Russia's Putin Rebukes U.S. for Handling of Debt Deal Issue

Russian Prime Minister Vladimir Putin has weighed-in regarding the long saga called the U.S. debt deal crisis.

"Thank God," Putin said, "that they had enough common sense and responsibility to make a balanced decision."

Putin, you may run again for Russia's presidency, add that the United States is living "like a pararsite" on the global economy and argued that the dollar's dominance was a threat to the financial markets.

"They are living beyond their means and shifting a part of the weight of their problems to the world economy," Putin said, nydailynews.com report.

But Putin, who has frequently criticized the United States' foreign exchange policy, noted that Russia holds a large amount of U.S. bonds and treasuries.

"If over there (in America) there is a systemic malfunction, this will affect everyone," Putin told the young Russians. "Countries like Russia and China hold a significant part of their reserves in American securities ... There should be other reserve currencies."

Other countries, including emerging market giants China, Brazil, and India, have expressed an interest in having new "global currency" for international transactions. In theory, a global reserve currency patterned after the International Monetary Fund's special drawing rights is possible, but the world's major economic powers in the G-20 are far from an agreement on the possible new medium of exchange.

In leiu of the above, the euro has served as an "alternate dollar" -- up until Europe's sovereign debt crisis decreased its value; further it's possible that the euro may be discontinued, if European Union leaders do not continue to agree on the appropriate response to debt-burdened countries Spain, Portugal, and Italy.

On another possible run to head Russia, Putin did not indicate whether he plans a return to the Kremlin or will stand aside for current Presdent Dmitry Medvedev, his partner in Russia's leadership tandem, to run for a second term.

Putin is still very popular in Russia, with his approval rating at/near 70 percent. His United Russia Party is trying to overcome a slide in voter backing before December's parliamentary election, and it hopes a strong showing then will bode well for a March 2012 president election -- one with Putin possibly on the ballot.

Economic/Foreign Policy Analysis: Putin's words were somewhat harsh. That said, In fairness, China also rebuked the United States repeatedly for its handling of the debt ceiling issue, and urged it to "act responsibly."

Overall, the U.S.'s handling of the debt ceiling issue was poor, to put it diplomatically. The narrow, short-term, self-interest of a very small but vocal segment of the U.S. ideological spectrum -- the Tea Party faction -- was willing to hurt and freeze up not only U.S. stock, bond, and credit markets, but the global financial system. And the international community -- including major lenders to the United States -- were appalled, and justifiable so.

It will take the U.S. a considerable amount of time to recover internationally from the sad chapter, and the chapter will likely encourage Russia, China, India, Brazil and Mexico to lobby harder for an international medium of exchange.