Oct 29, 2021
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In anticipation of hyperinflation: Citizens have already begun to actively withdraw funds from deposits

In anticipation of hyperinflation: Citizens have already begun to actively withdraw funds from deposits

Photo: Mikhail Pochuev / TASS.

By the end of this year, the Russian ruble may greatly depreciate, even the scenario of hyperinflation, which everyone remembers at the beginning of the 90s, is not excluded. According to the economist Mikhail Delyagin, soon the deposits of citizens in banks may be completely zero. But this is a very cautious forecast; there are other possible scenarios.

The change in the forecast of the Ministry of Economic Development for inflation for 2021 from 5.8% per annum to 7.4% per annum and an increase in the key rate of the Central Bank from 6.75% per annum to 7.5% per annum – it would seem that there is nothing to worry about. The indicators have not changed very much. Nobody believes in the official inflation rate for a long time, this is some kind of completely speculative figure. And few people understand what the Central Bank’s refinancing rate is. However, their synchronous growth is a signal of impending disaster.

An increase in the refinancing rate – at which the Central Bank lends to the entire banking system of Russia – means an automatic rise in the cost of loans. That is, on the thorny path of economic development, the country is putting up another barrier.

“The increase in the key rate of the Central Bank may provoke an aggravation of the macroeconomic situation. In Russia, the economy has two main problems of the economy: money hunger and lack of working capital. The increase in the refinancing rate aggravates this state of affairs, ”says Mikhail Delyagin.

By contrast, at the recent meeting of the Eurobank, the key rate remained unchanged. How she was NULL, so it remained. In Japan, it is altogether negative, minus 0.1% per annum, that is, the state pays extra for the money to go into the economy. And so practically everywhere. The normal government is interested in the country’s development.

Under the growth of the refinancing rate, Russian banks will slightly increase the rates on deposits, this is what they have already begun to trumpet in the “ordered” materials. Say, bring money, deposits – this is profitable now. However, citizens, taught by bitter experience, have already begun to actively withdraw their funds from deposit accounts, many do not even wait for interest. The rate of growth of prices is many times ahead of the profitability of the most profitable deposits, further, apparently, it will be even worse.

About $ 33 trillion rubles – this is the total amount of individuals’ funds on the accounts of domestic banks. Is it a lot or a little? Decently.

According to the Central Bank of the Russian Federation, in the first half of 2021, the total assets of the domestic banking system amounted to 110 trillion. rubles. A beautiful figure, but there is no faith in it.

“In an amicable way, the figure needs to be halved at least. Because a significant part of assets either have “inflated” value, or they are completely illiquid. Loans were handed out “by pull” or “kickback”, all sorts of “left” bills, “garbage” stocks and bonds were bought. Which, in terms of balance, cost a lot of money. This is if we talk about outright criminality, which is everywhere – both in state banks and in commercial structures. The whole system is sick, totally. But there are also completely objective problems. For example, we have a company or a trading company that is our lender. Now all the conditions are being created to make it impossible for business entities to carry out activities, including with the help of “lockouts”. The bottom line is that at some point a firm or a plant becomes unable to pay its debts, and we get another “hole”. De jure, up to some point in accounting, this is not a “hole”, but de facto it is it, ”explains the director of a department at a commercial bank.

The financier neatly bypassed another process in which the structure where he works is also involved – the withdrawal of capital abroad. The scheme is the same: allegedly expensive securities of companies such as Roga & Kopyta Inc. are bought, which in fact are not worth a penny. What percentage of the population’s savings thus leaked “over the hill” – we can only guess about this.

Obviously, with the growth of economic problems and the rate of capital outflow, the size of the “hole” in the Russian banking system will grow. Already today it is comparable with the total volume of deposits of the population, and if people suddenly want to withdraw their funds, there will be simply nothing to give to the bankers. The state corporation “Deposit Insurance Agency” does not have even a tenth of the above amount, and there are no such funds in the state budget.

The problem was foreseen, and even more than a year ago. And as a “solution”, a not very original “recipe” was proposed – starting from a certain amount, “freeze” funds in banks. Until better times, when there will be something to give.

Thirty years ago, they did just that, the owners of Soviet savings books suddenly became beggars. And just the other day, the Russian authorities once again “postponed” payments on the Soviet debt. Until those “best times” again. Apparently, until the last holder of the passbook with the hammer-sickle coat of arms on the cover dies of old age.

Accordingly, there are no obstacles to doing this again. Citizens will be explained that there is no money, but they need to hold on, and that the deposits will be returned. But after. Soon. You just have to wait a little.

This scenario is by no means an idle invention. According to data from sources close to the State Duma, the “fish” of such a law was created more than a year ago. And when the hour comes, a draft law will appear promptly, which the new parliamentarians will quickly adopt. However, he would have accepted the previous one.

It cannot be said that this will be such a shock for the majority of citizens. Over the past three decades, “respected, you panic, scattered” are almost used to being robbed on a regular basis. And they are preparing for another trick of the authorities.

For half a year, almost all more or less decent used cars have disappeared from sale, and prices have doubled. Sweep away everything that costs up to a million rubles and so. Mostly disposable rubbish is on sale, you can’t buy a decent car nowadays.

There is no boom in the real estate market, but only because the population simply does not have money to buy apartments, houses and land plots. Although a number of enterprising citizens have found a way out here too.

“The ruble will depreciate, so I got into debt. In rubles, of course. I sold the car, bought another – simpler and more reliable, albeit not so prestigious, bought dollars, cash for the difference, and hid them. And I also bought a house – on credit. The bank will burst, and the house will remain with me, you will be tortured to take it away. Especially considering what may begin in the country as a whole, ”says small businessman Alexey.

Nothing new, people have already done something like this – in the early 90s, when it became clear that the country would soon go haywire. Some people even made a fortune on this: a ruble loan in Sberbank, dollars are bought for it, in a month they rise in price several times, the loan is given, and the remainder is excess profit. You can’t count on something like that today, but something like that is still relevant.

While the people are still holding on, there is no mass escape for deposits. However, anything can be the impetus for this. For example, a sharp rise in prices for food or other essential goods. By the way, the same Mikhail Delyagin is sure that prices will jump in January 2022. As an option. But he can be wrong …

And then everything will fall down – the banking system of the Russian Federation will “fall down” overnight. It’s scary to even imagine what will happen to the purchasing power of the ruble, but all imports will definitely become unavailable. And taking into account the appetites of our “oligarchs” who recognize only dollar profits, goods of domestic origin will also rise sharply in price. Apocalypse, nothing else.

Is it possible to correct the situation, prevent the impending financial collapse? Easily! There are only a few well-known steps, including the return of exported capital to the country according to the scenario of the Celestial Empire and the Chinese experience of industrialization. It is sad that the latter they once studied with us.

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