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Vladimir Putin Slams Western Monetary Policy, Predicts Global Shift to Commodity Reserves

Russian President Vladimir Putin not too long ago blamed the United States and different G7 nations for inflicting rampant inflation in world commodities markets. Under these circumstances, he predicts the world will begin to transition its reserves away from sovereign debt into “real resources,” deepening the commodity inflation spiral.

End of a Unipolar World

The President aired his criticisms throughout a greater than hour-long speech on the St. Petersburg International Economic Forum Plenary on Wednesday, June fifteenth. He started his handle by claiming that the “very principles of the global economic system have taken a blow.”

“Fundamental business notions such as business reputation, the inviolability of property, and trust in global currencies have been seriously damaged,” he stated.

By this, he refers to two uncommon phenomena surrounding Western money in 2022: sanctions in opposition to Russia, and record-breaking inflation.

Last March, Russian banks have been expelled from SWIFT – the world’s largest monetary messaging system utilized by 11,000 establishments globally. The transfer successfully remoted Russian monetary establishments from developed Western economies. This, alongside bans on Russian oil and gasoline imports, was meant as punishment for the Eastern superpower’s invasion of Ukraine in February.

Putin said that such measures have confirmed a double edged-sword, equally harming those who carried out the sanctions. For instance, each Europe and the United States are struggling from considerably increased prices of residing in latest months – particularly gas prices. 

However, inflation within the product and commodities markets is about extra than simply sanctions and was a “fact of life” effectively earlier than this year. 

“The world has been driven into this by years of irresponsible macroeconomic policies pursued by G7 countries, including uncontrolled emission and accumulation of unsecured debt,” claimed the President.

Money Printing Problems

To handle their accruing debt, Western economies have been pressured to print extra money into the financial system at an exponential rate. As Putin notes, the U.S. money provide has grown by 38% prior to now two years alone, with Europe’s rising by 20%. This new money shortly discovered its means throughout nationwide borders, continuing “to wipe out global markets.”

Putin backs this idea by highlighting that the United States not too long ago turned a internet importer of meals. It now imports about $350 billion price of products each month, up from $250 billion on the finish of 2019. That’s a 40% enhance – in actual proportion to the nation’s money provide progress. “Why exchange goods for dollars and euros that are losing value right before our eyes?” he requested. 

Putin stated that the mix of record-high inflation and demonstrable danger of confiscation surrounding {dollars} and euros poses a risk to nations holding these currencies of their reserves. 

“A conversion of global reserves will begin … They will be converted from weakening currencies into real resources like food, energy commodities, and other raw materials,” he concluded. 

Meaning for Bitcoin?

As Russian sanctions have been being carried out in March, many Western politicians scrambled to discover options to the Kremlin’s potential use of Bitcoin as a method of bypassing their restrictions. 

For higher or worse, many consider Bitcoin may very well be the precise answer the Russian authorities wants. It is censorship-resistant, permits for peer-to-peer change, and is immune to the debasement of fiat forex. 

Legacy investor and fund supervisor Bill Miller said in March that the Russian Ruble’s collapse was bullish for Bitcoin. Every week later, an funding strategist from Credit Suisse predicted a really related flight to commodities as Putin – and that Bitcoin would possible profit from it. 

So far, Putin has acknowledged the advantages Bitcoin mining might present to Russia. A member of the State Duma has even recommended that the county could settle for Bitcoin as compensation for oil funds. 

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