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Medvedev wants to start “printing press”

Медведев хочет запустить "печатный станок"

The government has been working on the idea of unsecured to issue money to support the economy. It happened just a few days after President Vladimir Putin said that the launch of the printing press has the potential to become a reality in the foreseeable future.

The idea of the concept consists of actively pumping the economy with money and substantial reduction of interest rates on ruble loans. Economists would print 1.5 trillion roubles annually for five years, directing these funds to the industrial development and the maintenance of “stable and undervalued real effective exchange rate.”

The authors of the concept believe that the trillions printed only eliminate current imbalance, so the fear is that such emission policy will lead to a surge of inflation is not worth it. The amount of money in the economy is underestimated.

With foreign exchange market offered to clean the main suppliers of dollars and euros into the country — exporter. They should just list currency revenues to the budget, bypassing the conversion in rubles, according to the economists.

It is proposed to introduce a “soft currency control” to avoid the devaluation shock, which may occur on the background of the spill-over printed trillions in currency. It involves the introduction of a tax on the purchase of foreign currency by the corporations, the withdrawal of foreign currency deposits of the Deposit insurance system and the ban on the earnings on devaluation for banks (zero foreign exchange position).

The Minister for open government Mikhail Abyzov on the instruction of Prime Minister Dmitry Medvedev in two weeks will create a working group to discuss the programme of the Stolypin club “Economics of growth”, in which there is a run in the country unsecured issue money.

It is planned that the concept will be finalized in the next two months. The authors of the program, including the co-Chairman of “Business Russia” Anton Danilov-Danilyan, Deputy Chairman of VEB Andrei Klepach, Deputy Minister of the Russian Federation on protection of entrepreneurs ‘ rights Boris Titov, presidential adviser Sergei Glazyev — are about to change the course of Central Bank policy from restrictive to stimulating.

The result of implementation of the planned actions should be economic growth and the restart of the national industrial production. However, it is unknown how and in what period of time should increase relevant economic indicators.

The program also involves a partial change of personnel in the leadership of the Central Bank of the Russian Federation. Money issue in the country, unlike Western countries, exposed to unnecessary risks of a collapse of the national currency and a spike in inflation, which inevitably can lead to the impoverishment of the population. This has been repeatedly stated all of the current “operators” of the ruble machine.
Some experts note that the question is not whether there will be a money issue or not. The authorities of the country against the background of low oil prices is simply no other way. The question is, how much will delay the startup of the machine and in what form it will happen.

How can you reduce wages? How can you reduce real pensions? There are two ways — either pay less for the same work, pay less to retirees, or simply index, and inflation all have to eat. The question is how inflation will be generated and budgets. Proceeding from today’s realities, the authorities will not be able to hold enough policy successfully adapt to these new realities, of course, if prices remain at this level in the $40 per barrel without resorting to printing money. That is, I support the idea that, most likely, the adaptation process will go through the hidden, the open, but some sort of issue.

And as fully as possible the position of the Central Bank announced the acting head of monetary policy Department, Bank of Russia Alexander Polonsky in November. At the meeting of the Duma Committee on Finance he argued the deputies that create economic growth by simply pumping the economy with money it is impossible. Switch on the machine is acceptable only in the conditions of planned economy and the “iron curtain”, which will close the Russians access to technology and foreign currency.

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