… Brazil’s financial openness made Brazil an easy target to attack. One might hope that Vladimir Putin would take note of the cost of “economic openness.” Putin is a careful and thoughtful leader of Russia, but he is not an economist. He has confidence in neoliberal Elvira Nabiulina, Washington’s choice to head the Russian central bank. Nabiulina is unfamiliar with Modern Monetary Theory, and her commitment to “economic openness” leaves the Russian economy as exposed as Brazil’s to Washington destabilization. Nabiuina believes that the assault on the ruble is due to impersonal “global market forces,” not to Washington’s financial clout.
Nabiulina, an indoctrinated and propagandized neoliberal, is essentially a servant of Washington, not that she is aware of her role as “useful idiot.” She delights in the applause she receives from the Washington Consensus for leaving the Russian economy open to Washington’s manipulation. Being a neoliberal, she does not understand that Russia’s central bank can create at zero cost the money with which to finance productive projects in Russia. Instead, she thinks that the money entering the economy from the central bank is inflationary, but the money entering the economy from foreign sources is not.
Money is money regardless of whether it is made available by the central bank or by foreign creditors. As long as the money, whatever its source, is used productively, the money is not inflationary.
There is a huge difference between the money created by the central bank and the money created by foreign creditors. Money lent by foreign banks in the form or US dollars or euros must be repaid with interest in the foreign exchange in which the money was lent. Money created by the central bank to finance public infrastructure projects does not have to be repaid at all, much less with interest and in foreign exchange earned by exports….
Paul Craig Roberts
Can Russia Learn From Brazil’s Fate?
Paul Craig Roberts and Michael Hudson
It is nonsense to think that Nabiulina doesn’t understand how the system works. She works for the City of London and Wall Street the same way that our Fed does. She knows exactly what she is doing. And as for Glazyev, if his policies start to take effect watch for him to have a "heart attack" or commit suicide.
ReplyDeleteIt's so good to see PCR saying this. This is a long way from supply side. If only Putin could understand this. PCR and Michael Hudson writing this shows how the moderate left and right can work together to defeat neoliberalism, which we all hate. I would love to have a chat with Alex Jones to see what common territory we cover. Neither of us like the power of the elite.
ReplyDeleteAs long as the money, whatever its source, is used productively, the money is not inflationary. PCR
ReplyDeleteBut what about the government privileged usury cartel, a.k.a. "banks"? Profit is their bottom line at best* and that profit can easily come from a speculative feed-back loop** they themselves create.
*Control fraud by bank management being another possibility.
** i.e. George Soros' theory of reflexivity
Not that productive lending by the usury cartel is just either since workers have been dis-employed with what is, in essence, the public's credit.
ReplyDelete"Money is money"
ReplyDeleteLol... Read the rest of it at your own risk...