Western populations have been hearing for the past two years that NATO sanctions would have a devastating effect on the Russian economy, so much so that Vladimir Putin would be forced to back out of military operations in Ukraine almost immediately. The removal of Russia from the SWIFT network and the suffocation of its exports was going to cripple the nation’s banking sector and send it into an economic death spiral. Corporate media economists and Biden Administration representatives alike compared the financial warfare strategy to a kind of “cancel culture” action on a global scale. The very first modern cancellation of a country.
Well, needless to say, sanctions did not turn out the way the establishment expected. Initial reports in US and European media claimed that Russian businesses were struggling to stay afloat and some argued that the Russian populace might even revolt against the Kremlin in anger. But this was all a farce, much like the majority of reports suggesting Ukrainian victory was imminent.
Rather that imploding, Russian exports and imports are thriving. The nation printed an oil export surge at the end of 2023, as well as increased exports on a number of raw goods from oil seeds to grains in 2023. Most of the export rise can be attributed to closer trade ties with Asia, a move which western government should have expected. In fact, the NATO tactic of using Ukraine as a proxy battleground has only driven eastern governments like China and India closer to Russia.
Tucker Carlson, one of the few western journalists reporting on the conflict without anti-Russian bias, took the opportunity while visiting the country to go shopping in a local retail mall. The experiment was meant to examine how much inflation and economic hardship was punishing the Russian public. What he found, in fact, was relatively low inflation and stable price averages compared to the US.
If you thought the warhawks on social media had a meltdown over Carlson’s interview with Putin, the response to the above segment was absolutely rabid. Critics attacked Carlson, accusing him of “trying to argue that Russia’s economy is better than the US economy.” They also ridiculed him for not taking Russian wages into account vs American wages in his analysis.
But, as usual, the mainstream media has missed the bigger picture.
While it is true that average American wages are substantially higher than Russian wages and the dollar has greater international buying power due to it’s world reserve status, the greenback is decidedly weak in its home country and this is a factor that many in the public do not yet realize.
The cost of living in dollars for one person in the US is approximately 400% higher across the board compared to one person living in Russia. Individual items vary – For example, a loaf of bread is 500% more expensive in the US than it is in Russia, while a bottle of coke is only 164% more expensive. A one bedroom apartment is 500% more expensive in the US, while a beer is only 233% more expensive.
Most of Carlson’s critics used the inflated average “household income” numbers in the US and compared them to single income numbers in Russia. This is an inaccurate methodology. US household wages average at $76,000 per year, but this involves multi-income families. The average US single earner makes only $40,000 per year. The point is, though Tucker Carlson may have overlooked the wage gap between Russians and Americans, the cost of living exercise in US dollars still showcases two things:
1) Americans have the world reserve currency at their disposal, yet, it doesn’t do them much good in America. The value of the dollar isn’t evident to most people in the US until they travel overseas. This is due to expansive monetary stimulus by the Federal Reserve, which has greatly diminished the dollar’s buying power within the US economy and caused 30%+ higher prices since 2020 alone.
2) The more important takeaway from Carlson’s experiment is the lack of chaos in Russian markets. Despite the global sanctions leveraged against them, Russia has proven increasingly resilient. With their overall inflation rate expected to fall to 4.5% in 2024, it would seem the economic war against the nation has failed.
For the people who were expecting the Kremlin to be reduced to smoking ruins after a financial Apocalypse similar to Weimar Germany, this must be a disappointing realization. What we can learn from this outcome is that trade finds a way, and cancelling an entire country is not as easy as some might think.
Tyler Durden
Mon, 02/19/2024 – 23:00
