Source: https://www.youtube.com/watch?v=HPzNS7DxrVk
Translation: Eugenia
ANCHOR: Good evening. Here in our studio this Friday we have the member of the Russian Academy of Sciences Sergey Glasyev. Sergey Yurievich, welcome. Thanks very much for finding time to come here. I have heard that you have to use metro to reach us.
GLASYEV: It is a perfectly good means of transportation. The only reliable one.
ANCHOR: Do you have to use it often?
GLASYEV: All the time.
ANCHOR: Do people recognize you?
GLASYEV: Not really. People now are careful to minimize contacts in order to avoid catching the virus.
ANCHOR: That is true. Let us turn to our financial/economical subjects. Is it necessary to introduce extraordinary measures in the economy as the bankers asked to do – they called them emergency measures? Or, perhaps, something similar to the term Hollande used – the state of emergency in the economy?
GLASYEV: I think in the economy one needs to use reasonable measures, because what is happening now, particularly in the financial sphere, causes bewilderment: often lots of merriment in our enemies, but bewilderment in experts. In our situation, with the ruble being the most secured currency in the world – let me remind you that our currency reserves exceeds two-fold the volume of rubles in circulation – with ruble as the most undervalued currency in all G20 countries, for our purchasing power parity is almost three-fold higher than the exchange rate, and with trade surplus, to experience such jumps in the ruble exchange rate, it is impossible to explain. What is this done for?
Of course, there are hypotheses, suppositions, and opinions of the market participants that the ruble exchange rate is being manipulated by unscrupulous traders, but unscrupulous traders do not just appear out of thin air. This happens because the Central bank fails to fulfill its constitutional obligations to provide for the stability of the national currency, and as a result of that today we have canceled many investment projects, and business people lost directions, because nobody knows what rate to expect tomorrow. In such conditions, it is impossible to plan for the business activity, or invest, or trade in rubles.
For 7 years, I have been studying the Eurasian integration. I can state that the process of the Eurasian integration has never suffered such damage from any factor as it does now from unpredictable fluctuations in the ruble exchange rate. We were developing quite successfully; we were making plans to make ruble the reserve currency; we were trying to convince our partners to trade in rubles. And now the process received such a shock, as a result of which our partners no longer want to hear about trading in national currencies. They started to separate themselves form us, because they think that depreciation of currency is employed to gain unfair competitive advantage. Although we know that the depreciation was unplanned. In fact, it happened precisely because the Central bank dodges its key obligations.
However, since this is happening, it means someone is benefiting from these events. The profitability of currency speculation is enormous – about 80-100% – so, some people make tens of billions on this. Players on the market have a pretty good idea who these people are.
ANCHOR: Do you mean citizens of the Russian federation?
GLASYEV: No, not just our citizens. You know the story about the Deutsche Bank that is now under sanctions from the United States, and the US Justice Department even announced an investigation based on suspicion of manipulation of the ruble exchange rate. The whole world is looking with astonishment on this puzzling experiment of reanimation of the archaic policy from 19th century, but then, at least, there was gold, which functioned on the marked spontaneously, to a certain extent. But today everything is regulated. What is happening is destabilization of the foundation. Our President said at the forum “Foundations of Russia” that we must not destabilize the foundation of our economy. The ruble rate is the load-bearing wall of the economic structure, and every fluctuation in the ruble exchange rate is similar to an earthquake.
If we use an analogy of a house: we are building our collective economic house, but in the foundation, mines constantly explode, and we know that people that cause these explosions collect super-profits as a result, whereas the security service, whose job it is to make sure there are no cracks in the foundation, pays not attentions to these explosions. That service pays no attentions to gigantic cracks, into which the whole brunches of the Russian economy have sunk, which stopped developing, stopped investing precisely because fluctuation of the ruble rate 5% a week – this is unheard of even for the oil-producing countries that dependent on oil export more than we do, but even there the exchange rate of the national currencies did not drop more than 12-15% total. Thus, every jump in the ruble rate is an explosion in our foundation, its slow transformation into sand, on which nothing can be built.
ANCHOR: It is understandable that some of the players on the market would want to make money on the ruble fluctuations, but do you think that there might be someone bugger, our geopolitical adversary, perhaps, that could profit from this situation, particularly considering that we see openly hostile actions? For example, accusation against our President – this is a clear demonization.
GLASYEV: Clearly, this is all in the interests of our enemies that applied sanctions against us counting precisely on such policies. Please, note that sanctions were applied at the moment when the transition to co-called targeting of inflation was announced. This is a pure myth, because the method of “targeting”, which let the ruble free float, led to the exactly opposite results: inflation did not decline but increased two-fold. And the Americans with their sanctions counted that there would be exactly such policy: the Central bank would leave the market, thus allowing the speculators to take control of the market. If the Central bank had stayed on the market as a stabilizing force, no speculator, even with the big money from abroad, would have been able to do anything considering the ratio of our currency reserves to the circulating ruble mass. Thus, to make the economic sanctions against Russia effective, first thing to do was to convince our financial authorities to abandon the currency market. After that, the currency market fell into the hands of the speculators.
I want to emphasize that during the past decade non-residents, i.e. foreigners, stably dominate our financial market: approximately 3/4 of all operations in the currency-financial market are performed in the interests of non-residents. In the currency segment, which is dominant today, in certain periods the proportion of non-residents reached 90%. Note that the American sanctions do not apply to the speculative capital. They apply only to the long-term loans that cannot be given to our country, but as far as speculators are concerned – no problem, take a 30-day loan, speculate to your heart’s content. Considering that along with the ”targeting inflation” what also happened is that Moscow stock exchange was sort of semi-privatized. Today, speculators are in charge there, and they, judging by many indications, stimulate the speculative fluctuations using all sorts of credit instruments, very likely using insider information. Therefore, Moscow stock exchange today has turned into the main source of profit in the country that performed operations exceeding two-fold the country’s GDP and 5-fold – the volume of export or import. The economic activity in the country is declining, whereas the volume of the stock exchange operations grew almost two-fold. Moscow stock exchange is now the main source of profit in the country. The banks siphon the money there taking it away from the real economy, where the profit is 5-7%.
ANCHOR: Unprofitable to invest.
GLASYEV: Unprofitable to invest and with such fluctuations of the ruble exchange rate, how could anyone plan the business activity? Conversely, the fluctuations are the source of profit in the stock exchange. What is death and cessation of investments for the real economy, for the speculator is a godsend. Profit there is 60-80%. It is not shown openly; the profit, via pseudo-deals is transferred abroad into offshores. The payers show losses, although in reality they collect 60-80% profit. Since the Central Bank does not stabilize the situation, the market is controlled by a small number of players with access to unlimited credit and, thus, with enough money to manipulate the market. That was what the economic sanctions were based on: that exactly this kind of policy would be adopted, which, in the conditions of disconnection of the Russian financial system from the sources of long-term loans, would first create high demand due to the need to pay off the external loans of our corporation and, then, completely take all the regulatory instruments away from the government in favor of manipulators acting in private interests. I can assure you that nothing like that happens anywhere else in the world, for all these events would have long become the subject of investigation and very tough measures.
We have had many discussions with former leading financial regulators from Japan, Europe, and the US. They give recommendations and claim, and this is supported by calculations, that it would be possible to stabilize the ruble, prevent speculations and organize investments. But you would agree that after December of last year when rubble lost its value several fold – and the experts speak about deliberate irregularities in the functioning of the stock exchange that provokes this drop – OK, the drop happened, but what prevented from stabilizing ruble at that level? We now returned to the same level, but we could have avoided all these gigantic fluctuations; the business would have calmed down; the real sector of the economy would have acquired new criteria of competitiveness, since after the devaluation it became more competitive; we would have obtained stability and today would be experiencing economic growth.
Not just our calculations but also recommendations of the business circles, say, of “Business Russia”, “Foundations of Russia”, suggest that we today could grow, grow at least 10% a year.
ANCHOR: Sergey Yurievich, this is most interesting. Let us talk about how we could transition to the rapid growth situation. But before we talk about how to initiate growth, please, say a few more words about the Central bank. The President said, and I am quoting:” I would like to emphasize that the Central bank is by law an independent institution with it own sphere of responsibility”. We have several questions from our viewers. One question: “ If the Central Bank knows everything, why is it doing nothing? Who profits by this inaction?” Such talks that, supposedly, the Central bank is independent, which was also mentioned many times by the President’s press secretary with the reference to the Constitution, do they suggest that there is no way for us to influence the situation?
GLASYEV: Of course, we can. There is a law about the Central bank that determines how the leadership of the Central bank is appointed: it is a democratic open procedure. The President proposes candidates to the board of directors, and the State Duma confirms them. Yearly, the general directions of the unified state credit and monetary policy are discussed at all levels of the government. Thus, the Central bank is one of the state regulatory institutions; it does, of course, have a wide autonomy but at the same time it is supposed to act in accordance with its obligations determined by the law. I am guilty of having participated in the writing of the law about the Central bank at some point, although not all our proposals were incorporated. For example, since the Central bank is responsible not only for the currency exchange rate but also, as everybody understands these days, for the interest rates as well as for the bank oversight and regulation of the financial market. All these functions are determined by the law.
But the fundamental function is the stability of the national currency. This is even written into the Constitution and for a good reason. Nobody has ever doubted this function: it is indeed the main job of the Central bank as it is the key condition for the economy is stability. The stability of the macroeconomic situation rests on the stability of the exchange rate, particularly for such an open economy as ours. The main issue is not whether the Central bank is independent, dependent, or half-dependent. The problem is the lack of the mechanism ensuring that the Bank fulfills its functions. The Central bank can interpret the law as it wishes, and that is the problem.
Another problem is its function as a financial regulator. Five years ago, the Moscow Stock Exchange was completely under control of the Central bank. At that time, to imaging that speculators could have manipulated the ruble exchange rate to such an extent was impossible, because the Central bank regulated the Stock Exchange. There exist 101 methods how to stop the speculative agitation. I would like to stress that neither in December of last year nor at any time later none of these 101 methods was employed. The large credit levers are still in place; the Central bank itself permits refinancing of speculative operations; it also creates new channels of refinancing of speculative operations such as cross-currency Repo. The Central Bank uses none of the widely known across the world methods to stabilize the financial market in case of agitation, and 5-7% fluctuations are considered agitation. Any financial regulator in any country would interfere in such situation, even stopped the trading. It seems that financial operations were on purpose given away to speculators that make deals among themselves, drive the currency to the bottom, collect profits, sell the currency, let the rate go up, pick the right moment and start the drive down again. Nothing good comes out of these swings, because every drop in the ruble exchange rate hits the prices causing the waive of inflation but when the ruble comes up again, the prices do not go down correspondingly. That is why every drop in the ruble value translates into an inflation waive, whereas the rise in the ruble exchange rate only hits the competitiveness of businesses that cannot adapt to these rate fluctuations.
ANCHOR: What about the frequent talks that we could benefit from a low ruble value by starting new industries, although it is unclear where is the profit, because we import machinery, spare parts, etc. We also mentioned that because of the sanctions we do not have access to loans, but we are still repaying old loans without the ability to refinance. It appears that the internal credit is also problematic.
GLASYEV: I would like to return to the statement of our President about the fundamental conditions for the macroeconomic stability. What is a fundamental condition? If we compare the economy to a building, the main thing that an engineer should accomplish – and the financial authorities are engineers on the financial markets – is to make all load-bearing elements sturdy enough. So, the stability of the ruble exchange rate is the key load-bearing structure of the entire macroeconomic building and its foundation, as I have already said earlier. One important issue is proportion: what should the rate be exactly? There are certain economic rules to follow: it is bad when a currency is overvalued, since it negatively impacts the competitiveness of the national business, but it is also not good when it is grossly undervalues, because it prevents effective participation in the international division of labor. You were correct to note that import of technologies becomes too expensive, and the countries lagging behind technologically are highly dependent on import of machinery and technologies (we, unfortunately, today import about 60% of industrial machinery). Therefore, when the ruble drops too much, import of technologies and machinery becomes impossible. But the worst situation is when the ruble swings widely from one red zone to another, which, as I said earlier, equals an earthquake, when the main load-bearing structure destabilizes the whole building.
Let me stress one more time that, considering our resources, it would be a simple matter to stabilize the ruble. It would be so much easier than, say, come up with a strategic plan or discuss and develop, together with the business, indicative plans. Most importantly, we have all the means. But what is happening today, particularly, in view of our dependence on swings in the external short-term speculative capital and considering offshorization of our capital, it look like our “building” is shaking, it foundation is destabilized, the main load-bearing structure swings with super-wide amplitude, all windows are broken, but we keep heating the building. We have lots of heating oil, lots of building material, skilled builders but instead of fixing the building we are sitting and waiting for the good weather, when the Western investors come to us again and help us stabilize the macroeconomic situation, and then summer will come and everything will be well. That is what it look like, an analogy.
ANCHOR: There is also that word – innovation that are supposed to save us.
GLASYEV: Innovations require long-term planning. The program of measures proposed, for example by the Stolypin Club in the name of the business and scientists, is well developed from the engineering and financial standpoint being based on the today’s understanding of the laws of the economy and finances (similar to the material resistance law in the construction industry). Clearly, if we want to rebuild our economic building, we have to make investments profitable. Without that, we will not be able to repair the load-bearing structures or renovate other elements, or even replace the windows.
In the condition when the interest rate exceeds the profitability of the industry 3-fold, all our excellent workers will not be able to make ends meet, and no investments are possible. Therefore, the key proportion in the economic foundation is that the interest rates should not be higher than the profitability in the industry. If the do exceed the profitability, and today it is a 3-4-fold excess for the market interest rates, it means that if someone take on a loan, then in all probability he will not be able to repay it.
And the banks understand this quite well. That is why they either stop financing the industry altogether and turn themselves into raider offices that simply reposes the property of healthy businesses unable to keep developing in today’s circumstances, because in the industry half of the working capital today is covered by loans. So, when the Central bank increased the interest rate several fold, all enterprises that took on loans to keep their production going immediately ran aground. To keep the production going with such interest rate would be to incur losses, which would be pointless.
If we want to build solid macroeconomic foundation, we must, as I have said many a time, first stabilize the ruble and, second, reduce the interest rates so they would not exceed the profitability of the industrial sector. But we also have to take care of the broken windows in out building, so that the heat we are producing for our economy would not escape through the openings. For that, we need control of the use of money specifically for the intended purpose; we need selective currency regulation including restrictions on speculations, prevention of manipulations of the financial market, suppression of the attempts to destabilize our financial market as a result of uncontrolled cross-border operations. When we will have achieved these basic necessary conditions for the macroeconomic stability, we could achieve the economic growth, the potential of which is no less than 10% a year.
ANCHOR: Sergey Glasyev – we sill continue after the news. Sergey Glasyev: the second half of the hour. Today in the studio we are talking about the economy and the situation in our economy. Let us talk about the growth. The government is developing a new anti-crisis plan, as they call it. First, it is unclear what is wrong with the old one, for which the praised themselves at the end of the year. Second, this one contains words “structural changes in the economy”. Is there hope that these words mean something similar to what the economists from your camp have been talking about? Do you think that the small business will save us? We have started to talk about the nonexistent investments. If everything remains as it has been, what will happen to the economy, to our motherland and to us?
GLASYEV: In the absence of the macroeconomic stability, in the situation when the economy is shaken all the time, our economic foundation is turning into ashes. There could not be any constructive anti-crisis policy – any measures will drown in this quicksand. Take an example of 2007. Almost 2 trillion rubles were distributed to the banks, and the banks simultaneously increased their currency reserves approximately by the same amount. This means that the money went to the currency market and abroad. The banks earned, approximately 300 billion rubles in super-profit, whereas the real economy dropped by 10%. The GDP as well as the industrial output declined to a worst extent that any other of the G20 countries.
The economists like myself do not form any camp – they are just normal scientists that live and work for the real knowledge, for the truth. Conversely, those that do belong to a camp, a camp of the speculators – they have praised that policy as if it had been the most effective anti-crisis policy. But in reality it turned out be an abject failure, and we did worse than other G20 countries. The efficiency – the ratio of the amount of money spent on the anti-crisis measures to the macroeconomic outcome – only Ukraine faired worse, which does not belong to G20 anyway.
Now let us look at 2014-2015. In 2013-2014, when the ruble exchange rate started to jump in connection with so-called “targeting of inflation”, a considerable amount of money was spent. But spent how? If the real sector of the economy borrows at the interest rate of 18%, the commercial banks competing on the market can borrow at 11% from the Central sank, whereas there exist organizations that can borrow at 0.5% or even 0.1%. So, when the critics of our program state that we would not be able to ensure the goal-oriented regulation of the money distribution, it sounds absurd, because the regulatory situation when some borrow at 18% while the others at 0.1% has nothing at all to do with the market or liberal economy. This is pure Middle Ages, with monstrous degree of arbitrariness and outrage. Whoever is closer to the table, gets more. We need sensible rules equally applicable to everyone.
I have already talked about the basal constructions. Now I would like to say a few words about the development strategy. When the scientific proposals are treated as if they represented a return to the old system of direct planning, it is a total nonsense. Our opponents are constantly trying to muddle the waters without presenting any arguments. In reality, the development strategy that the country needs today would inevitably have mixed features. We have a small group of modern sectors where we are still at the most advanced level, such as the space industry, the atomic industry, to some extent, the aviation industry. Note that these are all technologically advanced sectors where the price of 1 kg of a product could reach $10,000-15,000, not like in the oil industry where it is just cents. Therefore, every percent of the growth in these sectors translates into 10 or more percent growth in related sectors.
That is precisely what we are talking about all the time: innovations, scientific and technical advancement that are responsible these days for 90% of the economic growth. In addition, we have segments where we had been world leaders for a long time, such as the stem cell technology, which has been discovered in the Soviet Union. These technologies are now widely used in medicine, which is experiencing a real revolution. The rate of introduction of bioengineering technologies in the industry is about 35% a year. In general, new technologies are being implemented at the rate of 20-80% a year, depending on the sector: nanotechnology, bioengineering, information-communication technologies. We have people that know hwo to do this. The problem is they emigrate: we lose more than half of college graduates with majors in molecular biology or gene engineering; up to two thirds if we include graduate students. Visit the Moscow University, and in any relevant Department you’ll see ads from Apple, Microsoft and such. They hire our people on the spot. Why do our people leave? Because here we lack the mechanisms of financing the research and development. As you know, in the Silicone Valley Russian is the second language. Our problem is not the dearth of ideas or projects but the absence of financial, economic mechanisms for the implementation of these new technologies.
In those areas where we have an advantage, we need the strategy of the outpacing development. The world is now shifting into the new technological era. The race is underway: what will happen first, the disproportions associated with the old technological state hit the developed countries in the form of financial bubbles, unemployment, capital loss, or they manage in time to build up the conditions for the economic growth. We can now observe the beginning of economic recovery in the developed countries.
ANCHOR: You do not think this is recession in spite of the decline in the oil and metal demand?
GLASYEV: You know America grows by about 3%, Europe – by 1.5%, China is reforming itself on the go all the time. Thus, the new technological order that is growing by about 30% a year is today making an impact. It is becoming the engine of the economic growth. But we, on the other hand, do not in reality pay attention to either strategic planning or long-term investments in these advanced technologies. While we do have academic science, we are busy reforming it instead of giving our experts the opportunity – in other words, give them cheep “long” money, so that we could experiment, create and use new technologies here. We need to help them with subsidies – of course, not at 18% interest – with such interest rates new technologies could not be produced. We need differentiated mechanism of financing for 10-15 years. We have already missed the opportunity to rapidly jump onto that new technological waive.
Let us see here. We were first in the laser technology but today we cannot still mass-produce light-emitting diode, although this is our technology. About nanomaterials: we are still stuck at the laboratory designs we made 10-15 years ago. Therefore, the state does not function as a state of development. But considering that we are living through the transitional period to a new technological level, the state must become the state of development. Thus, the first strategy is the strategy of the “outpacing” development of the industries and technologies representing the new technological level.
The second strategy is the strategy of dynamic “overtaking” in areas whether we are close to the leadership level but are still lagging behind due to inability to assemble the entire technological chain. We don not have the production capacity for all components. Here we have to supplement our own production by the import of technologies, by purchasing patents, experimental models, licenses, and so on. The civil aviation would be a good example of such sector: in that area, we are lacking only some elements, mostly due to the low level of production and worn out equipment.
Finally, the third strategy, which is quite well known, is the development aimed at simply catching up. It is when we simply invite foreign investors to come with their own technologies. Like, for example, what is called today “the industrial car assembly”.
Therefore, the strategy should be mixed: it should include “outpacing” development as well as “overtaking” and “catching up”. These strategies require appropriate credit mechanisms. Monetarists think that money equals golden coins. That is how they regard the money, and that is why they think the smaller amount of money circulates, the lower the prices, the same as with any product. Our financial authorities have an understanding of the money matters at the level of 18th century, totally backward, having nothing to do with the reality. Credit is the mechanism of promoting the economic growth. The economic growth since the 18th century happened when the states invented the credit, managed to squeeze out the usurers form the financial market and gave the industry the opportunity to obtain “long” long-term money. Naturally, there has to be a balance. Obviously, money should not be simply given away or dropped from the helicopter, as some did.
ANCHOR: The President also said no to simply giving away the money.
GLASYEV: Our program include the goal-based regulation of the money, creation of the long-term credit via the mechanisms that will not not just control the money movements with the help of the institutes of development but will be coordinated with the strategic and indicative plans. What we refer to as “strategic and indicative plans” is not the same as the old centralized planning. This is a collective creation of the business, science, and the state, with the state acting not as a dictator but as a coordinator.
ANCHOR: Two-minute news brake, and we will continue. Sergey Yurievich, there are many questions. You have mentioned the rescue of banks by the state and gave examples from our recent past when the government rescued banks, state-owned or not. The story with the mortgage-holders came to the forefront recently: people go out and block streets in protests. The society is divided: some say that those people chose to take on foreign currency-denominated mortgages, so it is their problem. Peskov (the President’s press-secretary – translator’s note) said that here there is no simple solution, and we have to move carefully. How can we solve the problem for the citizens of the largest country on earth, the country riches in the natural resources, so they would not have to repay their mortgages, in dollars or in rubles, for centuries? So that everyone would have a roof over his head? Could we do that?
GLASYEV: The state can only be responsible for things it controls. Our state does not control the dollar emission, so it cannot respond for dollars and euros. That is why the decision to stop giving lending in foreign currency was correct, albeit belated. However, since that was permitted, and people believed the state that the ruble exchange rate would be stable, which was the obligation of the state, the state should pay off its obligations, i.e. convert these mortgage obligations into rubles based on the exchange rate that was promised. This is my opinion. The stable exchange rate was promised, and I do not see why law-abiding citizen should suffer just because the Central bank simply removed itself from the financial market. The law-abiding honest citizens that believe in our government are suffering.
I would like to return to the planning mechanism, to round up our conversation about the program that we have developed in cooperation with the business and science within the framework of the Stolypin Club and are now offering to the society. The key is the partnership between the private and the state sectors. Business would develop its potential, find, with the help of science, the opportunities for the breakthroughs, modernization and increase in productivity. The state must, as a part of this social contract with the business, guarantee the stability of the macroeconomic conditions, i.e. the ruble exchange rate, interest rates, taxes. The state should also provide long-term credit with reasonable interest rates. In exchange for that, the business should take on the obligation to increase the production of the products that are in demand, for example, within that program of the substitution of import that we talk so much about and that has a potential to increase the economic output by about 3 trillion rubles. The business should also take care of the modernization and increase in productivity. All of this should be cemented by a contract between the state and the business, and each side should fulfill its obligations. In such situation, increased loan availability to the industry will result in the increased output, increased productivity of the economy, and, consequently, lower prices.
The real way to fight inflation is not to reduce the money mass, which leads to the deterioration of the quality of money, as we have seen in the 1990s. Anyone familiar with the economic practice would agree that the sure way to fight inflation is to reduce expenses, increase productivity, develop new technologies, and increase the production output. Our dialog with the business has demonstrated that today our business community is ready to take on the responsibility to increase the industrial output by at least 10% a year and introduce new technologies.
ANCHOR: Ten percent a year?!
GLASYEV: Let me emphasize that as far as resources are concerned this is perfectly realistic. We are using today on average 50-60% of our industrial capacity, and the higher the technical level the lower the percentage. Recession we are witnessing today concerns the new sectors, i.e. the enterprises with the modern technologies experience the sharpest decline in production. We have no limitations in resources: we produce ten-fold less of the finished product per unit of raw material than, say, Europe does. Thus, our resources permit us to achieve such rate of growth. We also have unlimited labor resources, for we have hidden unemployment and suboptimal use of the labor resources. We also have access to the large labor reserves of the Eurasian Union. The catastrophe in Ukraine produced a significant influx of qualified knowledgeable people willing and able to work.
ANCHOR: Do we face any limitations in terms of time?
GLASYEV: Well, the new technological model is now expanding. In the developed countries the production is increasingly organized based on novel technologies, i.e. the true technological revolution is taking place. The experience accumulated over the past 200 years show that the window of opportunity to make a breakthrough opens precisely at the time of the shift from one technological level to another. At such time, the old structure stops expanding; the search for the new technology is underway; new technological trajectories are being formed. The countries that happen to be first to come across these trajectories rise upon the waive of the economic growth. Such a long waive known as Kondratiev waive is today entering the growth phase.
ANCHOR: World wars, in which phase of such waives do they occur?
GLASYEV: Wars?
ANCHOR: Yes.
GLASYEV: The time when a shift in the technological paradigm occurs is also the period of geopolitical tension and struggle for the leadership. The sanctions against our country are a clear attempt of the USA to solidify their dominance in our part of the planet. In the 1990s, they have decided that we were their periphery, and from the macroeconomic point of view we indeed were their periphery: offshorization, external dependence, the share of the external credit all point to us being at the periphery of the American economic system. They want to keep us that way. That is why the economic sanctions are directed against the independent policy of our President and are aimed at keeping us at the periphery of the American economy, at preventing us from developing and gaining independence. Obviously, if we do not alter our economic policy, if we do not chose the development strategy I talked about, the strategy encompassing the activity of the business, scientific achievements of our country and the state activity in the area of indicative planning and credit policy with the flexible control of the proper use of the money, then we will not be able to maintain the independent policy in other areas for much longer. Obviously, no one can be independent without strong competitive economy.
ANCHOR: Including the military sphere.
GLASYEV: Naturally. The technological revolution touches the military-industrial complex as well. That is precisely why the geopolitical tension goes up in such periods – because in the liberal-democratic model, the state has the right to interfere with the economy solely to ensure the defense capabilities. The shift of the technological formations always occurs via the arms race. Unfortunately, that is how it has always been so far. We could, of course, oppose that and propose a program of inclusive international cooperation in the scientific and technological spheres, for example, protection of the earth from the technogenic threats and catastrophes. We did propose to refrain from placing weapons to the orbit in cosmos before the sanctions but the Americans went on the warpath.
They went on the warpath, because the war allows them to maintain their control over the periphery. The today’s war is hybrid in nature: the most important front is the currency and finances. The main goal is to enhance the control over the periphery but, if that fails, to create chaos in the periphery. The next step is to obtain preferences in that chaos, and prevent China from gaining in competitiveness. Thus, the struggle between the old and the new leader is going on – this is a separate subject. I can say that based on the theory of long cycles, there are long Kondratiev waives, the cycles of capital accumulation – we call them not just the change in technological but also in the world economical formation, when the whole system of institutions regulating the reproduction of the capital changes. These periods are very dangerous, because of the struggle for leadership. Today, although that struggle is between the USA and China, they fight for the control over the periphery. We are the key element of that periphery that could potentially become a part of the nucleus of the new world economic and technological order. But for this to happen, we need our own development strategy and sensible modern program of economic growth.
ANCHOR: Just in 10 seconds – what about our future? Do you look with pessimism at the near future?
GLASYEV: I look with optimism, because we do have potential for a breakthrough. Our healthy business generally is ready to take on the task. But for that to happen, the state needs to create the necessary conditions within the framework of the private-state partnership based on scientific recommendations and not leave everything to chance.
ANCHOR: Sergey Glasyev – thank you very much for coming. There are many questions for you on the subjects you walked about. We are looking forward to seeing you again here. Thank you.
Thanks. One imagines it will be hard to succeed in Eurasian integration when the ruble is under enemy control. Or, perhaps the real problem is that the enemy isn’t seen as the enemy.
On the bright side, the last crisis brought in Putin. Maybe another serious crisis will lead to some dramatic changes.
This was posted today on Cassad’s site. Sergei Gubanov talking about the need for Russian industrialization. It argues that he has been one of the strongest critics of the liberal establishment for many years.
http://colonelcassad.livejournal.com/2617501.html
Can anyone recommend any other essays or such by or about him?
I have always liked this man. I use public transportation like him. And I love the public like him.
I read about half way through and then skimmed quickly. I was too angry to focus.
Russia harbors traitors within while she sacrifices her sons on foreign lands.
I now question Putin’s motives. If he allows traitors to betray the Russia I love and this vineyard which proclaims its love for Russia also, then Putin himself is a traitor, consciously or unconsciously.
Maybe he’s just a coward, wanting to avoid the fate of JFK. So what? It still is a betrayal of love for Russia and that I can’t stomach.
If Putin does have a better plan and it turns out that he’s right, I’ll have to eat my words. For now it is my responsibility to say what I think and feel.
If Sergei is only half-right, I’ve just about had it with Russia. I want to support a winner, not a loser.
In the big picture I support Love because she’s always the ultimate winner. What I see in Russia is not love but betrayal from within. It makes me sick. I’m angry so I might not be thinking clearly.
I’m no chess player like Putin. I rely on my sense of smell. I can tell by the smell a piece of cheese from a chess piece.
Thanks for bringing Sergei Glazyev to my attention once again. I consider this the vineyard’s greatest service.
From the above article….
…..The President said, and I am quoting:” I would like to emphasize that the Central bank is by law an independent institution with it own sphere of responsibility”…
Putins weakness is that he is law abiding and a stickler for the law. It is also I think, why many people around the world respect him. A huge handicap in geo-politics though.
There’s an exact parallel (in)famous clip out there from the mid-1980’s where Ronnie Ray Gun is being interviewed by Baba Wawa.
Maybe it was 60 minutes.
She asks him the very same theme question regarding the just past deep recession, the slow recovery, etc–“why don’t you just tell the Fed what loans to make, what rates to set, etc?”
He just looks at here like she’s insane, just freshly fallen out of the open gangway door of a passing visiting UFO & landed on her head, then tells here point blank that the Fed is a completely separate institute, & he has zero say in its operations & activities! LOL.
DJL
“If Sergei is only half-right, I’ve just about had it with Russia. I want to support a winner, not a loser.”
What about supporting right against wrong? We all know what groups base their thinking and morals on winning instead.
Sadly,who was “right”, ends up being determined by the winner. There are countless,and I do mean countless, times throughout history. That the loser in a situation was “right”. But it meant nothing in the end. They ended up dead and buried. With only historians to speculate about what “could” have happened if “that right” had won out. And “that right” been the one considered as “right” in the end. For a “right” to end up as “right” you have to be the winner. Not really fair I know. But it is the way humanity operates,always has,and almost certainly ,always will. One reason the early US “founding fathers” talked of the constant need to, “Water the tree of Liberty with the blood of Tyrants”. Something not remembered in the US today.
Your anger is totally justified,I do feel the same way and ask the same questions for a while now.I can’t imagine why is Mr.Putin so patient with his own traitors or rather the traitors of his people,didn’t they suffered enough in the last Century,didn’t they bleed enough for their country and for others and now in Syria ? For the sake of all these sufferings and sacrifices,he mus act now.But he is the President,he has the power and knowledge,the ability to chose the right time and to act in the right direction.
Glazyiev has the luxury of focusing only on the economic front. But this war has many fronts: economic, political, geopolitical etc. Putin has to fight on all of them. and he just can’t wave a wand and win battles.
This is an excellently done interview. Sooner or later, Russia will have to confront the pink elephant in the room, which is the main vector for this internal economic sabotage, and remove that elephant, along with all its toxic influence.
Every country that wants to get independence from BIS+FED+Rotshild (and whatever extra secret societies like the Club of Rome, the CFR, the Bilderberg, the Council of 300, the Freemasons, the B’nai Brith, the Skull and Bones and all the other disgusting and evil brotherhoods) should create A PARALLEL CURRENCY for INTERNAL NEEDS.
This currency should be used by the local population of that country to trade between each other. This currency should not obey the arbitrary international exchange rates dictated or manipulated from Basel by the BIS.
Ideally, this currency should have an intrinsic value expressed in units of energy (kWh or Joules), such that price discovery for various things should become much more logical and connected to physical reality.
This currency will have the same value now or 100 years later because units of energy cannot be manipulated by the international banking mafia.
My sentiment exactly. Even food ,clothing, transportation and shelter can be expressed in Calories for which there is an exact, and unmanipulable, conversion to Joules, or similar. But who is going to legislate new energy currency?
I have seen only one place, Israeli Kibbutz, where units of labor/work are being recorded/monitored and serve as a measure of one’s contribution to living community. Kolhoz labor, I’ve heard, was monitored too but with mixed success and sad side effects.
There are, I am sure, other places like that but I am equally sure not many and they are confined to very small communities, like monasteries, and it is hard, impossible, or prohibited to extend it to much larger ones.
I do see it, however, as a future development. Would like to hear about other people knowledge about this topic.
Regards, Spiral
Yes, everything that is around us can be expressed in units of energy, eventually. Every price of an object can be decomposed in energy to make it, to transport it, to store it and so on … even energy of the humans who created it. If humans will create a society in which wealth will be expressed in amounts of energy that each person is entitled to use (similar to a the amount of dollars in your bank account), that society will make a giant leap forward and eliminate at once a parasitic class, which has the only interest of creating never ending WARS !!!
If you think at a higher level, everything on this planet called Terra was created with energy received from the sun. All the plants and animals grow because of it, including us. Oil and natural gas was created from fossils, who once were fed by the sun.
An economy will grow naturally if there is extra energy produced (similar to infusing money) or it will shrink accordingly if there is less energy around. No more artificial booms and busts created by a hand of international banking mafiosi.
V. Putin has a choice to show us that he is on the side of humanity, by doing something with all that military power that backs him up. He should create a parallel currency in Russia (it can have any other name like “energy coupon”, “kWh coupon” or whatever) and make the current Central Bank of Russia IRRELEVANT (together with all the corrupt rules that regulate its functions) !
All the internal trading should shift towards using that new currency. Let’s see traitor Nabulinna look at that in astonishment and despair. And hopefully, after her, all the other heads of Central Banks from Eastern Europe, for a start …
I’ve thought something similar as well. Why would you permit any other currency to be used in your country (at all). I can understand for international trade you would need “some” form of common value to use. But that should be “purely” for international trading. And be regulated for that purpose only,by the nations MOF.Any other use or holding of foreign currencies should be a criminal offense. Or at the least be prohibited for use in the country. Its insane that its even a question of the dollar being used or held by people in the RF or in their bank accounts. I can’t even imagine if you tried to use Euro’s or Roubles in a store in the US to buy anything.You’d be booted right out of the store,and told to go to a bank and change that “paper” for “real money”.
For any currency to be viable it has to have intrinsic value i.e. its ‘standard’ or’peg’ has to be something readily traded where the currency is in circulation & use, whether internationally or nationally/domestically. So you could base a currency on a bean standard, if the beans are traded, sought after/in demand, maintain a market value & are available i.e. in stock. This is the reason why it is so difficult, next to impossible, for countries that aspire to independence – say Venezuela, to gain financial independence. Basing a currency on energy will not work, because you need to be able to trade that currency in for that energy if required, even under limited domestic conditions. Domestically, you don’t even need a currency, you could have a system of barter trade, but it is the international trade that is the key because that is how wealth is gained. No genius has yet figured out a method for a society to independently become prosperous other than through international trade, as yet there is just no way – & it is either prosperity, poverty or a subsistence economy, there is not much in between.
Cannot anyone not grasp the fact that if money supply of a country is controlled from outside, at some point, those external forces can choke an economy ?
If they can influence the amount of money and the interest rates, they can either create hyperinflation or depressions from lack of money. Peasants won’t be able to sell their grains, meat and milk to construction workers because there is no money or because pricing are rising every month. And then the construction workers will stop working because they have no food. is that simple to explain it.
How ridiculous to see countries brought to stand-still because no one can figure out how to restart the trading.
Countries as big as Russia should never have an issue of feeding its own population or building some minimal shelters above their heads. Just build houses from wood and stop luring your own population into getting ridiculous mortgages that have criminal interest rates.
Schroeder: NATO Expansion Toward Russia Destroys Basis of German Ostpolitik
Read more: http://sputniknews.com/europe/20160215/1034802258/schroeder-nato-expansion.html
“Sanctions are hurting both sides,” Schroeder told the newspaper. “They don’t help to resolve the conflict, but only create obstacles. It is therefore necessary to gradually abandon them,” the politician said.
“We also need a new NATO policy towards Russia. I consider it too risky that the alliance is now building up its military presence on the Russian-European border, thereby destroying the basis of our Ostpolitik,” the politician stated.
Gerhard Schroeder has repeatedly opposed the decision of the West to extend sanctions against Russia. The politician said that the restrictive measures are counterproductive, while a constructive dialogue with Moscow is essential for ensuring European security.”
It’s high time for the Russian president to walk into the central bank, followed by a hundred policemen, and to lock the fraudsters up for state treason. Put one fraudster back in charge under surveillance and cut him/her off a toe each time the Ruble to EUR/CNY/USD basket exchange rate fluctuates more than 1% a week, 2% a month, 3% a year. Cut off a finger anytime the annual interest rate for domestic credit exceeds 5%. If all ten toes and/or fingers are gone, proceed with the next fraudster.
Sometimes, drastic measures seem appropriate.
Well now, now, You see, therein is the rub.
When ol’ Adolf took that same exact step back in the day, THAT’s when WWII had started.
“The economic growth since the 18th century happened when the states invented the credit, managed to SQUEEZE OT THE USURERS form the financial market and gave the industry the opportunity to obtain “long” long-term money. Naturally, there has to be a balance. Obviously, money should not be simply given away or dropped from the helicopter, as some did.”
I agree with every word the man sez…wink wink.
Didn’t WWII start a few years later when the German credit and state employment bubble was about to burst?
These fraudsters need to implement the rules set forth in the law. It is not about changing the rules on the Central bank. It is all about warranting that the law is respected. If the Central bankers fail to accomplish their domestic policy in favor of foreign policy, treason is the order of the day.
What credit? The Reich wrote it’s own paper, for most. It had a trade surplus, there was no in or deflation, no unemployment und des volkes wuz all hunky-dory – except for a little ethnic clensing goin’ on them all so snooty krauts in – well, let’s call it Poland for the argument’s sake.
Nein?
The nazi economic policy was much more complicated than that.It was based on barter in a lot of its Eastern European trade.And those countries were beginning to question the barter prices. As for the full employment, a huge amount of that was for war related industries (what is now called the MIC). Without the huge sums ,internally,spent on war industries. The German economy would not have had those good results. But when so much of an economy is built solely on government funds paying for objects not usable by anyone but them.You end up with a finance problem pretty quickly. Especially if part of your imports from other countries goes into those products. You end up paying out your hard currencies (or barter goods.Hence the importance of the barter nations not refusing to barter because of prices) for products you then have to buy from your own MIC and then not be able to use. So Germany was quickly running out of options to keep the economy running.Unless they started moving more to civilian goods. And that would harm the plans for European domination that they had.
More Mumpitz about Germany. “Running out of options to keep the economy running”, sure. Germany produces quality stuff that everyone wants to buy so Germany is never running out of options.
The alleged preponderance of the MIC is just a post-war fairy-tale. Sure, the MIC was important because Germany had been pretty much stripped of its military as per the Versailles dictate, and all our neighbours were strongly armed. So a lot of military airplanes were built, that is true. But when Germany struck France and the Brits in 1940 (which had declared war on Germany on Sep 3, 1939, and were threatening to strike the Ruhr zone in the West) the most important tank force were the Czech tanks.
The most important German tank (Panzer IV) was only produced in modest numbers before the war.
Panzer IV Serienproduktion
There weren’t enough submarines to fight Britain either. Because war with Britain was not anticipated.
Hitler naively and stupidly tried to strike an alliance with Britain. Hitler was an Anglophile, that was his greatest mistake. He counted he could trust the Anglo leadership. He counted wrong.
And this is quite generally so. German industry simply was not ready for war. Peak production was only reached in 1943/44. The whole story of Germany “arming for war” is nothing but a silly myth.
If you look instead at film footage from Germany from 35-39, you’ll see that people are happy, enjoy life and increasing material well-being. Most people were happy that the Weimar misery was over.
Yes, Germany emitted its own paper. When Hitler came to power, he organized ‘welfare’ by hiring the unemployed masses of people for weapons production, street building and so on. Germany was first to build highways – they allowed to move troops quickly across the country. Much of the German state spending went into the arms industry. But as with any other good or service produced in quantities, it must be sold or used to keep the production going.
In addition, Germany had to compensate losses to the winners of WWI. As it could not pay these enormous amounts through trade alone, Germany printed money (literally). When this money hit the German street, it caused hyper-inflation and economic turmoil – maybe the main reasons Hitler came to power. Inflation was going to rock again, this time with the printed money for paying the wages of the state employees. Germany was cornered: too much money circulating, too few useful goods and services to buy.
You’ve been indoctrinated with the usual anti-German drivel. The facts tell a different story.
Die Aufrüstung in Europa und USA 1918-1939 [Vorkriegsgeschichte.de]
Central bankers only work for themselves and their own kind. They don’t feel nationalistic pride as they are all globalists. They will burn any country to the ground and finance both sides over every war until they decide who they want to win.
Every war is a bankers war since Rothschild played the British bond market in 1812. Consider who financed the Germans AND the allies in:
WWI
WWII
Russia might survive or burn. They do not care as long as they get the profits associated with debt slavery and that is just what will happen to both the winners and losers.
Consider Libya, Afghanistan, and Iraq and their banking status before and after war.
» Didn’t WWII start a few years later when the German credit and state employment bubble was about to burst? «
What bubble ??? When people produce stuff that is actually in demand, when people build up their country’s infrastructure, there is no bubble. Bubbles happen in the speculative markets, or in nonsense fluff like “rare tulips”, or in the art market. The housing bubble in the USA is/was also a speculative bubble: the houses are real and have a certain value, but were overpriced, and used as the basis of a securities bubble. So what bubble are you talking about ???
The bubble I explained above. By the way, I wonder what kind of “anti-German drivel” you read into my statement.
At first, Sergei Glazyev legislates the rules about the Central Bank, then he gets angry, when an “independent” director of the Central Bank works in favor of the enemy. Someone shoot him, or hospitalize him!
‘Russia was the only country in the world in which the directing class opposed and organised resistance to universal Judaism. At the head of the state was an autocrat beyond the reach of parliamentary pressure; the high officials were independent, rich, and so saturated with religious (Christian) and political traditions that Jewish capital, with a few rare exceptions, had no influence on them. Jews were not admitted in the services of the state in judiciary functions or in the army.
The directing class was independent of Jewish capital because it owned great riches in lands and forest. Russia possessed wheat in abundance and continually renewed her provision of gold from the mines of the Urals and Siberia. The metal supply of the state comprised four thousand million marks without including the accumulated riches of the Imperial family, of the monasteries and of private properties. In spite of her relatively little developed industry, Russia was able to live self- supporting.
All these economic conditions rendered it almost impossible for Russia to be made the slave of international Jewish capital by the means which had succeeded in Western Europe.
If we add moreover that Russia was always the abode of the religious and conservative principles of the world, that, with the aid of her army she had crushed all serious revolutionary movements and that she did not permit any secret political societies on her territory, it will be understood, why world Jewry, was obliged to march to the attack of the Russian Empire.’
Source: Vicomte Leon De Poncins. The Secret Powers behind Revolution, p139 (quoting an article by A Rosenbert in the Weltkampf, 1 July 1924)
Some things have changed since the above was written… especially the ‘slave’ bit.
This is among the first of the major criticisms of the Russian Central Bank, its failure to do its job (of stablizing the ruble) properly. When enough Russians “get this”, the Eurasian Sovereigntists will have an opportunity to change the bank’s personnel–who then might be more helpful to Russia’s needs rather than those of George Soros and company.
“Give me control of a nations money supply, and I care not who makes it’s laws”.
Mayer Amschel Rothschild
The Khazars tried to defeat Russia by using Napoleon and Hitler. They failed. Now they have other proxies. Russia can handle the outside ones but the internal ones may finally succeed.
I don’t discount the race factor of khazars. Naturally they dismiss it as irrelevant proven by their gene studies which I trust like the plague.
Khazars have never forgiven Russia for defeating their empire. I don’t see any other factor that explains the ferocious racial hatred toward Russians spanning centuries.
Jewishness is just a cover. If Jews weren’t so manipulated and could be themselves they’d be more or less like the rest of us.
The Russian philosopher and artist, Irene Caesar, talks about this and is convincing to me. She’s pretty unconventional but that may strengthen her argument in this conformist world.
I don’t think Russians can understand visceral hatred since they themselves don’t experience it, although I would think by this time they would feel it coming at them.
I am really worried that the Khazars will win this time since as we say in the states: three strikes and you’re out, which they can’t accept.
The following metaphor is probably too raw for the gentle souls of true believers but I’ll risk it anyway. Russia complains when the KZs (Khazar Zionists) stab it in the back in their back yard; but then turn around, kiss the feet of the knifer in their own house and plunge his knife into their own heart.
This cruel metaphor, my friends, is supported by the evidence up to now.
I pray. I send love and light. I live my life on the square. I resist the empire within and without as well as I am able. I try not to let people stab me in the back and I certainly don’t want to kill myself with an empire knife.
Sometimes I come close to throwing in the towel and making a deal with the empire out there and in my home. When I am saved from that awful fate, it is always because of love. I can’t prove it but I’ve experience her holding back the knife time and again.
I’m beginning to believe in magic and miracles. I tried to run away as recently as two hours ago. I handed in my resignation but just before I hit send the whole thing went down the rabbit hole. I assume I touched something wrong but I don’t remember it.
Taking a cue from Irene and her “information wave technology” which she claims Russia has, I direct it to Russia that it may change in the direction of her modern day prophet, Sergei Glazyev.
Dennis
Jesus once said : ” they are telling that they are jews,but they’re not because they are serving the Synagogue of Satan “
In case you want typical bullshit verbage from members of Central Banks, here is a recent sample from Ksenia Yudaeva, taken straight from the BIS bank website. Using a language that makes your head spin and leaves you with more questions and dilemmas, she still manages to send at least one clear message: she hopes Russia takes more debt.
What else can you expect from a typical member of international banking mafia ? They want all the countries of the world to be in debt. Other members from central banks around the world are passing the same message: take more debt, take more debt ….
But, if every country is in debt, a logical question is: who are the countries giving loans ? Some of you know the answer: it’s not other countries, but private entities and families (some connected to the old aristocratic european nobility) that control the FED and the BIS.
And minions like Ksenia Yudaeva and other traitors from other countries are nothing but their useful idiots. Here is what this treacherous lady is regurgitating:
“An important question is how to finance the deficit: through reserves or through debt? Strictly speaking, both options lead to growth in net debt (net of reserves) and consequently to debt burden accumulation. That is why this choice is also a sham one to a large extent. Nevertheless, since the commodity market risks are high, we believe that today the priority should be given to debt financing and keeping reserves for more complicated scenarios, when the access to debt financing is even more difficult. Moreover, no doubt that the available reserves serve as an insurance from the market point of view and make the access to debt financing somewhat easier.”
Here is the link to the full mind twisting speech (be prepared to get dizzy after reading this crap):
http://www.bis.org/review/r160118a.htm
Ksenia Yudaeva – Yuda-eva,it’s clear…
The 1 thing that could force the constitution-abiding Putin to act is a movement centered on the issue that Rodina needs her sovereignty back.
A constitution is not written in stone and with the same right the Constitution of the 90s came to be it can be undone.
Attack the circumstances in which the Constitution of the 90s came to be, demonize those who laid the seeds, and the masses will see its genealogical and factual illegitimacy.
The US is quite open that it wages economic warfare. It’s perfectly possible it lined up investors to sell rubles. The Saudis appear to have deliberately crashed the the oil price (at the behest of the US, despite the hit to the shale gas industry?). Once the oil price crashed, the ruble was going to fall sharply (indeed it’s probably better to let it fall than try to maintain a fixed exchange rate after such a huge shock to the economy). Selling the ruble would have been a no-brainer for investors and speculators with or without Treasury guidance. There may have been a conspiracy, but it’s not necessary to posit one to explain what happened. Currency traders look for any sign of weakness, like an inconsistent set of circumstances and policies, and have a go. And once the fall in the currency starts to accelerate, others would pile in. Something similar happened to the £ in the early 1990s and to Asian markets and Russia in the late 1990s. It may be that the Russian central bank should have tried to do something to cushion the blow. I don’t know. It certainly should not have tried to keep the exchange rate at its previous level. It may also be that the central bank should implement more rigorous regulation of the financial markets to rein in illegality. Again, I don’t know. But ranting about traitors in the central bank seems a silly distraction from the real business of trying to make the Russian economy as robust as possible. This will surely require a rejection of the Washington Consensus, but also care in diagnosing what to ditch and what to keep.
Sorry, there is something boring and incomplete in the views of Glasyev. This game is much bigger than and beyond macrooeconomics. Just imagine a Glasyev ten years ago in Iran. Doom and gloom. But Iran survived traitors and sanctions and whatever. And is stronger than ever. Because the only things that really matter are the spirit, the intelligence and the resilience of a people. And the Russians have all what matters. Like the Syrians. “Steel has entered into the Syrian soul”, as someone wrote. The natural outcome of a system of ursury is cannibalism, and this is just what happens now in the West. And the people in the the West, following their religion of consumerism, have become stupid and depressed and helpless. They need Russia. In November Hitlery, Bernie, Donald or whoever will be riding a toothless tiger. Russia and Iran and Syria and Hizbolla have this abomination by then unmasked and shown to be the joke it really is. Look at this list: http://www.deagel.com/country/, and then at this: http://www.deagel.com/country/forecast.aspx. And then relax. This forecast is probably not based on macroeoconomics. The world is much bigger.
I agree with the author when it comes to the importance of a stable exchange rate and a lower interest rate. But with stability for me concerns the short term – not the long term.
However, when it comes to level of the exchange rate I have my doubts. According to a recent article on Russia Insider one of the reasons of the lo exchange rate is to keep a major trade surplus so that outstanding loans can be repaid as they are unlikely to be prolonged when they come due because of the sanctions. In a recent interview Soros remarked that many Russian loans will become due in 2017 and he expects major trouble for Russia then.
I don’t buy the argument that low exchange rates are harmful because they make it more expensive to import machines. At the same time exports bring in more rubles so this is at the most an allocation problem.
I reject the claim that the government should fully compensate the people who took mortgages in dollars or euros because it is the job of the central bank to keep the exchange rate stable. Everybody knows that when the oil price sinks there is no way to keep the exchange rate stable. And so the author is de facto making the government responsible for the falling oil price.
Agree, the Central Bank should pay for their consequences (just like any individual and most legal entities do).
The Central Bank (and not the state) is the one who should pay for the loss the mortgage obligations had after it ‘removed itself from the financial market’.
Bad play by Nabibulina, now coughupski.
…And in the end Glasyev recommends that the dikotomy between the State and the Private is healed.
Thus he is suggesting to scrap liberalism, for no point in (continuing) socializing the costs while privatizing the profits.
Agree.
If Russia would nationalize its central bank in a set up much like the Bank of Canada used to operate under and disengage from the Bank of International Settlements it would find irself in a much more prosperous position with much less debt. The BoC was instituted to lend debt free money to all levels of Canadian governance at a fixed percentage of annual revenues depending on the level with repayment within a fixed time, a year, for social and capital infrastructure projects. As the nation was slowly built up at the beginning so did revenues and so larger projects were then able to be invested in. This is how Canada was built. When Canada joined the BIS in 1974 stipulations ended this arrangement and Canada’s national debt has quickly gone from a small manageable amount of debt to where it is now with just interest payments on the debt now the largest budgetary item. The international bankers cabal will ruin any country in association with it.
From Lord Keynes (a terrible man who nevertheless well knew how central banks operate):
“Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become ‘profiteers,’ who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.
Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
Ask yourself, who is ti that requires the existence of a central bank and why is it that they do.
Siotu.
I have been riveted by Sergei Glazyev since I first read a speech of his telling Russia what she is facing in America’s global wars of great genocidal force.Brilliant thinker who makes a point of speaking clearly, like with polished glass, you see his meaning immediately.You can never know how to handle a problem until you find out what it consists of in all detail.
The USA and UK and Israel plan to erase Russia and it’s culture, genocide. Because Russia with all Europe is the only set of countries that could stop American in her tracks.Europe is her unwilling set of vassal states because without Russia, Europe is frozen in fear.
And, seeing how America has spent herself since WW1 and then 9/11, stopping her won’t be that hard. She has put herself into, by the lowest figure, an 18 trillion debt hole. The situation in America for 99% of Americans is much mire than dire…it is catastrophic.
Actually it is more than that by far. Try USD 222 trillion of unfunded liabilities…
Siotu
Financial War is still ongoing and as the wise Mr. Glaziev noted, more deadly to Russia than any bombs. I can’t believe the Russians would try to offer bonds to Goldman Sachs! And all the currency manipulation allowed! Putin and his team must take control of the central bank.
See the latest on ZeroHedge:
http://www.zerohedge.com/news/2016-02-25/john-kerry-threatens-us-banks-over-russia-bond-sale
Excerpt:
The worry, apparently, is that The Kremlin will channel the funds to companies currently under sanctions meaning banks “could run the risk of inadvertently violating the sanctions in spirit.” We’re not entirely sure the best way to promote global security is to forcibly compel banks to help freeze the Russians out of international debt markets at a time when the fate of international peace is effectively in Russian hands thanks to Putin’s intervention in Syria.
We’re also not entirely sure why the federal government feels like it has the right to dictate with whom private enterprises can do business. Besides, if John Kerry is really interested in curtailing the financial activities of nefarious actors, he should be warning the Russians not to do business with Wall Street – the bankers are much more dangerous than Vladimir Putin.
***
I hope the Saker writes on this and has contacts that will listen!
The financial mafia controls the world through international control of currency. They know how to do this by having spent centuries mastering banking technologies. Not one single nation controls its own currency nor does any nation have the capability of managing currency as an effective means of exchange for legitimate business activity or for its people to work and survive. The closest to this are China and Iran. But it can be done, and if Putin sat down with some genuine experts such as Michael Hudson it could be figured out and implemented. The time has come to do this. Putin stands to lose everything he has worked for otherwise. While Putin has parried the Empire’s thrusts in Georgia, Donbass, Crimea, and Syria, a vast financial flanking movement is underway.
Vivo en Argentina y me gustaría mucho que sus palabras fuesen escuchadas en mi pais., especialmente por póliticos y economistas. Muchas gracias sr Glaziev