Bloomberg News

Putin Says U.S. Acts as Parasite, Benefits From Dollar Monopoly

October 11, 2011

Oct. 11 (Bloomberg) -- Russian Prime Minister Vladimir Putin said Federal Reserve purchases of Treasuries are damaging the country’s fiscal discipline and the U.S. is taking advantage of the dollar’s “monopoly” as the main reserve currency.

“Maybe our American colleagues know better, but back in the day, this wasn’t how they were advising us to act,” Putin said in an interview with Chinese state media in Beijing today. “America is being parasitic with the dollar’s monopoly position. I didn’t say that it’s a parasite on the world economy.”

Putin said the U.S. should work together with Europe and and the so-called BRICS -- Brazil, Russia, India, China and South Africa -- during Group of 20 meetings to find solutions to global imbalances. Russia, which has the world’s third-largest reserves, has reduced its holdings of U.S. government debt by 43 percent from a record high on Oct. 31, 2010, to $100.2 billion as of July 31, Treasury data show.

An announcement by Germany and France that they intend to support the euro is a “positive signal” as Europe struggles to resolve its debt crisis, Putin said. Troubles there are primarily political because Greece only represents 2 percent of the European Union’s economy, he said.

European leaders will need to show “courage” to concentrate their political forces on finding a solution, “because the people in those countries aren’t very happy,” Putin said.

--Editors: Paul Abelsky, Eddie Buckle

To contact the reporters on this story: Ilya Arkhipov in Beijing at iarkhipov@bloomberg.net; Scott Rose in Moscow at rrose10@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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