The UN has just positioned itself against the FED. Is the US central bank blackmailing the rest of the world?
UN vs EDF
UNCTAD declared in its annual report that the Federal Reserve risks plunging the global economy into recession if they continue to raise interest rates.
This year, the FED has already raised its key rate by 0.25%, then 0.50% and again by 0.75% three times.
The ECB and the Bank of England are also on board. In fact, all central banks are forced to join the dance. Unheard of since 1970 according to the World Bank.
Central banks that do not follow in the footsteps of the Fed would expose themselves to a depreciation of their currencies. The reason being that between two economies with a similar inflation rate, international investors prefer to go where the rates are more profitable.
At the moment, euros are sold against dollars to invest in the United States. Hence the decline in EUR/USD, among other reasons, such as the fact that we shot ourselves in the foot by cutting ourselves off from Russian energy.
However, the Fed’s attitude is beginning to irritate. India’s central bank launched last Friday that aggressive rate hikes by rich-country central banks are a third major shock after the pandemic and Russia’s invasion of Ukraine.
“Are you trying to solve a supply problem by acting on demand? [hausse des taux qui ralentit la croissance] ? »asked Richard Wright, leader of the team in charge of the report.
Richard Wright suggests here that the FED raises its rates for other reasons than to fight inflation. Indeed, it is illusory to slow down growth in an attempt to stem inflation when we know that energy is clearly used as a weapon by the largest exporter of joules in the world: Russia.
The Fed knows it. But then, why?
Would the FED be blackmailing?
Probably the ulterior motive is to force the rest of the world to condemn Russia. The BRICS are clearly on the Russian side. And apart from the EU, very few countries participate in the sanctions against Moscow.
However, the whole world will have to line up behind Washington and Brussels if the famous “price cap” on Russian oil were to see the light of day. As such, the eighth sanctions package is still under development.
We know, however, that the EU puts pressure on oil transport companies (tankers) and their insurers. The goal is to persuade them to stop transporting Russian oil if it is not sold at a discount.
Greece, Cyprus and Malta, which have some of the largest tanker fleets in the world, have expressed concern over restrictions on transporting Russian oil.
EU countries failed to reach an agreement on Monday. The talks continue and we bet that the pressure exerted by the FED weighs heavily in this globalized blackmail with hints of the Cold War.
We’ll see where it all takes us. Will Jérôme Powell and Christine Lagarde be able to cause a recession without provoking popular discontent? Couldn’t the whole world decide to get rid of the dollar?
Moreover, we have seen in England that it is risky to raise the rates with huge debts. On the other hand, Russia’s debt represents only 14% of GDP…
All this to say that the UN exit suggests that central banks will start printing again much sooner than we think. Buy Bitcoin!
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