First, Russia was in much worse shape economically after the October Revolution and as a result of WWII and the Nazi invasion. The current crisis can't compare with those events. In addition, the condition of the country after liberalization (privatization) was worse, too.
Secondly, Medvedev doesn't realize the implications of currency issuance.
Russia faces toughest economic challenges in modern history – Medvedev
Secondly, Medvedev doesn't realize the implications of currency issuance.
"We still maintain a relatively low level of public debt. The federal budget deficit, although slightly increased, according to the results of this year will remain at an economically safe level. Unemployment remains within reasonable parameters, it is low against corresponding conditions in other countries," Medvedev said.RT
Russia faces toughest economic challenges in modern history – Medvedev
3 comments:
It's what's killing them. They're clueless about their own monetary system. Stuck in a gold standard mentality. They've even been buying gold.
China and Russia buying gold like crazy to reduce their USD savings. With yields so low and interest rate risk high with the Fed talking about raising rates soon, holding USD in bonds isn't very attractive.
Heh, you're both right. Russia needs more debt, by a lot, to ramp up it's internal economic activity. However, gold is also useful in international trade with third world nations that don't have stockpiles of other currencies either. That's about the only monetary function for it left now--trade with nations whose own currencies are shaky. It is sad that Putin doesn't have anything but old-chicago-school economists on staff.
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