Sunday, June 19, 2016

Pepe Escobar — US Think Tanks Dream Up Russian Collapse, Aggression Despite the Facts

A solid case can be made that Moscow does not need mountains of Western investment; credit can be created in Russia. Most of all, there is rather less productive investment money in the West than wild speculative funds; it’s largely a matter of fiat money and credit, and Moscow does not need to go to the West for that.
As long as Russia uses investment capital to increase the production of goods, this will offset the increase in money supply. So in the end inflation will be negligible. Quite a few Russians must be puzzled at the Central Bank’s Elvira Nabiullina, with her policy of raising interest rates to cut back the increase in investment; that could eventually lead to a strangled Russia. Not accidently Nabiullina happens to be extremely praised by US Think Tankland and the City of London...
Nabiullina has been focused on the ruble and inflation owing to the combined effect of the ruble collapse and supply shortages owing to sanctions. The ruble is way above its lows now and inflation has moderated as import substitution has taken effect and new supply channels opened. The Central Bank of Russia just eased.

No comments: