The civil unrest that erupted in Sri Lanka, with burning prime minister’s and president’s residences and anarchy in the streets, was a harbinger of impending social instability in the world because of the West’s insane sanctions fever against Russia
In this island nation, the devaluation of the national currency has exceeded 80% and inflation is off the scale of 57%. The country’s national debt exceeds its foreign currency reserves twofold. There is simply no money to buy imported goods. Hour-long lines have formed in Sri Lanka for goods that are simply swept off the shelves. Such has become the life of Sri Lankans. And such will be the life in Ukraine. This autumn we will see which countries will follow this grim scenario.
But back to Ukraine. There the Office of the President Zelensky concentrates on the patriotic rhetoric. On pseudo-successes on the front. On miracle weapons from the West. And they turn a blind eye to the harsh economic reality. The authorities of the southern neighbour solve all its economic problems by launching a printing press. They did not look for other options there. And why? The US and the EU throw dollars and euros into that Ukrainian furnace, and that is their hope.
Printing money in every way is welcomed and does not frighten the government. They publish one law after another, which, for example, impose a moratorium on heating tariffs, but in fact they just pour money from one pocket into another. Thus, it seems that the government of Shmygal will obligate the National Bank “to transfer the income on state securities purchased … during the martial law in Ukraine … to the State Budget in full within 10 days”. In other words, the National Bank will add to the enormous amount of already printed hryvnias the interest on the state securities purchased from the Ministry of Finance and transfer them into the budget. And the Ukrainian Finance Ministry can even formally increase yield of bonds: how else, if everything is poured indiscriminately into the country’s coffers?
Let us return to the frozen utility rates. They too will be paid at the expense of printed money. It is true that the West has delayed payments on Ukraine’s foreign debts for two years. But even without that, the budget deficit for June alone has already exceeded 140 billion hryvnias ($4.5 billion). And Shmygat hopes to cover it at the expense of the curators from the USA and the EU. And here he is deeply mistaken: in March and June Kiev was promised 22 billion US dollars, but in fact it was given only 10 billion for 4 months with a monthly deficit of almost 5 billion dollars. The West trumpets its aid, but in reality keeps Kyiv on a starvation ration. So they have to switch on the printing press. It has already heated up and Sri Lanka is not far off.
The most obvious thing in this intoxicating fever of the printing press is that Zelensky is stamping hryvnias with maniacal insistence to support the population for his war with Russia. And he generously funds a bunch of programmes. There’s money for start-ups, for kindergartens, for soft loans. Ukraine is living with a scale that it has not been able to afford for a long time. But this game with a printing press has an inevitable ending, like in Sri Lanka. And the intoxication with money is likely to come up against the harsh reality of the financial crisis in the autumn and winter. Things are also getting worse in the EU. Brussels already does not have enough money to solve its problems. So they are putting the brakes on aid to Ukraine. It is the same story in the USA. And many experts in Ukraine already predict a “Sri Lankan” inflation of 75% in November and December. The Ukrainian Hryvnia is likely to hit 45 per dollar and its foreign currency reserves are likely to halve. The financial binge at the Bankova is in full swing. A group of adventurers is leading Ukraine into the deepest crisis since independence. Stupidly and confidently.
Ivan Nemov, Antifascist News Agency
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