TL;DR:

1. There is no empirical evidence that monetary policy (interest rate) has any direct impact on an economy running a floating exchange rate currency.
2. The driver of economic growth is largely a function of government deficit spending. Interest rate can have an indirect impact on the economy when it makes up a large proportion of the federal government spending.
3. Interest rate is a weapon/tool to discipline the working class in the form of monetary austerity, and the developing world when wielded by the global reserve currency issuer.

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Full analysis:

There is no empirical evidence that monetary policy (interest rates) has any direct effect on an economy that runs on currency with floating exchange rate. If anything, it’s just the opposite of what the neoliberals had thought would happen.

Take Russia for example - the Central Bank has raised the interest rate to 19% already! Not only did it not curb inflation, not only did it not increase savings, corporate loans have gone up, consumer spending has gone up, auto loans are growing at a record pace, and small and medium businesses are still taking out loans at a rapid pace.

The Russian Central Bank continues to implement the neoliberal directive from the IMF - increasing rate to curb spending and thus inflation, but the opposite reaction has happened. Now they’re thinking of going up to 20% lol. How is this not a complete breakdown of the neoclassical economics paradigm?

The situation in the US is even more ridiculous. The Fed wanted to engineer a recession through rate hikes to curb inflation (remember when Larry Summers wanted 10 million people to lose their jobs to bring inflation down?), but unexpectedly caused deficit to grow because the volume of US treasuries is so huge that the rate hike had caused a $1 TRILLION payout in 2023 alone. With so much fresh money given to the rich people, even small drips of trickle down was enough to keep the US economy afloat. The interest payment of the US federal government has exceeded their military spending for the first time this year! At 8% GDP deficit spending, this was the reason why the US has not gone into recession, yet.

Now, changing interest rates may work in a fixed exchange rate regime (e.g. gold standard, Bretton Woods) because of the coveted “real” or “natural” interest rate that the central bank can somehow “divine” and try to “match” that, but there is irrelevant as the US has already abandoned the Bretton Woods since 1971 and gone full fiat currency. Somehow mainstream economists still pretend as though economics work as it did in the gold standard era.

As such, whether the economy stays afloat or spirals into recession is, for the most part, a function of government deficit spending (how much money is being circulated in the economy i.e. people have money to spend vs how much money has been collected by the government in the form of taxation i.e. people have no money to spend and thus have to take out loans until they can no longer pay back their debt, triggering a recession like in 2008).

The US has a higher risk of recession after lowering interest rates (if sustained over the next few months - now it’s too early to tell), because nearly half of its deficit spending has been driven by interest income payout. When interest rate drops, less interests are being paid out, and if the government does not pass new budget bills that increase spending (and not to the rich people, but in social spending and stimulus), then consumption will go down, unemployment will rise, and recession will happen.

Now, there are other uses of interest rate as well. First is monetary austerity, a weapon/tool to discipline labor. By increasing interest rate, it punishes the working class with high APR rate, while the rich receives free income through interest income, which effectively functions to shift the wealth from the poor to the rich.

Second, rate hike is a weapon/tool to wreck the economy of the Global South. When the US raises interest rates, international capital fled back to US shores, causing a dollar crunch in the developing world. Egypt, Pakistan, Sri Lanka and two dozens of African countries on the brink of default are the direct victims of the US hiking rates over the past 2 years. Furthermore, foreign central banks raise their own interest rates to prevent capital flight to the US, effectively administering monetary austerity on their own citizens!

Now that the US is lowering interest rates, it will ease the dollar crunch problem in the Global South, and increases IMF lending back to the developing countries who are desperately in need of cash to buy food, fuel and repay their debt. This will facilitate the restoration of dollar hegemony in the Global South, in the absence of a viable alternative.

What the Fed just did playing with the interest rate is complex and perhaps will even cause unexpected consequences that we cannot predict due to non-linear effects. and it is not even remotely as simple as what mainstream economists think - high rates means more savings, less spending and lower rates means less savings, more spending.

Huawei phone owners stay winning.

It’s more nuanced than that. The last election in Taiwan gave a pretty clear answer, and it was fairly split.

DPP ran on “open up to the world first, then to China” while KMT ran on “open up to China first, then to the world”.

DPP won with ~40% of the votes and KMT ~33%.

In general, most people expect and want the status quo to persist, and the most pertinent question is whether Taiwan should lean more towards the rest of the world (liberal democracy) or towards China in the immediate future.

That too. American politics is more like an entertainment in China haha.

Because Trump still says reasonable things once in a while that is not completely detached from reality. The bar is that low. Desperate people will believe in anything.

It’s the same reason why many people in China and Russia like Trump, because once in a while he says stuff like this (there is even a tag that says this clip was the 12th most popular video on Bilibili at one point).

Israel is betting on Iran not wanting to be dragged into a regional war. The economic situation has’t been great for Iran with all the sanctions, it’s going to get even worse if a war is to happen (not to mention that many will be looking to flee the country if economic conditions continue to deteriorate). Most countries are not like Russia that can sustain itself and possess conditions that render it highly immune to Western sanctions (and even then, the impact is not insignificant).

So you end up in a situation where everyone is dragging their feet because they don’t want to start a war. And this is precisely what allows the US and Israel to keep calling everyone’s bluff and getting away with it.

Besides, everyone knows what the Zionists are capable of doing if they are truly on the brink of defeat. It is an ideology of ethnosupremacy with ethnic cleansing the Palestinians as their end goal, and the defeat of Israeli military would certainly mean the end of its ideology.

What do you think the believers would do when they have come to realize that their ethnosupremacist ideology can no longer be allowed to exist, that their dream of an Israeli state without Palestinians would have to be abandoned? Blowing up the world with nukes becomes the only option left for them. It is a rational decision for the irrationals.

Trivia time:

Hunter Biden met his business associate Devon Archer through Christopher Heinz, John Kerry’s stepson and heir to the food company.

Archer and Heinz were friends in Yale and founded the private equity firm Rosemont Capital together.

Archer, Heinz and Hunter Biden then founded Rosemont Seneca Partners together.

Hunter Biden and Devon Archer would then go on to serve on the board of Burisma Holdings, a Ukrainian energy firm. Heinz reportedly ended his business relations with both because of this.

In 2016, Vice President Joe Biden got the Ukrainian Prosecutor General Viktor Shokin dismissed by threatening to withhold a $1 billion dollar loan to Ukraine. Shokin had been the top prosecutor investigating the corruption case of Burisma Holdings.

In 2019, Trump would get impeached by the Democrats for threatening to withhold a $400 million military aid to Zelensky unless he agreed to investigate the Bidens and their connections to Burisma.

It’s crazy to think about the whole connection between the Heinz food company, the Democrats and the war in Ukraine.

I wasn’t going to respond, but let’s not throw around accusations here about “bait” and whatnot.

That question was inspired by Trueanon’s latest episode that covered how RT was recently caught trying to fund American right wing grifters like Tim Pool and his likes in a most incompetent and hilarious manner.

It wasn’t so much about how Russiagate made Trump win, but the fact that Russia is indeed trying (and failing) to influence the American political right. How hard is it to believe that some incompetent Russian intelligence officer named “Eduard Gregoriann” came up with some half baked plans that the Republicans fell hook, line and sinker for?

I simply asked if Project 2025 (which I don’t take nowhere as seriously as libs as I don’t think it will ever be realistically implemented) somehow had a Russian connection given its naming conventions (something I picked up on reading Soviet military history), but that was enough to invite a whole load of angry comments from Russia defenders on Hexbear which I truly did not expect.

Yeah people forget that Russia is a neoliberal hellhole.

After the crisis, the percentage of black homeowners with negative equity exploded by twenty-fold, from 0.7 percent to 14.2 percent — and unlike white families, did not reach its peak until 2013.

What insanity.

It was also extremely demoralizing with an attrition rate of 90%. Only a few thousand made it to Yan’an, and most people they started out with would perish along the journey.

The feat was extraordinary, and what determination it would take to keep the revolution alive at all cost. Nobody even knew what the future would look like for them, the challenges ahead of them, let alone their ultimate victory!

Well the screenshot says 26 days of non-stop walking. If you factor in rest and sleep, it could easily be a 2-3 months endeavor at minimum.

The Long March was nearly a year, and yes I agree, not even remotely comparable given that the Chinese communists were trekking through uncharted wilderness of the mountain ranges.

I shudder to think what would have happened to world history if they had just decided to give up instead of keeping the revolution alive at all cost.

To what end? To continue the brutalization of Africa, South America, the Pacific, etc. under the new shining sun of a Black president?

Don’t forget that Obama wiped out nearly half of the generational wealth of black communities in America overnight when he chose to bail out Wall Street by evicting 9 million American (predominantly black and Hispanic) families and transferred their properties to private capital ownership, one of the single largest transfer of wealth from the working class to the top 1% in American history. The wealth that black communities had accumulated over decades all ended up in the hands of private capital overnight thanks to Obama.

Well this site is probably the only place I feel comfortable asking stupid questions like this, but clearly I forgot that Hexbear is full of Putin’s strongest soldiers and treated as though I had just asked an idiotic question (it probably was).

Honestly I think American communists (if such a group even exists) should really prepare for a potential Long March if it ever comes to that.

This is nothing (~1500 miles on foot, likely on paved roads as well) compared to the Long March where Chinese communists trekked over 5600 miles through the most treacherous mountainous terrains across China while being pursued by the KMT set out to kill them.

Slightly unrelated, does anyone knows why podcasts like this never bothered to release their transcripts?

These episodes were scripted after all, so it’s not like they have to do extra work to get it down in written form. I’d even pay good money to purchase them but this has never been an option.

As someone who much prefer reading than listening because it’s so easy to miss small details when your attention wanders off for just a few seconds, it’s kinda frustrating. The same with the Revolutions podcast - so much details are packed into every episode and it would have been so much better to just being able to read them.

The Soviet Union and Russia use numbers as designation for many of its projects under development, and they are not assigned a name until serial production phase. Here’s an example of Soviet ship project numbers that follows this convention.

This extends beyond military projects though. In the USSR/Russia, research institutes are designated by numbers, as well as hospitals and schools etc. You don’t go to Libertyville High School, instead in Russia you go to “School 57” (Школа № 57).

China also largely follows the same numbering conventions for military projects, institutions, hospitals and schools.

Follow up to the IMF mission to Russia:

IMF scraps its mission to Moscow, Russian media reports

The IMF has indefinitely postponed its first official visit to Russia since President Vladimir Putin ordered the full-scale invasion of Ukraine following criticism from several of Kyiv’s European allies, according to Russian state media.

The IMF’s leadership scrapped plans to begin a review of the Russian economy this week ahead of a trip to Moscow later this month because the mission was “technically not ready”, Alexsei Mozhin, the IMF’s executive director for Russia, told Tass news wire on Wednesday.

Mozhin said the last-minute decision was taken on Monday, the day preliminary talks were supposed to start. He suggested the U-turn had been prompted by objections from European countries to the IMF’s renewal of its ties with Russia.

In a letter seen by the Financial Times and signed by Poland, Denmark, Finland, Sweden, Lithuania, Latvia, Estonia, and non-EU members Iceland and Norway, ministers spoke about the “reputational risk” to the IMF and implied that such a visit would “diminish donors’ efforts and actions in supporting Ukraine through IMF initiatives”.

The visit “would be a sign for the international community that the IMF is ready to go back to business as usual, taking a step towards normalising relations with the aggressor”.

The European libs have prevented the reconciliation between Washington and Moscow lol. What a twist.

Once again the Russian libs get betrayed by their European “allies” who they love so much but that one-sided affection has never been reciprocated.

Do you seriously think that the consequences of Khrushchev’s reversal of Stalin’s policies would manifest immediately and not take years to culminate?

Stalin had built a strong industrialized economy that was growing exponentially and on the rise by the 1950s. It would take 30 years after Khrushchev’s policies for the USSR economy to stagnate, and eventually fail.

For example, when the USSR defaulted under Khrushchev in 1957, the seeds that would lead to “no food under communism” stereotype had already been sown, as both industrial and agricultural production were brought to stagnation. Many policies under Stalin that made the USSR the most rapid growing economy in history were reversed en masse by Khrushchev.

Reagan and Clinton’s financial deregulations culminated in the subprime mortgage crisis in 2007 and the global financial crisis in 2008 - 7 years after Clinton had stepped down as president.

Honestly this site has always leaned more towards vibes-based discussion rather than actual material analysis. Can’t really fault that since this is a shitposting site after all and most of us come here after a day’s of hard work to relax and talk shit, not exactly to engage in profound intellectual discussion. If we’re restricting this to serious posting the number of active users will dwindle by a lot.

So a bit of vibeposting isn’t so bad as long as it keeps people engaged and come here to read the news and learn from/participate in the discussions going on in the news mega.