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Hyper-inflation being induced by the US
Published on: Sunday, May 08, 2022
By: Datuk John Lo
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Sabahans have already been suffering from higher prices more than the rest of Malaysia for decades for many well-known reasons. We can take comfort that the Russian/Ukraine war is many thousands of miles away in Europe. 

But Sabah, like the rest of the world cannot escape from its very serious economic fallouts, the hyper-inflation induced by a declining, increasingly irresponsible and desperate-USA.

The USA created the Russian/Ukraine War.

The USA in cohorts with its vassal states, EU, has, by design and intention, provoked this war. Not Russia. Since the breakup of the Soviet Union, the hegemonic USA has pushed and enticed most of the former Soviet states into EU and Nato. 

Russia has warned for a long time that the West’s continuing eastward push has reached Russia’s redline. USA has totally ignored it. 

Ukraine is at Russia’s doorstep. Trying to admit Ukraine into EU/Nato was the last straw for Russia, hence this war. 

Practising double standards, USA and ally Australia, have objected strongly and threatened invading the Solomon Islands cos it has signed a security pack with China. USA is dictating “Do what I tell you, don’t do what I do”. 

The West is in favour of the “rule based” world order that they have created to facilitate them to rule and ride roughshod over the rest of the world. 

Backfire on USA/EU’s bad economic sanction strategy.

In the most discriminatory manner, USA has been dishing out unilateral imposition of economic sanctions against any and many countries. 

The fact is that USA has been acting the self-appointed big bully in the world. 

Like previously, it has no authority from UN to impose sanctions on Iran, Iraq, China, Cuba, Latin American countries. 

The American economic sanctions have caused untold humanitarian sufferings and human right abuses, most especially Iran. USA is the biggest human right abuser in history.

USA/EU sanctions against Russia have backfired. The Russian economy has not collapsed, the Roubles, which fell precipitously for a few days has regained its strength and is now stronger than before the economic sanctions.

Poor Ukraine has been played out by USA/EU badly, having been put on the pedestal to fight the Russian. Result? Great loss of life and defeat is all but imminent now. 

Millions have become refugees. Ukraine has been inflicted massive destructions, all that USA/EU have done, in term of war contributions, is to send obsolete/reconditioned weapons to Ukraine. Not one Nato country, not even USA, dare to put boots to the ground.

Weaponising sanctions, seizing of USD foreign reserves and physical assets of other countries, depriving use of SWIFT will boomerang and weaken the USD and create havocs in the American economy. 

USA, the culprit, has benefitted most. 

Ukraine has suffered worst. EU’s inflation has reached all time high in 40 years. Price of energy has shot through the roof. Poor and emerging countries have been greatly impacted with many of their economies on the brink of collapse. USA has emerged the greatest winner. 

It is selling oil/gas to EU at record prices, EU countries are buying American weapons like no tomorrow. The American military complex companies are doing roaring business. Its war industrial complex is booming again! At whose expense? 

The Americans are in this war, like all other wars since WW2, for the profit for the few in politics and arm industrial complex, causing thousands of lives and human sufferings.

American overly arrogance or naïve-stupidity or desperation.

USA has tried to destroy China’s economy by fair or foul means for several years without success. Despite the Americans and Covid the Chinese economy is still growing. The American economy has shrivelled. 

https://www.forbes.com/sites/jonathanponciano/2022/04/28/us-economy-shrank-14-last-quarter-in-worst-showing-since-covid-recession-new-gdp-estimate-shows/?sh=41bfc0384277

In desperation to put down Russia, USA has demanded and threatened China to go against Russia. How silly can USA get? Does USA really think that China, in the context of present USA/China bad relationship, will be stupid to go against Russia? Arrogance? Naïve stupidity or just desperation?

America has lost its position as the world leader. China has refused to entertain it, as has India, Saudi Arabia, Qatar, all African and Asian countries except its vassal states, Japan, South Korea, Taiwan, Australia. USA has isolated itself.

USA has caused world’s worst inflation in 40 years.

By taking on China, USA has caused the first round of serious inflation in the world. Picking a fight with China which has become the world’s factory, USA has disrupted and destabilised the world’s greatest and most efficient supply chain system. 

Over the last 40 years, China has built up an unparalleled industrial/manufacturing base, supplying products to the global market at competitive prices. USA, with its bloated high cost labour structure, has simply failed to compete.

Covid has brought a 2nd round of inflation.

So far, the world can still cope.

But by instigating the Russia/Ukraine war, USA has caused the deadly third round of hyper-inflationary spike which is producing massive economic disorders in the world. Suffering most are the poor and emerging countries in Latin America, Africa, Asia. 

What Afghanistan is going through now is unimaginable. Even EU countries’ standard of living has plummeted because of spiralling of food and oil/gas prices. 

The worst is yet to come. American couldn’t be bothered as long as its military industrial complex is booming with profits a few companies and some politicians.

At time of writing, US Federal Reserve Bank has up 0.5pc interest rate. This is a very rare and significant decision which the Fed has not done since 2000, reflecting the seriousness of inflation pressure.

https://www.wsj.com/livecoverage/federal-reserve-meeting-inflation-rate-may-2022

Malaysia? and Sabah?

Malaysia has somewhat sheltered from this hyper-inflation by the exceptional good prices in oil/gas and CPO. But little of these windfalls have yet to reach the poor especially those in the B40.

Sabahans are affected badly [a] Inflation has hit all Sabahans very severely. Prices of almost every item have shot up a lot. 

[b] Apart from better revenue from sales tax from CPO and royalty from oil, Sabah will not benefit much from their high prices. 

Sabah will not smell the federal government’s windfall from these two commodities even though Sabah is the largest producer of both.
Federal has refused to fund the Serudong CIQ in Tawau. So, what can we expect as the unwanted child in the Malaysian family?

Sabah has absolutely no say/power in monetary policies/implementation and fiscal policies at the federal level. Sabah has limited fiscal options in Sabah. 

This is true, irrespective of which party is in federal government. Restoring MA63 rights is futile if Sabah has no say in monetary/fiscal policies and implementation. 

Soonest possible, all our political leaders should meet on alleviation of the raging inflation adversely impacting on Sabahans very badly. 

Our standard of living is deteriorating rapidly.


 

- The views expressed here are the views of the writer Datuk John Lo and do not necessarily reflect those of the Daily Express.

- If you have something to share, write to us at: [email protected]





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