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Chronicles of the crisis. Part 2

Хроники кризиса. Часть 2

The situation with coronavirus in Russia, including due to the preventive measures taken, is lagging for more than a week from the European, but fundamentally it is no different – found in the Ranepa. Thus the Russians see is just the beginning Covid-19, and a week later ripen and berries. The first “harvest” will be Muscovites and guests of the capital and in the regions “gathering” will be held later. Therefore, it would be interesting to see how it is there in civilized countries?
On the one hand, to “spread” the peak of the epidemic in time is the task of governments of all countries to all people infected could get proper help and at all enough doctors and equipment for artificial lung ventilation for critically ill. Deputy Prime Minister Tatiana Golikova reported that in Russia there are 40000 of these devices is 27 vehicles per 100,000 people. The who recommends 20 per 100,000. Despite the bust, the government from its reserve Fund to the Ministry of industry and trade has allocated 7.5 billion rubles. for the purchase of the 5700 ventilators in “Rostec”. The Ministry of Finance has allowed to carry out procurement related to the pandemic, from a single supplier, however, the Director of ANO “Infoculture” Ivan Betin, it is imperative that these contracts are awarded transparently and would have to be disclosed not only price, but also addresses the supply.

On the other hand, the peak of the epidemic should be the peak of the economic recession, and each country takes it in as his “economic capacity” and, therefore, political. Past achievements don’t count, for example, the United States, having plenty of time and the fewer the infected population (March 24 – 40709 pax – 3) than in China (81409 people – 1 place) feel more serious problems in the economy in comparison with its Asian competitor. At least the panic of the population and on the stock markets in the United States more noticeable.

“According to forecasts by investment Bank Goldman Sachs, at the end of this week my job is a total of 2.25 million Americans. The pandemic virus that caused the quarantine, and stop the work of many companies, has already led to mass layoffs in small and medium business in the areas of catering, tourism and entertainment.”

Washington’s economic policy Institute in its study admitted that to fly about 3 million Americans could lose their jobs. Meanwhile, according to the resource 96% of small business owners in the United States has already declared about the beginning of their problems because of the pandemic. One third of entrepreneurs are confident in the current environment they can’t survive more than three months before being forced to go out of business and lay off employees. The most vulnerable jobs of cashiers, waiters, cooks and gardeners. Because of the coronavirus, the us GDP could collapse by 50 %, and unemployment to soar to 30 %. According to the publication Politico, 24 million Americans at risk to remain without work.

Against this background, the fed announced unlimited purchases of government bonds and mortgage derivatives. The FOMC (Federal open market Committee) announced the redemption of corporate bonds and various measures of credit support companies in the amount of $300 billion Providing loans to citizens and businesses will contribute $30 billion from the stabilization Fund of the U.S. Treasury.Created and other tools to help big business, some tools have already proved themselves in the crisis of 2008-2009. The fed also provided for the refinancing of educational loans, car loans and credit card debt.

Not far behind the U.S. of using its “entrepreneurs” and the countries of old Europe.

Since 14 March, France imposed a quarantine mode: closed all shops, restaurants, schools, institutions, only work grocery stores and some banks. March 16, quarantine was tightened, all should stay at home, with the exception of those whose profession does not allow you to work remotely. To exit to the street needs a permit issued in advance. Infraction is punishable by a fine of €135.

In the early days of rigid quarantine in France (24 March – 19 876 infected – 7) was present panic among the population, but a week later the situation returned to normal. In the East, where an outbreak of the virus was stronger, lacking the equipment of mechanical ventilation and intensive care places. The French government is urgently trying to redistribute medical resources and announced a General mobilization of doctors from dentists to orthopedists.

“On declaring war with COVID-19 thrown huge resources the government promised to spend €300 billion, in order to minimize loss of business and households. The state will help pay the salaries of the companies at the time of the quarantine, households with low incomes were exempted from rents and pay bills for electricity and gas”.

The number of cases of infection with coronavirus in Britain reached on March 24 6,656 man – 10th place. Last week on Friday night closed the schools in the country, since Saturday not working cafes, restaurants, pubs, gyms and sports centres. It is expected that up to 80% of the population will be infected Covid-19 over the next 12 months, and up to 15% (7.9 million people) may require hospitalization.

The Prime Minister of the United Kingdom Boris Johnson announced the introduction of hard constraints. The British are obliged to stay at home. Close all stores, shops, libraries, and religious institutions. However, the opposition accuses Boris Johnson of indecision, the lack of strategy and the loss of a precious nine weeks time, then was discovered the first infected.

In Germany (March 24 – 29076 infected – 5th place), authorities have ordered the closure of all cafes and restaurants, Barber shops, massage and tattoo parlors. On udalenku left Angela Merkel, she was in contact with an infected Covid-19 doctor. The Bundestag (Federal Assembly) will continue to work normally, although he himself had forbidden to gather people for more than two. Laughter laughter, but to help the business by the government of Germany is providing €156 billion – almost half the annual budget of Germany.

In addition to local assistance, the European Union for the first time in history suspended the Pact of stability and growth, the basic document of the Euro area. Cancelled the limitation of the budget deficit above 3 % of GDP, the boundaries of the national debt 60 % of GDP, now it is the governments of the United Europe can gain credits through the roof, as you can carry, if only to help businesses facing ruin and bankruptcy. Recall that in 2008 during the economic crisis, the Pact Brussels is not suspended, this means that the situation in Europe today is much more serious. Earlier, the European Commission has decided to reallocate from the EU budget of 37 billion euros to support the health sector and small businesses, but obviously it wasn’t enough.

China, meanwhile, spreads its sails and is gathering pace.

“Despite the fact that the epidemic of the novel coronavirus strong enough impact on economic activity in the first two months, its consequences for the Chinese economy are transient and controllable. This was stated today by Deputy head of the State statistical management of China Shen Liuni”.

The Deputy head said that the fundamentals of China’s economy is not affected, the company has resurfaced, and indeed, in the first two months of the year, the Chinese economy has always stuck because of vacations, holidays and cold weather, and after the second quarter the economy will grow and losses will be easily offset! The mood is great in comparison with their Western counterparts, Chinese officials show!

The epidemic in China had a serious impact on tourism, automotive, entertainment, hospitality and catering, but the consumption is recovering, as “pent-up demand”. Adopted by the departments of the China economic measures contribute to the recovery of the industry catering to help stabilize employment. The demand of China’s population on cultural tourism began to increase. As of March 16, 3714 tourist site of national importance in 28 provinces, Autonomous regions and cities of China has resumed the pace of the resumption of work exceeded 30%.

Currency the Chinese market is functioning stably and without any panic, a balance between monetary supply and demand is maintained.

“Commercial banks of China received a net surplus of foreign exchange payments in the amount of 20.6 billion USD. USA for the first two months of the year 2020, while non-Bank financial institutions showed a surplus of 18.7 billion us dollars. United States.”

China’s foreign exchange reserves reached at the end of February 2020 the mark 3,1067 trillion dollars, and the devaluation of the yuan in the third decade of March was much weaker compared with the depreciation of the Euro and the pound sterling. The state administration of exchange control of the PRC adopted a series of measures to ease the financial burden on domestic enterprises, especially medium and small, and private companies to enable them more efficiently to resume work and production.

Looking at all this grace, Deputy Director of the people’s Bank of China (the Central Bank) Chen Yilu said:

“Despite the fall that occurred in the global financial market after the pandemic coronavirus disease COVID-19, it is too early to talk about the onset of the global financial crisis.”

It is said the head of the Central Bank of China at a time when the US and Europe are drowning in their own “futures”! At the same time, the official promised that China as a global financial power, will contribute to the preservation of global financial stability. Has anyone heard similar statements from bankers of the United States or Russia? Not for Senka cap.

Here and international experts already are discussing the global balance of power after the crisis and coronavirus, in this scenario, the navel of the capitalist world is not in North America and certainly not in Europe. Harvard Professor Stephen Walt predicts that the center of influence on global processes will shift to the East, because South Korea and Singapore, and later China, unlike Europe and America, have demonstrated an adequate response to the crisis. Kishore Mahbubani of the National University of Singapore predicts a departure from the globalization center globalization center in China. Corey Shake from the International Institute for strategic studies believes that Washington has failed the test of leadership. Princeton Professor John Ikenberry believes that nothing but the increase of nationalist sentiment, the rivalry of the great powers and the separation does not expect the mankind in the near future.

Nationalist, and if you call a spade a spade, fascist sentiments were also observed in many countries of the world to the current crisis. Moreover, carriers of these sentiments were political parties that fought for power in the state, where elections and where the revolution this government has made. The current crisis, implicated in coronavirus, and its aftermath of course will push many governments to pupation within its own borders, for their own security and economic independence. At least under these slogans will be the militarization of the economy and fascist policy, the accumulation of military potential and the devastation of the national budget. Hence the tendency from the imperialist governments to military adventurism, the idea is to improve the welfare of their oligarchs at the expense of other, less powerful competitors.

But why go far and look for new imperialist predator, when the US approach to the peak of the pandemic and the economic crisis? Really great marine and nuclear power the first economy in the world, the white man, the capitalist surrender their lead narrow-eyed oligarchs?! Similar to the demise of the history already observed in the case of the Soviet Union, but the couple whether trump Gorbachev? The last is still alive and can advise first to give up with all the giblets to China, so to speak, to share their own experiences. Maybe the American bankers decided to peacefully fill exchange fire with trillions of new crispy dollars, which conspired to produce indefinitely many, would be enough paper and ink?

One thing is certain: while capitalism exists, the struggle of the imperialist powers for a place in the sun will not stop. In the global economy will continue a regular and growing commercial, industrial and financial crises, involving in its fate, one way or another, all countries and all peoples, bringing with them grief and hardship for workers, taking their earnings and work. And viruses like Covid-19 will wreak havoc and carry away thousands of lives because of the inability of the capitalist system they effectively warn and control.

But China still managed? Apparently, Yes, although the Chinese experts do not exclude the possibility of multiple outbreaks. From news we know that the infected get to China regularly, but they are trying to identify at the border or at the airport. Let’s not forget that China is the second, and in many respects the first economy in the world, who does not like her to deal with similar challenges? Unfortunately, under capitalism, only a handful of countries have a privileged position in the world, the others should provide and maintain. Imperialist China is still young and full of energy to take care of themselves but the Chinese capital and goods has long been spreading worldwide, increasing the appetite of local oligarchs

And what bourgeois Russia, as she lived another week of crisis? Let’s not forget that there is oil war and Russian oligarchs are fighting on several fronts: international, domestic and your own pocket. On the international front seems to be dawning victory and if not victory, then at least a truce. Not just anybody, and the United States 21 Mar mouth Ryan Sitton (one of the leaders of the “Texas railroad Commission”) hinted through the Agency of business information Bloomberg on possible negotiations:

“Theoretically, Texas could cut production by ten percent, and if Saudi Arabia is ready to cut production by ten percent compared to dependenices level, and Russia is ready to do the same, it will return the market to pre-crisis levels (and only to a slight oversupply of oil)”.
If the largest oil exporters agree, the eyes of mankind will appear the largest oil monopoly in the world size “OPEC++”. And on March 23, Russian energy Minister Alexander Novak has already conferred behind closed doors with the heads of major Russian oil companies. The meeting discussed the situation on the market, but no decisions have adopted the official version.

On the domestic front, which you know is being waged against workers and smaller capitalists, the Russian bourgeois government also looks cheerful. The government promised that the money will be enough for almost everyone, and expanded the list of strategic companies of Russia three times, from 200 to 600. These are the companies that will have to save the crisis in the first place, among them Auchan, McDonald’s, IKEA – all are the backbone of the Russian economy and others.

CB, as an adult, didn’t panic in the foreign exchange market and speculative manners and left the key rate at the same place (6 %), which had virtually no impact on business activity. Not lifted and the glory of God.

While economic measures of the government are reduced to debugging tools and ways to overcome the epidemic and the peak of the economic crisis. Moreover, for the regions economic impact of the epidemic can be almost worse than the medical, but the White house hope that at least the epidemic for many months not stretch. And the crisis? What crisis? Until will pass the gold reserves and SWFs, where, if the default is do not break out (“insurance” against default has risen 5 times in the last 2 weeks), podsokratit budget and perhaps break through!


Today’s review proved to be largely international, so next week will be more time to talk about Russia. After all, as the reader will recall, our government was able to delay preventive measures the peak of the pandemic for a week. If we are alive then and discuss it.

Whale Plankton

© 2020, paradox. All rights reserved.

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