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Vladimir Putin criticizes Western monetary policy and predicts a global shift towards commodity reserves

Russian President Vladimir Putin recently accused the United States and other G7 countries of rampant inflation on the global commodity markets. Under these circumstances, he predicts that the world will begin to convert its reserves from government debt into “real resources,” which would deepen the spiral of commodity inflation.

End of a unipolar world

The President voiced his criticism for over an hour speech at the plenary session of the St. Petersburg International Economic Forum on Wednesday, June 15. He began his address by claiming that “the principles of the global economic system have taken a hit.”

“Fundamental business concepts such as corporate reputations, the integrity of property and trust in global currencies have been seriously damaged,” he said.

He is referring to two unusual phenomena surrounding western money in 2022: sanctions against Russia and record-breaking inflation.

Last March were Russian banks expelled by SWIFT – the world’s largest financial messaging system used by 11,000 institutions worldwide. The move effectively isolated Russian financial institutions from developed western economies. This by the way prohibitions on Russian oil and gas imports, was intended as punishment for the eastern superpower’s invasion of Ukraine in February.

Putin explained that such measures have proved to be a double-edged sword and have harmed those who imposed the sanctions equally. For example, both Europe and the United States are Suffer of significantly increased living costs in recent months – especially fuel costs.

However, inflation in product and commodity markets is more than just sanctions and was a ‘fact’ well before this year.

“The world has been propelled into this situation by years of irresponsible macroeconomic policies by the G7 countries, including uncontrolled issuance and the accumulation of unsecured debt,” the president claimed.

Problems printing money

To deal with their mounting debts, Western economies have been forced to inject exponentially more money into the economy. As Putin notes, the US money supply has grown by 38% in the last two years alone, and Europe’s by 20%. This new money quickly found its way across national borders and set about “wiping out the global markets.”

Putin supports this theory by emphasizing that the United States has recently become a net importer of food. It now imports about $350 billion worth of goods each month, up from $250 billion at the end of 2019. That’s a 40% increase — exactly in proportion to the growth in the country’s money supply. “Why trade goods for dollars and euros that are depreciating before our eyes?” he asked.

Putin said the combination of record-high inflation and demonstrable risk of seizure associated with the dollar and euro pose a threat to countries that hold those currencies in their reserves.

“A conversion of global reserves will begin… They will be converted from declining currencies into real resources such as food, energy and other commodities,” he concluded.

Meaning of Bitcoin?

When Russian sanctions were imposed in March, many Western politicians scramble to find solutions to the Kremlin’s potential use of Bitcoin to circumvent their restrictions.

For better or worse, many believe Bitcoin could be just the solution the Russian government needs. It is censorship-resistant, allows for peer-to-peer exchanges, and is immune to fiat currency debasement.

Legacy investor and fund manager Bill Miller specified in March that the collapse of the Russian ruble was bullish for Bitcoin. A week later, an investment strategist from Credit Suisse predicted a very similar flight to commodities as Putin did – and that Bitcoin would likely benefit from it.

So far, Putin has accepted the benefits that Bitcoin mining Russia could offer. A member of the State Duma even did recommended that the county can accept bitcoin as compensation for oil payments.

Source: Crypto News Deutsch

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