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What did Vladimir Putin just call the United States?

In the run-up to yesterday's debt ceiling deal between Congress and the White House, there was a lot of frustrated reaction from world leaders fearful of what a U.S. debt crisis could mean for their own economies. But Russian Prime Minister Vladimir Putin might have just won the prize for the strongest response so far.  Today, he told a Russian youth group that the United States was "like a parasite" on the world economy.

They are living beyond their means and shifting a part of the weight of their problems to the world economy ... They are living like parasites off the global economy and their monopoly of the dollar ... Thank god that they had enough common sense and responsibility to make a balanced decision.

Russia holds a large amount of U.S. bonds and treasuries, which means had the United States defaulted, it too would have been in trouble. There was clearly some relief this morning, following the news of yesterday's agreement. Both of Moscow's stock exchanges opened up about two percent -- though, they later declined due to investor doubts about the Washington plan.

In today's speech, Putin said Russia should look for other reserve currencies to hedge against "a systemic malfunction in the U.S. economy," according to the Wall Street Journal.

What options do they have besides the dollar? The Journal reports that last year Russian President Dmitry Medvedev held talks with Chinese leaders exploring the possibility of moving reserve assets into the yuan and away from the dollar.

Russia cut back its purchases of U.S. treasuries in recent months -- down from $176 billion in October, 2010 to $115 billion in May. Still, they are unlikely to completely bail on the U.S. market any time soon since Russian officials concede it is still a safer bet than other world economies.

So, the Kremlin will most certainly be dealing with the U.S. "parasite" for the foreseeable future.

AFP/Getty Images

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Suicide-stricken Chinese iPhone-maker replacing 1 million employees with robots

Chinese media agency Xinhua reports that Foxconn, China's largest private-sector employer, is angling to replace more than 80 percent of its workforce over the next three years with robots.

The announcement comes a year after a string of employee suicides drew attention to poor working conditions at the company, which produces gadgets for Apple, Nokia, and Motorola, among others. At the time, management responded with a hodgepodge of measures, some to actually appease its workers (granting them pay raises and access to counselors), and some to just get them to, you know, stop killing themselves (forcing them to sign a pledge not to commit suicide and installing suicide nets on buildings to catch those who jump). But a report released this May by a Hong Kong-based labor watchdog suggests that working conditions remain worrisome.

Employee discontent aside, Foxconn's announcement appears more a response to the changing environment for Chinese manufacturers who look to produce cheap goods for export. Rising wages have made this model increasingly less sustainable. Foxconn reported a net loss of $218.3 million last year and has seen revenues decline 8 percent since 2009.

The company's location exacerbates its financial predicament. Half of its workforce operates out of its factories in the affluent region surrounding the southeastern Chinese city of Shenzhen, whose liberal business environment made it a major hub for Chinese manufacturing during the 1980s and 1990s. But the same success that first brought companies like Foxconn to Shenzhen has driven up wages and forced many manufacturers to relocate inland, closer to the homes of the migrant workers who make up the bulk of China's low-wage workforce.

Even moves inland can only work for so long. Chinese finance magazine Caixin says that, in the wake of the Foxconn suicides, almost every provincial government has legislated minimum wage increases over the last year. In the first quarter of 2011 alone, says Caixin, hikes in 13 provinces averaged more than 20 percent. Meanwhile, a May 5 report from Boston Consulting Group predicts that net labor costs in China and the United States will converge sometime around 2015.

If this is the end of the line for one million humans at Foxconn, the company probably could have done a better job breaking the news to its employees. The Xinhua report says that company chairman Terry Gou announced the measure last night at a workers' dance party. I'll bet the party petered out pretty soon after that.

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