Dollar and euro, ruble and yuan - all non-free, all non-convertible
Which one will you have to cry for first?
Who among the experts today does not wonder whether it is even necessary to look for reasons for transferring the policy of de-dollarization from the realm of the promised to the realm of the real. After all, you don’t even have to get off the oil and gas needle - we were released from it, and even with scandals, and actually a forced SVO.
It seems to be the same with the dollar disconnection from SWIFT, but the Central Bank and the Ministry of Finance prefer to get out, neglecting the Chinese yuan and periodically disdaining Indian rupees. Moreover, they suggest that we be proud of the fact that Russia has the lowest debt burden among any developed countries.
Our debts are the first reason to completely forget about the dollar, or rather, forget about the dollar. You might think that thanks to minimal external debts within the country, the pensions or salaries of intercity bus and ambulance drivers will increase.
And all this during the SVO is extremely costly, no matter how much they try to hide it from us. As if the country has nothing else to be proud of. Is there any real reason for this kind of pride?
Moreover, taking into account the 300 billion reserve foreign currency that the West now wants to hand over as security for loans to our enemy. Is it really necessary to rely on export revenues for the well-being of citizens and the formation of the notorious “effective demand” due to this?
Our debts, and not quite...
In Soviet times, for many years we calmly made do with bets on cinema, wine and dominoes. They borrowed from the population through the legendary “Stalinist bonds,” but only in order to finance industrialization, thanks to which they could then work not for the generous Western uncle with his “Bush legs,” but for themselves.
So, you need to borrow, but as much as possible within the country. And of course, not only and not so much for citizens, but for businesses. Having grown fat due to exports, frankly speaking, to the point of indecency. It was not for nothing that Primakov and Maslyukov first turned financial flows towards the real economy a quarter of a century ago.
Analysis of financial rubble - the directive resolution of non-payments was supported by extremely strict financial control. President Yeltsin personally gave the go-ahead for the creation of the VEC - the special service for currency and export control; he simply had no other choice.
The current currency commissioners and some kind of “chekist” games in exchange offices compared to the VEC service, which oversaw seven federal departments at once, right up to the Central Bank and the Ministry of Finance, are a pitiful bureaucratic resemblance.
And in general, spending money on something real is better than going straight to a financial dead end. This is another reason to stop clinging to the dollar, while continuing to constantly talk about “de-dollarization.”
Need to stimulate demand? Necessary! Does the economy need to be revived? Necessary! Although the SVO has already revived many things that had almost died. Unlike games with the exchange rate, the defense order is really some kind of panacea. Not like regular rollbacks of the ruble.
In March 2022, just a couple of weeks after the start of the SVO, when they were ready to bury the ruble, an order was given to go back. And what, you have already forgotten how bankers and exporters howled because of the excessively strong ruble.
Another IPO? Original...
Something original in this regard is actually being done in Russia now - a whole series of IPOs has been launched. These are initial placements of securities from companies where there is no need to cling to a large government order. There is no special fanfare or advertising, but the profitable instruments sell very well.
And this indicates only one thing. Despite all the moaning about expensive money and inflated rates, the business still has free funds that need to be invested somewhere. This means that, first of all, the banks have it, so why not offer them a loan to the country, which is having a hard time right now.
It is worth recalling here that these same banks not so long ago, although still before the SVO, willingly bought up the bonds not of some Sberbank or Gazprom, but of Chubais’s Rusnano. And not even on command from above - they believed in future profitability.
Yes, Chubais cheated everyone here, not for the first time, so now let the buyers of this kind of paper be smarter. Although it is possible that bondholders will be paid off for Rusnano one way or another. Who and how - the future will show. And in general, this is the case for many - they suffered losses, wrote them off as a net loss, and the whole thing was short-lived.
Isn't this another reason to give up the dollar? I wish I could go over the Central Bank rate with a hot iron. To start with, bring it down somewhere to the current official inflation rate. Too cool? But it is effective.
Because it's unexpected. Yes, and impressive. And in general, who said that a low discount rate is contraindicated for the Russian economy? Or will we become special again? And you can’t understand us with your mind?
There will be no default. Nowhere and never
With the beginning of the SVO, and then in connection with mobilization, there was talk about an inevitable epidemic of defaults in small and medium-sized Russian businesses. In addition, we were threatened with rising unemployment and deterioration of the ruble. Something is visible with the latter, but otherwise everything is quiet.
Selling oil and many other things for rubles has nothing to do with it at all. This is nothing more than an exchange transaction, which, if desired, may not be reflected at all in exchange rates. This is quite possible in a country with a self-sufficient economy, in a country in which there is a queue of people waiting for goods.
Not in the West, but in the East. Again, there is a hidden, although only for now, reason to exit the dollar. Now you can’t convince anyone that they will give less than a cent for a “wooden” one, and the very definition is disappearing into oblivion.
Oil can be expensive and cheap, but, except for Russia, not everyone has it. Biden may completely deplete the US strategic reserve, but this will not reduce the demand for Russian black gold.
Someone here will certainly remind you of the complete failure of the import substitution program and the insurmountable difficulties with parallel imports. Tell me, which economy is now completely independent? Chinese, Indian? Don't be ridiculous. Their addiction is greater and much more dangerous than Russia’s.
If the embargo actually turns off our oil tap, then it’s a lost cause. But if our economy were truly self-sufficient, then the ruble exchange rate would not react so hysterically to the fall in barrel prices. But we don’t hide bad things, we admit them and even fight them. True, it helps little, but the trend is important.
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