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Apr 24, 2022
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Price pandemonium: America and Europe fell under the rink of their own sanctions

Price pandemonium: America and Europe fell under the rink of their own sanctions

Photo: XinHua/ Global Look Press

Inflation in the US and the EU is on the rise. So, in March, annual inflation in Uncle Sam’s country accelerated to 8.5%. For comparison: in the prosperous pre-pandemic 2019, it was only 2.26%. Even fast food is getting more expensive: the new prices will shock Americans.

Neither America nor Europe have seen such pandemonium of prices since the 80s.

But then perestroika was ripe for the West in the USSR. As a result, the “dashing 90s” began in our country, and everything settled down with them.

But now, it seems, the “collective West” is raking in full.

A harbinger of disaster was the rise in price of gasoline. The price for it in different states is different, and brands are different. But in general, compared to last year, it has doubled in price. Because of this, both urban transport and cargo transportation hit the wallets. And then – off we go. Prices for electricity, rental housing and industrial premises, food, and even the holy American fast food have risen.

The president Biden accustomed to blame everything Putin “70% of inflation is due to Putin’s gas price hike,” he convinces Americans who are cutting back on necessary spending. But not everyone believes him.

In fact, goods in America have been rising in price since last year, The Wall Street Journal notes, and the reason for this is “excessive federal spending and loose monetary policy.” That is, you could not rely on the printing press and unsecured loans, this never leads to good.

The US currently manufactures more than half of all its goods abroad, recalls expert Alexander Artamonov. In fact, of the total number of jobs in this country, about 80% are in the service sector. That is, the products that the United States consumes, they simply do not produce. At the same time, GDP volumes are calculated in dollars – the national currency of the country – in such a way that, for example, the completely virtual activity of a company in the field of software production can cost more than the production of Magnitogorsk or Nizhny Tagil.

However, you can’t deceive life, since the financial economy has long been separated from the real one, but you still need to drink, eat, heat up and defend yourself in the real, and not the invented world. In this regard, reflections Klaus Schwabthe leader of the Davos Club, about the need to reduce the population and further digitalization – this is just philosophizing in isolation from the daily life of our planet.

It is those very disenfranchised billions – that is, the proletariat that has not disappeared anywhere, moved by world capital to other countries, away from its continent – and produce the very benefits that America enjoys. Therefore, the operation to de-dollarize the world economy, launched by our president at the same time as the special operation in Ukraine, is not only timely, but also dramatic for the United States.

joint venture»: — And what could this mean for the “collective West”?

“In fact, Washington is heading straight for the Great Depression. By the way, few people know that in those days a large part of the American population was simply dying of hunger. And by the way, impoverishment threatens not only the overseas power, but also Europe. No wonder the Minister of Agriculture of France Denormandy stated that if re-elected Macron French President will issue a “food check” for a consumer basket of 100 basic items, so that “they just keep eating.”

“Food checks” for a recently well-fed Europe are very harsh … It turns out that the margin of safety of the developed European economies, which we were called to be equal to, turned out to be not so great. After the White House banned the purchase of Russian oil and other energy resources, oil prices rose to 130 “green” per barrel. And in February, after the start of the special operation, it was about $100 each.

At the same time, some analysts believe that quotes may rise up to 170 bucks per barrel.

And here is the latest news about gas, the cost of 1000 cubic meters in Europe has risen above 1170 dollars (we are talking about futures for May).

But a year ago, the Europeans thought that $200 gas was too expensive.

By the way, the EU also failed to keep prices down. Lithuania was hit the hardest. There, the inflation rate was 15.6%. In Germany, the figure is 7.3%, and this is the highest mark in the last 40 years. Then the problems arose because of the rise in oil prices, provoked by the war between Iran and Iraq. Now the problem is being created artificially, sanctions against Russia keep the energy market in a state of hysteria.

In the Old World in March, energy prices rose the most, which, in fact, was to be expected. In second place are food products, alcohol and tobacco. The cost of services was in third place. This is Eurostat data, if anything.

Whatever European country you take, the economy is in a fever everywhere.

In Russia, of course, not everything is going smoothly either. In our country, annual inflation accelerated to almost 17% in March. There are problems due to the fact that it is impossible to receive spare parts, due to the fact that supply chains are broken, and so on and so forth …

But, unlike the US and Europe, we see light at the end of the tunnel.

Economist Andrei Bunich believes that there will be no further increase in prices. Because the panic caused by the sanctions has already subsided. In his opinion, our prices were inflated, often unreasonably. Sellers took advantage of the fact that part of the population began to buy everything. Plus, there was nervousness due to the fact that the dollar and the euro began to rise in price. But now we have the opportunity to create new trade relations, new supply chains, and a suitable system of mutual settlements. Moreover, we can now create our own financial sector from scratch.

– Russia was built into the Western financial system, and this greatly slowed us down. Our own financial sector will be very powerful. And our ruble will be in demand on a much larger scale, because financial transactions are always larger than trading ones. They are carried out more often, and the volume of financial assets is larger. We cannot and should not stay longer in the Western financial system. We were robbed there, and we must forget about them like a bad dream.

Now our share in the global financial market is only half a percent. And if we count new placements, then we will only get a hundredth of a percent, because the Western market takes all new placements for itself. This is real discrimination!

If we open our financial market, our capitalization will immediately be five to six times greater. But in reality, the figures should be much higher, because Russia has very valuable assets and a promising economy. And we have a hundredfold potential for new placements. The main thing is not to waste this potential now!

If the government makes the right decisions, then Russia in the foreseeable future can become a new center of an alternative financial system, the expert is sure.

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