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(8,243 posts) Sat Jun 18, 2022, 02:32 PM Jun 2022

Putin's stagflation revenge

Between a tanking stock market, soaring inflation, and mounting recession fears, Americans are turning on the economy.

And somewhere, Vladimir Putin is probably smiling about it.

Amid all the chaos, inflation has become the biggest financial concern of nearly every American as prices rise for everything from gas to groceries.

There are several reasons that inflation reached a 40-year-high of 8.6% last month, including rising rents and labor costs. But economists say a major driver is Russia’s invasion of Ukraine, and the subsequent disruption to commodities that it has caused.

“The Russian invasion and spike in oil and other commodity prices is the No. 1 reason, followed by the pandemic & the housing shortage,” Mark Zandi, chief economist at Moody’s Analytics, wrote in a recent Twitter thread.

The invasion in February immediately scrambled the global economy and sent international markets spiraling into uncertainty. Some commodities have been especially volatile, including oil and food, due to constrained supply from Ukraine and Russia.

But even as Russia’s economy feels the pain, President Vladimir Putin continues to dictate global prices for energy and food. Western sanctions are starting to hurt the U.S. and the rest of the world too due to recent surges in energy prices that have caused factory shutdowns and slower growth across the U.S. and Europe, proving that Russia has more leverage than Western leaders thought.