Will Kudrin’s resignation lead to the abandonment of the “currency committee” regime?
Important events on the political Olympus of Russia and the observed processes in the economy force us to pay attention to them and somehow comment on them. Although not in my habits the news - analytics requires a thoughtful approach. Nevertheless, if there is a desire to share relevant information, then you should hurry up - public attention is always riveted to current events. So for now, I’ll digress from the story of the tragic stories Soviet cybernetics and pay a little attention to the "routine". Moreover, the same recent resignation of Kudrin gives reason to once again discuss the main problem of the Russian economy - its dependent, essentially colonial, financial system. Which even has a quite scientific decent name - "surrency board" or "currency committee" (sometimes the English name is also translated as "currency board" or "currency board" mode). So, the resignation of Kudrin. Kudrin traveled to Washington, where he reported that he refused to participate in the activities of the future new government under future President Putin. When returning to Russia, at the nearest modernization council, the current President Medvedev accelerated events for six months and dismissed Kudrin. This event caused a lot of comments, Kommersant even published a transcript of Medvedev and Kudrin’s conversation at that very meeting. He is really funny and causes a lot of emotions. Someone sad, someone joyful. Personally, I was glad. Finally, the IMF representative was removed from the Russian government! Maxim Kalashnikov after this event even changed his opinion about Putin. He writes that "the authorities in the Russian Federation realized that for the West it is a waste material, that they intend to send it to a landfill. The authorities went to confrontation with the West." It was reasonable to say to the writer and popular blogger in the comments on his post: "Damn, 10 has reached you years, who Putin is. Well, that finally reached ..." In fact, it is hardly reached, who wrote some good books about soviet weapon Kalashnikov does not understand politics at all. Despite his former collaboration with Krupnov, quite competent in this. Putin has long and consistently "conflicted" with the West. More precisely, this West is in conflict with Putin because of his desire for independence and a not too liberal policy of strengthening statehood. This includes the construction of a “vertical of power”, the nationalization of YUKOS, the persecution of oligarchs who are too “close to power”, and the creation of state corporations. And, by the way, the strengthening of the armed forces, which after Yeltsin were in the most distressing situation. Maxim Kalashnikov should know about this, but he is completely out of it.
And, again, by the way, Kommersant, commenting on his resignation, explains Kudrin’s disagreements with the state’s leaders on weapons costs, which Kalashnikov cares about (and I, by the way, also). "Since 2015, the HPV requires government spending to increase government spending by 1,5-2,5% of GDP per year," Kommersant writes and continues: "The adoption of the state program in itself meant that in the 2015 year, the Russian Federation will have to or by a similar share of GDP government spending, or go to the long-term deficit state budget, borrowing money for weapons on the domestic or, less likely, on the external market. " In this case, it is apparently assumed that the budget without these costs will have a zero balance - revenues are equal to expenses. However, a couple of recent "deficient" years are the consequence of the 2008 crisis of the year - which for Russia was, in turn, a direct consequence of the "currency committee" (this will be discussed further), and with the recovery we again had a surplus - in January-August it already amounted to 2,3% of GDP and is unlikely to be lower in the year. It can be said, in spite of the predictions of the same Kudrin 2% deficit. I believe that nowadays financiers give what they want for the forecast. Including Kudrin. That is, an increase in spending on the HPV is unlikely to lead to a deficit at all. And on the other hand, even with a deficit, you can live without loans, which threatens Kommersant, otherwise why have you accumulated such a “jug”? No country has that. On the contrary, all developed countries prefer for some reason to live in debt. I do not agitate, no, I just pay attention ... But in the end, all these Kommersant comments about the reasons for Kudrin’s “disagreements” with the President and the Prime Minister are simply demagogy. What is famous for the former Minister of Finance himself, I once commented on his speeches.
Now, many media reports about the resignation of Kudrin, recall about his merits. “What is the“ risks of non-fulfillment of the budget, ”they have almost forgotten in the Russian Federation,” writes Kommersant, consistently defending Kudrin. "Look" in a little more detail reveals the "positive role" of Kudrin:
"The first noticeable decision of the new head of the Ministry of Finance was the tax reform, which was to increase the burden on the oil sector, sharply criticized by almost all political parties, the introduction of a flat income tax scale in 13%, a reduction in the VAT rate from 20% to 18% and the abolition of 5-percent tax from sales. During Kudrin’s time in office as finance minister, the total amount of taxes was reduced three times. "
In this case, however, inserts a comment:
“Increasing the burden on the oil industry is, by the way, the merit of Putin rather than Kudrin — it was aimed at removing price opportunistic rents. But rather crude mechanisms were used, such as export duties, which are not used almost anywhere in the world. It was introduced as a temporary measure, but it remained. This duty replenished the budget, but slowed down the development of the entire oil complex, remote eastern regions. "
From myself, I would add that the Primakov government in the 1998 year under President Yeltsin introduced the state duty for the export of petroleum products, which was one of the reasons for his removal from the post of prime minister. But Putin, who succeeded, did not abolish the duty, but increased it. What became a symbol of his rule - the oligarchs had to share their income with the state. As a result, the state budget has become surplus for many years and the state has accelerated its foreign and domestic debts at an accelerated pace. The plans were to transfer the oil sector from licenses for concessions, but due to the organized and persistent resistance of oil industry workers through the State Duma and the media, this was not possible.
The main "merit" of Kudrin, many consider the creation of the Stabilization Fund:
“The creation of the Stabilization Fund's 2004 in January was a natural continuation of the Kudrinsky policy of accumulating“ extra ”funds that the government could manage at its discretion. The Ministry of Finance invested super-profits from selling oil in foreign securities (primarily the United States). For the first time The fund served to pay off Russia's debt. Today, very few people remember this, but the topic of IMF debts and Russian borrowing in particular was a headache for the authorities all the 90s, and only under Putin Don't only relieve the tension, but also pay off all debts to 2005. In addition, the debts owed to the Paris Club of creditors were repaid in 2006: then Russia paid 21 billion dollars. "
As it follows from the above, the main concern of the former minister was the fight against "extra money", formed due to the very duty on oil exports. He categorically refused to spend this money and carefully removed it from circulation. Under the pretext of allegedly threatening inflation. In general, inflation is such a universal horror story among liberals, except for corruption, of course. Allegedly, any government spending leads to both, and to another. And because it is desirable to reduce government spending, up to a complete reset. That is the elimination of the state. Such is the liberal "paradise". That is the "jungle", where every man for himself. In general, Kudrin was not lucky - he would lead the ministry in the Yeltsin era, then everything was much more liberal ... The country looked more like a “jungle”, that is, a liberal “paradise”. And therefore it is not surprising that many famous liberals, like Novodvorskaya, remember that time with nostalgia.
However, there is another "merit" of the minister, about which everyone is silent - this is the maintenance of the regime of the "currency committee" for Russia. What it is? This is a colonial system and its essence is that the issue of a national currency goes under the reserves of another - the currency of the country whose colony is a country. The issue is only with the redemption and accumulation in the reserves of foreign currency. This was the invention of the British for their colonies in the middle of the XIX century. Earlier, I briefly described the essence. Now it makes sense to dwell on this financial policy in more detail, since it determines not only the exchange rate of the national currency, but also has a serious effect on the development of the country's economy. In particular, the problems of 2008-2009 for Russia were determined by this very policy. This many do not understand. Or refuse to understand.
So the essence of the system was described by the well-known liberal economist Boris Lvin:
"The essence of this system is that all liabilities of the central bank (monetary base) are fully covered by reserves in a certain foreign currency - most often in dollars. In fact, the central bank refuses its so-called discretionary rights, that is, rights to regulate the amount of money in the economy His monetary policy becomes completely passive, it ceases to be a policy in the true sense of the word. The central bank simply exchanges the national currency for foreign currency - anchor and vice versa. "
Lion was not her opponent, on the contrary, he believed that such a system is good from an ethical point of view - "the less discretionary rights the state has, the more freedoms its citizens have." Having forgotten, it’s true to clarify which citizens have more rights here. Otherwise, everything is written correctly. And because other liberal sources do not like too much to refer to it. The same Wikipedia diligently camouflages this essence, giving the definition of some specific consequences of such a policy:
"Monetary Board (eng. Currency board), also currency board - the monetary policy regime in which the monetary authorities are obliged to maintain a fixed exchange rate of the national currency to foreign."
In this case, the features of the system indicated:
"The country's foreign exchange reserves must fully cover the amount of national currency in circulation (they usually make up 110-115% of the monetary base of M0)"
Wikipedia swaps the cause and effect here. In order not to crawl out the colonial nature of such a policy. This "feature" should be put by definition of a mode, but not a consequence of a certain deduction of a national currency rate. How else to determine at a constant rate, which currency is an anchor, and which is secondary to it? And at what exchange rate? This “parity of currencies” is not the most important consequence of the “currency board” (or “committee”). This “parity” can be changed as you please (which is what the Central Bank of the Russian Federation does), without at all canceling the main feature of the regime - the gold reserves determine the money supply of the country. But this is not the main point of the system. After all, what does the requirement to match the gold reserves and the domestic money supply really mean? Only that the Central Bank does not perform emission functions! What Lion called "discretionary law." The central bank does not serve as a source of money in the economy, it is replaced by another - an external emission center, whose currency is used as a “reserve”. Colonies are not allowed to issue their own money. There is only a replacement of the reserve currency to the "national". That is why this system is colonial, similar to the one where the national currency was completely abandoned.
But the point, of course, is not in the names, where the word "colonial" is absent. And in what consequences for the economy arise from such "features" of politics. And I have already described them:
1. Binding of the money supply to the export of resources regardless of the real needs of the country in the money supply. For Russia, this means linking its economy to oil prices. The price is high - the economy is growing less, the price has fallen - we are in a crisis. And not because budget revenues fell. The country simply does not have enough money!
2. Binding of money supply to Western loans. Since not only exports are the source of currency, but also loans. And this means binding the country's money supply to the problems of the banking system of the West. There is a lack of liquidity and lending stupor, we have - a sharp contraction of the money supply. That is, again a crisis!
Of course, such statements are best illustrated with figures. Nobody believes in words. And it is right. The only problem is that in the statistics of the Central Bank to discern the "currency committee" is quite difficult. Take for example the monetary base and compare its dynamics with the dynamics of the gold reserves. Since January of this year, the gold and foreign currency reserves have grown from 479 379 to 533 905 million dollars. Increased 54 526 million. How did this affect the money supply? M2 increased from 20 011,9 billion to 20 742,6 billion rubles, that is, increased by 730.7 billion rubles. In terms of dollars - just 26 billion. The monetary base at the same time declined - from 8190,3 to 7147,3 billion. That is, the Central Bank continues to maintain the ruble rate despite the excess inflow of dollars (only due to this, reserves can grow), but tries to restrain the corresponding growth money supply, increasing reserve requirements. Can such details be considered as the difference from the "currency committee"? It depends on how strict the definitions are. In fact, judging by the appropriate money supply and gold reserves, then such a policy is even tougher than the "currency committee." The money supply is clamped more than it even follows from such a policy!
But let's not hurry. Let's try to understand the terms "money supply" and "monetary base". The fact is that different central banks consider the “base” and the “mass” based on their own definitions, including different components. And according to the textbooks, the “monetary base” is the aggregate of the liabilities of the central bank. That is his commitment, "banknotes". Are all liabilities of the CBR included in its base? It turns out that not all! Therefore, it is more correct to study statistics not on the basis determined by the Central Bank of its choice, but to look at the balance of the Central Bank, which, based on general banking balance rules, cannot contain such arbitrariness.
Why does the balance prove the existence of this regime for Russia? For one simple reason - the assets of the Central Bank is not gold. Not obligations of Russian banks or the Russian government. There are obligations of a completely different origin - foreign. The same gold reserves. It is he who determines the basic size of the asset, corresponding to the liability - the monetary base (according to the textbook). "Securities of foreign issuers" - 13,273145 trillion rubles (at 1.08.2011). This is what determines the main money supply of the country - Central Bank liabilities (cash (5,925962 trillion) + funds on securities accounts (7,726311 trillion) = 13,652273 trillion). Almost full compliance minus small amounts! The Central Bank’s financiers did not include government funds in the amount of about 4 trillion rubles. Therefore, we have a different monetary base from the gold reserves. Of course, the Fed also has foreign securities in the asset. In the minimum amount. But they do not form the main part there. The main part of it is "treasuries", the obligations of their own government. Same as ours! Funny Not really. For this suggests that our Central Bank - a branch of the Fed in Russia. He releases his obligations - money only under the security of US debts. Well, the EU, of course, "basket" we have a "double." We can say that we are a colony of two metropolitan countries at once. They somehow divided us there ...
But how did this affect our crisis in 2008? The fact is that the Russian economy was credited (and is being credited now!) By Western banks. This is the main source of money with us. Not because our companies like to get loans in dollars, not at all - they still have to be exchanged for rubles. And simply because Western banks have lower rates than our Central Bank. The Central Bank practically does not credit, its rate is always higher than even the interbank rate. And it is just determined by Western banks - there is something lower rates. Therefore, the interbank loan rate on 3-4% is lower than the Central Bank rate (you can look at the Central Bank website and look at MIBOR or MIACR - this is just an interbank loan. These rates are growing now, which is a sign of another capital outflow). The role of the Central Bank rate is a prohibitive barrier. It is impossible to say, they say - "we will not give you money. Generally. Point." Why, then, would we need it, this Central Bank? Not. So not beautiful. Its existence must somehow be justified. Therefore, a prohibitive rate is established, and only the exchange rate is performed from the functions. Exchange office, in general.
So. Based on this particular policy of the Central Bank, which directly fits into the colonial financial system called the “currency committee”, the Russian economy receives its financing abroad. And by the beginning of 2008, I gained credits for 500 billion. One can cite more accurate figures with links. At 1.10.2008, banks and companies scored debt on 504,8 billion dollars, banks - 307,0 billion, companies - 197,8 billion. This, of course, does not take into account the national debt, which we now have is small - 35 billion. And this was the basic basis for credit multiplication - money supply while the economy has increased several times. And it was good for the economy - because of the presence of this money in the Russian banking system, the rates fell, it reduced the costs of enterprises for revolving funds, and the revolving funds themselves were added. It stimulated the economy, construction, production and sales of cars grew ... Everything grew. I believe that the arrival of Western capital with low interest rates was not in the plans of our Ministry of Finance, which knows only one means against inflation - to hold the tap. The crane had squeezed it in a long time, and the monetization of the economy grew with the decrease in inflation. Monetarists from the Ministry of Finance could not explain this phenomenon, but they could not do anything either - the crane was twisted to the limit.
This incomprehensible situation of economic growth, contrary to the efforts of the Ministry of Finance, has broken the 2008 crisis of the year. Then Western banks suddenly stopped lending to Russia. And Kudrin's dream came true - the money supply began to shrink. Since the beginning of September 2008 r and by the beginning of March capital outflow from Russia began due to problems of the western banking system - as a result, the fall in money supply (M2) in billions of rubles amounted to 14 530,1 - 11 990,7 = 2 539.40 billion (–17% ), monetary base (M0): 5360 - 4331 = 1 029 billion rubles (- 19.2%). This fully corresponds to the outflow of Western capital - 88,3 billion dollars (on 1.04.2009 the total debt of companies and banks - 416 billion dollars). Banks lost loans for 37 billion, and companies - for 51 billion. The average exchange rate of the ruble over this period was 29,985. Multiply it by the currency outflow to 88,3 billion and get 2 647,675 trillion - almost the exact value of the contraction of the money supply in Russia over the same period. This is not just a coincidence of numbers - it is a direct consequence of the work of the "currency committee" regime. For the Russian economy, this was tantamount to a blow in the gut - the air from the lungs was knocked out, but there was nothing to breathe. Bank rates soared at once to 20%. The bulk of the economy has lost profitability and rose. Since the rate is included as an expenditure part for the budgets of manufacturers, the working capital of enterprises is all borrowed. This led to massive bankruptcies.
The government represented by Putin understood something there and gave some money from the Stabilization Fund. Well, his first. Deripaska is the same ... Otherwise, Russia would have to go without oligarchs ... Gave out money for several tens of billions of dollars. On credit, by itself and at high interest rates. Well, not 20, and so - 10-13%. Two times more than Western banks gave. This saved strategically important companies from bankruptcies. Even Rosneft somehow felt bad and occupied tens of billions ... But the rest of the economy lay in complete “blackout”. Production fell by more than 20%, stronger than in Europe, where we borrowed money. The question is - was there a method of bringing it to life? The answer was. Elementary. Take and take our Stabilization Fund from Western banks and deposit them in ours. Under the same 5%. Everything. This would eliminate capital outflow FULLY! And precisely because this was not done (although a small part was still transferred), I stopped sympathizing with Putin. He had levers, he could push on Kudrin. Either could not, or did not think of. In any case - no longer a leader for me. But the main thing - it was the responsibility of Kudrin. However, he did not. For the colony! The IMF representative defended completely different interests.
What happened next? And then throughout the year, the Western banks and the printing press once again donned their money with the efforts of the Fed and its printing press. And again they went to Russia. And everything has already returned to the old channel - the money supply has regained its size and the effects of the crisis have already been eliminated - credit rates have returned to the pre-crisis level. But this again makes the financial system of the country dependent on the problems of Western finance. This September is an example of such a relationship. Any sneeze in the west responds with hemoptysis. And another question arises - when and under what conditions will this bomb work again? Maybe with the default of the United States?
I wonder how we implemented such a system. This is best described by Scare:
"I recall that the well-known reformer Boris Fedorov, considered a prominent economist and financier, immediately after the collapse of 17 in August brought to us the former Argentine Finance Minister Cavallo. This figure once brought in his own country, ravaged by cooperation with international financial organizations, a relative order. Experience Argentina for a short time became the main topic of discussion in newspapers and on television, in the lexicon of economic observers, a new expression “Karency Board” appeared, meaning something like “currency regulation iran "or" currency board authorities. "What was the situation in Argentina? By 1991, after the reign of generals' junts, the country was a pitiful sight - the government could not or did not want to collect taxes, but simply printed everything for state needs new batches of money. The money supply grew, the salary was given out almost every day, and we had to spend it right away, because it devalued on the next day. The then foreign minister Cavallo proposed and implemented his plan, the main feature of which was a rigid peg of and the national currency to the foreign currency reserves, with exchange rate was fixed. That is, a new currency began to circulate in the country, the banknotes of which were, as it were, notarized copies of the dollars that lay in the basement of the National Bank. A new dollar appeared in the bank - it means that you can print the next banknote, and nothing else. Deep privatization and public spending cuts were also carried out. And no salary indexation! "
That was the system that Kudrin supported. And now I'm wondering, in connection with his resignation, will the “currency committee” also be canceled? Or will he be continued by some heir of Kudrin? Another IMF representative?
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