Whether you thought sometime of the question “From Where Money Undertakes?“
“Economy - the only science where two antithetics can get the Nobel Prize
“ Now for dollar give 150 tenges, and will give in a muzzle soon.“
Not in sense, - “are earned“. And initially. How they get to economy? This question served in dispute with one German financier as the prerequisite for creation of article.
Reasons were rather simple and are even primitive.
If we have, for example, a certain society, with some certain money supply in it. (As, for example, Germany after World War II began restoration with the fact that distributed to the citizens 50 brands.) That while the quantity of goods, services, constantly grows in it (as it is observed actually) and nobody “falshivomonetnichat“ (That is does not pour in economy of flat money), inflation cannot be at all. (There can be only a deflation. What is not observed actually. (Money supply obviously grows quicker than commodity.)
All explanations of the German financier about the credit party of monetary issue of the Central Banks did not explain an overall picture.
Yes, locally money supply at the time of issuance of credit increased. But upon completion of a credit cycle it became even less, at a size of an interest rate that has to urge on a deflation even more. Through some time initial “50 brands on a nose“ will just disappear from economy - will leave on payment of percent. There will be no money left, per se. There will be only credit debts which will be used as money.
At continuation of this absurd, illogical process, money will become negative. Percent that continue to be raised further. It means that if you hold “dollar“ for which nobody is had to in the hand, is an illusion. For it “someone“, “somewhere“ surely has to. And in attempt to repay these debts, from you will beat out also your dollar, and everything that you have. (For example, in a type of tax. The debtor “someone“ is, as a rule, the state.)
If the system with loan percent already worked long enough, then you own negative size. Even, in spite of the fact that you have in hands a piece of paper in which you trust. Frankly speaking, extremely surprised me that the person who is professionally engaged in “making of money from money“ is not able to answer intelligibly the elementary in essence questions. Well really. Physics cannot, for example, (even if the nuclear physicist or the radio physicist) not to know laws of Newton, - basic laws of mechanics.
We tried to simulate “economy“ from three bauer (farmers) and forced them to trade among themselves, having given them on start a quantity of money. “Financier“ did not understand a difference between the opened and closed systems. All the time strove to take money from where that “from outside“, for service of our simulated economy. Then began “to issue the credits“, - at all without understanding that with each cycle of crediting and return of the credit with percent it only reduced money supply and thus curtailed monetary circulation in a limit to zero. As the German financier could not formulate distinctly any model explaining this elementary discrepancy and all ended with a classical question, - “if you such clever, - why such poor“?, - it was necessary to understand most.
(In fact he simply did not see a difference between micro and macroeconomic, though the textbook which is recently found me on macroeconomic (by the way very good) begins with an explanation of this difference:
“ The microeconomics on the most sutiimet business with open systems. For example, the separate firm, in principle, can long make the economic benefits beyond all bounds.
Selling the products, it receives means for purchase of new batches of raw materials, hiring of workers, replacement of the worn-out equipment. Further with their help the new economic benefits are made, their sale in the market is carried out again, then the next round of purchase of factors of production etc. follows. Therefore it is quite lawful to speak about existence of reproduction processes at the microlevel.
We will pay attention that the reproduction cycle is not closed: sale of finished goods is carried out outside firm, also purchase of production factors necessary for it is made in the same place. The microeconomic analysis, therefore, silently means that the market (as a certain perennial spring) is always ready to deliver to firm all necessary. In particular, it is supposed that on production of firm solvent demand will be really shown; that in the market there will be in enough free factors of production necessary for it; that on them reasonable prices etc. will be established. In other words, the reproduction continuity at the microlevel is provided only with openness of system (in our example - firms, but the same treats both households, and other subjects of market economy). That is the subject of microeconomics is not self-sufficient, it exists only thanks to constant acts of an exchange with external environment.
Reproduction processes at the macrolevel on the scale of the states are realized in the closed system if not to take the international economic relations into account. Further we will be convinced that involvement in the analysis of foreign economic relations essentially does not change an essence of reproduction processes in macroeconomic, allowing to specify their contents some. A reproduction basis, even at the modern high level of internationalization of economies, in the majority of the countries, including also Russia, make processes in domestic market. Thus it is admissible that each country can count on sale of the made production only in own market and on receiving production factors in the same place. And especially it is fair if we speak about reproduction within all world economy as receipt of goods and services from the outside of it just does not happen. The macroeconomic system is closed in the sense that conditions for continuation of economic processes have to be recreated constantly in it.
In other words, the microeconomic analysis assumes that reproduction conditions in the market are favorable, and concentrates on studying of ability of the subject of economy to use these conditions. And the macroeconomic analysis is urged to explain the mechanism of emergence and maintenance in economy of favorable conditions for reproduction and to find out whether violations of reproduction processes are possible (and if yes, that in what cases). “) Search of literature gave to
the unimaginable number of books on “how lawfully to earn (to steal, select) one million“. Other pole of literature, - well told about operation of the person - the person, about how it is necessary “to select and divide all“, but again did not give intelligible answers to questions what is money and from where (more precisely, on what conditions?) they arise in economies of the countries? These books told how in the course of production “cost“ is created. But any of them did not mention parallel production. Production of money. Which in the same way creates cost, but much less expensive means just from air. All of them more or less adequately described circulation of money supply, but carefully avoided a question how this money supply is created? Perceiving it as a certain, self-evident, objective reality. Among this information garbage there were practically no texts which distinctly would answer questions:
“ What is money?“ - “From where they undertake and what can be (Private? Public?) “
“ On what conditions and by means of what mechanisms join economy?“
“ to Whom “possess“ emission centers?“
“ What happens to the money received by the Central Bank as percent on the credit (Disappear from the address? Are paid in the state budget?)?“ In other words - whether there is a profit on monetary issue? And if is, - who it receives that? (Issue, it in fact the same counterfeiting, a question only in in what advantage it is conducted. States? Individual?)
“ What does the Central Bank with not returned credits?“ (more precisely with mortgage assets under which the credits were issued. That it could not give money just like that in due time, for beautiful eyes)“ to Whom actually the Central Banks submit to
? That is whose instructions are followed? (Well really. It cannot be just “wishes“ of several people of managing directors. There have to be some purposes. And who can set these purposes, except as the elected parliament, the president, the government? Of which the Central Banks are independent under the law. Some nonsense turns out. What to hell “democracy“ if usual financial instruments, are unclear and “independent“?)“
“ What functions and mechanisms of influence of the Central Banks?“
“ As cash flows flow between the countries? (Freely? Selectively? At one or various courses for different operations?) “
“ Why one countries, the richest are poor in mineral resources, and the labor occupied on production for 12 - 15 hours a day as church mice. And others which have no natural minerals in noticeable sizes and the working day is limited for 6 hours... already just do not know where to invest this money to keep the developed rate of return?“
of Attempt to understand showed dense ignorance of people around... even those who, apparently, by the nature of the activity have to understand in the deepest way these, simple on - to a being questions. People with economic education got confused, contradicted themselves or frankly lied when to them “on two fingers“ by means of usual arithmetics for the 2nd class it was proved that “capitalism“ is system of the economic relations which mathematically has no right for existence.
Really. The simplest example:
Imagine “island“ in which there is a closed economy in the form of one village (Our earth is the same island, it is only more), which on a zavodika makes certain “food“ and sells it in “general store“. All our village works (perhaps, from itself collects a tax from which feeds with this “food“ of tens of pensioners, one disabled person, kindergarten and the watchman near the wood).
Working get paid (the part it leaves in a type of tax on contents above-mentioned “disabled“ and “armies“), the food is bought up, all are happy.
If someone from working “undereats“, - remains after work on overtime... makes more “food“, gets paid more (and respectively more taxes spend in shop more). Eats also itself more and remains to another (disabled) more.
Idyll. Money rotates around. Everyone works exactly on so many that was enough for it.
And now it is representable that our zavodik had “owner“.
Zavodik in a month made necessary quantity of food. Its price is known and settled, taxes are paid, but... here “owner“ covers in the price of 20% of the lawful (!) profit, and offers “food“ for sale in shop.
What occurs further?
Correctly. 80% will be sold only near ~. (Strictly speaking, the owner is also a consumer. But he all the same will not eat all surplus. Will burst.)
Because only for this sum it is paid salaries and taxes. For other 20% the village will just undereat. Not because there is no “food“. Is. But to buy it, - there is no money. On their indignation, he it will recommend not to be lazy, and better and to work more.
Next month the owner will make only 80% of quantity of necessary food. (Why it is more? And those 20% remained unsold with it.) Respectively and its working will be occupied for 20% less time, and will naturally receive so smaller salary...
With each cycle production will be phased down.
In a limit of this meeting sequence we will receive:
The stopped production.
Full warehouse of goods (“food“). (And we still were surprised in the Soviet Union, from where such abundance on capitalism show-windows? Yes just the population has less money, than the total cost of goods. The short-sighted Goskomtsen watching compliance of a total salary - commodity weight, could organize abundance of show-windows with the stroke of the pen. At the same time and incentives to a hard work.)
All money which is flown down to “owner“.
the Hungry, jobless village which of course can advise to work more to earn money, but in it is not present special sense. In our model there is no economy left just money. All of them are brought from it and concentrated on one of poles.
Strangely enough, all this perfectly was understood last century.
Try to guess who wrote it:
“If I was forced to choose between reduction of a salary and destruction of dividends, I, without hesitating, would destroy dividends. However, it is the choice it is improbable because as now it was proved, a low wage it is impossible to reach savings. Reduction of a fee - bad financial policy because along with it also purchasing power goes down. “
“In our reasonings we do not adhere to statistics and theories of the politician at all - house-keepers about periodic cycles of welfare and a depression. The periods when the prices are high, at them are considered “safe“, but, really, safe time is defined on the basis of the prices received by producers for their products. We are occupied by here not harmonious phrases. If goods prices are higher, than the income of the people, then it is necessary to adapt the prices for the income. Usually, the cycle of business life begins production process to terminate in consumption. But when the consumer does not want to buy what is sold by the producer, or he does not have enough money, the producer casts blame on the consumer and claims that affairs go badly, without understanding that he, with the complaints, harnesses horses behind the cart.“
“Great exploiter“ Henry Ford.
In textbooks on economy such stalemate for some reason is called “overproduction crisis“. Though what it the FEATHER - production, when fully hungry?
Even if they are not in the concrete country, they it is obligatory to eat in another, related with strong economic bonds. For example, China knits socks for all America, but there will hardly be enough salary of the Chinese knitting socks to buy the socks in America. In fact, its work is free, - but for this reason the American has so high standard of living and can buy a bag of socks for the American salary. Does not come to its mind that “the dirty Arab - the terrorist“, picking out oil from the earth, for gas station of his car, - digs just for “zubotychina“. And the Chinese girl chewing cottage cheese for its “Danona“ for breakfast works with a plastic coupler on a neck. That did not swallow. (A request not to perceive these “okolokhudozhestvenny hyperboles“ literally).
That is that part of the population which owns “nothing“ is just “economically“ taken out either out of borders of the country or in “a migrant ghetto“ and does not participate in process of the “democratic“ choice of the power. Economic borders do not coincide for a long time with state though by inertia still continue to argue on the “good“ and “bad“ governments in the “rich“ and “poor“ states.
As “soft toy“ which is sewed in Asia for 20 cents and sold in the USA for 3 dollars, - Wal - Mart“ already on 20 goes to the final buyer to shop “. And these 17 dollars of a difference register in GDP …, - that`s it. In GDP of the USA. Therefore “competition“ of the countries in the GDP level, - to put it mildly, makes small sense.
(Though it is already other subject. We will sort the relations between the countries later. Meanwhile we describe the closed economic system not divided by borders into various economic zones of the “rich“ countries and “poor“ ghettoes. (Almost according to Keynes) Also we try to show why the existing relationship just cannot but be divided or take out poverty out of the limits.)
And, as a result, all this cannot but bring to are powerfulm to the social conflicts. If you live in the economic desert and are not able to earn by any work to yourself a living. And nearby impudent muzzles guzzle caviar, languidly sipping whisky, necessarily there are a wish to enter the conflict with the sacred right of a private property and to steal at least sandwich.
There is no free Chinese, - the American socks would cost at the American prices and he would buy them on tick as real estate, - production of which it is impossible to take out completely to “China“ and it “not free“ Americans build.
Such system of the public economic relations in itself seeks for folding. At the same time some stateliness of “investments“ and their termination - leads to oscillatory processes in economy, called by “recessions“ or “crises“. If each average “investor“ made decisions on monetary deposits, without looking back at others (more precisely on their profit), - this convolution would be absolutely uniform, in process of removal of the “earned“ money from economy.
(!) it can be imagined as a certain financial pyramid. In which money is distributed in the form of the turned pyramid eventually. (They are not in the lower, most mass layer or few. In a pyramid top their maximum quantity.)
As a result or “the Great Depression“ with destruction of goods on purpose not to allow increase in warehouse costs and as a result of reduction of price (quickly to sell stale goods) at crowds hungry. You think a lie? Alas, historical examples indicate the opposite.
“On elections of 1932 under the slogan of “The new agreement“ Franklin Delano Roosevelt became (New Deal) by the president.
Attempts to stop falling of prices for products of agriculture became one of the first actions of Roosevelt. Working in purely market style, for stabilization of the prices it was decided to reduce the offer of goods and to limit production. In hungry America destroyed 6 million heads of pigs and 200 thousand sows, and also plowed 10 million acres of cotton plantations.“
Or “Great October“ from it “to select and divide“.
Coming back besides to Henry Ford:
“Poverty on light is generated in the rare occurences by lack of values, but mainly a lack of money“.
Unfortunately not only poverty. But also a stop of the economic relations, - which, eventually, should be started by means of the next repartition of property.
And it is extremely difficult to find historical examples of the fact that they were made without blood.
I emphasize! To draw this conclusion, it is not necessary to study classics of Marxism, the nobility “the theory of the meeting sequences“ and “Cauchy`s signs of the decreasing numerical row“ (Though it is useful and to esteem). There is quite enough common sense and knowledge of the mediocre pupil of elementary grades of high school. The economic science, is not science. She does not know what is a logarithm on the basis … and can drag the integrated sum only in. Weigh matapparat, used by this “science“, is located in the accounting calculator with four arithmetic actions.
(Certainly it is not necessary to take these words literally. Exchange speculators pile up the most difficult mathematical behavior models of the markets. Here only nobody heard about the written program which all (!) could buy and quietly without nerves grow rich all - navsy following its advice. Alas, profit of one, - always a loss for someone another.)
So we painted a picture in which money is withdrawn from economy. But in practice we see absolutely return picture. Money becomes more and more. How it becomes?
Whether it is possible to make something that our economic system did not skollapsirovat and continued to work?
Yes, it is possible.
1. If the owner, for example, buys from the hungriest “a shed from a kuryama“. That will receive a little money. Will repay debts, will send the translation of mother, will give to the little son on pocket expenses … That is in our economy money appeared again. The shop will buy food. Means, demand appeared. Time is demand, - the owner will urgently employ workers, will untwist production, there will be salaries and the economy will recover … - but!
Money for a shed for a long time will not last. Through several cycles of production that not to stop it, it will be necessary to buy a shed already from another. Then houses, earth … and so on. Through some amount of time, everything will return to a condition of “the Great Depression“ again, but anybody will have neither an earth, nor real estate, nor property any more.
Whether it is possible to make something in this situation to continue production of food?
Yes, it is possible.
2. It is possible to borrow still money at the owner, but in exchange to offer him the debenture.
It will recover economy, for some time again. So far will not bother to lend to the owner. He will call all freeloaders, idlers, eternal debtors and will stop “credit“.
Here any more it is impossible to make anything. If it is the island, - that everything. It is possible to consider that the fluffy northern small animal came. Even the subsistence economy is already impossible here because the majority did not have neither goods, nor property for an exchange.
(!) If to speak more precisely, then the debenture in modern economic system is hanging not by a thread of the borrower, and by mortgage property. That is money comes to a turn, but only on the security. But as money arrives (and are withdrawn by all types of “percent“) from system much quicker, than the new property is created, in a limit all property has to appear under pledge. Then a refund in an economy turn quickly fading will stop.
For further functioning the system needs to be expanded. Otherwise where to take new mortgage property? Otherwise robberies, civil war, hunger. There is no other means of redistribution left. But expansion of some local system is always prevented by neighbors. And they have same problems.
(Running a little forward it is necessary to tell that after “achievement of a limit“ virtual financial assets became one more way of expansion of mortgage base, - “securities“. Actions, bonds, public, mortgage debts... etc. In difference from real property they can be created infinitely. But “the belief of the investor“ that these papers represent though some value is not infinite. Therefore in economy the parameter as “optimism of the investor“ which is easily measured“ became extremely important such “reliable“, “especially economic“ and “. It needs to be supported at any cost.)
It is possible to object of course that the model represents only a special case for one goods and one production, and actually their set.
Yes, of course. But it does not change an overall picture at all. If each of these productions builds small financial “pyramid“ in which money aspires to top, to “owner“, - the model will become complicated, but its structure will remain invariable. A set of “pyramids“, each of which will work with the certain layer, to differ in the sizes or the size “leaving upward“ of percent, are all the same synthesized in one big, but anyway the direction of the movement of money to top will not change.
Each fragment of “a big pyramid“, is occupied with “collecting of money“ from below and sending “percent“ from each turn “upward“. Through some quantity of cycles of monetary circulation practically all money appears above, and tovarno - the monetary relations stop.
Kayuk. Great Depression.
In other words such system can work still some time while “owner“ spends 20% for example for buying up of houses and the earth starting with “the most undereating“ in the (or the stranger) to the village. (That is so far there is an expansion of the owner on new territories or “investments“. These processes throw money from pyramid top, in its basis and thus form “demand“) Then the balance of supply and demand for some time is leveled again. Money comes back to a turn. When it buys up everything and process of expansion of a zone of influence of the owner will rest, for example, against frontiers. Money will begin only process of “vzbiraniye“ on the turned pyramid up. There will be no mechanism of their zakoltsovyvaniye left “down“. There is no need.
Through some time extremely revolutionary situation will ripen. The crowded warehouses of goods, at their utter impossibility to sell somewhere. Below there is no solvent demand. At the same time “below“ hunger and poverty. Explosion in this or that form is inevitable. A question only in the one who will be stronger or more cunning. Or the owner by means of the watchman will drive all superfluous into a ghetto and will force to die out silently. Or “superfluous“ will lift the owner on a stake.
After expansion of capitalism on new territories comes to an end, the economic system becomes closed within the globe. But “owner“ (or “Owners“) continues to cover the price with the “lawful 20%“. Money ceases to be invested. (To fall to the pyramid basis for formation of demand.) There any more is nothing interesting that could be bought up to earn more. If there is no need to build and develop, money completely leaves to top. At this time reproduction of goods stops.
What to do?
Yes as always. To throw the accumulated money from “pyramid top“ down. To invest.
But in what?
It is necessary to direct energy of quickly growing poor and numerous “basis of a pyramid“ somewhere. It is necessary to do something. And for actions the owner has all conditions. Money all at top (at it). Goods full warehouses. Too belong to the Owner (there is no place to put and spoil). From below presses tension of hungry mass of the money separated from these goods by absence. (Here - here all will select.)
The best investment, than war, it is difficult to imagine. On the money saved by the owner production of the weapon is started. Means, there is a work. Right there in the form of a salary “solvent demand“ is injected into the basis of a pyramid. Goods from the crowded warehouses begin to find the buyer. The economy comes to life again, and doubly. It is necessary to reproduce still “food“ until armories collect. Of work it is full. Is enough for all. All are happy.
But … when armories are filled much, money ceases to come to the pyramid basis again.
But on a scene “gun“ already appeared. In the following act of revival of economy it is obliged to shoot.
If around our economy there were not too successful neighbors, they will be declared applicants for Lebensraum (vital space) so the enemies who are liable to destruction. Their property will be taken. It is sold for debts to the owner and economy on some final again (!) time will earn.
Certainly, - the above described model is limit simplification.
Certainly, - “economy“ it not only the market of consumer goods. Both oil and gas highways, and blast furnaces, and planes, and spaceships … all this do not eat it and on yourself you will not dress. It both means of production and science and education and army.
This model shows only one of the main mathematical “convergence“ and the current ways of its temporary permission. Actually it is more of them. And they “are much more fundamental“, than a special case of “capitalist profit“.
Reflect at least what means the word “credit“ by means of which money appears in economy? What occurs when “bank“ gives “the credit under percent“?
For example, it gave to “economy“ the credit of “100 billion“ of rubles under 10%. It means in a year took away the credit and the percent total of 110 billion. Whether there was in economy more money? What will occur at the following cycle of crediting? (To fill a lack of money, it already should give out 110 and to take out from economy 121) And through 10 cycles? (it will already have to give 260 billion and to take away 286. And all these growing figures, is essentially irredeemable debt of economy to bank. Which grows significantly quicker than the economy.)
Oh! And what will happen to economy if in 30 years it suddenly under the flag of fight against inflation does not give the new credit? There is “not no credit“ money in economy that for a long time. (That “50 brands“ on start were only a priming to general game in “a big pyramid“. They are exhausted by “percent“ for a long time and became negative.)
As a matter of fact it is also a standard technique of submission of the weak countries.
At the first stage goes a massive rating of economy credit money. (At the same time it is important! The external debt of the country has to be nominated not in its own currency that return of a debt by issue was impossible.) After money supply is within the country (generally) replaced on debt... - the external credit just stops also all real assets of the country under noise in mass media “about falling of the markets“ quietly and automatically flow in possession and management of the external creditor.
So who then actually operates economies and respectively through them the states? Government? Unless only labor. The answer, in my opinion, is obvious. The one who operates the Central Bank. (Not necessarily owns. There is nothing to own there, except ten computers and old chairs.) Only operates.
(!) Important remark:
The power is “subject“ of economy. Money for the power has no value. They only the instrument of implementation of this power over “object“ (in general, - society). The specific inhabitant thinking and working within “economic feasibility“ available to it is the operated object.
For it money have quite concrete value rigidly defining borders of his behavior.
Objects of management are not only people, but also all “open systems“. (Firms, enterprises, organizations... everything that falls under definitions of objects of microeconomics. In other words, - “business economics“) That is any “not closed systems“ existence of which is possible only by delivery external in relation to them (that is uncontrollable them) resources. Money, raw materials, labor, sales markets, etc. can be such resources.
If the government thinks and exists in categories of economic feasibility, it means as well as “enterprise“ (“open system“) - is object of external management. And the power is not. The real power is somewhere behind it. Further.
You can imagine “an economy organism“ with “blood system“ in the form of money which is live only because lent it “blood“? Certainly for the fact that he promised to return then more. But it does not produce blood. Under the law has no right. When time of repayment of the loan comes, blood will take away (everything), and - for percent to it “will cut off hands or legs“. And if he lives already long, - that in general all with giblets. Without blood it is impossible to live, and to the dead all the same?
By the way, the Central Banks under the law are independent of the state and the governments, and in some countries especially without hiding are just private offices. For example U.S. Fed.
(!) Read the small “Tale of 5 percent“. In total simply it is also it is clear stated. Input of money in national economy happens only by the credit. And as money supply is limited to this issued credit, the percent on it cannot be paid in principle.
It is possible to tell that all aforesaid is simplification of the most difficult economic relations to a primitive. Yes. This is true. And “The tale of 5 percent“ also does not describe all mechanisms of economy. Through simplification it shows only main “convergence“, without going into details of all variations which this convergence temporarily improves. But this simplification allows to systematize and understand all mess and crudity reigning in economy which cannot but lead to mass accidents. When they occur, - “clever men“ from the power tell about a lack of money. But it is not the reason, but a consequence. Matter in nonsense of all system.
For those who has a good Internet - the channel, recommend to watch the small animation movie in which the main ways of emergence of money in economy are also well depicted.
Great The depression began not from lack of money at all. Of money it was full. Not from a lack of productive forces. It was full of the standing plants and factories. Not from a lack of raw materials. There can be a lack of goods? Too not. In the Great depression goods were just destroyed without finding the buyer. Everything was. In total - navsy the main mechanism of economy did not work. Simply did not give the next credits and the circulation of monetary circulation was opened. Money got stuck at top of a financial pyramid. Stopped economic reproduction and turned into the mechanism of management of crowd. Magnificent on the simplicity and efficiency and dangerous at the same time.
Can be as that in a different way destroyed economy of the Soviet Union?
Well. By the same technique. Only broke off monetary circulation, - “liberalization of the prices“.
In the USSR existed three, quite independent among themselves a contour of monetary circulation. “Cash“ served circulation of consumer goods. “The non-cash ruble“, provided assembly in a whole of all industry and scientific potential. (Could not, for example scientific institute, having received non-cash money for development of the material resources simply them to cash and to plunder. He could only pay with them supply of equipment and materials. All this passed according to documentation and was accepted on balance. The contour of the non-cash address repeatedly surpassed cash in the sizes of money supply. The free overflow of non-cash money in cash did not exist. And on it the financial system of the state was constructed. (The third contour, “ruble for international payments“ does not interest us yet.)
In 1987 - 1990 years there were first laws preceding future reform “The law on cooperation“ (May, 1988) “About the State Bank USSR“, “About banks and bank activity“. (November, 1990). At once, there were first cooperatives and banks. (Irreversibility of reorganization of economy came only with the advent of commercial banks and loss of the state control over processes in monetary - the financial sphere. At the state selected the main instrument of management of society. Then began to select mass media, to destroy army, education.) From a subsoil of All-Union Leninist Young Communist League appeared so-called TsNTTM - the centers scientifically - technical creativity of youth, - to Komsomol members of which (Khodorkovsky, Menatep of 1987) the state allowed to carry out operations on cashing in. Any enterprise having turned money through TsNTTM and having given them their “percent“ (which at the beginning of work of this business reached 50%. Having gradually fallen to 15%) received live cash. The huge mass of money of “a non-cash contour“ rushed on the consumer market. Having provided a hyperinflation and that it is far worse, final fracture of a financial system of the state. Who else remembers, empty shelves of shops and storerooms filled to a ceiling with soap, powders, unnecessary goods in houses. People had a large number of cash, but possibilities of production could not increase the necessary volumes of commodity weight in so short terms. Domestic market disappeared, borders opened and goods of the USSR began to flow to the world markets rolling the prices of raw materials in the world markets (aluminum, the titan). “Someone else`s“ money was included into the country washing away commodity (generally raw) weight, generating surplus of money and a lack of goods. That is inflation. But in other countries rise began. The cheap raw materials urged forward production. And surplus of money supply went to the USSR that generated falling of the prices and growth of a standard of living in these countries. (Thus “inflation was dumped in the USSR“) it is not necessary to be the genius to understand to what all this led.
In the USSR basis of a financial system were tens of thousands of names of goods. On them the firm, though floating prices were also established. Huge resources were enclosed in the enterprises. The enterprises indirectly were base of money as were constructed on issue money and provided them.
The government told that all state property is not intended for providing money any more, and will be distributed to citizens equally. The state ceased to bear any responsibility on ruble as to the indirect state commodity debt obligation. It happened in 1991 - 1992. All of us know what it led to. The ruble began to fall absolutely freely. The blow was struck to a financial system, division of labor was at a loss, sharp recession in economy began.
Allegedly “to rescue“ ruble from final depreciation, now the “Independent“ Central Bank raised a rate of refinancing of the economy to absurd 210% per annum in 1993. (though it would be rather directive to close borders and to forbid cashing in) it became impossible to Obtain the internal credit for something. No “plant“ could be constructed any more as could never pay such percent. Even the working production of end products stopped, - but production of raw materials did not. She was supported by export. Ruble money supply sharply contracted, but it did not reduce inflation. Everything is simple. In the prices flying up percent on the credit were already put.
B oddly failed 1998 a pyramid of state credit obligations jump having squeezed money supply of the country. “Strange“ not because failed. It is the ordinary final of any financial pyramid. The fact that the default of the government was declared on internal (but not external) to a debt was strange. As though within the country it is impossible to print any quantity of the money.
The Russian public internal debt (state credit obligations - federal loan bond) during 1994 - 1998 grew approximately by 30 times, having exceeded 435 billion rubles on the eve of August crisis of 1998 when the financial bubble of debt obligations of the government burst. At the same time occurred catastrophic devaluation of ruble, the collapse of a banking system and refusal of the Russian government of payments on an internal debt were in total an event which objectively divided various stages of a transition period, had huge economic and socially - political consequences...
In world practice cases of refusal of the government of implementation of the financial obligations are frequent though, as a rule, the default appears on an external (sovereign) debt. Meanwhile, biggest “surprise“ if it is so possible to be expressed, the Russian default of 1998 refusal of payments on an internal debt was. An event - more than interesting and surprising.
the Shortage of currency reserves conducting to a default on an external debt for developing, and in Russia of - the stagnating, transitional economy - unpleasant, but
quite clear and explainable phenomenon. Also the default on an internal debt for the country with a limited right of emission of own currency, for example, adhering is clear to
of the “currency board“ system. In principle, the last is an option of a default on a sovereign debt. Russia, at least formally, was not deprived of the right to mint an own coin.
Smirnov A. D. is professor, the Doctor of Economics, the full member of the Russian academy of natural sciences, GU HSE.
158 the ECONOMIC HSE MAGAZINE No. 2
… to destroy the economic capacity of the state it is absolutely optional to put it is rocket - bombing attacks to industrial facilities. It is enough to complicate division of labor only as much as possible. It is possible to make it, having destroyed a financial system. Thus, destruction of a financial system the most refined and humane course for those who intended to destroy the economic capacity of the state.
Thus, thanks to those who advised to arrange liberalization of the prices in Russia the financial system was almost destroyed. Ruble money supply is approximately equal to 50 billion dollars now. It is 20 - 40 times less than what is required for normal functioning of economy. It is possible to tell that the financial system is destroyed for 95 - 98%.
The lack of financial resources is compensated at the expense of “the credits from - for a boundary“ for which the constant “material tax“ which is washing away commodity weight from the country and to these besides generating inflation is paid. (An increase in prices for the commodity weight which remained in the country) And in the country there was everything. Both experts, and raw materials, and efficient plants, and money distributed as paper. All “material“ was. Only the “non-material“ tool providing assembly of all base in the uniform working mechanism stopped. After destruction of the industry, the country began to pay in raw materials for products and goods which it made earlier regularly.
Now many demand return of money of Sberbank of the USSR, believing that they were stolen. Well. Not money was stolen. Theft happened when “business became“. When the commodity mass of the Soviet Union freely went through borders to the western, not poor countries and production capacities created by the whole generations in poverty and deprivations under the pretext of their “noncompetitiveness“ cut out on scrap metal and sent afterwards. It was also money of the Soviet Union. And “bank notes“ in Sberbank it is no more than monetary “SIGNS“ which actually and were filled with production base of the country. And by and large it is unimportant, 1) would return them..., 2) would return ten times more.... or 3) just burned.
In the first case they would be eaten by inflation as there are no goods. Are taken out. In the second inflation would be in 10 times more. And in the third, - inflation maybe would not be, but all the same nothing can be bought. There is nothing. As they say, - “there`s small choice in rotten apples“.
The only way “to return“ these deposits, (not in the form of paper, and in the form of real goods) is a difficult way to restore production base and to make goods. Having solved in parallel a set of grandiose tasks. (Only one problem of protection of the productions and a financial system of the country of what costs!) Only this way there will be a basis for return of goods (deposits) to the population and (or) their exchange for goods of other countries. All the rest, - political fraud. Money can be given. As much as necessary. But there are no goods under them as there is no production. And nobody will begin to carry them for the “printed“ money.
(A special case of the issuer of US dollar, - “a uniform measure of value“ for the whole world we will consider below. Such situation is possible only on historically short period. No more than several decades. (if not to keep the developed order periodic wars)
War as repartition of crucial property of course can increase this time interval, but its outcome is unambiguously unpredictable.)
For understanding that represent money in economy it is possible to think up a set of analogies. (For example electric current in the semiconductor in the closed contour. Where “electrons - goods“ move towards to “holes - money“). The analogy to a live organism is represented to the most adequate. “Money“ it the “blood system“ of an organism providing its assembly and interaction in uniform viable system. Let`s allow for ensuring blood circulation the child (small economy) needs 0,5 liters of “blood“. It is no more and not less. To the adult (developed economy) - 3 liters of “blood“. In a healthy organism no body can “bring out of an organism profit“. Cannot detain for example “brain“ at itself blood as “profit on the activity“ as it automatically suppresses all other organism. As well as cannot “invest“ suddenly the blood which is selected earlier under which for a long time the liver emitted new, having filled the shortcoming which disappeared in due time. To all organism from such balancing act it will become good not. Such body needs to be deleted. It is a tumor. Any delay of monetary circulation (or on the contrary “unreasonable issue“) destabilizes work of the balanced uniform organism of economy. Up to “death“.
If all money accumulated at our top of “a financial pyramid“ monetary circulation stops and hungry crowds will run in any “party“ where for them will throw the “hose“ lowering down money. As it is a necessary, though insufficient condition of their existence (for those who else remembers from mathematics of a condition of “need“ and “sufficiency“).
If this “party“ is in other country, - they will run also in it as labor migrants. (“To Moscow“... “to Kiev“... “to Spain“... to build or to gather tomatoes...) If this country has something against, - all of them will equally run to it. But already as the soldier with automatic machine. (To Iraq, Afghanistan...) They have no place to disappear.
And it is absolutely unimportant, the country which they flee is rich, or is poor. They run because “their lower layer“ of a financial pyramid is already excluded from economy and there is a wish to eat all the same.
(Poor Moroccans to France for work run. And in the same way Americans to Iraq run. Not for democracy ideals. Not because it is so exciting to hide bravely in dust behind bags with M there - 16. Just there “lower“ for them “from above“ money, and thus again include in an economic circulation.)
If they have no such opportunity, the country will blow up from within. Some “revolution“ or civil war.
Now when the capitals for a long time nadnatsionalna, have no homeland and can freely flow between the countries, - it is possible to revive and destroy by such “tool“ the states.
You invest for example in “Malaysia“ (Thailand, Indonesia, Philippines, Singapore, it is unimportant) - and you receive “a jump of Asian tigers“.
To summer cataclysms of 1997. Asian tigers attracted more than a half of world financial investments. The reason is banal - extremely high interest rates attractive to the speculative cash flows wandering on the planet in search of fast return. For Thailand, Malaysia, Indonesia, Philippines, Singapore and South Korea the favorable financial situation meant high rates of economic growth (8-12% of VP annually), extensive development of production, blossoming of the exchanges and ekstravaganets of a - la nouveau riche: the stream of the household credits went for purchase of magnificent cabriolets, mobile tubes and cottages exotic for those times with pools. Even the bouquet of the accompanying negative - from permanent shortage of current assets before phantasmagoric rise in price of the earth and real estate - could not shake conviction that life was successful, and she is beautiful.
It is enough to tell that at the beginning of 1997 Malaysian Kuala Lumpur Stock Exchange was - no more no less - the most active exchange of the world whose turns exceeded even turns of New - York stock exchange.
You withdraw money from the country, closing all projects, and you receive “Crises of YuVA“. Oh! It appears …
... Hugo`s lameness - east model was never a secret for professionals: long before crash (in 1994) professor of Massachusetts Institute of Technology Paul Krugman discredited the myth of “an Asian economic miracle“ in article in which it described illusiveness of the success built not on achievements of real economy and its cumulative productivity, and on impetuous injection of the foreign capital.
In more detail about Hugo`s miracles - East Asia can read here. It is useful and is informative.
In fact it is possible to subordinate to the will the government of any country which will be forced to choose between creation of optimum conditions for investments of foreign “owners“. (Read: granting free labor and raw materials for some temporary (!) improvement of living conditions in the country) Or instant a collapse of economic monetary circulation as a result of which the government will be forced to disentangle a revolutionary situation and to suppress hungry revolts (if it has enough for it forces).
As practice shows, can conduct independent economic policy and be protected from the international capital only very insignificant number of the countries. (Cuba, Belarus, Venezuela …) And that, only to a certain degree. Being under improbable pressure. Polnostyu they cannot be isolated from other world. It would mean for them return to a level of development of last century. In one country it is impossible to make and get all variety of goods and raw materials. (Where the certain country will be able to take, for example oil if it does not have that? Or to electronic engineer? Or cotton? The list can be continued infinitely.) And for this reason for example “economic blockade of Cuba“ is incredibly effective instrument of impact on a political and democratic order and firmness of Cubans of decade can only be surprised holding in the main weight the principles. Practically in poverty managed to create the most perfect (and only!) among all countries in the western hemisphere an education system the provided absolute literacy of the population. (As well as the most available high-quality medical care.) Up to that the Cuban teachers and doctors became article of export of this country. And this with the fact that the clothes at them are often distributed by cards.
Besides. This poor country gives an opportunity of free training for foreigners in quantity which the richest country of the world is not able to afford.
“ Instead of one center for training of doctors in Central America through which there passed about hundred people - that pleases us - our country has today tens of thousands of students from the Latin American and Caribbean countries who free of charge get in Cuba medical education within six years. Of course, we do not exclude also young Americans who treat the occupations very seriously.“