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John Daly

John Daly

Dr. John C.K. Daly is the chief analyst for Oilprice.com, Dr. Daly received his Ph.D. in 1986 from the School of Slavonic and East European…

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Putin Calls U.S. Economic Parasite

Don’t expect to see Russian President Vladimir Putin invited to the White House for a sleepover in the Lincoln Bedroom anytime soon.

Vladimir Vladimirovich has committed the unpardonable diplomatic sin of speaking bluntly.
Like Sherriff Woody from the Pixar movie “Toy Story,” Putin has declared “there’s a snake in my boot,” only in this case, it’s the U.S., which he labels a “parasite” on the global economy.

Addressing a gathering of the pro-Kremlin youth group Nashi at their summer camp near Moscow Putin commented, "They are living beyond their means and shifting a part of the weight of their problems to the world economy. They are living like parasites off the global economy and their monopoly of the dollar. If there is a systemic malfunction, it will affect everyone."

Putin’s caustic comments follow his equally dour observations when  in July he called U.S. monetary policy "hooliganism," a favorite code word from the Soviet era for anti-social behavior and castigated the U.S. for printing money to bolster the dollar. Putin added that Americans are "living beyond their means" and that irresponsible U.S. fiscal policies will have a negative impact on other countries, like Russia, Japan and China, all of who hold a massive amounts of U.S. bonds and Treasury bills. Putin said, "We, thankfully or not, cannot print a reserve currency. But what are they doing?" They simply spit nails, turn on the printing press and throw money to the world, in order to resolve their urgent problems."

At the end of his monologue Putin finally praised the U.S. for reaching an eleventh-hour debt deal to cut roughly $2.4 trillion from the U.S. deficit over the next decades, saying, "Thank God that they had enough common sense and responsibility to make a balanced decision."

Putin’s comments, while harsh, nevertheless reflect a global opinion that the U.S. economy has become a hostage to inter-party political grandstanding, but the implications of which extend far beyond U.S. shores.

Three factors play into foreign awareness of the crisis – first, that the world’s largest economy is being held hostage by what some Democrats call the “Taliban” wing of the Republican party, whose insistence on zero compromise and dollar for dollar cuts for raising the debt ceiling have paralyzed the normal workings of the U.S. economy.

The second factor is that while many countries are deeply unhappy with the dollar’s global hegemony, there is no clear consensus about what might replace it. The euro has recently been tanking thanks to the perfect storms of the Greek, Irish and possibly soon, Portuguese, Italian and Spanish fiscal crises, the yen has been hammered by the fallout from Fukushima, and China does not want the yuan to play a major role in world trade, as it could well lead to an inflationary spiral that could short-circuit China’s thriving economy.

Last but hardly least, oil exporting nations like Russia are subject to the vagaries of the fluctuation of the dollar, as it is the exclusive currency used in both New York’s NYMEX and London’s ICE energy exchanges.

The final casualty of all this ultimately is the U.S. fiscal global prestige, which dates back to the end of the Second World War. The fact that a minority of right-wing Congressional leaders have chosen to play chicken with the U.S. economy in order to achieve their extremist national political goals has been a highly sobering and distressing experience for foreign nations to watch, which along with the global recession caused by the casino roulette machinations of American Wall Street banksters, has effectively driven a stake through the heart of the U.S. free market enterprise model, though the corpse is still twitching.

What countries like Russia, Japan and China are now most concerned about is how to shelter their massive American investment holdings since, as the U.S. has a presidential election next year, the internecine political bickering can only intensify.

The Swiss franc is looking better and better; on Tuesday it rallied as much as 2.5 percent against the dollar, but oddly enough, the gnomes of Zurich seem reluctant to turn on the printing presses to produce more of them.


Pay as you go? What a concept.

By. John C.K. Daly of OilPrice.com

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  • Anonymous on August 03 2011 said:
    How dare he call the US a parasite? The Russian economy has been a parasite on other nations in recent times (not a good idea to be their neighbor!). Talk about misusing resources, choosing the development of weapons at exorbitant prices and the high costs of spreading some untested ideology, i.e., socialism over the welfare and feeding of their own people!. And so many Russians/Soviets now live and work in the West: What would be the result if said Soviets were to be expelled and sent back home? There would be more jobs for the unemployed non-Russians/ex-Soviets and less hard currency going over there. And, why continue to buy US Treasury bonds and other investment instruments – when the US is a parasite? And the arms race, would that be a part of the reason that led the world economy and the US to such a dire situation?
  • Anonymous on August 03 2011 said:
    how has the Yen been hammered? FXY looks to be in an uptrend. And QE does seem to be starting in Switzerland.http://globaleconomicanalysis.blogspot.com/2011/08/quantitative-easing-begins-in.html
  • Anonymous on August 03 2011 said:
    Although Putin may not be looking in the mirror when he casts his criticism, it sure looks like he's hit the nail square on the head when he criticizes the USA about being a parasite.
  • Anonymous on August 04 2011 said:
    Problem with Putin is that he can not shake off that old KGB feeling, US as an enemy, Russia wants to seel its oil in other reserve curencies that is his goal, and wants total control over Europe energy suplies,he is moving into Turkey slowly but surely who is stunch US ally and Nato memeber state and very stratejic location, if US looses Turkey which will stand as greatest lost to US intrest,and Israel should not allowed to shun Turks and Israel itself will greatly hurt is Turks decide to go east or north,China was invited to Turkey when US did not go for military manuvers bcz Israel did not go,and Russia or China is loving this, entire cold war was conducted from Turkey and so was creation of Israel,it is a vise move for US and Israel to befriend Turks again as both country suffers from public opinion in Turkey,I se denger in that and l am sure so are US and Israel,time to do the right thing and not force US to choose between Israel and Turkey,that would be dissaterous.
  • Anonymous on August 04 2011 said:
    Gerry SummervilleWhen the US with 1/20th of the world's population, uses up 1/3 -1/4 of its resources, I'd call that pretty parasitical. Unless of coyrse one is true 'red-white-and blue' in which case the US owes nothing and the world owes it everything. In that case I regret to say there is little hope for understanding.
  • Anonymous on August 04 2011 said:
    If the US is a parasite, it was put in that position by the American voters who reelected George W. Bush. That mistake led to the election of the incompetent Mr Obama, and as a result the economic outcome is uncertain for tens of millions of Americans.The solution - START OVER! Forget about people like Bush, McCain, Obama and Tea Party nutters. Also forget about the beliefs and thoughts and intentions of the good Mr Putin and busybodies from various Stone Age countries. Forget about protecting civilians in Monte Carlo and protect them in Philadelphis and LA. Forget about the precious opinions of foreigners, who evidently have forgotten that the US won the Second World War for them. And if that is not enough, forget about some of the opinions of John C.K. Daly, whose knowledge of Wall Street behaviour is about the same as my knowledge of brain surgery.
  • Anonymous on August 04 2011 said:
    Mr Mark, and others, as Chairman Mau said: WAR IS TEN PERCENT FIGHTING, TEN PERCENT RESTING, AND 80 PERCENT PERSONAL DEVELOPMENT. Actually, for the US, that should be 90 or 95 percent personal development. Where those other great nations you mention are concerned, I give less than a damn if they fight or rest. They can plot and scheme until the cows come home, although I would like to have a president of the US who would not be concerned with their nonsense.Something else, Russia is not in the war business, and they are selling, not 'taking'.

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