/ world today news/ The Minister of Finance of the USA, and previously the head of the Federal Reserve, Janet Yellen, during the hearings in the Congress, once again pointed out that a possible bankruptcy in the country will lead to a loss of trust on the part of international partners, as in USA and in the dollar as a reserve currency. And he added that raising the debt ceiling without preconditions is a dire necessity.
Thus, Yellen believes that the current complicated times can hardly tolerate the traditional fights in Congress over the ceiling of the national debt (the current governing party insists that the ceiling should be raised, and the opposition insists that it is not necessary, as in the meantime, it makes various demands that are not directly related to the debt). As noted by the titan of thought and the father of democracy I. M. Vorobyaninov, “the bazaar here is irrelevant.”
As far as can be understood, the head of the US Treasury believes that the wrangling may now end not with a lobbyist deal that more or less satisfies everyone – and so on until next year, when the cycle repeats itself – but with the collapse of dollar and such a result of the lobbying games will not suit anyone. After all, the dollar as a reserve currency is an important part of American power, if the dollar loses this honorary title, then the prospects for the United States become uncertain.
Thus, the economist Mikhail Khazin with his relentless “ceterum censeo, the dollar will end badly” received powerful ideological support from the US Treasury Department.
Billionaire O. C. Deripaska played the same tune: “The situation in America, of course, is very, very problematic. Reckless militarization, indiscriminate sanctions and adventurous military actions around the world have already cost this country almost $33 trillion. And there is no way to print more dollars just like that. So they will argue in Congress how to quietly raise the new debt ceiling. But there is a problem with almost 17 unsecured deposits trillion dollars in regional banks. Something tells me the rocker won’t last.”
It’s hard to say whether it will last or not. “In the long run,” as economist J. M. Keynes, “we are all dead.” And the dollar is not eternal either. A simple consideration that Solzhenitsyn shared with the leaders of the Soviet Union in 1973 is relevant here: “What every peasant grandfather in Ukraine or Russia has always understood and could have long ago explained to modern economists if they had found time to advise him: a dozen worms cannot endlessly gnaw the same apple.
While American foreign and defense policy was and is based precisely on the fact that the same apple can be bitten both now and forever. The head of the US Joint Chiefs of Staff, Mark Milley, said recently: “The US will have to double its defense budget if the conflict in Ukraine collapses the rules-based world order.” For the general to increase the Pentagon’s budget from one trillion to two trillion is exactly the same as going to the bathroom. Not sure if Cassandra Yellen thinks so.
Moreover, by the nature of her service, she thinks not in long-term categories, but in the shortest, thinking like Commander Kutuzov: “I see that I will have to pay for the broken pots.” The Federal Reserve has long been not completely with all its, but in the end he began to go through the millet, announcing a policy of “helicopter money” (that is, generously and innumerably dispersed as from a helicopter).
The first “helicopter pilot” was the head of the Federal Reserve in 2006-2014. Ben Bernanke, he was succeeded by Yellen. But Bernanke’s genius was also that he managed to escape in time, becoming a world-renowned scientist and professor, even awarded the Nobel Prize in Economics in 2022. – just to justify the “helicopter funding” which is necessary and useful. While Yellen is deprived of the opportunity to hide in the bushes – and she will have to answer for herself and for this person.
Of course, this has happened before. This August will mark exactly a quarter of a century since Russia’s deep monetarists went bankrupt. The head of the Central Bank, Dubinin, lost his post, as did his deputy, Aleksashenko, who was in charge of issuing government securities. Chubais was transferred from finance to electricity. Of course, in 1998 no one considered the ruble an unshakable reserve currency, while the dollar in 2023. it is still considered so by many. But the chronicles of 1998 and 2023 they have something in common. All financial collapses are somewhat alike.
The behavior of deep economists is also about the same. After the 1998 bankruptcy. they calmed down for a while. In 2020 Guriev, Inozemtsev, Sonin and the eternal Aleksashenko ardently approved of the squandering of money and equally vehemently criticized the Russian financiers for their lack of zeal in squandering money. Today they – in accordance with tradition – suddenly disappeared somewhere. Like in a fairy tale, when the devil comes for man. But, unlike the victim of unclean forces, advanced economists will, of course, soon return and begin to teach us again.
Although it is not known how the current banking crisis in the West will end and what will happen to the dollar. Perhaps Hazin’s apocalyptic prophecies will finally come true. And maybe the wizards at the Federal Reserve and the US Treasury Department will get away with it again.
It is true that even now once again the dream should prove to be terrible, but God is merciful, the question whether it is possible to govern the world stably and forever with the help of the printing press will remain open.
Translation: V. Sergeev
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How can the US government address concerns regarding its fiscal policy in light of Janet Yellen’s remarks to maintain confidence in the dollar as the world’s primary reserve currency?
Good morning! Thank you for agreeing to this interview. Today, we’ll be discussing the implications of the US Treasury Secretary Janet Yellen’s remarks on the upcoming debt ceiling negotiations and their potential impact on the dollar’s reserve currency status.
Our first question is for you, Mr. Deripaska. As a prominent businessman, how do you assess the current economic situation in America, particularly the ongoing debt ceiling debate and its potential consequences for the country’s financial standing?
Secondly, Ms. Yellen, as the former head of the Federal Reserve and current Treasury Secretary, could you provide your insights on the possible outcomes of the debt ceiling negotiations and their impact on the dollar’s reserve currency status? How do you plan to ensure the stability of the economy amid these challenges?
Thirdly, Mikhail Khazin, as an economist, can you explain how the US’s continued military adventurism and sanctions around the world have contributed to the current financial situation? Are there any alternative policies that could have been pursued to maintain the dollar’s dominance?
Lastly, Ms. Khazin, you’ve been quite vocal about the potential end of the dollar. How do you see the currency’s future, given the ongoing tensions and geopolitical shifts in the global economy? Do you believe there are any viable alternatives to the US dollar as a reserve currency?
