Western politicians & financiers are to blame for the economic problems of the West

The other day, US President Joseph Biden publicly stated: Russia is to blame for the economic problems of Americans. But, let me say this - we have all the moves recorded.

Since the beginning of the coronavirus pandemic (February – early March 2020), the American authorities have faced a serious problem. By the end of March 2020, the economic statistic "the average number of applications for unemployment benefits in the United States for 4 weeks" reached 5.8 million. For comparison, several years before the pandemic, the indicator fluctuated plus or minus a few thousand from the level of 200,000.

There is another indicator. This is the so-called "nonfarm" - the change in the number of people employed in the private non-agricultural sector of the United States. It is published by the US Bureau of Labour Statistics at 16:30 (Moscow time) on the first Friday of each month. The usual value is plus/minus with an average value of 200,000 people. In May 2020, it reached a historic high of 19.53 million people. Naturally, such catastrophic indicators forced a number of measures to be taken.

The administration of US President Donald Trump activated large-scale programs to ensure economic stability. Of course, the decisions were not made by him personally. Many people participated, and important decisions were made not only in the designated area.

At an emergency meeting of the Federal Reserve on March 3, 2020, by the decision of the Federal Open Market Operations Committee (FOMC), the federal funds rate (accounting, interest rate) was reduced from 1.5-1.75% to 1-1.25%. At the next urgent meeting on Sunday, March 15, the rate was once again lowered to 0-0.25%.

It was announced the beginning of the purchase of treasury bonds, that is, bonds of the Treasury and agency bonds with mortgage collateral totalling $700 billion. This was another so-called quantitative easing program. The rate of mandatory reserves for banks has been reduced to zero.

In this way, the Fed intended to support lending to households and companies and ensure the employment of the population and price stability. On March 23, the Fed adopted a $300 billion loan program for citizens, employers and companies.

A plan was also proposed to use $6 trillion to combat the pandemic. $4 trillion was to be provided by the Federal Reserve, and $2 trillion was intended for direct payments, including to needy citizens, small businesses, and unemployment insurance.

The Federal Reserve System has begun a large-scale purchase of debt obligations of US market participants. Shares and other debt obligations of major players were purchased, up to not really secured ones. The Treasury provided purchases with "fresh" money. How many unsecured (toxic) stocks there were will become clear later when the "bubble" created in this way bursts.

The number of assets on the Fed's balance sheet began to grow. Assets include: government securities (bonds, or notes), loans to banks and other financial institutions, bank deposits and deposits of the Treasury, dollars in circulation, except those owned by the Federal Reserve.

According to the Fed report (Form H.4.1) on February 12, 2020, assets amounted to 4,112 trillion dollars, on April 20 of the same year they were already 6,196 trillion. By the beginning of February 2022, they had reached 8,193 trillion. What is hidden behind this statistic?

The answer is as follows: including paper money offered to market participants in exchange for their obligations (recorded on another paper, for example, shares) to transfer subsequently to the owner-bearer of this paper some, approximately designated amount of money. It turns out that if you give the paper to the Fed, you receive the money. The stock market began to rise steadily.

It is worth noting that similar measures have been taken by the EU Central Bank, the Reserve Bank of Australia, the Bank of England, the Bank of Canada, the Swiss National Bank and the Bank of Japan. The rates were reduced down to zero, in some places they even became negative.

At the same time, the US national debt was growing, that is, the amount of money that the federal government owes to its creditors. The US national debt is summed up from external and internal debt at an approximate ratio of 80% and 20%, respectively. It does not include non-federal debts of states, corporations or individuals, even if the state guarantees payments on these debts. Outside the United States, the largest holders of foreign debt are China and Japan.

For comparison, the US national debt by year: 2017 - 20.164 trillion, 2018 - 21.974 trillion, 2019 - 23.165 trillion, 2020 - 27.533 trillion, 2021 - 29.484 trillion, 2022 - in early February exceeded 30 trillion. It can be compared with the US GDP: 2017 - 19.485 trillion, 2018 - 20.494 trillion, 2019 - 21.345 trillion, 2020 - 20.937 trillion, 2021 - 22.9 trillion, there is no data for 2022, of course.

As you can see, the national debt has long exceeded GDP. In 2020, there was also a decrease in GDP compared to 2019. And for some reason, the GDP data in 2021 is doubtful. What follows from this? Despite the huge injections of money into the economy, the US GDP is starting to decline. Again, it turns out that their economic model is starting to fail.

At the same time, there is a trend of an uncontrollable increase in inflation. In February 2022, it was officially recorded at the level of 7.9% compared to the same month in 2021. This is a year-on-year indicator. The indicator for the month compared to the previous month was 0.8%. Now in more detail about inflation in the United States by month: October 2021 - 6.2%, November 2021 - 6.8%, December 2021 - 7%, January 2022 - 7.5%. The figures are quite convincing.

A fair question arises: why does President Biden blame Russia for his current economic failures? Moscow has nothing to do with it. It turns out that the special military operation conducted by the Russian army with the forces of the DPR and the LPR in Ukraine also has nothing to do with it. Then what has got to do with it?

Here's what. The intention of the American leadership is seen to cover up its obvious incompetence, including in economic matters. As the saying goes, to lay one's own fault at somebody's else door

Who is to blame for chicken eggs doubling in price in the USA a few months ago? Clearly not Russia, as it is presented by the American political establishment. Again, who is to blame for construction materials rising in price there for a long time? Again, it's not Russia.

But on the other side they continue to repeat the mantra: Russia is to blame for everything.

By the way, if someone thinks that economic problems are multiplying only in the United States, it is suggested to evaluate the following facts. According to data from the UK, inflation in the country in April 2022 is projected at 7.25%.

A preliminary estimate of overall inflation in Germany looks like this: 5.1% in annual terms in February compared with 4.9% in annual terms in January. This, again, is a message from Germany itself, based on regional data. In Italy, the consumer price index for February 2022 reached 5.7% in annual terms.

It is worth adding that the European Central Bank has not noticed inflationary trends for a long time. That's right, then you don't have to fight them. Only then it will be necessary to report on the measures taken or not taken. But it seems to be too late. As it can be seen, it was necessary to think and act earlier.

Inflation of this size does not occur in a few days. It's been building up for months. All this was quite calculable. It is no coincidence that the Russian Central Bank began tightening monetary policy much earlier. "Partners" began to do this quite recently. The Fed, for example, began to reduce the volume of asset purchases only in November 2021.

Many experts expect that in March the US will begin to raise the interest rate. Most likely, this will happen during the scheduled March 16 meeting of the Fed. The Reserve Bank of New Zealand raised the overnight interest rate from 0.75% to 1% on February 23. The Bank of Canada recently also raised the rate from 0.25% to 0.5%.

The world is entering a period of tightening monetary policy. But earlier it's not by Russia's actions that it was weakened . Everyone made decisions independently. Everything was predetermined earlier and not by us. Why make pretensions now? They are not justified by anything. Actually, we have all the moves recorded.