Secretary of the Russian Security Council Nikolai Patrushev in an interview with Rossiyskaya Gazeta, he expressed the idea of ”sovereignization of the national financial system.” Payment means, according to the Secretary of the Security Council, should have intrinsic value and stability, not being tied to the dollar, and for this, a return to a “two-loop monetary and financial system” is possible.
“In particular, it is proposed to determine the value of the ruble, which should be backed by both gold and a group of goods that are currency values, to put the ruble exchange rate in line with real purchasing power parity,” said Nikolai Patrushev.
Economist, former Chairman of the Supreme Court of Russia Ruslan Khasbulatov recalls that in times of crisis of the financial system, a huge number of different proposals are received:
– So it was in the early 90s, when I was just tired of looking at hundreds of such proposals. I do not think that the ideas mentioned by Patrushev have any future. I look at what is happening calmly – America is still a mighty power, and the dollar is of great, simply enduring importance. It is unlikely that there are opportunities in the world to create parallel currencies.
Another thing is that in specific calculations, as the president said Vladimir Putin the ruble can play some role. But this is also a palliative, a temporary solution. It reflects the current situation and, in general, according to most economists and financiers, is acceptable.
In the Russian Empire, from the end of the 18th century to the 20th century, more precisely until 1917, a two-circuit monetary and financial system was used. Russian banknotes were not always equal in price to gold and silver, but at the very least they worked. At the end of the nineteenth century, the Minister of Finance Sergei Witte carried out a monetary reform by introducing the gold ruble, and the country’s international obligations were secured by silver, as well as flax, hemp, timber and grain.
“SP”: – Public discussion of this idea can help find a way out of a difficult situation?
– No, in public discussion in such cases, the truth is not born. It is born in the real economy, which needs to be developed. And for twenty years we were engaged, for the most part, in a talking shop. All this time, the country pursued a policy that did not allow our economy to develop – in strict accordance with the “Washington Consensus”.
Enterprises and the population were kept on starvation rations, and money was saved. It seemed, what difference does it make to invest them in gold or in foreign banks! And suddenly – 300 billion burned – this is a mockery of the people.
I used to be critical Margaret Thatchercriticized the Supreme Council. Once he called her a “visiting grandmother”, which caused the anger of our then leaders. But she was right about one thing. She once said: “There are no public finances, there are people’s money, which is entrusted to regulate the government – in the interests of the people.” And our money is frozen in the West. Now Zelensky will apply for them. What good, the Americans will give. All this – it would be necessary to deal with the Investigative Committee of Russia and personally Patrushev …
Leading expert of the Center for Political Technologies, economist Nikita Maslennikov suggests that while not having a clear idea of the details and methods of implementation, it is too early to evaluate the idea itself:
The concept itself is interesting. The idea of backing the ruble with gold and export goods can, in principle, help make the Russian currency more attractive for exporting goods. But what basket of goods will it rely on in the face of sanctions pressure? Let me remind you that many export commodities: oil, gas, wheat are sold at big discounts.
Providing the ruble with a basket of goods will depend on the prices of these goods. And in the face of sanctions pressure extending to liquid hydrocarbons, Russian Urals oil is traded at a discount to world prices for Brent oil by an average of $20. The discount for wheat reaches $70 per ton. If we are going to build a two-loop system: with the Central Bank at the top and treasuries at the bottom, then we must understand how to influence pricing in the markets for goods that are put into the basket.
“SP”: – We had a relatively recent, under the chairman of the government of the USSR Alexei Rykov gold chervonets.
Yes, but a lot has changed since then. Many of us, even academics, live with the sensations of past centuries. And the world has become completely different. Our digital currency is about to appear, and we are all trying to back the ruble with gold.
Then you will have to pay in gold, as was laid down in Rykov’s gold standard. But this is one of the options for strengthening the authority of the ruble, when delivering goods abroad for it. But how will it be implemented? There are many more questions than answers, I would like details.
Tied to “purchasing power parity”? This is a calculated value that allows you to distribute countries according to the level of well-being. In real international trade, everything happens at the current exchange rate.
But in principle, the most complex, pressing questions can be answered. Relationships within the framework of OPEC + have shown that it is possible to ensure the stability of oil prices. But a special operation began, and sanctions pressure intensified. The new reality requires one more adjustment of the currency market to the changed conditions.
It is very important that the experts of the Security Council are working in this direction. But much clarification of the details is required. So far, we see a solid statement of intent, in which there is a clear meaning – strengthening the authority of the ruble. But the system of supporting mechanisms requires a detailed analysis.
Economist Vasily Koltashov recalls that any money is already backed by goods:
“But the security is made in the process of buying and selling these goods. After all, the security initially meant that banknotes can be exchanged for a not very voluminous, but valuable commodity – gold. No other software works. If we say that the ruble is backed by oil that lies in the bowels of Siberia, it will be just chatter. You can’t put this oil in your pocket. And the dollar is provided with a mass of commodities, which is actually sold for it. If it doesn’t sell, it will turn into a candy wrapper.
In modern conditions, provision can occur in two ways. The Central Bank can say: our cellars are full of gold, and we will buy any products that they try to prevent from us, we will buy gold. And we have never abused the issue, we have always focused on the limit of the issue of a certain amount of gold – how much gold, so many banknotes in circulation. We were honest, and this commercial honesty is very important.
“SP”: – According to Karl Marx, honesty does not arise from some kind of ethics, it’s just that dishonesty is expensive, leads to problems and mistrust.
– In order to earn trust, Russia needs a single-loop system with a single state issuer – the Central Bank. You also need to buy as much gold as possible on the external market. Moreover, you will have to buy for the currency, for all these candy wrappers: euros, dollars, pounds, yens.
Now few people talk about it, and yet this is the point of view of classical political economy. Some economist of the late nineteenth century would advise doing this. But not those who were taught on the basis of the neoliberal school and even the Soviet political economy, which was mainly critical of capitalism. Criticized – for the cause, but nevertheless, we do not have our own school now. All neo-liberal propaganda was dragged into Soviet textbooks, supplementing it with their own ideas.