t dead from nuclear fallout but I think we are on the verge of Bretton Woods III where Russia will next be integrated into the financial system and become a true democracy with the freedom and liberty many in the west take for granted. All of it hinges on no nuclear war breaking out. Unfortunately that may be closer than we think with the remaining European countries now applying for NATO.
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KidHorn
KidHorn
4 years ago
Reply to  Casual_Observer2020
I know many people who grew up in Russia. They say the US right now is more fascist than Russia ever was. There’s more government propaganda in the US now than there was in communist Russia. Everything you post is an example of it.
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Zardoz
Zardoz
4 years ago
Reply to  KidHorn

Know how I know you don’t know the definition of the word “fascism”?

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Mr. Purple
Mr. Purple
4 years ago
Reply to  Zardoz
It has fewer letters than the correct term “totalitarian,” and thus has become shorthand, clumsy and false, for such.
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RonJ
RonJ
4 years ago
Reply to  Casual_Observer2020
“It is basically military authoritarian rule which is rule by putting a gun to the citizens head and getting them to comply.”
I hear a federal circuit court reinstated the Covid shot mandate for U.S. federal workers.
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Captain Ahab
Captain Ahab
4 years ago
Reply to  Casual_Observer2020
Skipping financial/economic/political systems… which country has more in common with the USA in terms of culture? History? Social values and beliefs?
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Dominic69
Dominic69
4 years ago
I still not buy the fact that a reserve currency must necessarily imply a trade deficit. The US Dollar was the reserve currency after WWII and the US did run a trade surplus (sure, pre-1971currencies were not free floating but still).
The Euro is the #2 reserve currency in the world and the EU run a trade surplus with the rest of the world. Same with the Japanese yen, an important reserve currency.
Nothing prevents capital to be exported from countries running trade surpluses.
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Greggg
Greggg
4 years ago
Reply to  Dominic69
The Euro is the #2 reserve currency in the world.. but the Euro is the off shored US dollar system. So we are #1 and #2?
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KidHorn
KidHorn
4 years ago
Reply to  Dominic69
Running a trade deficit only effects the type of reserves. Not what country backs them. For example, when the pound was the reserve currency, countries held pounds. With the US, countries hold government bonds. The trade deficit forces the money to flow back into the issuing country. The US borrows the money back.
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Captain Ahab
Captain Ahab
4 years ago
Reply to  KidHorn
What if the reserve was gold? This negates (faux) currency issue(s) for international trade and replaces it/them with something that is homogeneous, long lasting, etc etc.
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Dominic69
Dominic69
4 years ago
Reply to  KidHorn
You still can flood the rest of the world with capital if you run a trade surplus…..you can “export” your currency and other countries can buy your assets (including government bonds) with that currency.
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vanderlyn
vanderlyn
4 years ago
Reply to  Dominic69
GREAT POINTS. men and women that think there is only ONE reserve currency, are truly amateurs in currency history and present tense, too. it’s typical amerikan culture. like our world series. we forgot to invite anyone else to compete in our minds. i vote in US and EU, btw. have allegiance to, 2 republics. but one of them is now an awfully wicked empire. the us republic died a long long time ago.
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TheCaptain
TheCaptain
4 years ago
Funny, when you asked how likely a 100% loss in confidence of the dollar was, I was already thinking I have lost 100% confidence in the dollar. The debt curve is exponential and we are now in the “straight up” portion of the curve. Expect “events” to occur closer and closer together.
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vanderlyn
vanderlyn
4 years ago
Reply to  TheCaptain
EVERY professional and many blue collar middle aged folks i know are all worth a million net worth, miniumum. in another decade they’ll all be nominal deca millionaires. this is not too difficult. we can all be billionaires and still live in the same lifestyle we were as mere hundred thousandaires. not too long ago, end of last century 90s, a man could retire with half a million and invest in some solid bonds and go fishing without much worry. those days are long gone. remember the show “who wants to be a millionaire”. i saw it once or twice. how quaint. make that trillionaire in another 10 years.
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vanderlyn
vanderlyn
4 years ago
the us dollar, is already backed by a commodity. OIL. the petro dollar protection racket hegemony, which is backed by the us navy missiles. of course this is very expensive to 99% of ordinary amerikans, not in the ruling class of C suites at military industrial congressional complex, or the C suites of primary dealer bond issuing bankers………..also to say a currency needs full convertibility of gold is just plain false. many currencies maintained gold conversion with very small percent of gold. it’s all about the faith of if one wants conversion. the british pound sterling is an obvious not too very old example of this. i agree the chinese won’t peg or back their yuan to gold. the chinese have probably the most gold of any country for thuosands of years and never let the masses of people near it. source. peter bernstein, one of the greatest economic historians ever. i could see the russians or the persians or the indians or the germans even eventually going to a gold peg. even the US. the past 50 years since nixon default and 55 years since LBJ default on silver, is a blink of an eye in history of international trading and monetary history of human primates and their money.
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Captain Ahab
Captain Ahab
4 years ago
Reply to  vanderlyn
Not true. The ‘us dollar,’ is backed by NOTHING, and certainly not ‘OIL.’ It works as ‘backed’ by the full faith and credit…. Which is an antiquated notion, and failing, because at the end of the day YOU CAN’T TRUST IT. Russian sanctions have proved this.
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Jmurr
Jmurr
4 years ago
So, the dollar fails on #2 and #3. What are the repercussions of that?
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Cocoa
Cocoa
4 years ago
If we need to back currency or money supply to anything I suggest trees. Then the 3rd world countries like Brazil are wealthy according to their benefits to humanity and climate. The Saudis are all sand, so they get nothing(as they deserve). Europe and US will have to begin growing trees to increase Money Supply after chopping everything down. Canada will get what it deserves-a resource currency and they don’t have to do a thing! Chinese will have to plant trees as opposed to destroying everything in it’s wake.Genius!
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StukiMoi
StukiMoi
4 years ago
Where does that list of 8 come from?
The US inspires no trust anymore. Who the heck trusts someone reduced to nothing more than robbing and confiscating other people’s stuff?
The US has more de facto (by way of “world wide income reporting requirements” and other nonsense) capital controls in place than darned near anywhere.
Confiscating some people’s stuff, while banning others from building what they want on their lots, sure as heck has nothing whatsoever in common with “respecting property rights.”
While (uhhh. tariffs, sanctions….) being increasingly export mercantilistic (only, like most of those in that club, not being competent enough to make anything anyone is particularly keen on importing…)
And it’s always a whole lot less about “willingness” to run trade deficits, than about inability _not_ to run them. Nobody particularly wants to be the clumsy idiot kid who can’t ever manage to do anything anyone else finds worth vile. Some just have no other option.
Aside from the trust part, did Gold meet any of these criteria? Gold is, after all, the only currency which ever enjoyed reserve status for anything more than a short blip.
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Maximus_Minimus
Maximus_Minimus
4 years ago
Reply to  StukiMoi
You only missed the money laundering aspect of the US financial soft power. Without money laundering, the Monroe doctrine would be toothless. Since Putin likes to copy and imitate the nefarious aspects of Western establishment, I can see potential for Russia to become a competing money laundering haven.
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vanderlyn
vanderlyn
4 years ago
Reply to  Maximus_Minimus
that’s a great observation. in due time, russia might be a place for fellas to “launder” and hide their money from their own prying eyes of local governments.
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vanderlyn
vanderlyn
4 years ago
Reply to  StukiMoi
those rules listed seem bogus to me. money and economics is a very soft science. rules make it sound like it’s something like a hard science. which it’s not.
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TheCaptain
TheCaptain
4 years ago
Reply to  StukiMoi
We have a crime family as a sitting president. Of that I am 100% confident.
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Mr. Purple
Mr. Purple
4 years ago
Reply to  TheCaptain
Isn’t that a prerequisite for the job?
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StukiMoi
StukiMoi
4 years ago
“
“The future of our international order, both for peaceful security and economic prosperity, is at stake,” she said.
“
That would be THE single greatest thing which could possible happen for anyone not part of the tiny clique of 100% useless, clueless and utterly worthless deadweight leeches who are included among this trashbag’s “our.”
There is ZERO value to the current “international order.” Literally zero. For anyone who is not a 100% useless leech, living off of nothing but wealth stolen from their betters. Really: Literally Zero. All that “The international order” refers to, is pure theft by now. Theft from competent, productive people. With the loot, all of it, then handed solely to the worthless piles of garbage who are the only ones that trash like Yellen represents.
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Maximus_Minimus
Maximus_Minimus
4 years ago
“The future of our international order, both for peaceful security and economic prosperity, is at stake”
It takes a skin thicker than a hippo to talk about international order, after all the military interventions and destruction with no justification, mostly but not exclusively on the opposite side of the globe.
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ZZR600
ZZR600
4 years ago
Just to add to my comment below, the prevailing assumption is that foreigners will ditch the dollar favour of some other currency, leading to hyperinflation. What is never mentioned is if Americans themselves start to sell the dollar in order to buy goods, as they see the purchasing power of the dollar decrease more rapidly. Yes, every single dollar has to be held by someone at any one time, but that doesn’t guarantee that the existing holder is able to sell, if no one wants to buy.
If Americans lose faith in their own currency, I think this is more likely to lead to a dollar collapse, than non-Americans trying to find an alternative currency for international trade
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ZZR600
ZZR600
4 years ago
I only partially agree with Mish. Having first hand and personal experience of the recent Lebanese hyperinflation, it was a mix of both politics and economics. There was the realisation than the banks didn’t have the dollar currency everyone thought they had, prompting people to buy USD cash, or otherwise buy whatever they could with whatever Lebanese Lira they had. There was also a realisation that the central bank and politicians didn’t have a clue what to do. I remember overhearing a man (I think a trader) on his mobile phone saying to someone “buy any goods that you can” in the very early stages of the hyperinflation. With prices going up, if there is a mad scramble to “buy whatever you can” that will lead to a vicious cycle of inflation and hoarding, i.e. loss of faith in the currency, leading to hyperinflation.
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FromBrussels
FromBrussels
4 years ago
SOLUTION : more money printing and creating more wars in particular ….at the other side of the pond of course…. as usual …..But , at least to me, it seems like the fn US of A is running out of ammo.. in ALL aspects !
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Zardoz
Zardoz
4 years ago
Reply to  FromBrussels
Da comrade! Soon stupid Americanskis have NO potato, and all Russian children have TWO potato, every day, not just holiday! Praises to comrade Putin for making it so!
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whirlaway
whirlaway
4 years ago
Reply to  Zardoz
OK, I get that you don’t like Putin, but you are about 35 years behind. The Communist Party is no longer a major player in Russian politics. The leading economic system in Russia is crony capitalism, introduced to them by BJ Clinton and his Harvard Boys in the mid 1990s. You need to update your notes…

Also, note that Russian billionaires are called oligarchs, while US oligarchs (who own both the DONORcrat and the Republican parties) are called “billionaire businessmen”!

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Zardoz
Zardoz
4 years ago
Reply to  whirlaway

Is not about that, comrade. Is about potato for every Russian girl and boy!In Russia all is about glorious potato!

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whirlaway
whirlaway
4 years ago
Reply to  Zardoz
Welcome to my Ignore List.
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Zardoz
Zardoz
4 years ago
Reply to  whirlaway

Cancel culture! Typical Americanski censorship! No potato for you… maybe you get turnip.

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FromBrussels
FromBrussels
4 years ago
Reply to  Zardoz
….TURNIP ? …..like your head , in other words ….
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Zardoz
Zardoz
4 years ago
Reply to  FromBrussels
Oh comrade, how you miss potato… but you have been spat out like the Brussian gnat by the brave Russian peoples. No potato, no turnip. Only western decadence for you!
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FromBrussels
FromBrussels
4 years ago
Reply to  Zardoz
don t know much about potatoes …. Russia though is selfsufficient in ALL fn aspects !
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