Let the ruble collapse to remind Americans the value of a dollar

As Russia's war in Ukraine proves far more difficult than President Vladimir Putin must have hoped for, the ruble has collapsed. Putin's gambit and the global sanctions halting the ability of Russian banks to use their money held in banks abroad have triggered ordinary citizens to make a beeline for ATMs.

As a geopolitical menace with weak economic growth, Russia was uniquely vulnerable to this sort of depreciation of its money, but the underlying factors enabling the ruble's collapse ought to serve as a cautionary tale for our own monetary and fiscal policies.

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Let the ruble collapse to remind Americans the value of a dollar ?url=http%3A%2F%2Fmediadc-brightspot.s3.amazonaws.com%2F1d%2Fba%2F91ca688f43f18825e19c171d7452%2F384626323

Russians are rushing to withdraw their money not just to ensure that a bank run doesn't deplete reserves but also in the hopes of exchanging the rapidly depreciating currency for one with more purchasing power. To be clear, the U.S. dollar is in nowhere near the same ballpark. Russia spent years above 4% inflation, two points above the 2% benchmark targeted by Western central banks, and the Russian central bank has just $12 billion cash on hand, just one-seventh of what it has invested in Chinese bonds.

But the fundamental flaws in the monetary stability of Russia echo problems increasingly ignored here at home. For a decade, economists adhering to hundreds of years of academic consensus were maligned or mocked for challenging the widely embraced liberal orthodoxy that maintaining near-zero interest rates amid unprecedented fiscal expansion would not trigger a devaluation of the U.S. dollar. Furthermore, while the U.S. dollar still maintains a dominant status as the world's reserve currency, thus buffering it from the wild instability cratering the ruble, it has still declined from comprising 71% of global foreign exchange reserves at the beginning of the century to 60% today.

The reasons for the ruble's demise are more political than financial, but it is a monetary crisis with monetary factors undergirding it nonetheless. No currency in modern history has spent much more than 200 years as the world's reserve, and it would be unwise for the United States to take ours for granted. Let central bankers and the government remember that lesson as they inflate away the value of our most precious means of global autonomy and power.

.https://www.washingtonexaminer.com/restoring-america/faith-freedom-self-reliance/let-the-ruble-collapse-remind-americans-the-value-of-a-dollar

The West's $1 trillion bid to collapse Russia's economy

.https://edition.cnn.com/2022/03/01/business/russia-economy-sanctions/index.html

Let the ruble collapse to remind Americans the value of a dollar

Let the ruble collapse to remind Americans the value of a dollar

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