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Failure to cut interests rates in Russia ‘ridiculous’, says Economics Ministry

As inflation in Russia tumbles in August and September, the Economics Ministry calls any failure to cut interest rates this September “ridiculous”.

Alexander Mercouris




Russia experienced zero inflation in August and in the first week of September, with suggestions that there might actually be weeks of deflation in September as there were in July and August. 

The annualised rate of inflation in Russia has now fallen to 6.9%, and is continuing to fall rapidly.  The underlying rate of inflation is probably around 5.5% or possibly even less.

There is a traditional pick-up in inflation at the end of the year, but even the Russian Central Bank is now admitting that inflation expectations in Russia are now abating. 

“InFom August public opinion poll launched on the Bank of Russia request showed a substantial decline in people’s inflation expectations with wealth prospect assessments turned out to be ultimately optimistic over the last year.

Respondents expressed much lower concern about prices for those goods and services that used to be given heightened attention: meat and poultry, fish and seafood, cheese and sausages, milk and dairy products, medication and drugs, fruits and vegetables. This is in line with actual inflation dynamics.

Respondents also seem to be more optimistic in terms of the changes in their material standing both over the last year and for the next 12 months. Nevertheless, in August they still preferred to do the saving since they believe the current time is unfavourable for big purchases including buying on credit.

Assessments of macroeconomic development in general changed for the better. Respondents expect the growth of production and reduction of unemployment and corruption in 2017.”

Both the Russian Central Bank and the Economics Ministry are predicting growth in August after the brief dip in July which the Economics Ministry attributes to seasonal factors.  The PMI manufacturers’ index for August after a brief dip in July has also turned positive, also pointing to growth. 

All this allowed Putin to say at the G20 summit in Hangzhou that the Russian economy has stabilised and that industrial output in Russia is growing, though slowly.

All economic forecasters, including the Central Bank and the Economics Ministry, are however predicting only slow growth for the remainder of this year and next year.

The reason for this is not the legendary “structural factors” of which we hear so much about.  I attended a seminar at SPIEF 2016 in June attended by Kudrin, Central Bank Chair Nabiullina and Finance Minister Siluanov.  Though the seminar was supposed to discuss “structural factors” and what to do about them, as is invariably the case when this subject comes up, Kudrin, Nabiullina and Siluanov struggled to say what they were.

The reason growth for the remainder of this year and next year will continue to be low is because monetary and fiscal policy continue to be so tight.  Interest rates at their current level of 10.5% may now be roughly twice the level of inflation, which is the reason why investment and real incomes continue to fall and why – in the words of the Central Bank – the population

“…..still preferred to do the saving since they believe the current time is unfavourable for big purchases including buying on credit.”

Since the government in the midst of a recession, with monetary policy extremely tight and despite a sharp fall in the oil price, refuses to run a large federal budget deficit (the current federal budget deficit is just 3.3% of GDP), it is not surprising that there is a lack of growth.  In order for growth not just to return but to become stronger, interest rates will have to go sharply lower.

The point is fully understood by the Economics Ministry whose head, Economics Minister Alexey Ulyukaev, was notably absent from the panel I attended at SPIEF 2016, and who has said that in light of the low growth rate and the sharp fall in inflation a failure by the Central Bank to cut interest rates this September would be “ridiculous”.

Ulyukaev is obviously right, and in light of the Central Bank’s admission that inflation expectations are abating I expect the Central Bank to cut interest rates again this month.  However in view of the Central Bank’s overriding focus on its anti-inflation strategy, and its single-minded determination to bring inflation down to an annualised rate of just 4% by the second half of next year, I expect the interest rate cut this September to be no more than 0.5%, bringing the Central Bank’s rate down to a still very high 10%. 

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EU leaders dictate Brexit terms to Theresa May (Video)

The Duran Quick Take: Episode 115.

Alex Christoforou



The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss how EU leaders have agreed on a plan to delay the the Article 50 process which effectively postpones Brexit beyond the 29 March deadline.

The UK will now be offered a delay until the 22nd of May, only if MPs approve Theresa May’s withdrawal deal next week. If MPs do not approve May’s negotiated deal, then the EU will support a short delay until the 12th of April, allowing the UK extra time to get the deal passed or to “indicate a way forward”.

UK PM Theresa May said there was now a “clear choice” facing MPs, who could vote for a third time on her deal next week.

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Theresa May outlines four Brexit options, via Politico

In a letter to MPs, U.K. Prime Minister Theresa May set out the four options she believes the country has in light of Thursday’s decision by EU leaders to extend the Brexit deadline beyond next Friday.

The U.K. is faced with a four-way choice, May wrote late Friday.

The government could revoke Article 50 — which May called a betrayal of the Brexit vote; leave without a deal on April 12; pass her deal in a vote next week; or, “if it appears that there is not sufficient support” for a vote on her deal in parliament next week or if it is rejected for a third time, she could ask for an extension beyond April 12.

But this would require for the U.K. taking part in European elections in May, which the prime minister said “would be wrong.”

May wrote that she’s hoping for the deal to pass, allowing the U.K. to leave the EU “in an orderly way,” adding “I still believe there is a majority in the House for that course of action.”

“I hope we can all agree that we are now at the moment of decision,” she wrote.

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US media suffers panic attack after Mueller fails to deliver on much-anticipated Trump indictment

Internet mogul Kim Dotcom said it all: “Mueller – The name that ended all mainstream media credibility.”





Via RT

Important pundits and news networks have served up an impressive display of denials, evasions and on-air strokes after learning that Robert Mueller has ended his probe without issuing a single collusion-related indictment.

The Special Counsel delivered his final report to Attorney General William Barr for review on Friday, with the Justice Department confirming that there will be no further indictments related to the probe. The news dealt a devastating blow to the sensational prophesies of journalists, analysts and entire news networks, who for nearly two years reported ad nauseam that President Donald Trump and his inner circle were just days away from being carted off to prison for conspiring with the Kremlin to interfere in the 2016 presidential election.

Showing true integrity, journalists and television anchors took to Twitter and the airwaves on Friday night to acknowledge that the media severely misreported Donald Trump’s alleged ties to Russia, as well as what Mueller’s probe was likely to find. They are, after all, true professionals.

“How could they let Trump off the hook?” an inconsolable Chris Matthews asked NBC reporter Ken Dilanian during a segment on CNN’s ‘Hardball’.

Dilanian tried to comfort the CNN host with some of his signature NBC punditry.

“My only conclusion is that the president transmitted to Mueller that he would take the Fifth. He would never talk to him and therefore, Mueller decided it wasn’t worth the subpoena fight,” he expertly mused.

Actually, there were several Serious Journalists who used their unsurpassed analytical abilities to conjure up a reason why Mueller didn’t throw the book at Trump, even though the president is clearly a Putin puppet.

“It’s certainly possible that Trump may emerge from this better than many anticipated. However! Consensus has been that Mueller would follow DOJ rules and not indict a sitting president. I.e. it’s also possible his report could be very bad for Trump, despite ‘no more indictments,'” concluded Mark Follman, national affairs editor at Mother Jones, who presumably, and very sadly, was not being facetious.

Revered news organs were quick to artfully modify their expectations regarding Mueller’s findings.

“What is collusion and why is Robert Mueller unlikely to mention it in his report on Trump and Russia?” a Newsweek headline asked following Friday’s tragic announcement.

Three months earlier, Newsweek had meticulously documented all the terrible “collusion” committed by Donald Trump and his inner circle.

But perhaps the most sobering reactions to the no-indictment news came from those who seemed completely unfazed by the fact that Mueller’s investigation, aimed at uncovering a criminal conspiracy between Trump and the Kremlin, ended without digging up a single case of “collusion.”

The denials, evasions and bizarre hot takes are made even more poignant by the fact that just days ago, there was still serious talk about Trump’s entire family being hauled off to prison.

“You can’t blame MSNBC viewers for being confused. They largely kept dissenters from their Trump/Russia spy tale off the air for 2 years. As recently as 2 weeks ago, they had @JohnBrennan strongly suggesting Mueller would indict Trump family members on collusion as his last act,” journalist Glenn Greenwald tweeted.

While the Mueller report has yet to be released to the public, the lack of indictments makes it clear that whatever was found, nothing came close to the vast criminal conspiracy alleged by virtually the entire American media establishment.

“You have been lied to for 2 years by the MSM. No Russian collusion by Trump or anyone else. Who lied? Head of the CIA, NSA,FBI,DOJ, every pundit every anchor. All lies,” wrote conservative activist Chuck Woolery.

Internet mogul Kim Dotcom was more blunt, but said it all: “Mueller – The name that ended all mainstream media credibility.”

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Canadian Lawmaker Accuses Trudeau Of Being A “Fake Feminist” (Video)

Rempel segued to Trudeau’s push to quash an investigation into allegations that he once groped a young journalist early in his political career



Via Zerohedge

Canada’s feminist-in-chief Justin Trudeau wants to support and empower women…but his support stops at the point where said women start creating problems for his political agenda.

That was the criticism levied against the prime minister on Friday by a conservative lawmaker, who took the PM to task for “muzzling strong, principled women” during a debate in the House of Commons.

“He asked for strong women, and this is what they look like!” said conservative MP Michelle Rempel, referring to the former justice minister and attorney general Jody Wilson-Raybould, who has accused Trudeau and his cronies of pushing her out of the cabinet after she refused to grant a deferred prosecution agreement to a Quebec-based engineering firm.

She then accused Trudeau of being a “fake feminist”.

“That’s not what a feminist looks like…Every day that he refuses to allow the attorney general to testify and tell her story is another day he’s a fake feminist!”

Trudeau was so taken aback by Rempel’s tirade, that he apparently forgot which language he should respond in.

But Rempel wasn’t finished. She then segued to Trudeau’s push to quash an investigation into allegations that he once groped a young journalist early in his political career. This from a man who once objected to the continued use of the word “mankind” (suggesting we use “peoplekind” instead).

The conservative opposition then tried to summon Wilson-Raybould to appear before the Commons for another hearing (during her last appearance, she shared her account of how the PM and employees in the PM’s office and privy council barraged her with demands that she quash the government’s pursuit of SNC-Lavalin over charges that the firm bribed Libyan government officials). Wilson-Raybould left the Trudeau cabinet after she was abruptly moved to a different ministerial post – a move that was widely seen as a demotion.

Trudeau has acknowledged that he put in a good word on the firm’s behalf with Wilson-Raybould, but insists that he always maintained the final decision on the case was hers and hers alone.

Fortunately for Canadians who agree with Rempel, it’s very possible that Trudeau – who has so far resisted calls to resign – won’t be in power much longer, as the scandal has cost Trudeau’s liberals the lead in the polls for the October election.


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