On the example of the Russian Federation first considered the process of “accumulation” simulacra of money in cash and cashless form, the main factors of the reduction of total volume of total consumption of goods as a natural consequence of the accumulation of simulacra of money and “save” from the use in consumption, the role and place of banking operations with simulacra of money in Russia is in the process of reproduction of social capital.
The conditions for the transformation of titles of potential rights to any goods at all in the actual (real) ownership rights to specific products.
In previous articles we have determined that the simulacra of money by the product are not and cost do not have, but are impersonal universal coupons (titles) the rights of the requirement of any goods in quantities determined by the simulacra of the prices of the respective goods at the moment of their requirements by the current owner of the currency.
Before the presentation (regardless of the method and form of presentation) simulacra of money a current owner of current owner of a particular product (including a service) at the hands of the simulacra of money only certify the presence of an eventual (potential) rights for the goods at all, only titles on that (to claim rights) owned by the current owner of the simulacra of money.
These rights are requirements of goods at all possible (potential), not only because they (rights) are not defined for quality (on a specific item, this law demands) nor the quantity (how many units of a particular product is right requirements). And not only because you have not defined the time of presentation of the right of claim on a particular product, and, therefore, not determined by the values of simulacra in the price of goods at the time when they filed claims for it.
The amount of currency as the value of the rights of the requirement for the commodity the eventual (potential) not only because of the specific goods on which in the future will be presented with these claims, on the market, probably not yet (in respect of the work and other services – definitely not). But because a specific amount of currency to an eventual (potential) as the right of claim on a product that the requirements on the disposal of a particular product owner of these eventual rights of the requirement for it has not yet presented to the future owner of this particular product. Be the owner of future goods is important at all not yet determined, but only in the future can be determined.
And just in time to make a claim about the appropriation of specific goods into private property by the bearer the necessary amount of currency these eventual (potential) claims of the product at all (any product) into the actual (real) claims. A prerequisite of such a requirement on the private appropriation of a particular product, on the one hand, is the presentation of this requirement is to address specific current owner a certain amount of that particular commodity or his authorized agent.
On the other hand, conditions required the owner’s requirements simulacra of money on the private appropriation of the specific goods is the availability of this particular product at a certain time and a certain place first, and the willingness of the owner of this particular product to its disposal according to the relevant simulacrum prices, second. But on the actual availability or the proper certificates (guarantees of) the presence of this particular product with a certain quality and in certain quantity at a certain time and in a certain place, as well as readiness for its alienation the owner of the goods (authorized agent) should also be stated.
Only in this act and through this act of alienation/assignment of a certain number of a particular product to an eventual (potential) claims for goods generally gain certainty on the quality, quantity, time, place, and purchaser. This act of alienation/assignment of specific goods, upon presentation to it of the rights of requirements of goods in General, certified by the simulacra of money is an act of redistribution (counter assignment) of rights to private ownership of a specific product and a specific amount of single coupons (of titles) the rights of the requirement of the goods, some simulacrum of the price of this product.
What in fact is the accumulation of simulacra cash money?
Based on the “obvious truths” confirmed by the postulates of modern economic schools of all kinds, propaganda claims that the citizens, organizations and the state budget, not spending all they received “cash income”, but “saving” them in some way, thus are the accumulation of capital. But is it really?
Let us first consider the “savings” of cash simulacra of money in any national form, that is, consider the accumulation of cash “on hand”.
To say that this way accumulated or saved capital, there is no reason at all, because capital is the cost, its public nature not only capable, but inexorably, irresistibly striving for self-expansion of its size. And even the accumulation of treasures here there is no reason to say, because the treasures in its public nature is one of the real forms of existence of value before its transformation into capital. And the simulacra of money value are not.
The accumulation of currency, first of all, is nothing more than the accumulation of cash (actually present as such) coupons (titles) attesting to the eventual (potential) claims of products generally for their (goods) the private appropriation of potentially possible in the future.
The accumulation of cash simulacra of money, then, is the act of restricting the consumption by the current owner the (accumulated) amount of cash coupons the rights of the requirement of the goods generally committed by (limiting consumption) by him in relation to himself and personally identifiable to them corporations (home or other facilities). It does not seem to have any direct relationship to a specific quantity of specific goods already on the market or has so far only produced for future supply likely consumers oposreduemyh market conditions.
However, the fact of limiting the consumption aggregate of current holders of cash simulacra of money is the act of abandoning the consumption goods available on the market here and now, in the first place. And the act of this out of consumption of cash goods, the quantitative proportions of these goods that could be consumed by the totality of the current owners “saved” the currency if they did not abandon the consumption the here and now, that is if they hadn’t “saved” these amounts of currency.
This is not the eventual (potential), but it is actual (real) excess supply (overproduction) of the relevant goods in an eventual certain quantitative proportions of these goods in the first place. Secondly, by this very act, the aggregate “savings” are, therefore, limited productive consumption of all goods at all technological chains and in the proportions that determined the eventual proportions of overproduction (excess supply) and technological proportions of production of goods, consumer demand which reduced the total “savings” of cash.
But limit their consumption, “drives” simulacra cash money “under the mattress” are bound to get a reduction in the so-called “purchasing power” of the simulacra amount of money they “save under the mattress”. This so-called “buying power” is reduced in proportion to the value of the simulacrum and the simulacrum of inflation lending rate (Bank Deposit rates).
If they win anything, and if so, then what exactly do they benefit from such “savings” simulacra cash money – will return to this issue after we consider all other forms and ways of “accumulation” simulacra of money (= currency in all species).
But now note the fact that according to experts, now in Russia on hand as “reserves” in terms of rubles is about 4-5 trillion. if not more. At the very least, this indicates a significant level of distrust of the population in banks of the Russian Federation and the state as a whole due to the high actual risk of loss simulacra of money, technically belonging to the population, but placed in Bank accounts.
Limits and risks of “accumulation” cashless simulacra of money by their depositors.
Non-cash simulacra of money being kept in Bank accounts, as well as in the accounts of the institutions of the exchequer (the funds of budgets of all levels), just as simulacra and cash money are the eventual (potential) rights of claim of goods in General regardless of what accounts (Deposit, settlement and other) made notes about them.
However, non-cash simulacra of money listed on the account and other similar Bank accounts, become real (actual) rights claims only at the time of execution of the Bank (Treasury) payment order or cheque given by the owner of the appropriate account. But it is only when and if another transition to private property rights this product is not set by law or by the terms of the agreement (contract) between the relevant counterparties.
The change in the form of non-cash simulacra of money does not change anything in the fact that they are eventual (potential) rights claims of products generally for their (goods) the private appropriation of potentially possible in the future.
In all cases, “cashing out” cashless simulacra of money is also no conversion to an eventual (potential) rights for the products in real rights does not occur. At the same time, it removed the risks of not receiving, incomplete and late receipt at their disposal simulacra of money deposited in accounts in banks in the first place. And are output to interested stakeholders of the process of using simulacra of money out of control (state and Bank), and in one or another part, reducing the tax burden, second.
Now we can move on to consideration of what happens in the case of “savings” simulacra of money through their investments in deposits in banks, and in all other cases “cashless store” simulacra of money in the accounts opened with banks and institutions the Treasury.
The current owner of the Deposit in the Bank is exactly the same as “drive” simulacra cash money “under the mattress”, limit their consumption (use production or productive consumption – it doesn’t matter now).
The “reward” for such a limitation of its consumption, the investor receives the nominal increase of the Deposit amount on the Deposit in proportion to simulacra lending rate (Bank rate on deposits) for the entire period of “storage” nominally belonging to him of the amount of currency on Deposit at the Bank. In addition, the owner of the Deposit in the Bank also receives “assurances state” in the same nominal amount of its contribution in the case, when and if the Bank goes bankrupt, but not above the state amounts.
No increase of capital is not happening and cannot happen, because the simulacra of money value are not at all the word at all, and therefore a change in their amount have no effect on the change in the value of the cost of not having these two “spaces” (“space” value and the “space” simulacra money) directly within the banking system absolutely do not intersect.
Bank deposits do not change anything in that nested on them all the depositors of the total amount of currency is the sum of the titles (LTL) eventual (potential) rights for the goods in General for potential future private appropriation of any goods by parties (the current owners) of these non-cash or converted into cash simulacra of money.
But for investors these sums, they (the deposits) change the other since the contribution of each of them has the appropriate amount of currency on hand and cannot, therefore, arbitrarily, at any time, transform these to an eventual (potential) claims the actual (real) requirements for goods.
Such “arbitrary” transformation of deposits (and other accounts) opened with banks in foreign currency for the nominal owners of these deposits (accounts) limited the terms of deposits, the location and mode of operation of banking institutions, communication, transport, and other access conditions for specific investors. But that’s not all, because in addition to this, banks may impose restrictions on the terms of issue and amounts of currency, issued as a lump sum to one current owner (administrator) account.
A significant limitation on deposits of all types (especially in the case of panic among depositors and/or insolvency of the Bank) is also and the presence/absence of specific banking institutions cash required for the repayment of deposits to depositors according to their requirements.
In other words, the aggregate amount of these eventual rights of the requirement of the goods from the aggregate of all depositors ‘ currency deposits in the banks as it is (potentially), but really those rights requirements on the products they no longer have.
Now it’s just an eventual (potential) possession amount to an eventual (potential) rights of claim on the goods, the real use of which is transferred to the banks otherwise the banks will not be able in proportion to the magnitude of the simulacrum loan interest (Bank Deposit rates) to increase the amount of the eventual rights of the requirements of the relevant depositors on deposits.
Actually the necessity of execution by banks of obligations on increase of the total amount of the eventual (potential) rights of claim on the goods, in fact, the eventual owners of which (the eventual rights of claim) are depositors of the simulacra of money on deposits and other accounts in banks, leads to minimizing the total amount of currency, at each current time is available in all banks.
The limit of this minimization is the average daily aggregate amount of the issuance of currency by banks to all clients – not only owners of Deposit accounts, but also borrowers who receive loans in cash, as well as all owners of settlement accounts in banks that receive cash in banks for the purpose of issuing her up to their staff.
All cash remaining from banks in the amounts exceeding the daily norm to the availability of foreign currency in cash, subject to delivery to the relevant territorial institution of the Central Bank with the simultaneous crediting of the relevant amounts on the correspondent accounts of the banks, which gave cash. We are talking about the transformation of currency into a cashless currency at the disposal of the respective Bank – in writing on the correspondent accounts of the respective banks opened at the Central Bank.
When and if banks are short of cash to meet the needs of the current operating activities, they are getting cash from the institutions of the Central Bank. However, each Bank receives cash from the Central Bank only to the extent those amounts are already listed at the Bank’s correspondent account at the Central Bank, in addition to this, the amounts of the loans that are provided by other banks or (and) the Central Bank if they provide.
The details on the actual interbank relations and internal operations with cash currency us in the present case, not interested. About them here told only in General terms and in that the minimum extent necessary for an understanding of the movement of cash from the consumers of goods which are the current owners of cash currency in banks and from banks to consumer goods.
Essential now for us is the fact that banks and institutions Central Bank of currency in amounts exceeding the regulatory minimum plus operating cash reserve in the institutions of the Central Bank is not available. But the practical needs to bonlonger amounts of currency in normal conditions of functioning of the economy is also no.
The aggregate amount of claims for goods that possess eventual all current owners of the Deposit, settlement and other accounts opened in banks, at every moment of time, if not in tens and hundreds times exceeds the total amount of currency available in banks and organizations. It is usual, that is normal situation in all States.
But this practice is followed by all the restrictions on the receipt of cash by the current owners Deposit, loan, settlement and other accounts in banks, as well as the consequences of these restrictions risks of non-receipt, incomplete or delayed receipt of cash in his hands, which were mentioned earlier.
Accumulate whether capital banking simulacra money?
Now after the retreat you can return to the direct consideration of leads to the accumulation of capital “savings” simulacra of money by making deposits in banks, and in all other cases, “storage” simulacra of money in the accounts opened with banks and institutions the Treasury.
This review breaks down into the following sections: 1) the use by banks of the amounts on Deposit for lending purposes of consumption; 2) the use by banks of the amounts on Deposit in the transactions in financial instruments. To the first and second respectively adjacent instances of the use of budgetary funds by managers to Finance productive consumption and consumptive production or financing of transactions in financial instruments.
To understand these processes it is necessary to recall the mechanism of credit issue simulacra of money by banks. He considered us in the initial article (“Making fictitious financial capital in actual financial capital”) part of the 7th series of the “Conditions and limits of extension, the reproduction of financial capital.”
A key indicator of credit issuance simulacra of money is the so-called “money multiplier”. It shows how many times the existing conditions of the functioning of the banking system will increase the mass of the simulacra of money (coupons or title rights of the requirement of the goods) as a result of the credit issue. According to the value of the “money multiplier” credit issue is inversely proportional to the magnitude of the norm of reserve requirements of the Central Bank and is calculated by the formula: Mm = 100 / R, where Mm is “money multiplier”, R – reserve requirements of the Central Bank, expressed as a percentage.
Assume that the total amount of deposits for the deposits in banks is equal to 10 trillion. national currency units (in the Russian Federation the amount of funds of citizens, being kept now in the Bank, almost three times more). Suppose also that the rate of reserve requirements of the Central Bank is 5 percent (now for banks with General license of the Central Bank of the Russian Federation the norm of obligatory reserves in currency of the Russian Federation is 4.75%). In this – alleged – case of banks in which the deposits placed these 10 trillion. units of the national currency, can issue loans for a maximum amount equal to 190 trillion. of national currency ($10 trillion. x 100 / 5 – 10 trillion). In this way 10 trillion. units of national currency which the aggregate current owners are not used on consumption, but invested in a Bank Deposit, it may develop a maximum of 200 trillion. individual coupons (of titles) the rights of the requirement of the goods at all.
Of these 200 trillion. individual coupons (of titles) the rights of the requirement of the goods, in case of credit issuance by banks, for banks issuing loans under the terms of credit issue will remain “motionless” 10 trillion. national units simulacra of money. These 10 trillion. in this case, it will be credited to the accounts of the Central Bank, the amounts which the banks that created these reserves pursuant to the requirements of the Central Bank, can not dispose. Another thing is that the Central Bank can use the reserves for lending banks and the government, but the mechanism and effects of this lending and the related issue of the simulacra of money we leave without consideration, in order not to complicate the already very simple for many, the subject of this article.
Banks use the simulacra of money “stored” their customers Bank accounts to the lending consumer production increases the potential demand for the goods that are already on the market or has so far only produced for future supply likely consumers oposreduemyh market conditions. This lending consumer production includes not only the so-called consumer credit in all its forms and varieties, but lending disbursements cash and non-cash simulacra of money to employees of organizations, beginning with “wages” and ending all “stimulating” and “social benefits”.
In other words, in this part we are talking about the process and consequences of directly opposing the process and consequences of the restriction of consumption through “saving” a population of simulacra money in cash. And here is a significant extent (quantity, volume) of the first and second, and the aspect ratio of their correlation.
According to the Central Bank of the Russian Federation and the National Bureau of credit histories now the total amount of “credit debt” of the population of the Russian Federation on the “body debt”, i.e. without taking into account accrued on debt per cent, compared to 17 trillion. rubles. This, at first glance, “offset” by about half (and even a little more) “deduction” from the total volume of consumption of the Russian population due to the total amount of “savings” simulacra of money by the population cash and cashless form. However, the deposits in banks in Russia are available from some citizens, and I take loans primarily quite other citizens. According to expert estimates, more than 8 out of 10 citizens of the Russian Federation, if not 9 out of 10 do not have deposits in banks.
Remain about 13-14 trillion. rubles “saving” the population of the Russian Federation in the banks, plus it is about 2.5 trillion. if not more than, the annual “payment” of a population of interest on Bank loans and 4-5 trillion “savings under the mattress”, for a total of 20-21 trillion. rubles. That such amount “not reimbursed” consumer lending and it is approximately equal to the total expenses of the Federal budget or, in General, (for us here significantly understanding of the order of the numbers expressing the respective shares), approximately three-quarters of the expenditure part of the consolidated budget of the Russian Federation.
According to the National Bureau of credit histories Russia, citizens of the Russian Federation as of the end of December 2019, the average was given to the banks in repayment of issued loans and percent on them has about a quarter of their “salaries” (24,6%) or about one-fifth of all their income. And in just the past year Bank interest on loans to the population made of the amount likely exceeded $ 2.5 trillion. rubles. This suggests that the restriction (= minimization) use of production of the Russian population has not only reached its limit, but has struck her “bottom”.
Money is not only to become independent value as the original form of capital and means of production generally, and the means of the reproduction of capital, in particular. Unlike money, the simulacrum of money is neither the cost nor the means of production; he is the General social condition, or, otherwise, mandatory in these public terms of the social background of the private appropriation and consumption of goods, as well as a means of private consumption of goods, including capital in its commodity form.
In the totality of social relations between people regarding production, exchange, distribution and consumption for anything other than the fulfilment of public functions essential prerequisite and means of private appropriation and consumption of goods, the simulacrum of money, its social nature is not designed. That simulacrum of money is a necessary “tool”, which “is measured by” financial distribution ratings (simulacra prices) of all goods, nothing changes in the social functions of the simulacrum of money, but only follows from them.
Total volume total household consumption (volume of consumption of goods, including works and services) in Russia by the end of 2019 was about 45-47 trillion. rubles. Cash and cashless ways of “saving” the simulacra of money by the population total total consumption them (public) goods reduced to 20-21 trillion. rubles – this is almost half of the actual volume of total consumer production in Russia. Therefore, the scale of consumer reproduction of the Russian population, thus “saving” the simulacra of money from the public and lending reduced by almost half. The scale and volume of it is equal to “free” content about (almost) more of the same countries as the Russian Federation, the citizens of which is anyone, but not citizens of the Russian Federation. In these circumstances it is not possible that the extinction of the Russian population is not accelerating.
The average rate of all loans in Russia was not less than 15%, the official inflation for the year – about 3%, the average interest rate on deposits in banks of the Russian Federation did not exceed 7%. The amount of deposits of the population almost 2 times the amount of loans to the population of the Russian Federation. If the lending banks were only used amounts placed in deposits population, “the percentage of pure cream”, a release in its favor of creditor banks with total deposits and loans, is not less than 2.5% per annum. Banks of the Russian Federation such “business” is not interesting.
If the loans are used loans from the CBR, the average key rate was about 7%, consistently decreasing during the year from 7.75% to 6.25% in early December, 2019. In this case, “the percentage of pure cream” shoot in their favor creditor banks for loans to individuals is at least 5% per annum – this is twice as good, but still not cornfields comparison with the “profit rate”, which is considered “normal” large and major “businessmen” of the Russian Federation (not less than 25% – that’s acceptable “rate of return”).
Race of growth of volumes of crediting of the population of the Russian Federation taking place and growing in the last 10 years, has a very different motivation than “profit” banks are in the lending.
If lending consumer production itself, at least, the banks of the Russian Federation not interested, it may be interesting to them lending to the productive consumption in General and the financing of investment in productive consumption, in particular?
With regard to non-investment lending Russian banks consumer production, it is not interesting neither the banks themselves nor producers in Russia. “Profitability” of the absolute majority of goods in Russia and a half-two and more times lower Bank interest rates, under which Russian banks make loans of Russian producers of goods in the first place. Secondly, according to the CBR and Rosstat “profitable” manufacturers of products in the Russian Federation “accumulated” on their accounts significant amount simulacra of the money they “save” by investing in the development of their production, and therefore Bank loans they do not require.
Third, more viable production, but for one reason or another, have suffered “damages”, though in need of loans, but who will give them, if not on the security of all their available liquid assets, and this is them just “not smiling”. Be only fourth, corruption cases lending industries, which we here do not consider, but which entail the investigation, obviously limiting not only productive consumption, but also turns declared “profits” in the “hole” in the balance sheets of banks from such lending.
So in regard to the accumulation of an already existing and functioning in the public departments of productive consumption processimage capital of Russian banks if play some role, most likely, is the role of “institutional Marauder” that reduce the amount of capital for subsequent “razderbanit”, the elimination and recycling it, rather than the role of partner in its accumulation.
But in the sphere of investment crediting by banks of the Russian Federation for productive consumption, i.e. in lending to industrial and civil construction, the situation is different. In addition to significant corruption component, which is spoken by almost all experts, giving chemy all participants of the respective schemes a significant “personal deal”, here opens a wide field for semi-formal and formal extracting “profit” on a high “rate of return”.
Mortgage lending in Russia, for example, according to the Central Bank of the Russian Federation accounts for almost half of the total amount of all loans to the population. That, coupled with the so-called credits for consumer needs is one of the main sources of crediting, as a rule, Bank-affiliated “partners” who organize and carry out housing construction and sale of housing to the population.
“Defrauded real estate investors (co-investors on the po)”, which have long been and are an inherent part of construction in Russia of apartment houses, is not the only source of high “normal profit” in this sector. Inflated estimates, the mass violation of the norms and rules of construction in terms of the quality of design and construction design and actual construction works, the use of “cheap” materials, machinery and equipment, wide application low-wage labor migrants, etc. more than cover the contribution of the “deceived investors” in total “profit” of the organizers and lenders of industrial and civil construction.
Lending acquisitions at different cycles, “investment” housing rights in property controlled by banks and affiliated organizations for the purpose of speculative assignment of these rights other nominal owners, or use them as objects of collateral for new loans of similar “investment” in nature – another means of increasing the total “deal” beneficiaries from such Bank lending.
Formally such lending seems to increase the social capital that is, it acts like the building of social capital. However, in reality, it’s not rational, but at the same time predatory and parasitic use of social capital, are burdened birthmarks “looting,” which does not so much accumulate, how many “eats” social capital, continuously narrowing the scale and the actual volume of its reproduction and in kind, and cost. Moreover, such lending has signs “a financial pyramid”, which cause a fatal risk imminent collapse not only of individual banks operating as “a financial pyramid”, but the entire banking system.
If we add to this the growth in the volume and proportion of incomplete construction of objects of defence, industrial and civil use, identifiable by the accounts chamber of the Russian Federation and control and accounting bodies of constituent entities and municipalities of the Russian Federation, the overall picture of “investment” the use of budgetary and off-budget simulacra of money in Russia takes on a new and highly expressive images and paint.
(to be continued)
Vladimir Vasiliev, 1-2 February 2020.
Article originally published and available at: http://www.dal.by/news/178/03-02-20-1/