In early March, at Congress Trading-industrial chamber of the Russian Federation President Vladimir Putin made a landmark statement: “there is No other way, except for the securities issue: Central Bank needs to print money, essentially”. This means that the last word of the liberal officials in the ministries, continuing the Yegor Gaidar, and Patriotic supporters of a sovereign economic policy has not yet been said. With the aim to influence the President, to convey to him the last defensible position of the Center of scientific political thought and ideology Stepan Sulakshin organized a meeting under the name “Russian business and the problem of monetary policy”
Vladimir Putin also admitted that between his advisers and the members of the ministries there is an intense discussion, the subject of which is the economic policy of Russia. The President kind of hinted that she knows about alternative proposals, which have repeatedly expressed, in particular, his adviser, academician of RAS Sergei Glazyev, without daring to make radical reforms in this area. Guarding her voice against conversions Glazyev elevates including the head of the Central Bank Elvira Nabiullina, last year received a landmark award from the management of the IMF and the world Bank
The main argument of her and other monetarists – the need to control inflation. As you can see, when it comes to the administration of the ruble float freely and the compression of money supply to an unacceptably small number, which insists the IMF, which has a policy of strangulation of developing countries, Nabiullina forget about caution. What we have now with the prices and purchasing power of the population? The situation is just wonderful, isn’t it? And inflation is defeated thanks to the wise actions of the Central Bank, presumably? GDP is rising, the real sector is thriving, entrepreneurs very often – a huge plus. No, the reality shows that is not so. Or rather – not so.
“What is lacking for making decisions at the top? Probably, advice, facts, arguments, scientific models and forecasts and projects “turnkey”, with which the President could be found, and then the scales could be biased in favor of supporters of economic reform. One of the most detailed projects of Sergey Glazyev falls to restore the emission and monetization of the Russian economy. This package, which is accompanied by a corresponding note required for the Kremlin offices. And maybe the voice of our congregation is just not enough, as the last drop in the Cup of the various proposals. Therefore, our forum seeks to appeal directly to the President of the country
Under the Constitution the President defines the basic directions external and internal policy, part of which is fiscal policy. But the fact is that already at the constitutional level a legal definition of positions and their contents carries the contradictions. First, under the Constitution, the Central Bank is responsible solely for ensuring the sustainability of the ruble, that is, financial stability. Thus we see that the Central Bank determined the status of amazing – its the decisions it takes, regardless of other authorities, all ministries
Consequently, the economic and social development derived from the fields responsibility of the Bank of Russia. Most of all it resembles a commercial Bank on export operations, although his actions depends, in fact, the future of the country. The law on the Central Bank also States that it formulates and conducts monetary policy together with the government. Question – so you are independent from other state authorities or in cooperation with them? The voices of the entrepreneurs, the public and the scientific expert circles in the face of uncertainty may be a significant factor in this discussion,” said Stepan Sulakshin
The most anticipated at the business meeting was the performance of Sergei Glaziev. Advisor to the President partially repeated the key points as stated in last year’s report to the Security Council. Then, in economic circles, especially among liberals, the repercussions have been very serious. Many experts and social activists, interested in a strong sovereign economy, noted that Glazyev describes the model economy and its proposed mechanisms can be very effective. However the real transformation case is still not reached. But the perseverance of the Rapporteur will not refuse, because it makes sense in detail of his updated thesis
“Let’s start with a clarification – I am the adviser of the President in the field of Eurasian economic integration, therefore, authorized to provide direct advice in this part. As for the theme of today’s conference, you can send the offer as max, the assistant to the President on the economy and hope, and believed that it would reach the addressee
If we look at the current macroeconomic situation, everywhere will see the crisis tendencies. But for some reason only in our country due to the adopted anti-crisis measures continued contraction in output and the decline of the money issue, while all the advanced and developing countries are on the path toward economic growth. First of all, we have a decline in engineering and other key branches of the real sector. Today the world is again going through a change of technological orders. Shows how the whole historical experience, during these periods, there is turbulence in the global economic space, which ultimately translates into a long depression
Without government assistance R & d perspective, without putting public funds in innovation we can’t do it. The only trouble is that in terms of the Federal-democratic paradigm that our country has copied the West, to intervene in the economy, the state can only in one case – if it threatens national security. As a rule, transition to new technological way has always occurred due to jumps in the arms race, the battle for leadership in a technology that is directly related to ensuring the sovereignty of the country
In the new technological environment of the relevant industry, according to our forecasts, will be health. This is due to new discoveries in biology, genetics, with the prospects of human life extension for one or two decades. World Association of doctors committed while in theory, extend human life to 120 years. 20% of GDP will be spent on the development of health, 10-15% – in education. Therefore, developed countries, first of all, develop a trajectory of growth in the social sphere
To facilitate problem-solving in the restructuring of a successful economy has developed a tool such as the emission of money. In recent years the total money supply of the dollar increased by 4 times, the Euro – twice, actually, the Swiss franc jumped seven times. Of course, a significant part of the emitted funds hangs in pyramid schemes and “market bubble”, however, today in the West, businessmen and engineers in promising sectors no problem – where to take money. Money now is issued by and under negative interest rates of key Central Banks, the borrowers can take in foreign banks credit on any period at the rate of 2-3%
Importantly, in the advanced countries completely removed monetary restrictions. Money is given solely under the reputation, a broad system of grants and loans provides a long term stable growth. In our country, by contrast, is dominated by cheap and expensive money. As soon as the Central Bank, contrary to the theory of economic development, began to raise interest rates, our economy went down. The Central Bank explained this by the fact that the move to inflation targeting. But it’s a lie – already empirically proven that raising rates and shrinking the money supply in conditions of nepomneschi economy leads not to a reduction, but to increase inflation
There is research work showing on example models of different countries that for each state there is an optimal level of monetization. If he has to go up or down, will inevitably result inflation. In Russia, the economy redmonetmizrahi, and in this situation you need an urgent infusion of new money
We have the same CB mindlessly following the orders of the IMF, which imposes on us raising interest rates and shrinking money supply. There is one rule for each economy there is, and your acceptable level of inflation. If inflation falls below this level, the economy is starting to slow down. That is why the Japanese in every way to pump the economy with money – now is deflation
People who do not know, may think that under inflation targeting the Central Bank involves the struggle for its decrease to some target level. But in fact we see that after these statements, she, on the contrary, began to grow at an accelerated pace. The system was completely out of control of the Central Bank, he just released all the process from the hands. Waiver of foreign exchange regulations and the floating rate means that the Central Bank has reserved the use of only one control tool DCT – interest rates. From the point of view of systems theory of management – it is complete nonsense. After all, the main factor of inflation is the fluctuation of the national currency – all expert estimates say about it. 80% of inflation in Russia over the past two years is the fluctuation
Comparison: we want to maintain in this chamber a temperature of about 20 degrees, make an official statement and it knocks out all the Windows and doors. Such monetary policy is currently conducting the Bank of Russia
As the argument of the leadership of the Central Bank is using a little-known article in which the author on the example of the DCT in Western Europe 50 years proves that the Central banks of these countries could not simultaneously target the exchange rate and conduct independent monetary policy. But since that time much has changed. Now in the new Russian economy, one can say that if we do not control the movement of capital across the border, we generally do not control the economy. How would the Central Bank may raise the interest rate, abroad business is carried on much more favorable terms: it is easier to take there money, bring them to Russia and thus affect the economic situation. There will always be some American hedge Fund, which will be released on the currency market and will suit the manipulation of the ruble
Another important point is the IMF is constantly saying raise, and capital will flow to Russia. In practice we see that with increase in the outflow of capital is intensifying. Funneling money from the real sector and flee abroad. After the course on inflation targeting by the Central Bank virtually cut off from credit all industries, except oil and gas and metallurgical
As a result, the activities the Central Bank has created the greatest “economic miracle” of the last 20 years – a fivefold increase in trading volumes on the Moscow currency exchange. 100 trillion. RUB in one quarter – such is the volume of transactions on it now. As you can see, the capital has started off a real and went into the financial-speculative sector. Moscow exchange today is the plaything of speculators, in fact its controlled by the same people that speculate on the course. The Central Bank has transferred all manipulations in their hands voluntarily, and they receive unprecedented profits of about $ 50 billion over the past two years
In any oil-producing country of the currency in 2014, fell lower than 12%, and it just collapsed. We need to know that ¾ of our operations on the foreign exchange market made by nonresidents of the Russian Federation. The share of Russian money in the currency market during the collapse of the ruble was 9%, the rest American and British hedge funds plus speculators from Europe
Now the largest country in the world currency card looks like a dwarf. Any American hedge Fund can topple our currency market. The assets of our banking system weighs less than any major American or British Bank. So while we keep borders open for capital to control the ruble exchange rate cannot
When the Central Bank announced a free floating ruble, it was rather exotic for the world. After all, he voluntarily sent our correspondent ship in a storm, and from that moment on, nothing to plan – no investments, no costs. Why then the Central Bank to accumulate foreign currency reserves, if they do not perform their sole function – support ship in the foreign exchange storm
In our country, in fact, there are no restrictions on capacities, labour capital, natural resources, intellectual – we could easily increase the GDP of 7-8% per year. What you need to do this? We offer visit target credit issue through multiple channels – first – state program (the defence contracts and procurement in General), the investment program of the government for agriculture, under zero percent, it is proposed to issue the money for lending to export oriented industries. The main thing – should have control over target use of means and tools for their selection can be somewhat. In particular, we propose to consider the establishment of a development Bank, which will manage gastroectomy, and the establishment of an Autonomous investment Fund lending to refinancing by the Central Bank.
The economy is not enough of 3 to 7 trillion. rubles for the normal development
Gradually, the issue needs to be addressed. If the real sector will get the loans at a reduced rate, the current interest rate the Central Bank will no longer interest us
The main danger here – the influx of money issued by the currency market is the fear of the proposed reforms, which says the Central Bank, and after him and the President. Accordingly, may increase speculation and there will be instability. But here just need precise control, it is technically easy to shut off the flow of money from industry investment in the speculative sector, our experience in the past confirms this”, – concluded Sergei Glaziev
Subsequent performance of entrepreneurs confirmed the words of the speaker – the business is now in dire need cheap money in the short and also in increasing consumer demand from the population. At the current rate of inflation is simply impossible – there is a fork, threatening to send our economy into a knockout.
Stepan Sulakshin, summarizing presentations at the meeting, pointed out another important fact. In Russia one of the highest inflation rates and one of the lowest levels of monetization, one of the worst GDP growth. Successfully developing countries have a coefficient of monetization of 100-150%. Statistics summary 203 countries by the ratio of the coefficient of monetization and the inflation index suggests that the liberals from the economy impose our President astray, telling him about the horror of transformation. Assessing objective data, Vladimir Putin, presumably, would be only for the transition from the block of countries with a huge inflation rate and low money supply in a successful group with high emissions and advanced economies
There is no doubt that the President (or his aides) have received a recommendation from Glazyev and Sulakshin pretty quickly. And I’d like to believe that an emergency meeting of Putin with Ministers of the financial unit and the leadership of the Central Bank, which took place late last night, likely linked to changes in DCT. There is hope that the aspirations of conservative economists will not be in vain
