Behind apparently “ignorant” of the actions of our government, lies the iron logic and someone’s selfish interest. A significant part of “Russian” of the bourgeoisie, not only the so-called oligarchs, in a special way organized their economic activities. Despite the “Patriotic” nature of the source of wealth, affiliation, they deliberately withdrawn to the West, the income generated by the exploitation of national wealth and population of Russia. This process is incremental. The future of Russia, while maintaining the…
IF YOU BORROW THE BUCKS UNDER 1%, AND THEN THEY TAKE THEM IN DEBT AT 4.5 – 8%…. WHAT?
The last 9 years from 100 to 170 billion dollars of “our” funds, the Central Bank lends to Americans investing in US Treasury bonds at 12% per annum.
At the same time, we are pleased with another “victory”: the Russian Ministry of Finance took on the external market is three billion under 4,25-5,25%!
Even our largest corporations, with the state share over 50% (Rosneft, Gazprom etc.), are obliged to take foreign currency abroad under the predatory 5-8%…
Summary: EARNING 3%(THREE PERCENT) a YEAR AT LEAST.
Question: WHOSE INCOME?
THE CORRECT DIAGNOSIS OF THE DISEASE. PART 1 “WHAT ARE DEAFENINGLY SILENT KHAZIN, DELYAGIN AND OTHER ECONOMISTS”.
Policy pursued by “our” economic bloc, is of such obvious harm the economy and population that define it as criminal, has become common place. Talking about it openly economists and political scientists argue. However, with the diagnosis of the causes of what is happening, there is a clear disagreement.
Most sane economists agree that this is a consequence of elementary illiteracy and incompetent representatives of the so-called liberal clan, given to the government the “West”. According to Ms. Nabiullina, who could not defend the thesis, this view has some basis.
Supporters Delyagin, Khazin and say that the reason that they directly depend on the global liberal elites and do not serve the interests of the country and serve the global business and its ideologues.
The adepts of the sect Fedorov argued that what is happening is the result of the occupation laws and the pedrosovtsev enough to get 2/3 in Parliament, as they will change the Constitution, law and we the “sovereign” alive “in Christ’s bosom”. The result of their activities, after the “victory”, are well known Adequate to the members of the sect it became clear that they were “bred” and the purpose of the GBR was to push through Parliament a little more accomplices compradors, under pseudo-Patriotic slogans.
What unites all these concepts, carefully thrown into the media space: referring to some external forces. Instead of analyzing economic interests of social groups and classes of modern Russia, they transfer the focus of public attention on her foreign enemies. I am convinced that it is the result of purposeful activity of the stakeholders that we want to install.
If so, then behind the outwardly chaotic and/or ignorant actions of our economic authorities, you’ll find the iron logic and someone’s selfish interest.
So, try being guided by the old principle of Cui prodest? (Who benefits), to determine the true customers of the policy! Will try to make out, the most egregious of actions/decisions of the government and the Central Bank and to correlate their effects with the interests of a particular social group: “comprador bourgeoisie” or just COMPRADORS.
Who are the compradors?
First, let’s take a look at a few facts:
1. “In Russia, about 0.2% of households (!!!) control about 70% of the national wealth in 2011, said the former Deputy head of the audit chamber, now the Chief Auditor of the Central Bank of Russia Valery Goreglyad.
2. Total capital 28 Russian billionaires has increased by $17,09 billion in Jan – Aug 2017 (data from Bloomberg Billionaires Index);
3. Over the last 13 years, Russia went from 20 thousand dollar millionaires and billionaires, and 6 thousand of them in the last three years;
4. Up to 40% oligarchs have refused Russian citizenship;
5. The national wealth of Russia since 90-th year has not increased and redistributed, and then flowed to offshore. Now there is the amount equal to 75% of the national income of Russia (more than 1.3 trillion dollars). Please note that this amount is excluding the legal assets derived directly in the West.
6. Net capital outflow from Russia in the first half of 2017, increased 1.7 times compared with the same period last year.
What conclusions about the processes we can do? A significant part of “the Russian” bourgeoisie, and, as we see, not only the so-called oligarchs (not all 20 thousand left to treat them), in a special way organized their economic activities. Despite the “Patriotic” nature of the source of wealth, affiliation, they deliberately withdrawn to the West, the income generated by the exploitation of national wealth and population of Russia. This process is incremental. As can be seen from the data, instead of developing their business in Russia, they’re a big part of profits withdrawn from the country, obeskrovlivaya its economy.
Therefore, instead of developing industry, there is a continuous degradation of production (primarily complex, knowledge-intensive, with a high proportion of surplus value). The result – the simplification of the structure of production, turning the country into a raw materials appendage of the global West. Thus, the country has a flawed economic model in which increased exploitation in Russia does not lead to the accumulation of national wealth and strengthen the economy of the state (albeit in the hands of a narrow circle of the national bourgeoisie). Instead, only amplified the outflow to the global West… special cases of the consequences of this process is a General impoverishment and increasing social inequality inside the country.
THIS part of the bourgeoisie, mainly selling overseas mineral resources and/or products of low added value as a feedstock (for further processing in the West) are called compradors. Thus, the compradors, act as Junior partners, in relation to the countries of the capitalist core, playing the role of the metropolis of Russia.
Because of economic ties and their own views of these people are linked to the global West far more than Russia. First, the consumers of their products outside Russia. Therefore, the economic situation of citizens and domestic manufacturers they are not interested – they are more important than the presence of effective demand in the West. Second: they are related to the West assets and the future: their children, villas, financial resources, etc. – are all there for a true “home”. So our country for their only source of income – nothing more…
Are adjacent to the banksters – monopolize the financial market, five banks, owners of national chains (usually non-residents of the Russian Federation), “saddled” trade and to lift up the margin up to 300%, etc. focused on the global West is bourgeois
From the above data we see that these people have tremendous aggregate economic power, often surpassing even the capacity of the state (almost half a trillion dollars, only for offshore accounts). It would be surprising if they had not used it to exert political influence inside Russia, in the interests of their social group. Therefore, they must join high officials and politicians serving their interests within the state.
Whether so it and in whose interests is the financial-economic policy of the state? The most egregious and discussing the facts:
1. From 100 to 170 billion dollars of “our” funds, the Central Bank lends to Americans investing in US Treasury bonds at 12% per annum.
Simultaneously, the Russian Ministry of Finance is in the foreign market the currency at 4,25-5,25%! Even our largest corporations, with the state share over 50% (Rosneft, Gazprom etc.), are obliged to take foreign currency abroad under the predatory 5-8%…
Let me remind you that the Americans have repeatedly used for the attachment of a foreign state in its bonds, to provide them political pressure. The seizure of assets of Libya, Iraq, Iran, etc. seemed to have demonstrated to the world their “safety and reliability”. Now, the United States imposed against us full-scale sanctions and threaten them tightening. In this situation, further storage quarters (!!!) our foreign reserves in bonds of the United States, takes on the character of some phantasmagoric idiocy!
However, it is still! What is happening, who and how, prevents the escape of our reserves, what social groups are interested in maintaining this abnormal situation?
Obviously, from the placement of foreign currency funds in us treasuries loses everything:
The state receiving the questionable reliability of attachments that can be lost at any time;
Major corporations deprived of the opportunity to use them for implementation of strategic projects, forced to resort to foreign loans, and sharply rising in price in terms of sanctions;
Average, and the entire manufacturing business that do not have opportunities to get foreign currency loans at a sane rate for the purchase of critical imported equipment.
The only social group interested in preserving the status quo compradors:
They need to demonstrate of metropolis loyalty, and handling, servicing of Russian political elites. The best way to ensure loyalty is the direct control over the reserves of the country. In exchange, they guarantee the preservation of “acquired by overwork” and exported to the West (to the countries of the capitalist core) of the national heritage.
Who approves the head of the Central Bank and its Board of Directors that determines the policy of the Central Bank – the State Duma of the Russian Federation. United Russia has a constitutional majority of 2/3 in this authority. Therefore, it is obvious whose interests are served by this organization…
2. In Russia was the last European country where there is a flat scale of the taxation of physical persons. At the same time, for almost twenty years, we continue to lie, arguing that it is the most “progressive” and also increases the collection of taxes. Is it really so?
In the modern world, there are hardly two dozen States that have flat income tax rate. Developed among them, there is no reason… the Main reason is, ironically, not in the pursuit of social justice. It’s just one of the conditions of normal development.
The super-rich do not provide the bulk of demand for the economy. They are consumers of luxury goods, generally imported and of real estate abroad. Therefore, the greater part of the national income comes their way, the worse things are going from conventional entrepreneurs in that country. Correcting the situation, the state through progressive taxation and a luxury tax, create the conditions for mass consumption, redistributing the national income in the interests of the middle class and exempting from tax the poorest.
With a flat scheme the situation is aggravated. The income gap is growing faster in relation to the national income growth rate:
This table shows the proportion of national wealth per 1% of the richest people.
Therefore, the population continues to get poorer, and the comprador – rich. During the first quarter of 2017, the number of poor Russians has grown by two million people and reached 22 million and billionaires, only for January – August of 2017, increased his fortune by $17,09 billion. It is not surprising that net capital outflow from Russia during the same period, grew to $14.7 billion in 1.7 times, compared with the same period last year.
In the result, the greater part of income not consumed within the state, ensuring the growth of demand, and therefore production, and displayed abroad, as we have seen above (almost half a trillion dollars, only for offshore accounts). The population continues to get poorer planning, such as: real disposable monetary incomes of the population of the Russian Federation in January-July of 2017, fell by 1.4% compared to the same period in 2016. Aggregate domestic demand is reduced. Thus, inevitably, the observed current stagnation and even decline in the sectors oriented to the domestic market.
This situation is akin to a child’s problem from a school textbook about the pool and pipes… If the rate of accumulation of national wealth, is lower than the speed with which it is trafficked abroad, the population inevitably will get poorer, and the production fell apart…
Call progressive system, which refused all developed countries, and that harms the economy, will drive the population into poverty, maybe only the comprador or his hired promoter.
The second lie is less obvious – the flat rate was introduced with almost a broken tax system. Currently, this model only reduces the tax base, as only millions of salaries of top managers displayed in “white” zone (otherwise it will be difficult to legalize their income in the West). Salary in “envelope”, as it was, remained a lot of not-so-wealthy middle and lower level. Therefore, the introduction of a progressive scale, they will benefit since they will pay less taxes.
Thus, the current model of income tax disadvantage, as a considerable part of the population is doomed to impoverishment and the national bourgeoisie is deprived of prospects of development of the “falling” of the internal market. While the country is “choked” from the oil revenues, some crumbs from the master’s table got her, but now its prospects are sad…
As we again see state tax policy is performed only in the interests of a privileged minority of compradors. It is not conducive to filling of the budget, but only allows them to keep more of the income for the export of “home”: to the children, the palaces, the “bright” future.
Who prevents the introduction of a progressive scale, which is necessary for all opposition parties from the Communist party to the liberal democratic party? The party with the 2001 regulatory State Duma – “United Russia”.
3. As you know the expanded reproduction is impossible in conditions when the interest rate on loans higher than the return in the major sectors of the economy (below the data for Russia):
Who’s going to be to take out a loan if you payments higher than the potential profit from investing in the business? Therefore, stimulating its growth, the refinancing rate dropped below 1%, as in the USA or even move to a policy of negative interest rates (POPS), as in Japan or Europe (Switzerland, Denmark, Sweden, etc.). As a result, the industry of the countries of the capitalist core, receives the credit resources under the ridiculous 2-4% per annum. We have the same loan rate at times, and sometimes much higher. Naturally, our industry is unable to compete with the West, receiving almost free resources for continuous upgrades. The result is a precipitous degradation of any complex production in the country. Some development occurs only where the state plays the role of an investor, carrying out direct funding (mainly MIC), that is, those sectors of the economy, which can not act as competitors compradors.
How organized this financial stranglehold on our economy?
We have 25 years of broadcasts about the need to attract foreign investment. However, in Russia more than enough! Only “our” banks have accumulated available funds,more than 36 trillion rubles (mainly Bank deposits). It is almost 600 billion dollars!!!!!! However, due to inflated interest rates on loans, these funds in the economy almost didn’t come, as potential borrowers are not ready to take them under such interest. Therefore, banks began to incur losses – the money lies without movement. When the “natural” development of the situation sooner or later, the banksters would be forced to drastically lower interest rates that pushed these huge, potential investments in the Russian economy.
However, this part of the global financial international, not to offend, depriving of profits. Then, the Central Bank of the Russian Federation, instead of the drastic reduction rates which would encourage banks to lower interest rates on loans begins to withdraw “excess” liquidity. It places bonds and conducts Deposit auctions, taking at banks “in debt” – almost 9%! Only for one week in September 2017, the Central Bank took the banksters more than 1 trillion rubles! This is the money that could come in the Russian economy, they are critically missing from the entrepreneurs for business expansion. Without them degrades our industry! Not far behind from the Central Bank and the Finance Ministry, placing their bonds.
The result of these actions: reducing lending to the real sector of the economy and an abrupt increase in the profits of the banksters: the banking sector profit for the January-July approached 1 trillion rubles, half (!!!) exceeding the result of the same period of 2016. Instead of “wrestle” in evaluating the creditworthiness of potential borrowers and to analyze the profitability of its project, banks “give money”… to the state. At whose expense “the Banquet”, You ask? Because the interest you have to pay?! Yes, for our… at the expense of our taxes, the profits of the state Central Bank of the country. That is, instead of funding the production, at the expense of private funds, there is a direct financing profits, in fact private banks at public expense!!!
Who benefits from this cheating scheme?
First banksters, as part of the international financial international, who were able with impunity to Rob and directly by the state;
Secondly compradors, whose economic interests do not suffer, as they are credited in Metropolitan France (countries of the capitalist core). In addition, they are not interested in strengthening of Russia’s national bourgeoisie, associated with the actual production. As a result of this, compradors can lose control over the state apparatus. Because the efforts of the national bourgeoisie can support the selection of alternative projects and to move away from “trough” and their subservient political party “United Russia”. No wonder “the ideology of” liberal course Edro, Mr. Kudrin strongly substantiates the inevitability of years of stagnation! Economic breakthrough just bury their undivided domination of the country.
4. Article 75 of the Constitution prescribes the Central Bank of the Russian Federation: “…the stability of the ruble – the main function of the Central Bank of the Russian Federation”. However, 10.11.2014 year, the Central Bank of the Russian Federation, in direct violation of the Constitution and legislation, refused to support the stability of the national currency and canceled currency corridor.
In the result, the Russian ruble is the third year of “sausage” and he was among antiliderov as the most unstable currency in the world! Even the hryvnia “Ruinously” where there is a civil war, foreign exchange reserves are less than our ten times, more resistant.
Hired propagandists that are mistakenly called “experts” tell us tales about the fact that the reason, was the drop in oil prices and the regulator (CBR), not being able to ensure the stability of the exchange rate, refused to support it. This is a blatant and cynical lie.
Let b/a Ukraine is not an indicator, maybe they have almost no oil. However, there are many countries dependent on oil exports, much stronger than Russia. For example, Kazakhstan, Nigeria or Venezuela. However, by the end of 2014, 2015 and even 2016, the stability of their currencies is also higher than the ruble! May be their situation with foreign exchange reserves is better than ours?
Let me remind you, Russia is ranked 7th in the world (!!!) the volume of gold reserves. They serve primarily to control the fluctuations of the national currency. Their optimal volume is calculated according to the ratio, for example – a composite indicator of the IMF. Even in the most stringent version of the criterion (for developing countries with unstable finsistemy), 2014 international reserves of Russia three times (!!!) exceeded these requirements.
Moreover, the volume of gold and foreign exchange reserves, exceeding even the amount of cash rubles and cash in the accounts of enterprises (indicator M1), and accounted for more than 70% of virtually all money in the economy (indicator M2).Thus, Ms. Nabiullina with “associates” could actually “freeze”the course. Even if all people and businesses rushed to buy foreign currency, its reserves would be enough for all the rubles in circulation.Thus, the monetary authorities, had every opportunity to ensure the stability of the ruble.
How do our CBR had managed not to perform its main function entrusted to it by the Constitution and the Law “On the Central Bank”?
1. First, after declining oil prices (July 2014), the Central Bank pursued a gradual devaluation of the ruble:
Not the smartest policy, because a little bit of duration of the process, both entrepreneurs and ordinary people rush to buy foreign currency, “warming” thus, the foreign exchange market. Our people, taught by bitter experience repeated “bloodletting” of their savings, from the state, making it twice as fast. Currency speculators, is also animated: if you understand that soon the ruble again “gives way”, it is natural and most importantly extremely profitable, to speculate on further downside. However the loss of the Central Bank from this policy were not so catastrophic. 11 July 2014, when the volume of international reserves amounted 476,7 billion on October 24, 2014 (a little over 2 months), their volume decreased by 37.6 billion.
2. By the end of October 2014, when the currency market was destabilized enough already, came the second part of “Marlezonskogo ballet.” On 22 October, the Central Bank “unexpectedly” declares: “the Rouble is almost free floating, until the end of the year the borders of the dual currency basket will be removed”. The fact that in a situation of economic and political instability dramatically increases the risk of currency speculation, “rock” course.Therefore, in such conditions it is administered, for example, received in 1998 (government of Primakov-maslyukova). The Central Bank, led by Gerashchenko. He introduced a currency corridor and limit currency speculation, which prevented the collapse of the financial system in terms of default and stabilized the ruble.
However unexpected these actions were only for those who sincerely believed that the purpose of the management of the Central Bank are the stability of finances and well-being of Russia. For financial speculators, it was a direct command to attack on the ruble – it became clear that preparing for its collapse. Accepted, two weeks later, the decision to abandon the currency corridor has fully justified their expectations…
3. For what would clearly see HOW “our” financial authorities have managed to destabilize the ruble, it is enough to compare two tables:
As we can see in the oil market had been relatively gradual decline in prices, no crazy “candles”, as in the currency market was observed. Therefore the jump rate due to purely speculative actions of market players…
Maybe a total destabilization of the ruble was the price to pay for saving foreign currency reserves, as some claim “experts”? Recall that for two-odd months of a policy of “gradual devaluation” we have lost 37.6 billion, over the same period (24.10.2014 at 02.01.2015) free of the ruble and a half times more – 53 billion!!!
Not lead this policy and stabilize the exchange rate in the medium term:
Not only in 2014, but by the end of 2015 and 2016, the ruble was among the five most volatile currencies in the world.
Could be “our” financial authorities were not alternatives to the policy? Not true: a one-stage devaluation and subsequent rigid fixing of a course or the introduction of a currency corridor – a standard practice used by DOZENS of States in the destabilization of the national currency. Even the IMF does not deny such measures to stabilize the exchange rate… However, instead of a one-time devaluation to a new equilibrium level, say in the range of 60 to 62 rubles per dollar, or at least, a further gradual depreciation of the ruble, the CBR actually is artificially destabilized the market, and then refused responsibility for the maintenance of stability of national currency…
As we have seen, in the framework of the standard notions of subordination, the goals and objectives of the Central Bank of the Russian Federation, we can’t explain its seemingly paradoxical actions. However, apparent absurdity and the “paradox” disappear if we rate his work from the position of the already identified customers:
An almost inevitable consequence of the devaluation is the revival of the economy. The mechanism is simple: devaluation of the national currency leads to lower costs (in foreign currency) domestic producers. The cost of transportation, electricity, labour etc in rubles remained unchanged, but the currency falls by the amount of the devaluation. Therefore immediately increases the profits of existing exporters, and in our case it is already familiar to us the raw materials-the compradors.
However, to start new industries in the country, devaluation is desirable, but not sufficient condition. The construction of new production facilities or expansion of existing ones, implies significant investments, which is possible only in conditions of stability of the national currency!
It is impossible to calculate the monetary return on investment in terms of currency instability. Because it is impossible to calculate: what will be, for example, in a year, ruble price of the goods produced by foreign competitors. It is impossible to estimate, under these conditions, and the exchange value of rouble denominated costs of the investor in Russia.
Domestic investor in this situation will not “stick his head in the noose”, it is easier to buy the currency and wait while the power of adequate people will come. In extreme cases it can go to the West and try to open a business there. This process, in particular in the form of the flight of the millionaires we see. For the foreign investor, the situation is even more complicated: he intends to profit in the currencies, investing currency, he’s a foreigner, and he can calculate the foreign exchange profit if the exchange rate continuously “shakes”? So, under the sweet talk of the desirability of foreign investment, the Bud is destroyed, the very possibility of germ growth, which appeared as a result of the depreciation of the ruble.
As we can see, the result of the policy of the monetary authorities, are: the increased profitability from raw materials producers-compradors and elimination of preconditions for the growth of the rest of the domestic economy, which appeared as a result of the devaluation. All of this fits into the already identified problem of “our” compradors: to prevent the emergence of alternative centers of power, represented by the national bourgeoisie, which can undermine the economic basis of their political domination!
To continue the analysis of financial and economic policy can be long. However, even a superficial analysis of the four basic directions, it is enough to characterize existing socio-economic model of the country.
As a result of the events of October 1993 and the subsequent “voucher privatization,” and especially “shares” auctions, a large part of the national heritage, the largest country of the planet, in the hands of a very narrow circle of people. These people because of economic reasons and political preferences focused on the core countries of the capitalist system (global West). Thus, Russia was imposed by the extremely backward socio-economic model of comprador capitalism.
Its main features we discussed in the course of the analysis. For the preservation of the existing order, formed a stable political system, which relies on a majority in Parliament belonging to a political the servants compradors (in 2001, the party “United Russia”). The deputies, under Patriotic slogans, but voted unanimously for the so-called “liberal” course of the Government.
The preservation of this model is disastrous for the economy and the state. It prevents the development of the country and dooming Russia to degradation. As in the children’s puzzle about the pool, and two pipes: if the rate of filling the pool, through the first tube, below the rate of expiration, through the second, the pool is empty. You can not take national wealth out of the country faster than it accumulates… This situation cannot continue indefinitely, as it is impossible without end to fall into the abyss. Sooner or later quantity will turn into quality and the state will not be able to fulfil its basic functions, losing to international competition, and this is the inevitable disintegration of the country.
The future of Russia, while maintaining that model no!