Monetary policy, inflation and a whole bunch of geopolitical uncertainty now, of course, were unlikely to hear about this in the western media. So i found this twitter thread here, which gives us a little bit of a translation of exactly what putin said. First up, he stated the very principles of the global economic system have taken a blow fundamental business notions as business reputation, the invaluability of property and trust in global currencies have been seriously damaged. When i spoke at the davos forum a year and a half ago, i also stressed that the era of a unipolar world order has come to an end. I want to start with this as theres no way around it. This era has ended, despite all the attempts to maintain and preserve it at all cost. Then putin went on to talk about sanctions where he said that sanctions as a weapon have proved in recent years to be a double edged sword, damaging their advocates and architects. Just as much, if not more, we see social and economic problems worsening in europe and in the us as well. Food electricity and fuel prices rising with quality of life in europe, falling and companies losing their market edge. The european union has lost its political sovereignty and its bureaucratic elites are dancing to someone elses tune, doing everything they are told from on high and hurting their own people, economies and businesses. Surging inflation in product and commodity markets had become a fact of life.

Long before 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, because they could not or would not devise any other recipes. The governments of the leading western economy simply accelerated their money printing machines, such a simple way to make up for unprecedented budget deficits. I have already cited this figure over the past two years. The money supply in the united states has grown by more than 38 percent. The eus money supply has also increased dramatically over this period. It grew by about 20 or 2.5 trillion euros. We all hear about the so called putin inflation in the west. When i see this, i wonder who they expect would buy this nonsense. People who cannot read or write, maybe anyone literate enough to read, would understand what is actually happening, so they printed more money and then what? Where did all that money go? It was obviously used to pay for goods and services outside western countries. This is where the newly printed money flowed. They literally began to clean out to wipe out global markets, while at the end of 2019, imports of goods to the united states amounted to about 250 billion dollars a month. By now it has grown to 350 billion. It is noteworthy that the growth was 40 exactly in proportion to the unsecured money supply printed in recent years. Americas role has changed drastically.

It has turned from a net exporter of food into a net importer loosely speaking. It is printing money and pulling commodity flows. Its way buying food products all over the world, the european union is building up imports even faster. Obviously, such a sharp increase in demand that is not covered by the supply of goods has triggered a wave of shortages and global inflation, and then here it is under the cloud of inflation. Many developing nations are asking a good question: why exchange goods for dollars and euros that are losing value right before our eyes? Global currency reserves are at 7.1 trillion and 2.5 trillion euros. Now these reserves are devalued at an annual rate of about 8 percent. Moreover, they can be confiscated or stolen anytime if the united states dislikes something in the policy of the states involved. I think this has become a very real threat for many countries that keep their gold and foreign exchange reserves in these currencies. A conversion of global reserves will begin. It will be converted from weakening currencies into real resources like food, energy, commodities and other raw materials. Obviously, this process will go further: fuel global dollar inflation now, of course, theres plenty of people who would say vladimir putin, hes, not a good guy. He literally invaded ukraine hes killing people and hes, causing all sorts of geopolitical chaos. I dont disagree, but what i do know is that vladimir putin, the president of russia, appears to be more honest and transparent about his views on the global economy and the united states and inflation than our own economic leaders.

Now, of course, theres plenty of nuance involved in this debate: theres all sorts of details like supply chains and covid and various other policies at play. But one thing is certain: is that in the united states we were sold a story of inflation as transitory and now were being sold, a story that a recession is not imminent, but what we have is an individual that has been operating on the global stage. For years and years and hes saying you have high inflation because you expanded your money supply by 38 over the last two years. Now many people wont listen to this warning. Theyll actually ignore it because of whos saying it, but put aside for a second who the person is, i dont agree with them either, but you have to understand that this is a very serious situation. Inflations at a 40 year high, the federal reserve is raising interest rates, theyre, trying to conduct quantitative tightening. They want to crash asset prices and destroy demand which risk pushing us into a recession. Ultimately, on the geopolitical stage, america is wobbling. This is the greatest country in the world. We literally are the shining light on the hill, and if we want to continue in our leadership position on that global stage, we got to get our act together. We got to strengthen the dollar even more. We have to get rid of the high inflation and weve got to do our best to avoid pushing ourselves into a recession.

Thats no easy task. I dont envy the central bankers, its basically a lose lose situation, but lets not get gas lit by our politicians and central bankers at the exact same time. What we are watching in the destruction of the dollars value and a potential recession is driven by market intervention by central bankers and politicians. Undisciplined monetary and fiscal policy is driving a lot of this. I dont think that many people in the united states see free markets here anymore, but we should return to those. We should stop intervening. We should allow the free market to do what its designed to do. It will use economic incentives to get market participants to find equilibriums, stabilize prices and, ultimately, let us grow out of our problems.