They say that there is nothing stronger than “an idea whose time has come”. It turns out that Putin is stronger and that he is able to overcome even the idea that has mastered the broad sectors of the Russian political and economic elite. Roughly speaking, officials, bankers and businessmen want to get access to a ruble printer and scribble freshly printed rubles in their pockets, waving slogans about reviving the economy and freeing the country from the bondage of dollar dependence. Putin did a terrible thing: he clearly stated on the air and in front of the whole country that no one would receive the keys to the money printer, and those who want to get cheap money should not “shake at the Central Bank”, but work to reduce inflation.
The importance of this presidential action is difficult to overestimate, since in recent months the idea of “printing and distributing to anyone should” has captured the minds of various elitist people. In addition to the already analyzed the author of these lines of the “Glazyev report”, the same ideas penetrated not only the joint proposals of the self-proclaimed liberals of the Stolypin Club, but also the program of the “liberal platform of the United Russia party”.
In order to understand what the idea of pumping up the economy with cheap money in the head of the average Russian elitist turns into, Sergei Markov quotewho personally witnessed the discussions in the camp of liberal United Russia:
“I am on the Liberal platform of United Russia. Here a riot is clearly ripe, and this riot against the government is already underway. A group of politicians, industrialists and experts, leaders of the platform, requires a dramatic change in the economic course of the government and a change in its economic bloc. It is openly stated that the government does not allow the economy to develop, but only waits for the price of oil to rise and relations with the West to improve. The essence of the proposed new economic policy is new industrialization. The main change that is being proposed is to print money, a lot of money (so that 3 has more money in the economy of money than it is now) and transfer it directly to the economy, first of all to industry, and especially to modern high-tech companies. A crowded hall of the elite, everyone understands that big changes are ahead, and everyone wants to understand in which direction these changes will go. ”
All clear? The main thing is to print a lot of money. And do not say that Markov and United Russia did not understand something. All of them understood correctly and had already gathered a small group of "elites" in order to understand what kind of "changes" they would have to wait for and where they would stick to the life-giving stream of fresh rubles.
To be honest, the rumors about the unprecedented inspiration of the Russian bureaucracy, which was massively confident that “well, money will begin now and go!” That have been going on in recent weeks, caused a certain emotional strain. There is no such meanness that a bureaucrat or banker would be incapable of, who sees the opportunity to gain access to an endless source of money.
By the way, I would like to ask those who are going to declare that industry is actually supposed to grow, and fresh rubles will be spent on enterprises, not on bankers and officials: please read not a political introduction to the Glazyev report, but concrete measures set out there in the annexes, as well as specific measures, under which Glazyev signed under the report of business ombudsman Titov.
Roughly speaking, the money will not just go to the bankers, but the bankers will also be insured against the opportunity to sit on the bench in case of fraud. Only this can explain the demand of Glazyev and Titov of the urgent "humanization" of the article 159 part 4, according to which the bankers are taking money from the banks to their personal pockets.
With the proposals of Glazyev and the Stolypinsky Club, exactly what your humble servant predicted happened. Sane offers get a move, but no economy will be pumped up with cheap money. Putin live He broke the hopes of the liberal and business elite, which in a narrow circle already shared fresh rubles:
"Question: ... Do you support the monetary policy of the Bank of Russia? Do you consider it necessary to reduce the interest rate?
V. Putin: Stormy prolonged applause for your question.
Naturally, it all worries. And, of course, everyone wants the Central Bank's refinancing rate to be lower, and, as you know, commercial banks are guided by it when issuing loans to economic participants. This, by the way, is not the only factor of interest rates in the commercial sector, but significant, it is true ...
To begin, I will directly answer your question. I support the policy of the Central Bank and the Government to ensure macroeconomic stability. The first.
The second. With all the desire to lower the rate it can not be done administratively, we must proceed from the realities of our economy, from its structure. Of course, I often hear: but there, somewhere over the hill, there are different rates, they are lower. Of course, there are lower rates. So they specifically do it. But there are other problems, and the structure of the economy is completely different. We have a threat of inflation, and there problems, perhaps, deflation, when the manufacturer produces, but cannot sell. That is the problem.
And we have a completely different problem. And we need, in order to lower the rate, not to shake on the Central Bank, as it was done in Soviet times and in a planned economy, but to help the Central Bank and the Government to suppress inflation and reduce devaluation risks and expectations. When we can do both, when we move along this path, then naturally the market will calmly and the Central Bank refinancing rate will decrease. "
It is clear that the reaction in the camp of the patriots was different. The most sane agreed that Putin knew better, or simply rejoiced that the president is highly resistant to the pressure of not very smart, but very greedy segments of bureaucracy and business. A certain part of the “patriots” finally became convinced that “Putin is either a fool or a traitor,” and notified about this discovery of the open spaces of social networks, inducing panic and fear in those around him.
The problem here is this. Macroeconomists are few. Good macroeconomists - even less. There are simply no good macroeconomists who can well explain macroeconomic concepts with human language in a public space. Against this background, the ideas of "The Sacred Printer" look just fine. They are simple, understandable to any blogger, fit in three or four points and bribe their logic. The faith symbol of the Sacred Printer Sect can be summarized in several paragraphs, the fulfillment of which should ensure economic growth, industrialization and, in the long run, an apple tree on Mars:
1. It is necessary to provide massive lending to industrial enterprises in rubles at a low interest rate (no more than 4-5%) and for a long term. For this you need to print a large number of rubles;
2. Foreign exchange earnings should not be accumulated in reserves, but invested in the development of industry (usually this item is explained by the unwillingness to lend our dollars to the US government, so that "our banks then borrow the same currency under 8%");
3. In order for printed rubles not to go to the foreign exchange market, to flow abroad in one form or another, and not to be stolen by government officials and businessmen, law enforcement agencies must follow the entire process. (Usually, the requirement of executions and the execution list is added to this item, without which the economy will not work).
Faced with this universal, logical, understandable and (at first glance) effective list of demands, a man in the street begins to wonder: “Why won't Putin do it? It's so simple!”
Pseudo-patriotic propagandists are ready to explain. They argue that Putin is either a fool or a traitor who works for the US / Rothschilds / reptiloids / Martians (underline the appropriate). To conduct a macroeconomic dispute in this format does not make sense, since theoretical reasoning will not have sufficient convincingness. Let's try to look at the situation from the other side.
So, we have a kind of universal economic doctrine, which is very simple to understand and supposedly guarantees growth if several conditions are met: lending to industry at low interest with printed money, getting rid of the "dollar tribute" and tight control over the targeted use of money by law enforcement agencies . There are many countries on the planet that are in bad relations with the United States and that really need economic growth. Let's see if the “Sects of the Holy Printer” magic method is used somewhere.
1 Example: Venezuela
This example is worth citing lovers of left ideologies. That, it would seem, was Comandante Chávez, there is Comandante Maduro — real leftists, Bolivarians and fighters for people's freedom, world peace, socialism and all the good, against all bad things. Not a single oligarch in the government. Central Bank - manual and obedient. So what?
Supporters of the Sacred Printer Sect are very surprised when they find out that the refinancing rate of the Central Bank of Venezuela is equal to 21% and even during the times of Chavez did not fall below 14%. Venezuela still sells oil for dollars, and while it was possible, its gold and foreign exchange reserves grew, that is, the Kudrinskaya Kapishka also worked there, although Kudrin was not there.
The schedule of purchase of American bonds by socialists Chavez and Maduro is quite clear:
2 Example: Iran
Iran example beautifulthat Iran was forcefully cut off from the dollar system after the introduction of international sanctions. It would seem that these are ideal conditions for developing the industry, printing the necessary number of rials, and showing the whole world how an economy based on Islamic principles will flourish. The Central Bank of Iran - manual, power structures - the most effective in the region, the death penalty (a favorite fetish of emopatriots) - is practiced.
The rate of Iranian securities is 20% and with 2006 it did not fall below 12%.
About how impatiently the Iranian authorities are waiting for foreign (currency) investments in the Iranian economy after the final lifting of sanctions have already been written by all the media on the planet. Now the same question about the leaders of Iran: are they fools or traitors? Or the button "print" can not be found on the printer? Maybe they still understand something in the economy?
Example 3: Republic of Belarus
Well, in Minsk there can be no obstacles for the application of the precepts of the “Sect of the Holy Printer”. Lukashenko is perceived by many passionate patriots as a kind of relic of the USSR, which has preserved and increased all the good that was in the Union. If we proceed from the economic theory, beloved by emopatriots, then the situation is ideal. The Central Bank is a manual squared, the Belarusian KGB is an ideal control tool, next is a huge Russian market and no obstacles for carrying out any kind of intervention in the economy. The export of capital is very difficult. It would seem that only the presence of a good printing press separates the Republic of Belarus from economic prosperity, and then the dreams of some Russian dreamers that “if Lukashenka goes to Moscow to throw out the oligarchs, he will start from one division, and 40 will reach Moscow” will come true.
This may be a shock for some emotopriots, but refinancing rate Central Bank of the Republic of Belarus - 25% and below 10% over the past 10 years it has not dropped.
If printing Belarusian rubles and pouring them into industry, science and agriculture was a magic wand, Lukashenko would use this tool long ago instead of negotiating with the IMF, which hints at the need to raise the retirement age in exchange for 3 billion dollar credit .
Does Lukashenka have Siluanov and Nabiullina in charge of finance? Or is life a little more complicated than it seems to specialists in monetary policy?
We have to ask the sectarians another time: Lukashenka is a fool or a traitor? Maybe his agents in the US Central Bank wound up? But maybe, after all, he has already conducted all possible emission experiments and exhausted their usefulness?
4 Example: China
The People's Republic of China is a favorite example of adepts of the "Sect of the Holy Printer." Let us take a closer look at it, especially from those angles that do not fall on the pages of the empathic economists.
According to Central Bank of China, the foreign currency debt of China, including public and private debt, is 0,85 trillion dollars.
Moreover, the National Commission for Reform and Development of the People's Republic of China calls on companies involved in the New Silk Road project, as well as the development of Beijing, Tianjin, Hebei and the special economic region of the Yangtze River, to borrow from foreign banks and receive funding in foreign markets:
According to the logic of the sects of the Holy Printer, some dreadful traitors entrenched themselves in the leadership of the People's Republic of China, who, on the one hand, collected more than three trillion dollars of foreign exchange reserves and invested 1,25 trillion dollars in US treasury bonds, while Chinese companies themselves were forced to take foreign currency loans abroad. Moreover, the state even encourages companies involved in key projects, such as the development of the Beijing region, to seek foreign funding. This may surprise some emopatriots, but so far no one has been shot for this Chinese “zradu”.
Adherents of the Sacred Saint Printer often set China as an example, assuming that China has a very high level of monetization of the economy. From the fact that the ratio of M2 to GDP in the PRC is about 180%, and in Russia it is only 60% (World Bank data) they conclude that the Russian economy needs to be urgently pumped up with money. Dear readers, the fetishization of any economic parameter is evil. Evil is unconditional.
Speaking of the Chinese exorbitant ratio of money supply to GDP, printer lovers forget to mention that the PRC leaders themselves consider this high ratio a problem, and this high level of monetization is explained not by the shock work of printing the yuan, but by the fact that the Chinese, instead of buying gadgets credit and dangle in Turkey at the resort for the last money, this money is massively carried on bank deposits.
Chinese savings rate - 50% of GDP.
The ratio of money supply to GDP is generally not related to the quality of the economy and the availability of credit resources for enterprises. Take a few countries that have according to the World Bank the level of monetization of the economy is higher than in Russia:
In addition to the PRC (188%), it is Morocco (112%), Thailand (127%), Mauritius (102%). Have something to envy?
Take a few countries whose monetization level is close to Russian (60%): Sweden (66,9%), Denmark (65,2%), Bhutan (62,7%). Still have a desire to make some global conclusions based on a single macroeconomic parameter? By the way, in Sweden - negative interest rates of the Central Bank, and in Denmark - zero rates, and this does not lead to a noticeable increase in the monetization of the economy. Here is a mystery for believers in the omnipotence of central banks.
I repeat the question: are the leaders of the PRC - are they fools or traitors? Maybe red heirs ancient tangerines know a little more about economics than pique vests who read a couple of postings in social networks and articles in the media?
5 Example: US and their Western World Colleagues
The example of the United States, as well as to some extent the EU and Japan, very clearly points to one uncomfortable fact that supporters of the Sacred Printer Printer prefer not to notice. In order to reduce the rates to zero and rounch the currency printer to its fullest, you must first do the following:
1. Win two world wars, joining them as late as possible and ensuring a situation in which all geopolitical competitors will be as weak as possible. Alternatively - become the closest vassal of this winner.
2. Make your currency the base (or one of the base) currencies of international trade, which will allow to export inflation to other countries
3. Become a welcome haven for private, public and criminal (corruption) capital from around the world
And only after these conditions have been fulfilled, it is possible to keep the economy on "monetary cocaine" for ultra-low rates for some time, and then, catastrophic consequences will inevitably manifest in the future. By the way, in 70 and 80, the US Central Bank rate was often higher than 10% and reached 20%, but this did not prevent America from finishing off the USSR.
Once again: you must first become a world hegemon, and then you can turn on the printer. On the contrary - it is impossible. This is understood in Caracas, Tehran, Minsk, Beijing and Moscow, but our emopatriots, who have imagined themselves to be the owners of a perpetual motion engine, do not want to understand this.
The above does not mean that the state should not stimulate the economy. Must. And it does this, as the president said most specifically at a press conference:
... And what does the Central Bank do in addition to keeping the entire financial and banking system of the country in working condition? And we can say that this is how it is today. What else does the central bank do? Together with the Government, for example, it works under the so-called project financing programs, when certain projects are passed through the Government, and the set is quite large, the bill goes to tens of billions of dollars, already, in my opinion, 250, then 500 billions, under different programs. And under these programs, the bank provides funding to our commercial financial institutions for the subsequent financing of these specific programs. This applies to new investment projects, the bank also takes part in them. A whole set of tools the bank uses. I think that is enough for now.
Putin Vladimir Vladimirovich
Putin Vladimir Vladimirovich
We must remember that the magic wand does not exist, and for every problem there is a simple, clear and wrong solution. In order for the economy to grow, it is necessary to improve and expand the mechanisms mentioned by the president. We need to increase funding for these programs, but the most important thing is to make officials work better and more actively with them without sacrificing quality, as often happens with government projects. And also, I would like the Central Bank to adopt one good practice from its Iranian counterparts, namely, limiting bank margins. Then the management of the Central Bank will no longer have a reason to complain that it is impossible to force commercial banks to lower interest rates after the Central Bank rate reduction.
Total: there are problems, there are solutions, there is work, there are reasons for optimism too, but there were no “magic wands” and “magic printers”, but there are no “magic wands” and “printers” full coil, do it not out of patriotism, but from quite selfish interests.
Today, our economy is looked at in the same way as they looked at our army in 2010, when Forbes magazine called it the “barnyard”, and our “patriots” in the blozhikah fully agreed with this opinion. Then there was an unexpected surprise. We will definitely wait for positive surprises from the economy, but for this everyone will have to work well.