At the suggestion of the authorities in Russia, they began to seriously discuss the prospect of the ruble, moreover, in the formulations of nothing more than “can the ruble become gold”?
What can you say?
The first thing that comes to mind is from a joke: “Dear brother, finally I found a place and time …”. In the sense that the whole situation around directly provokes the ruble all of a sudden, for no reason at all, to become nothing more than gold.
But, since the topic is already set, let’s discuss seriously.
First. Why is this topic being asked at all? Are there any more current ones? Paradoxically, the answer is almost yes.
In conditions when the so-called reserve currencies turned out to be empty and worthless pieces of paper for us, as states, and an unattainable luxury for citizens (free circulation is significantly limited), the question of some more or less reliable means of accounting for the value of goods, as well as a tool accumulation and conservation of the fruits of labor – turns out to be one of the most key for the Russian economy as a whole, and for each of the ordinary citizens separately.
That’s just the wording of the question, I would correct. Agree, it is one thing to raise the question, at a minimum, of ensuring that the state and specifically authorized by the state body the Central Bank fulfill the constitutional obligation of the authorities to ensure the stability of the ruble. It sounds quite prosaic, but it requires a certain concentration of forces, tension, concentration. And, from my point of view, and a significant reorganization of the financial system management system.
All this is difficult, responsible, but seemingly not at all heroic. And it’s quite another thing to discuss the wonderful prospects of the ruble as a “gold”, or even better than a “diamond”. We are still discussing only prospects, plans, or rather, even only hypotheses, projects, but everything sounds almost like something that has already happened, almost victorious.
Second. Under the “golden” in theory and practice does not mean at all some brilliance at the level of absolute perfection, but only real material support. In a sense, the Soviet ordinary ruble was “gold”. In the sense that it was provided with all the resources of the state (as it was written on each bill). But, unfortunately, nowhere and in no way was it stipulated which ones, in what volume and at what price. That is, the main thing was missing – the very details in which the very essence always lies.
The ruble is really golden, that is, the unit of which is tied to a certain amount of gold, we also had, even happened, but it’s impossible to say that it was he who performed any miracle in the economy of Russia or the USSR. This is just one of the tools – at a certain stage of development for solving very specific tasks at this stage.
At the current stage, given that gold today is just one of the exchange commodities, the same as oil or nickel, if we talk about pegging the national currency to something solid as a tool to ensure its guaranteed stability, then we can talk about on linking the national currency both directly to gold and, for example, to platinum or palladium, as well as to silver, nickel, copper, steel, oil, gas
Third. But we see how the world commodity markets are storming – the prices for all these goods are not just fluctuating, but are swinging vigorously. If we had pegged the ruble to gas only a dozen years ago, today we wouldn’t have given a dollar for a hundred rubles, but they would have almost equalized.
Would that be good or bad? And depending on whose interests we proceed from. A simple pensioner with his relatively beggarly pension in this case could suddenly feel great on vacation somewhere in Turkey or Egypt. But our oil and gas exporters would not have super profits from the sale of raw materials abroad: they would have to pay for labor inside Russia in the same way as if they were extracting raw materials in the USA, Canada or Norway. Yes, and filling the budget with rubles (which in recent years for every dollar received from the sale of oil and gas, they gave 70-75 pieces, and now for every dollar they would give only three rubles) would not be easy at all – it could also be paid pensions in the current ruble amounts are clearly not enough …
… And tomorrow, after some regular reorganization of the world economy, gas prices will fall again, let’s say, not ten, but at least five times. And then what? How, under these conditions, to plan activities for those who are connected with purchases abroad and keep household and accounting in rubles? After all, this will be the collapse of the ruble in relation to world currencies at once in the same five times?
Fourth. Of course, everyone understands this and, accordingly, they talk about pegging the ruble not to one specific exchange commodity, but to some of its “basket”.
And here the reader already guesses what the devil and in what details will be hiding here: who will form the basket and, most importantly, guided by what considerations, in whose interests? And also how often and by what method (again, in whose interests) will this basket be reviewed?
That is, attention, conflict: binding to any one commodity (exchange commodity) – this means the national monetary unit as a chip on the waves along with this commodity.
But on the other hand, malicious bosses – bureaucrats and corrupt officials, who have settled here and there, cannot arbitrarily harm us – only through manipulations with the exchange value of this product on world markets. Linking to a basket of goods, from the point of view of smaller and smoother fluctuations, seems to be more preferable. But on the other hand, the danger of arbitrariness and the same corruption when choosing a basket of exchange goods to which the monetary unit is tied, as well as when determining the methodology for its adjustment, is obvious.
In the first option, it seems, we are moving away from the arbitrariness of our bosses, but we become dependent on malicious, let’s say conditionally, “sores” who can manipulate prices not only for currencies, but also for exchange commodities. In the second variant, we seem to be more independent from international speculators, but we become dependent on our “good” bosses. But we are … and now in the same dependence on them? What then is the fundamental difference?
Fifth. It is worth unobtrusively recalling who in Russia were the main beneficiaries of the former financial and economic policy (to the enormity of plans for the “golden” ruble)? Known.
Banks reported fantastic profits every year, regardless of the state of the productive sector of the economy. Exporters of unprocessed natural resources, due to the undervaluation of the ruble in comparison with purchasing power parity, received expensive dollars abroad by two or three times, and paid in Russia for labor and infrastructure with cheap and periodically collapsing rubles. The authorities, in case of any difficulties, benefited from the next collapse of the ruble – they filled the budget and fulfilled social obligations to the population not with real resources, but with regularly depreciating rubles.
Who remained in the red is also obvious: the productive sector, if surviving, then “not thanks to, but in spite of”, as well as the population, whose salaries, pensions and labor savings regularly depreciated.
And who can and, more importantly, should become the beneficiary of the new financial and economic policy based on the “golden” ruble?
Production enterprises – if long-term financial stability and the inadmissibility of the depreciation of working capital are actually ensured. But, I draw your attention, this is an important, but not the only condition for their normal activity. The population – if they get a real reliable tool for accumulation and savings, especially in conditions when access to foreign currencies, which used to be at least some sort of lifesaver in terms of saving the fruits of labor, is now limited.
Who gets it harder? For the same exporters of raw materials – the “margin” on the difference between the dollar and the undervalued ruble will no longer play in their favor. And it will become more difficult for the authorities to reduce budgets, without the ability to fulfill social obligations to citizens with just depreciated rubles. And the banks? For them, everything can be turned this way and that way.
And the sixth. Is it possible to survive on the basis of such a “golden” ruble, but to develop? Where will the credit for development come from?
The system of the “golden” ruble is good, maybe for some time to stabilize after some egregious lawlessness. But what is needed for development? Probably, what competitors have is money emission for development. When there is no new product yet, it still needs to be produced, but there is also no money to organize its production. But they can be created from nothing, together we can agree that we do not produce them for inflation and the appearance of prosperity, but to launch new production from nothing. This is the essence of truly sovereign money emission. And we launch a new production, which will then lead to an increase in the volume of goods, which means inflation, new money, made initially, as if from nothing, however, subject to their strict targeted use, will not be produced.
But this is a field for arbitrariness and fraud on the part of the authorities? Of course, if the authorities are not strictly watched by the society. But the alternative – a “golden” ruble pegged directly to gold or any other exchange commodity – is welcome into the clutches of international speculators in exchange goods, without the possibility for the state to conduct a targeted development credit policy. Or the same now conditionally discussed “golden” ruble – pegged to a basket of exchange goods – welcome back into the clutches of its own corrupt officials, and again without the possibility of a state credit policy of development.
Is there any understanding that the notorious and many times condemned “carency board” – pegging the national currency to the US dollar, in its economic meaning is not much different from the currently proposed pegging of the ruble to gold or a basket of exchange commodities?
From the point of view of national pride, the difference is, of course, fundamental. But from the point of view of the conditions for development, it is almost the same. In both cases, for loans for development – welcome to the queue to Uncle Sam, who has a preference to make money from nothing.
So, maybe, why fence the garden with the ruble “gold” or equivalent conditionally “gold”? Perhaps it is more important to undertake the organization of a civilized sovereign system of state administration, responsible to the people? Responsible for ensuring appropriate conditions for industrial and technological development, including financial policy, which should ensure both the stability of the ruble (as required by the Constitution), and targeted concessional credit for development – on the basis of a special issue of money specifically for development?
With all the sober understanding that one task (monetary emission for development), with insufficiently skillful and responsible management, may directly contradict another (ensuring the stability of the ruble). But the latter, taking into account the precedents of 2008, 2014 and 2020-2022, is not provided in any way and now – without any development.
So, maybe it’s still worth trying to create a system of responsible public administration? And thereby create a truly golden ruble (in the sense of “valuable”), but not through any link to specific goods, but through responsible and predictable state financial and credit policies in the interests of national industrial and technological development?