/ world today news/ The monetary authorities in Russia are a resource of the enemy. They cannot enter the new rails, Sergey Glazev is confident. If we do not change what is happening, there will be no development.
The Russian Ministry of Finance is considering the possibility of replenishing the National Welfare Fund (NFF) at the expense of the yuan, the rupee, the Turkish lira and other currencies of friendly countries. This will be done within the same “fiscal rule” that the IMF recommended to our financial and economic authorities.
At the same time, most analysts from year to year oppose this “budget rule” and the purchase of “toxic” currencies or even money from friendly countries. No one has forgotten the story of how over $300 billion was “frozen” by Russia – in fact, they stole it.
The “budget rule” is a dead end, it is not about development. This is buying foreign assets with windfall profits. Interestingly, Elvira Nabiulina and Anton Siluanov invested not only in these “papers”, in government assets of countries that unanimously imposed sanctions against us, but also in private debt securities. It is not very clear why no one asks these people the uncomfortable questions about this.
Yet these heroes fall back on the “budget rule”, they are persistent in their reluctance to invest in their own country, in real, not fictitious, import substitution.
Instead, they are developing a new rule: they will buy the currency of China, India, Turkey, and so on. This follows from the document of the Bank of Russia “The main guidelines of the unified state monetary policy for 2023 and the period of 2024 and 2025”.
That’s what they were taught in Washington. They don’t know anything else
We discussed this topic with Academician of the Russian Academy of Sciences Sergey Glazev.
What do you think about this? Isn’t it the same mistake, just on the other side?
Sergei Glazev: Unfortunately, people not only lack the imagination, but they don’t even have the ability to somehow understand that the world has changed. That the budget rule imposed on us, contrary to the opinion of the expert community, by the International Monetary Fund and American “agents of influence” died long ago.
But that’s what they were taught in Washington, that excess money that goes into the domestic economy must be pushed out of it. And they still continue to do so.
That is, it does not matter, a special operation, not a special operation, a negative trace of anti-Russian sanctions, outright Russophobia – they do not care. They have a budget rule.
Sergei Glazev: Unfortunately, the dogmatism in the thinking of these people is simply disheartening. Well, I understand that some of them studied in the department of political economy, studied Marxism-Leninism and thought dogmatically. When Marxism-Leninism lost its relevance, the “Washington Consensus” became a religion for them.
They believe in this religion where they still get recommendations from the IMF and act on those recommendations.
Still?
Sergei Glazev: Of course, this is a routine procedure. Once every six months, the IMF gives recommendations on how to push money out of Russia. The advice is always the same.
The excess cash flow from our positive trade balance must be offset by the same budget rule. And his point is that the surplus budget profits that we get thanks to the instruments introduced long ago, the export duties on oil and gas, should be invested abroad, not spent in the Russian economy.
Let’s look at China…
China also has a large trade surplus. They will have a trillion dollar surplus this year. At the same time, Beijing, of course, will not invest more money in US securities. As well as in euros and pounds.
But the Chinese will not invest in volatile currencies either. China has invested in the accumulation of reserves, mainly gold, in stocks of strategically important types of materials, the famous rare earth metals, which are in acute shortage today.
China built up grain reserves in almost two years, built a huge infrastructure. China is not waging war, but it is constantly preparing for it and establishing national security systems so that any disruptions to the outside world do not seriously undermine internal security. These are fuel reserves, metal reserves and food reserves.
Why don’t we do that, Sergey Yurievich?
Sergei Glazev: We do that too, of course. We have a State Reserve and I hope that everything will be fine there with the strategically important reserves.
On the other hand, we don’t need to hoard oil because there is plenty in the wells. But the main thing is not that, but that China, in addition to stockpiling strategic materials and products that it needs, is still investing a lot in the external environment for itself.
One Belt One Road is a well-known project of the Chinese government, which is two orders of magnitude larger than its American counterpart in terms of investment, launched as a counterweight to China’s India and neighboring countries project.
That is, China invests in infrastructure to secure its exports. These are ports, terminals, airports, roads. China is the main investor in African infrastructure. And these are not gifts that the Soviet Union gave. If necessary, the Chinese military will advocate for these investments, they protect these infrastructures.
China is the largest investor in the areas it cares about to support its exports and import the goods that the Chinese economy needs.
And accordingly, the West can neither influence Beijing nor change the situation.
Sergei Glazev: Of course he can’t. Because the West is simply unable to even come close to offering such sums of money to developing countries today. Theoretically, they can, but they do not have the necessary production investment mechanisms.
And China is building what we call a physical economy around it. And what are we doing? Through the same budget rule, we have thrown as much as 10% of the gross product abroad, buying US Treasuries that gave us half a percent a year, and now that money is completely withheld.
I suggested that we invest the surplus currency in critical imports, but…
But nothing changes?
Sergei Glazev: When the problem arose of what to do about the oversupply of currency, I made a concrete plan: to fix the currency at a reasonable level that would suit everyone – exporters and importers alike. And the surplus currency that should enter our economy will be spent on critical imports, as it is difficult for private business to bring it in today for many reasons. The state could have taken this on, as we did in 1992-1993.
Then I was personally responsible for critical food imports to Moscow, because it was a serious problem. Today, thank God, everything is fine with that, but there are other problems – with spare parts, technologies, machines, integrated circuits, microprocessors, reagents for medicine. Much of everything.
Private business was never involved in this, because even the same foreign companies were engaged in servicing foreign aircraft. At the same time, privileges were also given to import foreign aircraft.
Today, “Boeing” and “Airbus” are gone, and ours, like blind kittens, do not know where to go at all. They did everything for them, they just paid.
Can you imagine what schemes are in place?
Sergey Glazev: Pwool degradation. There is simply no supply system to service domestic aircraft. Foreign companies did everything for a lot of money and we paid for it.
Some things today the state can do quickly using the mechanisms of strategic partnership with China, India and private business.
That is, the problem is not fatal, but solvable?
Sergei Glazev: Completely. By the way, when we were discussing growth rates, I told you that our monetary authorities, following their Washington patrons, have drawn us minus 10% of GDP. This is complete nonsense, they are simply programming us for decay and decay.
But they have already fixed it.
Sergei Glazev: Yes, the latest statistics – we are on the plus side in both industry and agriculture. Although intermediate imports are experiencing major problems. To eliminate these problems, the government can today buy this surplus currency at market rate and use it for critical imports, for centralized supply of everything that is vital to us.
But they have to take responsibility for it. I’m afraid they can’t.
Sergei Glazev: This is the first reason. And the second is the infrastructure of our exports. Here we are already talking about the vitally important North-South corridor for us. Our president has repeatedly spoken about this.
The Ministry of Transport said: Yes, there is no flow of goods there. We have now begun to analyze the Indian market, with which the Eurasian Economic Commission is negotiating to establish a free trade area.
The volume of trade with India in Soviet times was 10 times greater than it is now. India can produce absolutely everything that Europe does. In the Indian economy, there are no problems with the supply of the goods we need, as in the Chinese economy. That is, we can completely replace any goods.
It is necessary to develop the infrastructure of our exports for the North-South corridor
In addition, they have, for example, drugs that are head and shoulders above European drugs. And cheaper.
Sergei Glazev: And much cheaper. But we don’t have convenient infrastructure. So let’s invest this excess money, which today is about $240 billion this year, in developing this infrastructure.
We will build a port in the Caspian Sea. We will be building on Iranian territory in the Persian Gulf. Something else could be built closer to India. And there will be this corridor, north-south, and you can create it quite quickly.
In Soviet times, 20 million tons of cargo passed through this corridor. Much less today. Well, the West gets all these goods from there – from India, from China.
But nothing is done. You see, here they are official documents – yuan, rupees, pounds. Everything.
Sergei Glazev: And the last thing I wanted to say. You know, when I travel to our partner countries, I observe the conditions in which our Russian diplomats live and how Americans live. Even the American embassy in Ukraine has three thousand people. That’s a whole city! Ours is a small estate. I will not name other countries.
Well, let’s invest this money in our diplomatic missions! How much longer will we be confined in the backyards of the countries that are most important to us.
Which are in the realm of special interests.
Sergei Glazev: That is, it is clear where these extra 240 billion dollars can be spent, with which the Central Bank does not know what to do. And the Central Bank just backed off. 400 billion dollars have already been taken from him. So they generally distanced themselves.
Today we can say that our Central Bank has just closed. Before that they wrote “All went to the front”. Where they have gone, I do not know, because they are still actually working for the enemy, with all their policies they stimulate the export of capital. Instead of collecting this money, they say: let them leave it abroad.
Translation: V. Sergeev
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