Russian Prime Minister Vladimir Putin is talking tough about the USA. In a speech today he referred to the USA as a “parasite” on the global economy. Some highlights include:
“They are living like parasites off the global economy and their monopoly of the dollar.”
“Thank god,” Putin said, “that they had enough common sense and responsibility to make a balanced decision.”
“If over there (in America) there is a systemic malfunction, this will affect everyone,”
“Countries like Russia and China hold a significant part of their reserves in American securities … There should be other reserve currencies.”
First of all, let’s get some of the facts right. Russia’s GDP is roughly 70% the size of the state of California’s. Now, California’s no parasite (they’re the 8th largest economy in the entire world!), but I guess it’s a good political soundbite to call the American economy a parasite even though it’s more than 10X the size of your economy….
No, we did not have the common sense to come to a “balanced decision”. We agreed to handcuff ourselves due to a political constraint that is based on misconceptions regarding the monetary system. There was very little rational or balanced about this agreement.
Yes, we have an enormous impact on the global economy because we are by far the largest fish in the sea with total annual global output of $15 TRILLION. That’s roughly 25% of the entire world’s production. So, if we’re a “parasite”, we’re a pretty damn big one.
Finally, countries like Russia and China enjoy the benefits of investing in American securities by virtue of the fact that they enjoy millions of jobs due to the fact that they choose to do business with American corporations. If they do not want to hold American securities then they just have to tell their corporations to fire all of those workers who are employed due to their relationship with American firms. That way, they can stop importing dollars and they won’t have to complain about this $15T “parasite” anymore. Do you want to make that deal, Russia? I didn’t think so….