A terrible page of Soviet history could repeat itself.
Coronaries ruthlessly devastates the Russian Treasury. Reserve a jug of the NWF has also printed. In the early years, the state took unprecedented social obligations wrapped “gift” in a rewrite of the Constitution. Promises will have to do (after all, the vote on the amendments ahead), and the budget is bursting at the seams. Where to take money? There are three options: to include the printing press, to borrow on the foreign market or to borrow from its own citizens by using national bonds. Authorities seem to be undecided. They will go on the beaten Russian history path and impose the purchase of government securities. Preparations are already underway. The Soviet slogan “not a single worker, without a loan!”, seems to have new meaning.
I will explain to borrow on the external market, Russia may not: sanctions has not been canceled. To start a monetary issue too. Printed money will quickly flow abroad, and if they did reach people, it will result in a terrible inflation: the proposal would not keep pace with demand.
There remains a third option is to borrow from its own citizens. It would seem that we have to take, shaking in the period of epidemic for every penny? But the government is confident that the money is there. And knows how to make them. Already rang some alarming bells.
In mid-April, Alexei Kudrin said that the deposits of Russians is 30 trillion rubles, which in a crisis can be used to help Ekonomika. Kudrin said the nation has interpreted in his own way: the Russians have rushed to banks to withdraw deposits. Immediately had the explanation: that deposits one to withdraw will not, we are talking about potential loans in the domestic market. Once the Russians have the money for deposits, so there is money for the purchase of OFZ (Federal loan bonds) as an alternative to deposits.
Methodical preparation for the withholding of trillions began prior to the statement Kudrin. Remember how puzzled the country got to the end of the first Putin’s address to the population in connection with the coronavirus? Under the guise of an epidemic, we announced the introduction of a new tax on income on deposits and securities of over $ 1 million, which sounded very out of place in the context of the announcement of measures to support business people during the pandemic. Now everything fell into place. Besides, the Central Bank persistently reduces the key rate, thereby forcing banks to reduce interest rates on deposits. We like hypnotic, “give up deposits, we will offer something better.”
With another “enemy” of government bonds – shares in companies and other stock market instruments, the government also launched a struggle. May 1 came into force draconian laws to tighten the control of the Central Bank on investors suspected of insider information. Now the controller will have access to documents, work computers and files of market participants. The reason for the test can be a profitable purchase or sale of shares of a portfolio: what if “a little bird brought” inside? In developed stock markets, for example, in the United States, for the use of insider faces prison. However, there is a catch cunning businessmen is performed by special bodies, and not the regulator, which is the mansions over all branches of government and should remain independent. In Russia, the Central Bank responsible for banks, and for MFIs and insurers, and brokers, and also for inflation and maintain the exchange rate. Authority over all financial instruments are concentrated in one place. What kind of independence!
Investors trap. CB will become a “policeman”. Here are some comments of participants of the market. “Empowerment provides the CBR even more power. Now going to check everyone who is somehow touched in the securities market, even beginners, and professional players will have more tools of pressure,” said venture capitalist Alexei Buyanov.
“Why do you need all these checks, the nerves, the taxes, and suddenly the deposits be removed? Buy OFZ!”, – that’s what we are told from the beginning of the crisis. It is possible that the case will reach the direct promotion. So already. In the Soviet Union a massive domestic borrowings among the population was a favorite source of replenishment of the state budget. Only few of them who voluntarily bought. The extra money from the peasants and ordinary workers was not. The bonds imposed upon salaries, in shops, in the registry office. In the 1930-ies they were spread by force. The village Council was preparing plans for recovery of money sums on the yards. Dissent was stigmatized. In the 1950s it became clear that the state owes to citizens is a huge amount. Nikita Khrushchev has announced that it will repay the bonds in 20 years. These events are reflected in folklore: “the people in the duty he took, But never gave back./ And said: “You bear,/ the Bond store”.
The national paper people imposed and the war, the First and Second world. The governments of capitalist countries to receive funds for the conduct of the war, appealing to patriotism and the willingness to be a part of the future victory.
We are now as if at war: everything is paralyzed, the streets are empty, scared for life. And there is a high probability that when all this is over, to restore the shattered economy of power will be at the expense of our money raised through the “people” OFZ. That’s just the Russians not to patriotism. To help the state, which paid off a bankrupt business and its impoverished population, the miserable handouts, as you do not want. But ask us?
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