Vladimir Putin lashes US for economic failures

[alexmst]

http://www.timesonline.co.uk/tol/news/world/europe/article4860827.ece

The Russian Prime Minister Vladimir Putin lashed out at the United States today for what he said was its inability to deal with the financial crisis affecting the global economy.

In remarks unlikely to go down well in Washington, Mr Putin was especially critical of Congress's rejection of a $700 billion bank bailout – a rejection that hit Russian financial markets particularly hard.

“Everything that is happening in the economic and financial sphere has started in the United States. This is a real crisis that all of us are facing," the former president told a government meeting in Moscow.

“And what is really sad is that we see an inability to take appropriate decisions. This is no longer irresponsibility on the part of some individuals, but irresponsibility of the whole system, which as you know had pretensions to (global) leadership."

Highly leveraged Russian companies have been hit hard by the credit crunch, which has made it virtually impossible to secure borrowing abroad.

The main Russian stock indices are more than 50 per cent down from their May peaks, far outstripping losses on more mature Western markets, and trading has been repeatedly suspended over the past two weeks.

Analysts say foreign investor confidence has been hit by Russia's actions during the recent conflict in Georgia, as well as the Government's attitude towards Western energy companies trying to operate in Russia and other former Soviet states.

Mr Putin said today that Russia would allocate 175 billion roubles (£3.85 billion) of budget funds in 2009 to support the domestic financial market.

 

[Mcluhan]

He's pissed because the US Oligarchy controls his economy. In a decade or so, when China's State run bank controls the world economy from Shanghai , his troubles will be over...really over.

 

[FOOTSNIFFER]

Keep dreaming...

He's pissed because the US Oligarchy controls his economy. In a decade or so, when China's State run bank controls the world economy from Shanghai , his troubles will be over...really over.

China's banks are stuffed with loans that are collateralized with the factories that produced for markets in the US that are evaporating fast. China only has these enormous reserves thanks to Americans' willingness to run untenable current account surpluses without end. Well, the end of this era is nigh. China runs a slight surplus with Europe, and a deficit with almost every other country with which it trades.

Unless the authorities there find a way to redirect the goods produced in these factories to satisfy domestic consumption....watch as a deflationary calamity engulfs China, with banks leading the way. The US deficit provided reserves to the Chinese banking system, which attracted portofolio hot money into China that bet on its continued expansion, and underpinned foreign direct investment to satisfy american consumer appetites for these goods. All these processes are now set to reverse. Chinese domestic consumption is only at 37% of her economy; that's just irresponsible. The world has built for them a modern industrial plant....now let them use it for the benefit of their own citizens. Also, if they persist in trying to force the rest of the world to take their products even while western workers are losing their jobs to chinese competition, they'll undermine the very liberal trading regime that has brought them their success by encouraging the politics of trade restrictions in the West. It's already happening in Europe, and it could come here in NA.

But instead of pursuing these policies, to which the leadership pays lip service, they instead recently stopped the rise of their currency and targeted help to their exporters so as to keep the gravy train rolling along. I can see why England initiated the opium wars in the 1800s as a way of stemming the ruinous one way flow of gold to pay for british imports of chinese tea, which the chinese then refused to offset with purchases of british manufactures (the stated reason givern then was that 'the british produced nothing of which the chinese could make use'). Same mentality now, it seems.

 

[Mcluhan]

Those irresponsible Chinese

........The US deficit provided reserves to the Chinese banking system, which attracted portofolio hot money into China that bet on its continued expansion, and underpinned foreign direct investment to satisfy american consumer appetites for these goods. All these processes are now set to reverse. Chinese domestic consumption is only at 37% of her economy; that's just irresponsible......

I'm no advocate of Made In China myself, but the fact remains that the global banking system is wiring itself into Shanghai as the node for Asia Markets. 60% of the six billion consumers on the planet live in Asia. The inevitable will happen.

China today has the second-largest economy in the world with a GDP of over $6.9 trillion. That's 10% of the global economy last year, a straight line growth of about 10% a year since 1978 (it is said). So, in ten years it will be about 20 trillion or better than. My guess is better.

Combine that with the fact that India has a middle class which is larger in size than the entire US population and the US is busy outsourcing its manufacturing base to these two countries

Since global corporations are now managing the world economy on their own, where do you think the banking center is most likely to be? At the epicenter of the global economy? or in Manhattan?

 

[Mcluhan]

Read this on a blog this morning. It rather sums it nicely:

"I wont argue that there aren't extremely painful changes coming for the USA but I would argue that propping up the markets with what amounts to fake money is not going to help anyone except the financial parasites currently living off the system. America is no longer a super power - you blew it. There's nothing you can do to change that now, and it's going to hurt, but that's not an excuse for bailing out the top of the country with money from everyone else. Let the correction happen and try and lessen the pain for the people who are hurting the most. Don't try to hang on to the illusion of wealth and power that has been built up over the last few decades and is now slipping away. You have another decade of being at the top of the planet monetarily and economically before your power is completely frittered away. Use that time wisely and the USA will be OK. Use it to desperately prop up empire and the system and there will be nothing but a shell left when the conversion from super power to equal partner with the world is complete"

 

[great bear]

I am as we speak getting ready to open a large laundry franchise that will do laundry only for Chinese clients.

 

[red]

I am as we speak getting ready to open a large laundry franchise that will do laundry only for Chinese clients.

we need more calgon

 

[Mcluhan]

I am as we speak getting ready to open a large laundry franchise that will do laundry only for Chinese clients.

That describes 1/2 of the dry cleaners in Vancouver. Are you Korean too?

 

[FOOTSNIFFER]

Combine that with the fact that India has a middle class which is larger in size than the entire US population and the US is busy outsourcing its manufacturing base to these two countries

Since global corporations are now managing the world economy on their own, where do you think the banking center is most likely to be? At the epicenter of the global economy? or in Manhattan?

Manhattan or London, no. The chinese do have ample reserves but these are not likely to grow as much as people seem to think. Export led growth is shuddering to a halt for the chinese.

And IF they can't redirect the output of their modern economy towards domestic consumption, and soon, they could easily blow their brains out with loans that are collaterized with 'excess' factories that produce stuff that either people don't want anymore (americans) or can't pay for (chinese/asians/anyone else who has the desire but not the means to buy all that stuff). Plus, american reserves had the effect of replenishing the liquidity of banks in china...like waves gently washing over their economy. No net exports=contracting liquidity....if combined with factory-linked writedowns...then its a chinese version of our credit crunch. Then watch where the commodities that have been keeping Canada afloat go....

I really hope the authorities over there do the right thing.