A-Infos (en) Black Monday for the Russian Economy

[laure akai <cube@glasnet.ru>]

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For months now, economists have been seriously worrying about the state of
the Russian economy. For the past couple of years, especially since the last
presidential elections, a large part of the economy has been artificially
supported by different mechanisms. The Federal Reserve is now supporting the
rouble and the stock market to the tune of 1billionUSD per week, and there
is only 11 billion left in the cash reserves and maybe 20 million in gold
and other reserves.

Expert predictions do not always come true in this country due to creative
manipulation and the sometimes unpredictable nature of Russian politics.
Still, people have been seriously talking about a financial collapse in the
autumn and all sorts of higher-ups have been meeting to decide what to do to
prevent this. While visiting the financial heart of Moscow today, talk was
of the necessity of devaluing the rouble to prevent this collapse. However,
the devaluation necessary to do this would cause wide-scale social unrest -
a devaluation from 6 roubles to 10 against the dollar. After two years of
artificial relative exchange rate stability, people have begun to keep money
in roubles and this devaluation, asides from leading to panic and a further
drop in value, would wipe out savings and undoubtably put many businesses
into bankruptacy and leave even more workers without their salary, or with a
salary worth only 60% of their former one.

It is not clear what will happen; a credit miracle may occurr, for example.
What is clear is that while the economy is in such a precarious position,
there is no way that politicians will start to drain the budget to pay out
back wages. As a matter of fact, the other day they started to discuss the
right to liquidate pension funds and to open private ones - another way for
the nomenclatura to rob the people with one hand and make money off them
with the other.

Akai-47       


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