How long can you fool the people?

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

I'll tell you a terrible tale today. About inflation, devaluation, emission and just about degradation. The tale will be long, but instructive.

Not all of us have an economic education. And even if there is, then not everyone can competently understand the events that are taking place and make a forecast for the future. For this reason, they fool us. For example, our monetary authorities are constantly fighting inflation. She, according to Siluanova, Kudrinaand other members of our government - "a terrible evil." It must be suppressed and combated day and night, night and day. However, for 25 years of their "struggle" there is no result, and inflation in Russia is prohibitively high. Meanwhile, inflation in European countries and the United States does not exceed three percent. Paradox?! Not at all. This is an imbalance not only in our domestic economy, but also in the heads of our rulers. All of us, ordinary people, pay for their mistakes by paying for purchases in stores, not being able to develop small and medium-sized businesses, not having 25 million highly qualified jobs.

My guest today Valentin Katasonov, Professor of MGIMO, Doctor of Economics. Like a fabulous hero, he, analyzing, dotting "I" and prompts all of us a reasonable course of action. We discussed with him where the feet of inflation in Russia come from, what moods prevail in the regions and what role Kudrin plays.

"SP": - What is happening with the economy in Russia now? Ordinary citizens saw a freeze on wages, layoffs, difficulties in finding employment and, at the same time, an increase in prices for all types of goods and services, plus the inability to go anywhere on vacation, because people simply do not have money

- For a quarter of a century of reforms, our economy only collapsed. Despite the formal indicators of GDP growth, there has been no real growth and there is no real growth. Our statistical department Rosstat just learned to draw the necessary numbers. And where can there be growth ?! If we have had the so-called integration into the world economy for 25 years. As a result, in the international division of labor, we began to specialize as suppliers of raw materials and we purchase most of the goods on the world market.

By the way, we export resources for a song, practically free of charge. True, they create an illusion for us that we do not export them for free, because it seems like the currency is coming in. A simple example. Suppose we exported oil, natural gas, timber worth $ 100 billion, of which $ 50 billion remains somewhere abroad in offshore areas. Another half return to Russia. Exporters exchange this foreign exchange earnings for rubles, which are used to purchase raw materials, semi-finished products, for wages and for paying taxes. Here's a diagram.

At the expense of this currency, the ruble issue of money takes place. I would like to draw your attention to the fact that the currency in the reserves is actually cash receipts that cannot be used to buy something. An illustrative example is Iran, whose foreign exchange reserves were being unfrozen and then frozen. That is, if you have formed reserves, this does not mean at all that you will be able to dispose of them. The very same United States says that with this money they will cover some damages, for example, from terrorist attacks. And that's all. The illusion is created that we are earning something.

Naturally, such a raw material model of the economy cannot provide the necessary living wage for all of us. And most importantly, we are completely dependent on external factors, on imports.

"SP": - Moreover, it is dependent on machine tools, not only on ordinary goods

- Yes, from investment goods, from machine tools. Look at the statistics of Rosstat. Today, our production of machine tools is only a few thousand units. Imports are also several thousand. But our production in the best years was in the millions. I'm talking about the Soviet Union. Yes, we imported machine tools with programmed control, but we also exported machines in hundreds of thousands. Today we have practically no production of means of production. And this is the basis of the economy, because the economy is based on the so-called heavy industry.

"SP": - The government does not want to change anything, moreover, to give way to those who can do it. And the people live worse and worse, especially in the regions. What will be the result of such an attitude towards the people on the part of the government?

- Firstly, we do not have a government, but a colonial administration, which strictly follows the instructions of the "owners of money." According to the government, they did not make any mistakes. For 25 years they have been able to play many different "vaudeville" and "performances". For example, remember u Medvedev “Four I's”: industrialization, institutions, investments … Or “two GDP” (doubling the gross domestic product), or the creation of an “International Financial Center”. Every year and a half, the government changes its slogans. The only thing they do is verbal intervention. Blah blah blah. Some ordinary people even believe in it.

I do not exclude that those who run our colonial administration are interested in creating an explosive situation here. Therefore, for example, they invite Kudrin to the economic council under the president. Kudrin speaks from the position of the West and polarizes the mood in society. The national-patriotic forces are even more heated by his statements. Both beloletochnikov and the liberal opposition are being prepared, in general, the ground is being prepared for social explosions. And maybe in Moscow this is not so acutely felt, but in the regions the situation is very serious. Now in the regions they are even learning how to use weapons, and not any marginal people, but people are respected enough.

And how does the general situation today differ from the situation of the 30s of the last century ?! National Socialist sentiments are taking shape in Europe. In order to speed up this process, they planted a catalyst in the form of emigrants.

"SP": - That is, the collapse of the European Union is inevitable?

- Certainly. We have people from Donbass, from Lugansk who say that we are half a step behind them. It is an illusion that we are in a calm place.

"SP": - You communicate with entrepreneurs. What are the main problems they are concerned about? What is really stopping business development in Russia? For example, even in the anti-crisis programs of Kudrin and Glazyev, opponents agreed that it was necessary to reduce the pressure of law enforcement and regulatory bodies on business

- If by business we mean a dull extraction of money, then in Russia business has never had and will never have prospects. This is how we are traditionally arranged. Russia is a certain civilization aimed at spiritual and moral ideals.

Profit generally ends up all over the world, because no one is interested in creating a real economy for thirty years already. Everyone went to the gambling house, to the playgrounds. Therefore, all talk about economics is about how to divide that shrinking product, pebbled skin.

"SP": - Is it due to overproduction?

- This is due to effective demand. There is a demand. Look how many hungry people are in the world. But there is no money. Why is effective demand shrinking? Because our entire economy in the world is based on credit money. And Russia was one of the last to cling to the structure called "capitalism". Therefore, we are still in a winning position and have not yet reached the handle they did. Do you think America is a prosperous country? They have been living in debt for a long time.

"SP": - What do entrepreneurs say to you?

- Everybody has longing in their eyes … Just the other day I talked with a banker, he is worried, today or tomorrow they will take away the license. How could it be otherwise if you know how our banks work ?!

We have 700-800 banks today. Come to any, the balance is such that you need to immediately revoke the license. But do not immediately take everything away from everyone! First you need to process one, then the other.

There were three banks in the Soviet system: Gosbank, Promstroybank and Vneshtorgbank. It was a good system and no bankruptcies. And today the bankruptcy of a bank also means the bankruptcy of corporate clients. And this is sabotage. Because a corporate client, for example, can be an Oboronservice enterprise.

"SP": - Aren't you exaggerating? Solid negative results are obtained in Russia

- Positiveness begins when there is order in the head. And by the way, that banker said that he dreams of becoming a branch of a state bank. And no problems, no raids, no scams. And so they are forced to spin, spin, participate in various corruption schemes. This is disgusting to many people, not all of us are scoundrels from birth. Some even leave because they cannot work there, their conscience does not allow them.

"SP": - According to what laws should the economy develop in Russia so that we can see the growth of the non-resource sector, the development of production? What are the points of your anti-crisis plan?

- I will limit myself to five points and name only emergency measures, the implementation of which takes from one to three months. Everything else is on the next list, because there is a short-term emergency program, and there is a long-term program.

The first point is the introduction of restrictions and prohibitions on cross-border capital movement. The second is the liquidation of offshore companies. The third point is immediate exit from the WTO. A radical restructuring of the activities of the Central Bank and a change in its status is the fourth point. And the last one is the introduction of a moratorium on the repayment of foreign debt obligations.

"SP": - Failure to pay external debts can cost the lives of members of our government …

- Economic sanctions have been announced against us. Why on earth should we pay these debts ?! We can free ourselves from fulfilling obligations under credit agreements in the event of force majeure, economic sanctions are one of the varieties of force majeure. Any international lawyer will tell you this.

"SP": - Why is it so important to restrict the movement of capital from the country and to the country? Because of speculation?

- Remember the collapse of the ruble in October 2014. Why did it happen? Because there was a sharp outflow of capital and a frenzied demand for foreign exchange. It's simple. Any investor who comes to Russia, at the entrance, exchanges currency for rubles, at the exit there is a reverse process of exchanging rubles for currency. Accordingly, everyone began to "push" at the exit, and the demand for foreign currency increased.

"SP": - How can we fix the supply of demand for currency through the movement of capital?

- In 2014, private capital outflows amounted to $ 151 billion. Moreover, 99% of it was speculative capital, which did not come here to create, not build, not create! He came here to loot, especially in the financial and foreign exchange markets. Naturally, speculators come to our market only with a guarantee that they will be released. And our authorities have guaranteed that there will be no restrictions in the coming years. That is why they so impudently come in here, knowing that at any moment they will jump out of here. Without this, the ruble would not have collapsed. That is, it was a planned operation, played out clearly from the notes.

By the way, among the BRICS countries, Russia is the only country that does not have any restrictions on the movement of capital. China has strict restrictions, as well as India and South Africa. Brazil has a tax on the movement of cross-border capital. In our country, all restrictions on the movement of capital were eliminated in the mid-2000s by amendments to the Federal Law on Currency Regulation and Currency Control. Kudrin, our "great" financier, also tried to do this.

"SP": - Many talk about points of growth for the Russian economy. What niches should you bet on?

- We do not need points of growth, but we need a healthy organism. The economy is the movement of goods, resources and money. In the human body, there is metabolism, metabolism, blood flow, and so on. It's the same in economics.

We are Russia, and this is not Switzerland, not Holland, not Monaco. We are a whole continent. We must become a self-sufficient country. We do not need to go out with any brand, we simply should not depend on the world market for either export or import. And if we begin to depend heavily on foreign markets, then the owners of money begin to control us. If I didn't understand it Stalin, then we would not just not have won the war, we would have lost it in the first month. Stalin carried out industrialization, spent two and a half five-year plans, the main goal of which was to achieve self-sufficiency.

I saw a program where drones want to be the main priority of the Russian economy. We found such a growth point. Tell someone in the Lipetsk region that he should prioritize his small and medium-sized businesses and focus on drones. Moreover, drones in the general sense are both cars and locomotives. Is this the most important thing that we lack today ?!

Take a look at history. How did industrialization begin? After all, Stalin and his ministers had a certain algorithm. First, conditions were laid for heavy industry. They built "Kuzbass", "Donbass", because they needed their own coal, iron and steel. At this stage, of course, the machines were imported. During the second five-year plan, in the presence of their own iron, the machines went. The third five-year plan, which they did not manage to finish, is the production of special precision equipment designed for the production of weapons.

"SP": - Do you think that the half-century algorithm can be transferred to the present day?

- Yes. Of course, the Third World War will not be in the image and likeness of the Second World War. There are other wars going on today. But we still need an independent economy, a single national economic complex with a set of industries from "A" to "Z".

"SP": - Do you see people capable of organizing all this?

- Today the situation is much more complicated than during the years of industrialization. Because Stalin's industrialization was done by specialists who had an education and received experience in pre-revolutionary Russia. About 10 years passed from the moment of the revolution to the start of industrialization. We have already passed 25 years, there are few people left. They still exist, but there are very few of them. Recently in the Urals, people told me that they had received defense orders, but they could not recruit specialists. And there is money, and there is an order, but there are no people. And the equipment is still there, although it was also very tense with it. All our precision equipment is imported. And if they declare a blockade on us ?! They have not announced it to us yet, because we are not making a demand. And as soon as we "move", the West will immediately lay its paw on it.

"SP": - The government always sets the main goal of reducing inflation to 4%. Only for some reason nothing happens. And our monetary authorities are implementing these recommendations with enormous damage to the country. Explain to the people why Kudrin and others are fundamentally wrong

- Our refinancing rate is 11%. This means that commercial banks do not issue loans at less than 15%. The rate of return, according to Rosstat, is in the range of 5 - 8%, and it should not be lower than the refinancing rate of the Central Bank. Therefore, if you took out a loan, you are actually programming your company for bankruptcy. In other words, you make yourself "hara-kiri". I spoke with many entrepreneurs and asked them about the cost structure. The majority answer that in addition to wage costs, the largest costs are now spent on paying off and servicing debt, that is, loans. Further, the rule is simple. If your production costs go up, then your prices go up. And inflation is measured by price dynamics. Why did prices rise? Because the interest rate is going up.

"SP": - A vicious circle. Nobody understands this?

“These people confused cause and effect. Well, how much can you fool the people ?!

Examples from other countries are indicative. For example, in Denmark, commercial banks generally have a negative rate. In the US, 0.25% - 0.5%, and their inflation rate is 3%.

Moreover, the printing press in the United States has become extremely hot, and its products go not to consumer markets, but outside the United States to financial markets. If we imagine that financial markets will begin to “fall” if all this mass will pour into consumer markets … For the time being, all is well. These guys understand that there might be a flood. And our reader is too naive and simple-minded. I do not recommend our Russian person to immerse himself in these matters, because even if he starts to immerse himself, he will still be deceived.

"SP": - And what should Russia do?

- Money for entrepreneurs should be free, because if there is interest on money, then there will be inflation, there will be imbalances in the economy, there will certainly be crises, there will be a desire to compensate for these imbalances by receiving part of the cash proceeds in world markets. This means that “bickering” will begin in the world markets, which can turn into a hot phase, into a world war. Here I have explained to you the structure of the whole of economic science. How the economy smoothly turns into politics.

"SP": - Should there be controlled emission?

- We do not need controlled emission, but the issue of money for the creation of a mass of commodities. If we issue money for production, then there will be no inflation. And no matter what kind of production: tanks, porridge, nipple … If we spend money on the production of something, then the balance is ensured and there will be no inflation. And if the money goes somewhere to the left, if there is a loan interest, then the balance is violated.