“The US government solves all the economic problems by turning on the printing machine” – said the Prime Minister of the Russian Federation Vladimir Putin at the meeting with RAS economists, Interfax reports. “Thanks God or by mischance, [we] don’t print the reserve currency. But what are they up to? Behave like hooligans, turn (their printing press – Lenta.ru) and scatter money all around the world solving their priorities”.
Putin has also emphasized that the United States have a monopoly on the currency printing because the status of the dollar as a reserve currency. At the same time Putin remarked that Russia is not able to act like that and solve the current problems by means of increasing the budget deficit. Before the economic turmoil Russia had surplus budget but now it has a little deficit. The country is expected to have non-deficit budget by 2015.
From the beginning of the economic crisis the Russian government has repeatedly criticized the US economy. For example, at the end of 2008 Vladimir Putin said that the system built by the USA and pretended to the leadership had appeared to be “irresponsible”. Earlier the Russian President Dmitry Medvedev declared that the United States had provoked the crisis and got the rest of the world in troubles.
At the same time in 2009 Vladimir Putin noted that “American political and financial authorities would never agree to surrender the dollar’s position”.
It should be noted that the market also believes in the dollar’s reliability. Thus, in the middle of April when Standard & Poor’s rating agency announced the potential decrease of the dollar’s rating investors began to buy up the dollars considering it as the most reliable currency in the world.
Nevertheless, recently the dollar a smidgeon lost. It is related to the expectations that on August 2nd the USA may declare the technical default. It may happen if Republicans and Democrats fail to agree on the state debt limit increase. As for now, Republicans are refusing to accept the proposal requiring the sharp decrease of the budget deficit.
