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Russia’s inflation rate plunges to 2.8%; historic low

Alexander Mercouris

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This article first appeared on RussiaFeed

Russia’s current annualised rate of inflation has now been confirmed as 2.8% as of 9th October 2017, with price growth zero for the previous five successive weeks.

Inflation in Russia has over the course of 2017 fallen faster and further than anyone expected.  As the Russian Central Bank correctly says, price growth is likely to pick up in December (in Russia it invariably does).  However it is now all but inconceivable that it will be 4% for the whole year.  The Central Bank has itself now lowered its prediction to 3.2%.

For their part the international institutions have still not caught up with the pace of fall of price growth in Russia.  The international credit agencies and the IMF continue to predict annualised inflation for the whole year above 4%.  That is now all but inconceivable.

What some may find surprising about these latest inflation developments is that the institution which has been leading Russia’s fight against inflation – Russia’s Central Bank – is giving every sign of being far from happy at the runaway success of its own counter-inflation strategy.

The reason for that is that inflation’s continuing rapid fall is increasing pressure on the Central Bank to cut interest rates further and faster than it obviously wants to do.

The result has been a series of strange statements issuing from the Central Bank yesterday and today, which have claimed that the recent fall in inflation is temporary and is due to one off factors (basically the recent strengthening of the rouble and the better than expected harvest) leading and that price growth is likely to pick up in December.

Inflation however always picks up in Russia in December, whilst the recent strength of the rouble must be due in part at least to the Central Bank’s own high interest rate policies.

Real interest rates in Russia are now in fact at unprecedentedly high levels, because inflation in Russia is falling faster than the Central Bank is cutting interest rates.  They are now 5.7% as opposed to 5% at the start of the year.

Meanwhile of the predicted collapse of oil prices to $40 a barrel – predicted by year end both by the Russian government and by the Central Bank at the start of this year, and the basis of the Russian government’s budget calculations for the whole year – there is still no sign.  Brent crude is currently trading at $56 a barrel, whilst Urals crude is trading at $53 a barrel.

Perhaps the predicted oil collapse to $40 a barrel will still come – the lesson of the last three years is that accurate forecasts of oil price movements are all but impossible – but as of this moment that is starting to look less likely.

That the Central Bank is struggling to defend its interest rate policy in the face of the rapid inflation fall is shown by a curious claim today by Central Bank Nabiullina that inflation below 3% “does not diverge” from the Central Bank’s 4% target.  In reality it is a significant overshoot by any measure.

The one point the Central Bank has made over the past two days which is true is that the inflation perceptions/expectations of the Russian population are still much higher than the growth of actual prices in the shops would justify.

This is a notoriously difficult thing to measure, but data which has appeared over the last two days, and which is presumably based on polling, claims to show that Russians expect prices to rise by 9.7% this year as against the Central Bank’s prediction that they will in fact increase by just 3.2%.

High price growth expectations on the part of the population are unsurprising given Russia’s long history of double digit inflation extending all the way back to the USSR’s collapse.  It will inevitably take some time before the population’s perception of inflation adjusts to the reality of lower prices, all the more so as in 2015 the population experienced a further temporary spike of double digit inflation, which must still colour its expectations of where prices will be going in future.

In light of this it is perhaps understandable that the Central Bank – fearing possible demand for higher wages from a population anxious to compensate itself for higher prices which are not in fact coming – may be cautious about easing monetary policy too much.

Whether such caution justifies real interest rates of 5.7% is another matter.  On any measure real interest rates at this level seem to me far too high given existing economic conditions, even allowing for the possibility that – as I am coming increasingly to suspect – the Central Bank’s real inflation target is 2% not 4%.

At such high levels the primary effect of interest rates is not to increase savings or reduce inflation.  It is to lower the rate of economic growth, which could be higher in Russia than the Central Bank is making possible.

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Mueller Finally Releases Heavily Redacted Key Flynn Memo On Eve Of Sentencing

Alex Christoforou

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Via Zerohedge


Having initially snubbed Judge Emmet Sullivan’s order to release the original 302 report from the Michael Flynn interrogation in January 2017, Special Counsel Robert Mueller has finally produced the heavily redacted document, just hours before sentencing is due to be handed down.

The memo  – in full below – details then-national security adviser Michael Flynn’s interview with FBI agents Peter Strzok and Joe Pientka, and shows Flynn was repeatedly asked about his contacts with former Russian Ambassador Sergey Kislyak and in each instance, Flynn denied (or did not recall) any such conversations.

The agents had transcripts of Flynn’s phone calls to Russian Ambassador Kislyak, thus showing Flynn to be lying.

Flynn pleaded guilty guilty last December to lying to the FBI agents about those conversations with Kislyak.

The redactions in the document seem oddly placed but otherwise, there is nothing remarkable about the content…

Aside from perhaps Flynn’s incredulity at the media attention…

Flynn is set to be sentenced in that federal court on Tuesday.

Of course, as Christina Laila notes, the real crime is that Flynn was unmasked during his phone calls to Kislyak and his calls were illegally leaked by a senior Obama official to the Washington Post.

*  *  *

Full document below…

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The Myth of Western Democracy

British prime minister May has turned Brexit into subservience to the EU.

Paul Craig Roberts

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Authored by Paul Craig Roberts:


How does the West get away with its pretense of being an alliance of great democracies in which government is the servant of the people?

Nowhere in the West, except possibly Hungary and Austria, does government serve the people.

Who do the Western governments serve? Washington serves Israel, the military/security complex, Wall Street, the big banks, and the fossil fuel corporations.

The entirety of the rest of the West serves Washington.

Nowhere in the West do the people count. The American working class, betrayed by the Democrats who sent their jobs to Asia, elected Donald Trump and the American people were promptly dismissed by the Democratic candidate Hillary Clinton as “the Trump deplorables.”

The Democrats, like the Republicans, serve power, not the people.

In Europe we see the squashing of democracy everywhere.

British prime minister May has turned Brexit into subservience to the EU. She has betrayed the British people and has not yet been hung off of a lamp post, which shows how acceptance the British people are of betrayal. The British people have learned that they do not count. They are as a nothing.

The Greeks voted for a leftwing government that promised to protect them from the EU, IMF, and big banks, but promptly sold them out with austerity agreements that destroyed what remained of Greek sovereignty and Greek living standards. Today the EU has reduced Greece to a Third World country.

The French have been in the streets in revolt for weeks against the French president who serves everyone except the French people.

There are currently massive protests in Brussels, Belgium, with half the government also resigning in protest against the government signing a pact that will replace the Belgian people with migrants from Africa, the Middle East, and Asia. The corrupt and despicable governments who signed this pact represent foreigners and George Soros’ money, not their own citizens.

Why are citizens so powerless that their governments can elevate the interest of foreigners far above the interests of citizens?

There are a number of reasons. The main one is that the people are disarmed and are propagandized to accept violence from the state against them, but not to deliver violence in return against the governments’ illegal use of force against citizens.

In short, until the conquered peoples of Europe kill the police, who serve the ruling elite and delight in inflicting brutality against those whose taxes pay their salaries, take the weapons from the police, and kill the corrupt politicians who have sold them out, the peoples of Europe will remain a conquered and oppressed peoples.

Some time past Chris Hedges, one of the remaining real journalists, made it clear that without violent revolution to excise the tumor of government superiority over the people, freedom throughout the West is dead as a doornail.

The question before us is whether the Western peoples are too brainwashed, too firmly locked in The Matrix, to exhausted to stand up and defend their freedom. Resistance is happening in France and Belgium, but the government that sold out Greece hasn’t been hung off of lamp posts. Americans are so brainwashed that they think Russia, China, Iran, Syria, North Korea, and Venezuela are their enemies when it is perfectly clear that their Enemy is “their” government in Washington.

Except for my American readers, Americans are locked in The Matrix. And they will kill in order to stay in The Matrix, where the controlled explanations are reassuring. Anyone who looks to Washington for leadership is an idiot.

Washington is a master of propaganda. Washington’s propaganda has even infected the Russian government, which from all reports stupidly believes that accommodation to Washington is the secret that will make Russia successful.

It is a foolish government that relies on agreements with Washington.

What it comes down to is this: If acceptance of provocations avoids war, that is the correct policy, but if acceptance of provocations encourages more provocations until war is unavoidable, then a more robust response to provocations is the correct policy. A more robust response introduces caution into the process, whereas acceptance of provocations encourages the aggressor.

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Why The Senate Vote To End Yemen War Is So Important

Stopping US participation in this brutal war is by itself a wise and correct move, even if it comes years too late.

Ron Paul

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Authored by Ron Paul via The Ron Paul Institute:


Last week something historic happened in the US Senate. For the first time in 45 years, a chamber of the US Congress voted to pull US forces from a military conflict under the 1973 War Powers Act.

While there is plenty to criticize in the War Powers Act, in this situation it was an important tool used by a broad Senate coalition to require President Trump to end US participation in the Saudi war against Yemen. And while the resolution was not perfect – there were huge loopholes – it has finally drawn wider attention to the US Administration’s dirty war in Yemen.

The four year Saudi war on neighboring Yemen has left some 50,000 dead, including many women and children. We’ve all seen the horrible photos of school buses blown up by the Saudis – using US-supplied bombs loaded into US-supplied aircraft. Millions more face starvation as the infrastructure is decimated and the ports have been blocked to keep out humanitarian aid.

Stopping US participation in this brutal war is by itself a wise and correct move, even if it comes years too late.

The Senate vote is also about much more than just Yemen. It is about the decades of Presidential assaults on the Constitution in matters of war. President Trump is only the latest to ignore Article I, Section 8 of the US Constitution, which grants war power exclusively to Congress. Yes, it was President Obama who initially dragged the US illegally into the Yemen war, but President Trump has only escalated it. And to this point Congress has been totally asleep.

Fortunately that all changed last week with the Senate vote. Unfortunately, Members of the House will not be allowed to vote on their own version of the Senate resolution.

Republican Leadership snuck language into a rule vote on the Farm Bill prohibiting any debate on the Yemen war for the rest of this Congressional session. As Rep. Thomas Massie correctly pointed out, the move was both unconstitutional and illegal.

However as is often the case in bipartisan Washington, there is plenty of blame to go around. The Republicans were able to carry the vote on the rule – and thus deny any debate on Yemen – only because of a group of Democrats crossed over and voted with Republicans. Democratic Whip Steny Hoyer is being blamed by progressives for his apparent lack of interest in holding his party together.

Why would Democrats help a Republican president keep his war going? Because, especially when you look at Congressional leadership, both parties are pro-war and pro-Executive branch over-reach. They prefer it to be their president who is doing the over-reaching, but they understand that sooner or later they’ll be back in charge. As I have often said, there is too much bipartisanship in Washington, not too much partisanship.

Americans should be ashamed and outraged that their government is so beholden to a foreign power – in this case Saudi Arabia – that it would actively participate in a brutal war of aggression. Participating in this war against one of the world’s poorest countries is far from upholding “American values.” We should applaud and support the coalition in the Senate that voted to end the war. They should know how much we appreciate their efforts.

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