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Vladimir Putin Slams Western Monetary Policy, Predicts Global Shift to Commodity Reserves

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Russian President Vladimir Putin recently accused the United States and other G7 countries of causing runaway inflation in global commodity markets. He predicts that under these circumstances the world will begin to move its reserves from sovereign debt to “real resources”, deepening the spiral of commodity inflation.

End of the unipolar world

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The president voiced his criticism for more than an hour speech at the plenary session of the St. Petersburg International Economic Forum on Wednesday, June 15. He began his speech by declaring that “the very principles of the global economic system have been struck.”

“Basic business concepts such as goodwill, property integrity and trust in world currencies have been severely affected,” he said.

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By this, he means two unusual phenomena associated with Western money in 2022: sanctions against Russia and record inflation.

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In March, Russian banks excluded from SWIFT, the world’s largest financial messaging system, used by 11,000 institutions worldwide. This move effectively isolated Russian financial institutions from developed Western economies. This, along with prohibitions on Russian oil and gas imports, was intended as punishment for the eastern superpower’s invasion of Ukraine in February.

Putin said such measures proved to be a double-edged sword, hurting those who imposed the sanctions equally. For example, both Europe and the USA suffering due to the significantly higher cost of living in recent months, especially fuel costs.


However, inflation in the commodity and raw materials markets is not only associated with sanctions and was a “fact of life” long before this year.

“The world has been brought to this point by years of irresponsible macroeconomic policies pursued by the G7 countries, including runaway issuance and the accumulation of unsecured debt,” the President said.

Problems with printing money

To cope with mounting debt, Western economies have been forced to exponentially print more money into the economy. As Putin notes, the money supply in the United States has grown by 38% over the past two years alone, and in Europe by 20%. This new money quickly moved across national borders, continuing to “destroy global markets.”

Putin supports this theory, stressing that the United States has recently become a net food importer. It now imports about $350 billion worth of goods every month, up from $250 billion at the end of 2019. This increase of 40% is exactly proportional to the growth of the country’s money supply. “Why exchange goods for dollars and euros that are depreciating right before your eyes?” he asked.

Putin said the combination of record high inflation and the apparent risk of dollar and euro confiscation poses a threat to countries that hold those currencies in their reserves.

“The conversion of world reserves will begin … They will be converted from weakening currencies into real resources, such as food, energy and other raw materials,” he concluded.

Meaning for Bitcoin?

When Russian sanctions were introduced in March, many Western politicians struggled to find a solution to the Kremlin’s potential use of bitcoin as a means to circumvent their restrictions.

For better or worse, many believe that Bitcoin could be exactly the solution the Russian government needs. It is censorship resistant, allows peer-to-peer exchange, and is immune to fiat currency depreciation.

Veteran investor and fund manager Bill Miller declared in March that the collapse of the Russian ruble was optimistic for bitcoin. A week later, an investment strategist at Credit Suisse predicted very similar to Putin’s run to commodities, and that Bitcoin will likely benefit from it.

Until now, Putin recognized the benefits that bitcoin mining can bring to Russia. Member of the State Duma even proposed that the county can accept bitcoins as compensation for oil payments.

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