Rouble Nationalization – the Way to Russia’s Freedom. Nikolay Starikov

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СКАЧАТЬ stop caring about the three guys at the door who make a scene about right violation and carry on with dragging your man to the exit. You have decided to stop listening to the tales that spending your own money yourself is obsolete and inefficient. You were not convinced that the independent man is the key to your prosperity and wealth. In a word, you have decided to kick the annoying man out of the flat once and for all. And what do you see? Next to the lift there are three more people. Huge muscular blokes with very grim faces. The armbands on their sleeves say 'The US army', 'The British army' and 'NATO'. Still determined to kick the man out? Get ready for a fight then…

      The law on the Central Bank is full of controversies. It is technically federal property, and nevertheless, the Central Bank has no obligations towards the state. What is more, should we, that is the state, decide to get rid of the annoying man and use the gold and foreign currency reserves of the Central Bank to build new factories and roads, we would be doomed to failure. The three guys next to the lift would not beat us up while we still have the Russian army and the nuclear shield. But very soon a fourth roughneck would come to the flat. 'Independent International Court' is written on his back. You must have already guessed that there is no chance for justice. The Central Bank of Russia, if the Russian state wants to use what allegedly belongs to it… can file a complaint to the international court!

      Article 6. The Bank of Russia is authorised to file suits to courts in accordance with the legislation of the Russian Federation. The Bank of Russia is entitled to appeal to international courts, courts of foreign countries and courts of arbitration for protection of its rights'.

      The Bank of Russia and the state cannot decide a controversy themselves. It will be decided by the Stockholm court of arbitration. Or the independent court of the State of New York. This is as ridiculous as if the Central Party Committee and the People's Commissioners for Finances at the times of Stalin did not solve their disputes in the Kremlin or government sessions, but at the court of the Third Reich. It was equally independent from the Central Committee of the All-Union Communist Party and from the USSR government. Right? Right. Therefore it could decide who was right and who was wrong in the USSR, being the court of Nazi Germany. It would have been fair and impartial. And of course, it would have been guided only by the interests of Russia and by the letter of the law. But the funniest thing is that should the Central Bank appeal to the International Court of Justice, it would inevitably win. And Russia, that is us, would inevitably lose. Why? Because the Central Bank is a part of a whole system of similar central banks which, in their turn are a part of a web called the International Monetary Fund (IMF). And what is most important: the gold and foreign currency reserves of the Central Bank of Russia are not stored in Russia. Except for a small percentage of gold stored in Russia, the rest of the reserves of our Central Bank does not look like wads of cash from various countries bound with rubber bands but digital 'zeros'. Which are stored, incidentally, in computers abroad. Gold and foreign currency reserves of our Central Bank are invested in state bonds of other countries, mostly in US state bonds: 'Russia has spent over 30% of the gold and foreign currency reserves on buying securities issued by the US Treasury… According to the American Ministry of Finance, our country's investments in American state bonds have grown by 3.5 times over the last year – from 32.6 billion up to 116.4 billion dollars. And now Russia takes the 7^th place in the rating of countries crediting the United States.'[33]

      Can you imagine the USSR State Bank investing 30% of its reserves in US state bonds? Not in gold, but in bonds?

      But let us be just – the Central Bank does not invest the gold and foreign currency reserves only in American securities. The International Monetary Fund also receives some funds: 'In the near future Russia will invest 10 billion dollars of the gold and foreign currency reserves in bonds of the International Monetary Fund (IMF). This was announced at a meeting with Russian president Dmitry Medvedev by the Finance minister of the Russian Federation Alexey Kudrin. According to the minister, it was the Central Bank that was going to invest the money'.[34]

      The fact that the IMF is fully controlled by the Anglo-Saxons and other monstrous offspring of Bretton Woods will be discussed later. For now we will only note that the Central Bank always purchases various bonds when Russian economy needs the credits resources. But investing them inside Russia is impossible. Why? It is prohibited by law.

      Article 22. The Bank of Russia is not entitled to credit the Government of the Russian Federation to fund budget shortfall, buy state securities at the initial offer, except for the cases when it is provided for by the federal law on federal budget'.

      The Central banks of the so-called developed countries credit the budget through buying state bonds. And our Central Bank is not allowed to buy Russian bonds. But it can buy American state bonds and securities of some other countries. This is an important detail: the Central Bank of Russia is only entitled to buy bonds issued by OTHER countries, which means that it is obliged to credit other countries' economies. Very particular economies actually.

      According to the legislation, the rouble can only be issued by the Bank of Russia. And according to the same law, it is not entitled to provide loans to the state. How is emission organised then, how are roubles introduced into circulation? Easily – through purchasing foreign currency at the stock exchange.

      The system works as follows:

      ● Russia sells certain goods at the global market;

      ● the country receives 100 dollars;

      ● the Central Bank buys the dollars at the stock exchange;

      ● the dollars go to the gold and foreign currency reserves of the Central Bank;

      ● Russian economy gets 3000 roubles.

      In other words, foreign currency can only get into the country through the stock exchange, where it is sold and the respective amount of roubles is 'injected' into Russian economy. Some sort of an unspoken parity rate for the population is observed. The parity rate between the amount of dollars in the gold and foreign currency reserves and the amount of roubles in the economy. For example, oil prices grow. For the same goods Russia now receives 110 dollars and not 100. The parity is tilted and the Central Bank corrects it. It lowers the dollar exchange rate, buys them for less money and injects in the economy a smaller amount of roubles per dollar. If the oil price drops, the process is reverse: the Central Bank increases the dollar exchange rate. And now, for each incoming dollar, more Russian currency is issued. It is the Central Bank that watches the gross volume of roubles. As according to the law on the Central Bank it is the governing body of the Central bank – the Board of Directors – that makes decisions regarding 'total volume of cash issue'.[35]

      In other words, there is a strict relation between the monetary stock inside Russia and the dollar stock that Russia receives from the outside. And that means that we are vulnerable. We are not fully independent. Why does the Central bank keep the parity rate between the amount of dollars in the gold and foreign currency reserves and the gross volume of issued roubles? Because the Central bank controls issue of the rouble in the 'currency board' mode.[36]

      It is required because any country which is a member of the IMF is obliged to guarantee single-step exchange of the total amount of the national currency into dollars and pounds using its own gold and foreign currency reserves. This rule has to be observed at any given moment. Otherwise, a country cannot be accepted to the IMF. And without being in the IMF one cannot be a part of the 'civilised society'.

      As a result, the Russian economy does not have as much money as required for its proper operation but equal to the amount of dollars in the reserves of the Central Bank. The amount of roubles that can be issued depends of the amount of dollars Russia received for its oil and gas. That means that the whole Russian economy is СКАЧАТЬ