How to beat the dollar?

2024 Author: Seth Attwood | [email protected]. Last modified: 2023-12-16 15:55

First link to article

ALROSA FOR THE FIRST TIME SOLD DIAMONDS FOR FOREIGN CUSTOMERS FOR RUBLES

And for the sake of brevity I will carry out a "squeeze" of this article.

And here is the final paragraph of the same article:

According to the author's thoughts, it is really simply unprofitable to sell for rubles in Russia today. Many companies, especially mining companies, are forced to import production equipment from abroad, buying it for dollars. It is also more profitable to keep financial assets in dollars, since the ruble exchange rate is quite unstable, but this is still half the trouble. The real trouble is that the ruble exchange rate is completely unpredictable and a company can lose 10-20 or even more percent in one night, and therefore do not risk it.

And no matter how Putin persuaded the owners of these companies to trade for rubles, all conversations are empty, because they do not have an economic foundation.

But how can Russia get away from the dollar?

Introduce a gold standard for the ruble? Yes, perhaps this is a way out, but in this case speculators will start playing in the top three - ruble, gold, dollar.

Let's assume, quite conditionally, that a gram of gold costs a thousand rubles and a thousand dollars. But tomorrow in the world the price of gold will rise to two thousand dollars due to the increase in world demand. Consequently, gold will begin to be exported en masse from the country in order to sell it for dollars. And then the doubly earned dollars will be imported into Russia and exchanged for rubles at a thousand per gram and fantastic profit will be made on this.

Gold in Russia in free circulation will disappear. The price of gold on the black market will sooner or later rise to two thousand rubles, but this will disperse frantic inflation within the country. For this option to pass, you need to close the borders, and this is essentially the "Iron Curtain" known to the older generation.

Therefore, the usual declarative pegging of the ruble to gold or the dollar will not change anything.

Russia has little to offer the world in the field of high technologies. It is necessary to understand that it is high technologies that create the highest margins. It is not for nothing that the capitalization of one of the most technologically advanced companies in the world - "Apple" has exceeded a trillion dollars today! She is without a doubt the flagship of American industry, and therefore the flagship of the exchange rate value of the dollar.

And what can Russia offer in this sense?

They extracted oil for a dollar, sold it for a dollar and a half, that's the whole margin. This is me, of course, figuratively, but compare the US produced an iPhone for 10 bucks, and sold for a thousand … Catch the difference?

That is why the inflow of dollars to Russia is quite limited.

Today, the country has too few production competencies, which have no alternative in international markets

Mineral resources are, yes, they are in demand. More food. Also timber and fish catch. But for the rest, especially in deeply processed products - alas.

And in the world there are dozens of countries that can offer the same goods as Russia, but not for rubles, and for dollars and buyers do not need to bother, because today the ruble is the same unsecured security as the dollar

Moreover, the paper that "jumps" on the stock exchange every day. Therefore, any incorrect statements by those in power immediately push up the currency trading on the Stock Exchange. This means that no other attempts to create exchange trading in rubles will change the situation. Nobody in the world practically wants to buy anything from Russia for rubles.

Attempts by the authorities to oppose the World with some dubious know-how fail every time. "Russian Silicon Valley" - the highly publicized Skolkovo did not work. The exchanges where they trade in oil and gas for rubles are barely breathing and the problems of saturating the country with currency do not solve. Nobody really believes in the vaunted zones of special taxation either, for the Russian Government has "seven Fridays a week." Today they say one thing, tomorrow something else, and the day after tomorrow they “freak out” here and there

This was the case, for example, in the Government's promise not to change the rules of the game in taxation. Two years later, VAT rose to 20 percent. Entrepreneurs already know that the Government cannot be trusted.

Speaking speculatively, Putin dreams of creating Russia as a kind of rock against which all the raging capitalist waves of the West would break, so that Russia itself would flourish inside.

But how to do that? After all, a rock cannot be built out of soft clay.

Simple reflections suggest that it is necessary within Russia to subordinate the dollar to the State. Withdraw its uncontrolled sale from all exchangers, all private banks and subordinate the sale of the dollar to only one bank - the State Bank of Russia.

No, I am not calling for the closure of exchangers, I mean that all dollar sales and purchases should be strictly regulated. The euro is likely to undergo the same process. What will be left?

Players will remain on the MICEX, in the sense of speculators. They will also be brought under the control of the State Bank.

Those. the idea is to close the dollar's loopholes to the private sector, but without setting a deficit on the dollar itself. At the same time, take dollar transactions under the strictest control. The private sector is not only individual citizens, but also private commercial companies. These also include all sorts of CJSC, LLC, OJSC and other non-state firms. For them, organize VneshTorg as an intermediary in the purchase of equipment, machinery, machine tools and competencies, as well as medicines and food. It is he who, as an intermediate link, must accompany the necessary purchases in a declarative manner and convert rubles into currency. Yes, it is more expensive for companies, a little, but then how do we want to protect the borders of our economy?

Those traveling abroad on tourist visas should sell dollars in a fairly free amount, but when tourists enter back to buy from them all the unspent currency and it is obligatory at the purchase price.

It is necessary to create an analogue of the "two-circuit" Soviet economic system, where cash and non-cash payments filled different "circuits". Here it is the same, but with a difference - there are private and state-owned companies in "two circuits"

Fully state-owned companies will be able to freely use the dollar, and companies, even with partial participation of private capital, only under the control of a special body of the state

This will limit the circulation of the dollar within the country and protect our economy.

Then it will be possible to control the dollar exchange rate in Russia

And with a full state, i.e. total control over the dollar, one can speak of its controlled exchange rate, or its replacement with alternative currencies, such as the yuan, or perhaps a complete rejection of it.

And if this happens, then the need will push Putin to create an unshakable "Gold Standard".

And why is the "Gold Standard" necessary and important for Russia? Only for "show-off", what is it? And many critics may reasonably ask this question. Indeed, in this situation, pitfalls of "new perestroika" will surely appear, and this is inevitable.

For example, would a person want to buy real estate abroad? Where can he get dollars? So I will note once again that there should be no restrictions on the purchase * sale of currency, but the interested departments will be able to check once again how the citizen got extra money.

This is the factor of civil liability arising from this citizen!

Yes, of course, this factor will directly and inevitably restrict Russians in their rights, including to a significant degree of freedom. This is indeed the case. But today the absolute majority of Russian society dreams of decent pensions, salaries, decent education and medicine. The overwhelming civilian majority yearn for social justice.

But social justice is impossible without social responsibility

This is what I'm talking about.

Now go up to the beginning of the article, I highlighted the following line about Alrosa there:

Yes, selling for rubles is like death for any serious company today. Rubles, while they are just paper, today really nobody needs. But if you tie the ruble to gold … Now let's remember the story.