In order to prevent credits from going to the foreign exchange market, the Central Bank must stop the pyramid it organized there by printing rubles for the purchase of currency. Rejection of currency board policy opens the way to reduce the key rate, which the Central Bank is now raising and thus builds administrative barriers to deter the currency speculators from participation in the currency pyramid.

Comment on the article by Paul Craig Roberts and Michael Hudson: “Privatization Is the Atlanticist Strategy to Attack Russia

Money from privatization will be a drop in the sea of ​​money that the Russian Federation had due to high oil prices. This drop won’t change anything in the economy, but the resources will be lost. Paul Craig Roberts directly encourages CBR to abandon currency board policy, which leads to a permanent drop in the ruble exchange rate, to the higher rates on loans and to inflation. He calls to lend by our own powers and refers to the history of Western countries. Indeed, if we change the target of issuing money to ensuring investments, such a purpose, in terms of high quality investments, should lead even to deflation, because each high-quality investment project generates a flow of goods which overlaps the original loan. Thus, we can produce a non-refundable “loan”, i.e. we can return to the Soviet monetary system, which was not-for-profit one. In other words, printing money for the construction of the plant is normal. Printing money to buy currency or even gold for ensuring printed money is not normal. Insurance of the ruble are the Russian factories, science, culture, education and health care, etc. To print money in order to plunder it later, like it was done in the 90s, is also abnormal.

Yes, a change of course from ensuring the ruble with gold and foreign exchange reserves to ensuring it with investments will lead to “Dutch disease”. The ruble, the cost of resources in the Russian Federation will increase dramatically. We’ll have to abandon the idea of ​​the economy based on the export of natural resources, we’ll have to reduce their export at the current prices. But the security of the state will increase as well. Our people will not consider options, to whom to sell themselves. It will be much more difficult to buy them. On the contrary, a full-fledged tool for production of weighty rubles for buying almost anything will be in the hands of the state. Purchase of necessary training and technologies will be available to us. Russia will become the undisputed center of gravity. Maybe it will be necessary to to subsidize agriculture, as the French Government does, but under new conditions we will be able to do it together with the purchase of advanced agricultural technologies.