Americans to feel inflation pinch amid Russian oil ban
Published: Mar 13, 2022 09:23 PM
Illustration: Chen Xia/Global Times

Illustration: Chen Xia/Global Times

Gasoline prices are now surging to record highs in the US, prompting American police to warn motorists to guard against rising cases of gas theft - thieves who drill a hole in a fuel tank and drain all the gas with a siphon hose. How precious is the fuel? It used to cost $40 to fill a tank, but now the bill has shot up to more than $100.

To make things worse, consumer prices of nearly all commodities and services in the US have kept rising since President Biden was elected to the White House early last year. And, American households are unlikely to see a relief any time soon.

The US Labor Department said last week that domestic inflation is galloping at a new record pace, as February consumer price index rose to a high of 7.9 percent - a level never seen since January 1982. In January 2022, the reading was 7.5 percent. Double-digit inflation is on the horizon, shadowing the American economy.

Hyperinflation seems set to plague the US throughout 2022 and beyond, as the Biden administration bungles economic management by flooding it with endless credit lines and fiscal budget deficits since entering office. Last year, the administration pushed Congress to pass a $1.9 trillion fiscal stimulus bill which propelled inflation, and just a few days ago, another $1.5 trillion spending bill was approved by the US Senate, including $782 billion to fund American troops, of which a disproportionate chunk will end up in the pockets of the American military-industrial complex (MIC).

The ongoing military conflict in Ukraine, and the US government's penchant for playing geopolitics and taking a zero-sum game approach to major rivals or adversaries like Russia, will keep the CPI levels elevated in the US for a foreseeable longer time.

The swift and sweeping economic sanctions being placed on Russia by the US and its Western allies, and Moscow's countermeasures will almost certain stretch the US supply chain to near breaking point, driving the prices of fuel, mineral resources, food and other items even much higher. And, Trump's reckless trade war with China is inherited by Biden for the sole purpose to slow down China's economic rise, though the tariffs levied on $360 billion imported Chinese goods have ended up manifesting as higher price tags at the US supermarkets.

The majority of American families ought to be prepared for a harder life in the months, if not years ahead, as high prices eat into their buying power and erode livelihoods. The onus is on the Biden government to bring inflation down, but unfortunately, his economic team and the Federal Reserve are not up to the job.

For a time, the US government officials have hidden their heads deep in the sand like a horde of ostriches, telling the American public that inflation was just "transitory" -- meaning temporary. Lately, when asked by reporters what he will do to address surging prices, Biden shrugged his shoulders, saying that Russia is the cause for the staggering oil price hike.

It's laughable and silly to place the blame squarely on Russia.

After the military conflict between Russia and Ukraine broke out in late February, the US and its allies have rushed to sanction Moscow, cutting its banks off from the SWIFT global financial settlement system, seizing Russia's assets overseas, and prodding Western businesses to abandon Russian market. Obviously, the US and its allies are aiming to suffocate the Russian economy into an immediate coma, because a severely wounded Russia will lose ability to compete with the US.

However, in the eyes of many other nations and peoples on this globe, it is the US-led NATO that has kept expanding, enrolling numerous countries big or small in Europe and making consistent inroads toward Russia's doorstep, seriously threatening the national security of a sovereign nation. If Ukraine had renounced its intention to join the NATO, or the world's largest military alliance had made a written pledge not to admit Ukraine, the Ukraine conflict could have been avoided.

To pummel Moscow, last week President Biden even ordered to ban imported oil, natural gas and other energy products from Russia - a very unreasonable move as the US is already suffering from an inflation of energy prices. For the purpose of stifling or destroying Russian economy, the US government eagerly wanted to wrench Moscow's throat harder, even at its own peril. In a worst-case scenario, crude oil prices may surpass $200 a barrel in 2022.

And, another drama has taken the stage before global eyes. As Russia used to export 4-5 million barrels a day, the Biden administration is seen begging America's old foes like Venezuela and Iran to increase crude supplies and make up for the sanction induced shortfall. To date, the White House refuses to disclose how much oil it is seeking or describe any progress of talks with other oil-producing countries.

The current round of ferocious inflation covers across-the-board commodities and services, which could be worsened by the unpredictable course of the coronavirus pandemic, the conflict in Ukraine, and the US-led economic warfare with Russia. 

History has told us that in hard times, tens of millions of small and medium-size businesses will suffer from supply chain disruption and forbiddingly high costs, and, ordinary wage-earners, pensioners, and their children, will have to bear the brunt of consequences. 

The author is an editor with the Global Times.