From the Saker:
I have asked for expert opinions and I hope to get them soon. In the meantime, here is my own take on this which, caveat emptor, is backed by ZERO personal expertise in these matters. Still, for whatever it’s worth, my own speculations:
1) The Ruble is falling due to three completely separate reasons:
i) The recession in the West which triggers a drop in oil prices
ii) The AngloZionist pressures on OPEC not to cut production
iii) The impact of western sanctions
The first reason given by the Saker is wrong. The second reason is wrong as well. The third reason is as wrong as the previous two.
There is an illogical thought habit in economic reasoning today which sees the finance as a branch of economy, a derivative one furthermore. That is, the belief that financial outcome depends on the economic choice made or undergone by the economic agent, that what happens in the financial markets is the direct consequence of underlying economic interactions. Nothing can be further from the truth!
Modern finance or, better yet, post-modern finance is nothing else than a gigantic superstructure conceived for the purpose of domain over the economic and political processes by the issuer of the reserve currency. It’s totally detached from economic input and obeys exclusively to the agenda of those who printed on the dollar bills the writing “e pluribus unum” (Christians know very well that it’s really the opposite: e Uno plures et omnia).
It does not follow, it leads economic upheaval. It’s designed above all to cause fictive perceptions as a mean to impose alien choices and agenda on the economic agents targeted, or to force them out of the arena, with the juicy corollary to create for a selected few enormous profits exploiting the wild fluctuation of “prices”. Yes, because this post-modern finance, totally dependent on the reserve currency (credit) issuer(s) is just this: the ultimate price fixing scheme!!!
There is one and only one reason for the current free-fall of the ruble: a selected few people and entities selling gazillions of rubles that they DO NOT HAVE in coordination. It’s the same reason for the falling price of oil, the ludicrous current price of gold and silver, the valuation of some enterprises at two times their EBITDA or at 30% of their book value and the specular valuation of other enterprises at 50 times their sales, and so forth and so on.
Therefore, the hike in the ruble interest rates by the Central Bank is theoretically not a wrong move, but it’s inane to do it in little steps over a period of time: the interest rates must be hiked at 150% overnight to get the desired effect!
However, you have to insulate your domestic economic agents and your people at large from such rates. You should do it in any case! Economy, entrepreneurs, workers, people, should be set free from the tyrannical leash of the banks! You can put as much money as you want in circulation, economic agents will never benefit if that money goes only where the banks want to!
You can survive against the Leviathan of post-modern finance only if you can ignore the fiction it produces. You can ignore it only if you make immune your people and your economy to their financial holograms. You make immune them only taking in your hands the circulation of blood (money/credit) in your economic veins. Ultimately, that can be done only with a real sovereign monetary emission, respecting all the postulates it requires!
In the meanwhile, however, you can come up with very, very useful surrogates. Therefore, i must repeat here:
The solution to the current most urgent needs of the Russian economy and financial system is very simple. All of the current turmoil can be fixed overnight with two very simple provisions:
1) Create a State Bank for Economic Development, whose ONLY activity is to provide loans to every domestic non-financial enterprise, for investment and working capital purpose, and to families, for the purchase of the home or flat where to live, with interest rates charges capped at 2%. The Russian foreign currencies reserves alone can provide this bank with a loaning firepower of several trillions dollars. Of course, the loans must be granted and repaid in the domestic currency.
2) Forbid by law any short sale (i.e. the sale of what you DO NOT HAVE, in unlimited quantities, reserved to a selected few; in short, the ultimate price fixing scheme) of any financial securities (stocks, bond, currencies). Reserve the short sale of tangible commodities ONLY to the producers of the same commodities, limited to one year of current production.
That’s all! You shall not fight against your enemies, internal and external; they will die a natural death. You don’t need the Central Bank nor government’s cooperation for that, you need only two very simple laws and you have a strong majority in the Duma. If the Kremlin wants it, it can be done in a week! With that, interest rates on the ruble can stay high, it will add pain to the scoundrels and it’s good for savers (generally, the middle class) and savings are an investment in themselves.
With that, you don’t need the verbose proposals of Glaziev too. Glaziev is very interesting, a good reading. It’s clear that he has a good understanding of the basic functioning of economy and finance, moreover he describes very well the modality of the systematic plunder, operated by what we’ll term the “international banking cartel” for convenience of presentation, against the working and productive classes (the contraposition between workers and entrepreneurs is artificial, one of the countless false dialectic fabricated by the progeny of the devil to divide society and parasitically dominate), not only in Russia but everywhere. Over and above, he draws a good portrait of the absolute inanity and incompetence of modern “economists” and financial bureaucrats (even if I doubt that somebody can be SO stupid, so that I’d rather talk of treason, not stupidity).
Anyway, when he comes to the solutions he goes a little astray, falling for a plethora of academic, verbose and hazy proposals, which could be a recipe for disaster, relying too much on the good will of too much persons to be implemented.
Do not hold your breath waiting for the Saker’s experts too. Another very useful law would be the one forbidding every public financial or economic institution to hire people with a degree in economics or finance! But maybe I am a bit too radical here…..