#6101 ·
The difference between an economy using the dollar versus one tied to a local currency is night and day. Having a global reserve currency at your disposal is a massive game changer—which explains why the US credit rating is seeing such a boost lately.
Shifted?EUROPE?!
Look, armed aggression involving tens of thousands of casualties on both sides is a massive disruption to economic flows—so yeah, it’s not shocking that things changed, much to the detriment of Europe and ourselves.
urbanotter said:I honestly don't see the issue here; these are all standard maneuvers used by central banks to support the economy through monetary policy.
Interest rates aren't set in stone—if the FED raises them, why shouldn't the Russian Federation?
From what I understand, they actually dropped once the ruble strengthened to a level that started hurting Russian exports.
The real headache is that we grew up thinking the Federal Reserve wouldn't use monetary tools to actually help the economy, acting more like a simple currency exchange booth that blindly defended the exchange rate, regardless of how much damage it did to the American economy.
After slapping Russia with that massive wave of sanctions, most of which targeted the financial sector, these moves don't seem all that extreme; once it becomes clear they aren't needed anymore, they'll be lifted.
I’m not just talking about Russia, but rather what any Central Bank does—it's just that the Fed focuses on maintaining the dollar's peg (rather than juggling multiple currencies like the Swiss National Bank would)
and claims it's all to maintain price stability, which, looking back, feels like a complete failure and nothing more than pure demagoguery.
The sanctions have clearly exposed how poorly managed our monetary policy has been,
and starting next year, instead of the Fed handling things, the European Central Bank will take the lead—hopefully with better results, though they haven't exactly proven themselves to be highly efficient either.
It's obvious we have turbulent times ahead, especially with Europe and America constantly prepping new sanction packages, and it's perfectly reasonable to expect Elvira Nabiullina to strike back with countermeasures.
Sanctions are essentially a blunt political interference in economic flows, and it isn't surprising that shifts occurred—unfortunately for Europe and for us, those shifts were negative.
But there's no denying that the decision to continue paying for Russian gas and oil had the biggest impact on the recovery and the rise of the ruble.
Shifted?EUROPE?!
Look, armed aggression involving tens of thousands of casualties on both sides is a massive disruption to economic flows—so yeah, it’s not shocking that things changed, much to the detriment of Europe and ourselves.