Posted 14 мая 2020, 15:25
Published 14 мая 2020, 15:25
Modified 24 декабря 2022, 22:37
Updated 24 декабря 2022, 22:37
“Many people do not understand: the motion of money in the economy has not any connection with the amount of money in the financial system. In the financial system, there can be a lot of money, and the economy can suffocate from their absence.
Every month - well, if not saying every day - the financial system must throw money into the economy, and at the same time it takes money from the economy itself.
So, the whole problem of our modern life is that the mechanism of throwing money into the economy has stopped.
This is due to the fact that the movement stopped - salaries are not paid, respectively, people do not pay for goods and services, enterprises do not collect revenue, and banks stopped issuing loans - what is the point of issuing them if there is no guarantee that they will be returned?
This is a real problem, which is very similar to what happens to a person if he has a sharp increase in blood coagulation.
Money is the "blood" of the economy. Numerous “blood clots” formed in the “vessels”. So what needs to be done?
Firstly, it is necessary to reduce coagulation, that is, to facilitate the movement of money as much as possible, and secondly, to transfer additional money to the economy in order to fill those vessels in which this money has disappeared.
This is such a general recipe. But if you talk more seriously and specifically, you need to clearly understand: how much it is necessary to reduce restrictions, that is, to reduce “coagulation” in order to reduce “blood clots”, and how much money needs to be given.
If we talk about the money that the economy does not get today, then these are absolutely colossal amounts.
I draw your attention to the fact that the whole horror of the current situation is that even if - let's fantasize - cancel all restrictions now, the situation will remain. For a banal reason.
Imagine that tomorrow everything will work just as it was before the crisis.
But when people get paid, they will no longer buy goods and services. They will repay loans for the repayment of which they did not receive money in these months and which were postponed to them.
That is, in fact, the economy will still choke without money.
And for this reason, the question of how much money needs to be given is the question of determining the scale of financial flows.
For our economy, this is certainly hundreds of billions per month.
But to all this we must add one more circumstance. If you gave people money to buy something, it means that those who sold it will have money, they don’t have to give it.
And if we understand that they will not receive money from people, then they need to be given so that they do not die. Because otherwise, when people have money, in a few months they will come with that money - and there’s nowhere to spend it.
All this is a rather complicated process, in which you need to understand how your economy is structured and how money moves.
And I can assure you that the people who are sitting at the meeting with the president do not have the slightest idea.
If you listened to Ms. Nabiullina, who was here bursting with all sorts of revelations, then for any person who is even a little versed in the topic, it is obvious that she does not understand a thing about inflation, monetary circulation, and so on.
For me, by the way, this is not surprising. I have known her since 1995. She was never a specialist in this matter.
In addition, “how much to give?” - there is another question, purely administrative, it is no less important: who should I give?
And here it turns out that in some sectors of the economy it is necessary to give small and medium-sized businesses, because otherwise it will die, and in other sectors it should be given to people, because they will incur anyway.
That is, roughly speaking, you don’t need to give money to food stores, because as soon as you give money to people, they will run to buy food. This is the first thing they will buy.
And you will forgive me, of course, but besides inflation, there is also deflation. Attack and demand are always deflation.
Those who sell understand that the only way to survive is to increase sales at a falling price, and for this you need to lower the price even more.
That is, in other words, today in our economy both inflationary and deflationary processes are going on.
At one time, when I was the head of the credit policy department at the Ministry of Economy and was responsible for household incomes, I very closely monitored these trends.
Now I don’t see, sorry for this rude word, neither from our ministerial officials who should understand this, nor from the experts who serve them, a clear and intelligible explanation of what inflationary and deflationary processes are climbing.
And if we give less money than is necessary in order to compensate for deflationary processes, then prices will fall, not rise.
But then you explain to me what kind of deflationary processes they are - what scale they are, what compensation they require?
I have the feeling that Ms. Nabiullina, having learned the word “inflation”, has not yet learned the word “deflation”. And for this reason, all the institutions subordinate to it run from this word, like hell from incense"