Janet Yellen’s message to the world: There can be no ‘sitting on the fence’ on Russia…
…That was the forceful message sent by US Treasury Secretary Janet L. Yellen during a special address at the Atlantic Council on Wednesday ahead of next week’s spring meetings for the International Monetary Fund (IMF) and World Bank. Reiterating the Biden administration’s willingness to push Russia toward “economic, financial, and strategic isolation,” Yellen said international leaders would also push to mitigate the economic impacts of the war on those nations most dependent on its energy, food, fertilizer, and commodities.
The west’s economy is now financialized, many companies’ assets are derivatives and bonds which, in themselves, do not produce anything.
The world may be drifting into different currency blocks and I think that countries that are ‘asset rich’ will be the ultimate winners - commodity currencies as they are known by. Many transactions will still be in US dollars initially until the dollars’ power diminishes and fades. Good news for countries in Asia (including Russia) and The Far East but bad news for those in the dollar, euro, and sterling zones.
Sorry Janet, but if I was disconnected with the problems in Ukraine, then sitting on the fence is exactly where I would be. The world doesn’t jump when the USA tells it to anymore!
The world may be drifting into different currency blocks and I think that countries that are ‘asset rich’ will be the ultimate winners - commodity currencies as they are known by. Many transactions will still be in US dollars initially until the dollars’ power diminishes and fades. Good news for countries in Asia (including Russia) and The Far East but bad news for those in the dollar, euro, and sterling zones.
Commodity currencies explained:
This makes zero sense.
The US is the largest oil producing nation in the world, and by a good amount to. The US is the largest exporter of agricultural products as well, and among the leaders in mining and lots of other commodities as well. And there is tech, which is not a commodity but it is something the world needs and is willing to pay for and the US is very good at producing it.
If you want to bet on the Bolivar or Ruble becoming ascendant some day, knock yourself out but I find your theory to be highly implausible.
But then a big surprise. India joined China in refusing to honor the US sanctions regime.
India is but one example of the shift in power. Out of 195 countries, only 30 have honored the US sanctions on Russia. That means about 165 countries in the world have refused to join the sanctions.
Of the top 10 countries in PPP-GDP, 5 do not support the sanctions.
In other words they continue to do business with Russia. There is a whole lot company for those sitting on the fence.
The US is the largest oil producing nation in the world, and by a good amount to. The US is the largest exporter of agricultural products as well, and among the leaders in mining and lots of other commodities as well. And there is tech, which is not a commodity but it is something the world needs and is willing to pay for and the US is very good at producing it.
Hi syke6 - the USA also has a trillion dollar a year trade deficit which shows no signs of correcting
The USA’s rulers (the financial sector) are more concerned about gambling in derivatives and a thousand and one financial products rather than running a sensible economy for the benefit of the many:
The 400 richest Americans added $4.5tn to their wealth last year, a 40% rise, even as the pandemic shuttered large parts of the US, according to Forbes magazine’s latest tally of the country’s richest people.
Hi syke6 - the USA also has a trillion dollar a year trade deficit which shows no signs of correcting
That is not true. US manufacturing is increasing faster now. With efficiencies of scale inclusive of more production in various sectors increased manufacturing in the US will be a major deflationary force. The appreciating dollar will bring the cost of commodities down in USD.