Russian debt is not as high as the West, so an interest rate SPIKE isn’t as devastating in Russia as it is in the Western World – Russian ruble trading less than a U.S penny in the FOREX markets – August 15, 2023

I’ve been writing about something I call #LateStageSocialism for quite some time now. Late Stage Socialism, for me, is a period in which forced austerity or economic collapse is inevitable, and that’s what I see in the global economy today.

The world had gone far left dating back to the FDR, but things have gotten PROGRESSIVELY worse ever since. Sure every once in a while, a Ronald Reagan comes along and shrinks the size of government a little bit, but currently, the two front runners for president of the United States in 2024, Joe Biden and Donald Trump, have no intention of shrinking the size of government.

Sure, Donald Trump might be a better manager of the debt, but he definitely doesn’t appear to want to drain the swamp; Trump merely wants to restructure the swamp, and Joe Biden is obviously a representative of the ESTABLISHMENT swamp.

In no way am I condoning Russia’s warmongering behavior in Ukraine; there are other ways to settle land disputes than killing INNOCENT people. With that said, we live in a world in which if given the option, most people would be investing in Russia today if they could; why? Because Russia has low debt, a thriving energy economy, and an extremely low cost of living, especially if you’re using a world reserve currency.

In fact, the only reason Russia is having economic problems is because of the SANCTIONS; unless you’re a China, India, or some other large country, sanctions on Russia are problematic for you because western nations currently have STRONGER and respected currencies, but don’t allow that to confuse you with the current economic problems in Russia.

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The Global Economy is Deflating #LateStageSocialism

What’s happening with Russia is all finances and has little to do with its ability to be PRODUCTIVE, whereas, in the Western World, we have entered a phase in which it’s hard for us to MANUFACTURE things domestically.

If you look at interest rate charts in Russia, they have wild swings; they reached 20% a few months ago and then dropped down to I think it was 7% and now they’ve spiked them back up to 12% again in August, why? Well it’s because the global economy is DEFLATING.

Spending is down in the Western world as accessing credit is becoming more expensive, and a large chunk of Americans as an example are BANKRUPT if they can’t access credit; this is NOT the reality in Russia, in Russia, most people don’t even have access to credit, meaning that they’re FORCED to live within their means.

In fact, these sanctions on Russia by the Western world are forcing Russia to live within its means, yet, so far anyway, their economy hasn’t crashed, one should ask why? The answer is Russia controls its means of production, whereas most Western countries have abandoned what it considers menial jobs to countries like China, Russia has kept a lot of those jobs.

Where this low Rouble becomes a problem is IMPORTING things into Russia, as a lower Ruble in comparison to other fiat currencies will present challenges; however, because Russian energy is still in demand, a restructuring of their fiscal situation could solve some of these challenges.

So to start, the Russian government raises interest rates; now, these rates are oddly enough raised to reflect REAL WORLD challenges in Russia, whereas, in the Western nations, not a single Western nation has been able to combat inflation by raising interest rates.

Everyone knows how inflation is measured in countries like the United States, Canada, Germany, the U.K., and France are INACCURATE. In the U.S. right now homelessness has reached record levels, and Joe Biden has embraced open border policies, which equate to more people residing in America consuming far more than Americans are producing, thereby eating not only to an ever-increasing deficit but a future in which American dependence on IMPORTS is increased.

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Now, sure, Russia has its challenges with demographics, but at least it has the tools to address them because again, Russia is FORCED to live within its means, and I have to remind the reader that the Russian people are often considered very rugged, I believe the number is 24% of Russians are obese compared to 36% of Americans are obese.

Russia also doesn’t have a WOKE culture problem, and yes WOKE is a problem in the event of economic hardships, because WOKE is a form of ENTITLEMENT, in America, you have LGBT groups that feel entitled to some form of social and financial compensation, you have their Black population, feeling entitled to Reparations, you have the Democrats, pursuing an agenda in which makes more Americans reliant on the Federal Government and in America, instead of pursuing outright socialism, their governments use REGULATIONS on productivity to push their political agendas.

Even if let’s say a Donald Trump becomes president and the U.S. economy gets better, what tends to happen in America is that the people will start arguing that they’re entitled to a Universal Basic Income.

Because Americans have been living high off the hog of having the worlds reserve currency, they’re destroying their ability to be productive, that’s NOT what’s happening in Russia, what’s happening in Russia, is in their governments’ minds, they’re protecting their borders and their interests, and the current demand for their currency is being thwarted by the Western Establishment.

In a free market, Russia would likely be one of the top-performing economies in the world, and that should scare you because if Russia ends this war with Ukraine tomorrow and the West continues to pursue it’s ESG agenda, it should surprise nobody if the Russian economy starts grow more rapidly.

Because whether you like it or not, the cost of living in Russia is low, because, again, Russian people don’t have the same access to DEBT (which is an expansion of the money supply) as we have here in the West.

Now, I’ve argued that there are a lot of JUNK products and junk services in the West that exist primarily because of REGULATIONS by Western governments. As I’ve stated in prior posts, no austerity, no prosperity, China has already dominated Western economies, and I’d argue with this ESG push, Russians are now in a commanding position.

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When the Russian economy experiences a downturn, its leaders have the flexibility to drive up interest rates to actually FIGHT inflation; that says a lot because that can’t happen as an example in countries like Canada or the United States. If the Bank of Canada raised interest rates to combat inflation, their housing market would COLLAPSE!

The U.S, I think, is 30+ trillion in debt; if their central bank raised interest rates to combat inflation, the U.S. government would quickly find itself paying a trillion dollars in interest, maybe on a per-month basis, as the debt compounds; this would happen while the U.S. doesn’t have the ability to manufacture things for itself.

Now, again this problem doesn’t exist in Japan, China, or Russia; if the Chinese real estate market crashes, those losses don’t equate to the Chinese not being able to manufacture goods for the world; it would simply mean that the Chinese people invested in Real Estate would lose their capital.

On the flip side, because so many people in the West are reliant on debt and the government to survive, if there was a financial crisis in the U.S, everything would go to hell, as they don’t have the fiscal policies in place to be competitive with China, Russia or even Japan.

So when these writers make it seem like Russia is in bad shape, I advise the reader to look at the fiscal shape of the Western World because what I’m seeing is that the global economy is deflating, and global deflation is more harmful to Western nations deeply reliant on the expansion of the money supply, than it is to non-western nations.

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I always like to point out that the problem with Argentina is not an expansion of the money supply; it’s their FISCAL policies if your country’s fiscal policies are inherently flawed, now matter what new currency you create your fiscal policies will inflate your currency. Russia again has been FORCED to live within it’s means for a long time, and based on my analysis, this fiscal discipline is starting to bear fruits.

Interesting times ahead