Russia’s Putin Says US Federal Reserve Policies Represent ‘Hooliganism’

Even some governments recognize the implicit harm from US Fed policies.

This report from Wall Street Journal Blog (Bold highlights mine)

WSJ Blog AFP/Getty Images Prime Minister Vladimir Putin

Russian Prime Minister Vladimir Putin slammed expansionary U.S. monetary policy, calling it “hooliganism”, in remarks that followed more veiled criticism from China after Standard & Poor’s Corp. cut the outlook on its U.S. debt rating this week.

“We see that everything is not so good for our friends in the States,” Putin told lawmakers Wednesday.

“Look at their trade balance, their debt, and budget. They turn on the printing press and flood the entire dollar zone — in other words, the whole world — with government bonds. There is no way we will act this way anytime soon. We don’t have the luxury of such hooliganism,” he said.

Even as Putin blamed the U.S. for printing money — something for which Russia was criticized during periods of hyperinflation in the 1990s — other Russian officials said there is no alternative to the U.S. dollar and declined to discuss cutting the country’s dollar holdings.

Russia has the world’s third-largest international reserves after China and Japan, with the biggest part in U.S. government debt. However, Russia appears to have cut its direct Treasury holdings significantly in recent months, according to data from the U.S. Treasury.

Russia can be seen as benefiting from the recent policy of the U.S. Federal Reserve, linked to higher commodity prices. But an increase in dollar supply and low interest rates could also lead to a commodities bubble that could wreak havoc on Russia’s finances if oil prices later collapse.

Authorities of some nations earlier admonished the Fed’s actions as stoking a currency war.

The above report reveals that Russia’s Putin recognizes the consequences of the massive money printing operations as one of the bubble cycles and commodity inflation which eventually will sow chaos or devastate global economies again. (Could Putin be reading Austrian economics?)

It is not true that “there is no alternative to the U.S. dollar”. People will intuitively shift to either other foreign currencies or bring back hard currency once the ‘policies of hooliganism’ worsens.

With gold and commodities generally soaring, these represent symptoms of a worldwide “flight to real values” from the ongoing crackup boom.