.
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The Rothschilds of London run all Central Banks of all nations, save for Persia and North Korea.
They do this not through international financial regulation only, but through the APPOINTMENT of people who work in national central banks and who obey the financial laws of the Rothschilds of London.
This is not revolutionary strategic economics being spelt out for the first time, but things that have been uttered before by the Nazis in Germany, the Communists in the Soviet Union and many others of yet moderate political persuasion.
The pound sterling is strong this month and the Ringgit is weak for a whole year is utter voodoo fraud economics that bares no relationship to reality............it is in reality the backroom manipulation of financial markets through the Rothschild control of local central banks that allow such a situation to arise.
AND ......yes we have the paradox of the Soviet Union GDP growing each year by 20% in real terms from 1928--1941, with a far poorer backward country, with fewer resources and far greater sanctions that are exercised by the Neo-liberals against Russia from Washington, presently.
Of course you might well say that Comrade Stalin was a little bit more 'resolute' 'determined' 'illiberal' compared to bourgeois Putin, BUT the key difference is the position of the Central Bank under the two men. Under Stalin the Soviet Central bank was firmly under Stalin's control......in Russia with an inherited political system designed in Washington, the Russian Central bank is quasi-independent. Its very independence means that International Capital (Rothschilds/NY) leans on the Russian Central bank to obey its back room commands.
That is why Russia's economy is not doing too well....due to the Neo-liberal infested Russian Central bank, and nothing to do with the Washington Neo-liberal sanctions. As President Roosevelt, Stalin and Hitler proved so effectively, when demand slumps in one sector of the economy (In Russia's case Europe and North American trade presently) it is the governments duty to increase demand in another sector of the economy both domestic and international. .......by:
1. Cutting interest rates
2. Increasing spending (Infrastructure, healthcare, education and industry.....are non-inflationary)
The great deals with China as gimmicks go are symbolically important, to show the Neo-liberals that Russia has alternative choices, BUT the deals are spread out over many years and on an annual basis amount to very little.
The current NEO-LIBERAL philosophy is that there should be a few rich people.....and a vast mass of people under them slaving away for next to nothing, 7 days a week. AND if a high percentage of these rich people are Jewish in the West, that is also good....as they are beautiful deserving people. Absolutely beautiful....truly beautiful and pure. AND if in India there are billionaires who think like them, talk like them, walk like them, drive cars like them.....then AS LONG AS ITS ONLY A FEW.......that is also good.
______________________________________________
How Russia's Economy Is Being Strangled by Its Central Bankers
Despite rapid fall in inflation the Central Bank is keeping interest rates at an unreasonably high 11%
By Russia Insider
A whole new set of economic data now makes it possible to
form a clear view of the state of the Russian economy as the first
quarter approaches its close.
.
Industrial output is flat.
.
The story of this recession is of a steep fall in industrial output in the second quarter of 2015.
.
This steep fall caused world headlines with the usual commentators taking it as proof of an impending collapse.
.
In reality the fall in industrial output hit bottom in June 2015. Output has been steady since.
.
There
has been some excitement because of an increase in industrial output of
1% in February over the level of output in February 2015.
.
Part of that rise was statistical: the result of the extra day in February caused by the fact 2016 is a leap year.
.
However it is unlikely that this explains all of the output rise in February.
Industrial
output in February 2015 was higher than in subsequent months in 2015,
with output in the second half of 2015 continuing roughly at the level
it fell to in June 2015.
.
The fact
industrial output in February 2016 was slightly greater than in February
2015 therefore points to at least some recovery from the output levels
the economy hit in June 2015, at which the economy has been stuck ever
since, even if the rise is being exaggerated to some extent by the
effect of the extra day.
.
With output flat the statistics will soon anyway show a decline in the rate of output fall if only because of the base effect.
.
Since
the main fall in industrial output happened in the second quarter of
2015, even if output remains flat the statistics for the second quarter
of 2016 should show either zero growth or at worst only a small further
contraction in output as compared with the level of output achieved in
the second quarter of 2015.
.
The Economics
Ministry is more optimistic. It is predicting that output in the second
quarter of 2016 will be higher than in the second quarter of 2015 and
judging from the results in February it is probably right.
.
If so then that will confirm that a certain recovery in output is indeed underway.
Whilst
industrial output remains flat, agricultural output is continuing to
surge as the farm sector reaps the benefits of the devaluation and the
counter-sanctions.
.
Employment
has been steady The unemployment rate is still 5.8% - the same as in
the second half of last year. Predictions of mass lay-offs have never
come true at any point in this recession. They were again widespread at
the start of this year following the second oil shock. They have again
failed to come true.
.
The annualised rate of inflation continues to fall and is now 7.7% - half its rate of a year ago.
.
This
too is however in some respects a misleading figure. Weekly inflation
has been rock steady for several months at 0.1%, which would translate
to a real inflation rate of around 6% over the year as a whole.
.
It
is widely predicted that because of the base effect the annualised rate
of inflation will rise above 8% in June. Assuming the weekly rate of
inflation remains 0.1% that would again however be a purely statistical
effect with the rate of actual price rises in the shops remaining
stable. The Economics Ministry is now predicting that inflation over
the year as a whole will be below 8%.
.
That
the underlying or true annual rate of inflation is actually 6% or
thereabouts is implied by a claim made by the Central Bank in its latest
quarterly Statement.
The
Central Bank says the annualised rate of inflation in March 2017 - ie. a
year from now when all statistical distortions have been eliminated
from the figures - will be 6%, setting the scene for a further decline
to 4% by the end of 2017.
.
That could be seen as an admission that the true annual rate of inflation is indeed 6% or thereabouts.
.
“Annual
price growth rates may accelerate in the middle of the year, but only
on the back of the low base effect of last year. This is a statistical
effect.
In the second half of the year, as our forecast suggests,
annual inflation is set to resume its decline, provided there are no
new shocks emerging.
Some pressure on 2016 prices is envisaged
from increased excise duties, those on fuel in the first place. Yet its
input is expected to be minor: circa 0.5 percentage point into annual
inflation inclusive of all types of effect.
Our baseline scenario suggests that annual inflation will total under 6%, decreasing to the 4% target in late 2017.”
(underlining added)
If
the annualised rate of inflation in Russia has indeed fallen to below
6% by the end of the year, then inflation in Russia will have fallen
further and faster than anyone predicted. It will have been the steepest
fall in inflation in any major economy since the US experienced the
Volcker Shock in the early 1980s.
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Regardless,
predictions that the rouble’s second devaluation caused by the second
oil shock would cause a sharp rise in inflation (with the Central Bank
talking of inflation rising to an annualised rate of 16%) have - as Jon Hellevig has explained - simply failed to come true.
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According
to the Central Bank the economy was due to repay $26 billion in foreign
debt this quarter with the month in which the heaviest payments for the
year would fall - $12.5 billion - being this March.
.
There
is nothing to suggest any difficulties in making these payments despite
the widely reported problems at VEB. The rouble continues to track
closely movements in oil prices which suggests that foreign debt
payments are not causing strain despite the second oil price fall.
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There
remains real uncertainty about what proportion of foreign debt is real
debt as opposed to merely book debt nominally created through
intra-company transactions by Russian companies.
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The
Economics Ministry is now forecasting that net capital outflow in 2016
will be no more than $30 billion. If so then given that what is called
capital outflow is now principally debt payment that suggests the true
amount of foreign debt payment in 2016 is significantly less than the
$76 billion claimed by the Central Bank or even the $60 billion estimated by Constantin Gurdgiev.
.
Either
way total foreign debt has probably already fallen below $500 billion -
or should do so by the end of March - and appears to be on track to
fall to $440 billion or thereabouts by the end of the year.
.
Foreign currency reserves held by the Central Bank have been steady at $360-380 billion.
.
There
is no information of recent purchases or sales of gold or foreign
currency by the Central Bank, and there have been no foreign currency
interventions by the Central Bank to support the rouble even during its
steepest period of decline at the start of the year.
.
Changes
in the dollar value of the reserves held by the Central Bank that get
announced from time to time are therefore due entirely to movements in
exchange rates and in the price of gold, not to any actual increases or
reductions in the total amount of gold and foreign currency held in
reserve by the Central Bank.
.
Bank balance
sheets continue to improve and in fact there are reports of the banks
being awash with money the problems of VEB notwithstanding. Though it is
VEB’s problems that have been attracting attention the rise in
Sberbank’s share price - it recently touched its peak 2007 level - has
gone practically unnoticed.
.
This improvement in liquidity points to a general improvement in economic conditions. Contrary to claims made in a recent article by Bloomberg
it is not the result of extra spending from the Reserve Fund. On the
contrary budget spending - which is what the Reserve Fund is used for -
is being cut. Nor is the extra liquidity a substitute for an interest rate cut as Bloomberg claims (see below).
.
So
far the only visible effect of the second oil shock on the economy is
that it has caused a fall in the country’s trade surplus as the dollar
price of the energy products that are the country’s main export halved
in the first weeks of 2016 by comparison with their 2015 peak levels
achieved in the early summer of 2015.
This
fall in the dollar value of the country’s exports has however been at
least in part made up by a further decline in imports, ensuring that the
trade balance remains in surplus.
.
As Jon Hellevig has pointed out
it is this fall in imports that explains why the second oil shock has
not caused the higher inflation that the Central Bank predicted.
.
.
This
is that Russia saved a staggering $25 billion because Russians chose to
go to Crimea and elsewhere in Russia for their holidays rather than go
abroad.
Jon Hellevig has told me in
private correspondence that he found this figure so surprising that he
felt obliged to check and double check it. However it turned out to be
true.
.
This is not an unequivocally good
thing. It is a shame that because of the fall in the rouble’s purchasing
power many Russians have had to forego foreign holidays they doubtless
would have enjoyed and which some of them no doubt planned long in
advance and looked forward to. However what may not be good for
individuals can be good for the economy and this is a case in point.
.
Taking
all these facts together it is impossible to avoid the feeling that the
thing that is now holding the economy back is the continuing high
interest rates.
It is the high interest
rates that are stifling investment and demand, both of which need to
increase for the economy to grow. At the moment both are still well
below their levels this time last year, though there are tentative signs
of recovery.
.
At its recent meeting on
18th March 2016 the Central Bank decided to hold interest rates at 11%
where they have been since August.
.
.
This can only mean that the Central Bank intends to keep interest rates high both this year and next.
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Why is it doing so?
.
The Central Bank’s recent Statement justifying its decision to hold rates at 11% shows it running out of reasons.
.
The
Central Bank has consistently claimed that its reason for keeping rates
high is the risk of higher inflation caused by the devaluation of the
rouble caused by the oil price fall.
.
Following
the second oil shock, when the rouble again devalued at the start of
the year, the Central Bank predicted inflation would take off and used
this as its justification for keeping interest rates high. Indeed it
even warned interest rates might need to go higher.
.
As the Central Bank rather grudgingly admits - but as Jon Hellevig predicted
- what has in fact happened is the precise opposite: the further
devaluation of the rouble at the start of the year far from causing
inflation to rise has had no discernible effect on inflation at all so
that the annualised rate of inflation, instead of rising as the Central
Bank expected, is instead continuing to fall:
“………inflation
slowdown is continuing. Under the Bank of Russia estimates, the annual
consumer price growth rate is down from 9.8% in January 2016 to 7.9 % as
of 14 March 2016.
This is lower than the forecast for inflation
for the year ahead, which, the Bank of Russia released in its March 2015
press release (circa 9%).
In 2Q 2016, as the Bank of Russia forecast suggests, quarterly inflation will continue to decline.
However, annual inflation may accelerate temporarily in the middle of the year as a result of the low base effect.
Provided there are no new shocks emerging, subsequently annual inflation is set to resume its decline.”
However,
despite now admitting that inflation is going in the opposite direction
to the one it expected, the Central Bank continues to justify its high
interest rate policy with claims of future inflation risks caused by
possible further falls in oil prices:
In making
its key rate decision, the Bank of Russia Board of Directors took as a
premise the expectations for oil prices which are lower than its
December forecast.
The current oil market still features a
continued oversupply, on the backdrop of a slowdown in the Chinese
economy, more supplies originating from Iran and tighter competition for
market share.
Despite growing oil prices and ruble strengthening
in the latest period, the accumulated weakening of the ruble, impacted
by the drop in oil prices, between late 2015 and early 2016, is still
putting pro-inflationary pressure on the economy, contributing to
continued high inflation expectations
The risks remain that
inflation may exceed the target in late 2017. These relate to a further
worsening in the oil market developments; persistent elevated inflation
expectations; the global food price performance; changed rates of
indexation of regulated prices, wages and pensions, as well as the
uncertainty around a balanced federal budget over the medium term.
To
enable the accomplishment of inflation targets, the Bank of Russia may
conduct its moderately tight monetary policy for a more prolonged time
than previously planned.”
It is not difficult to see the contradictions in all this.
.
The
Central Bank continues to worry about “high inflationary expectations”
even as it admits that inflation is actually falling. It frets about the
possible effect on inflation of a further fall in oil prices even
though it admits the rise in inflation it predicted because of the
second oil shock has failed to materialise. Why suppose
that a third oil shock - if it happens later this year - will cause
higher inflation when the second oil shock failed to do so?
.
At
some level one senses genuine bafflement on the part of the Central
Bank that inflation is not behaving in the way the Central Bank expected
it to do.
.
Amongst Russia’s three big
economic policy making institutions - the Economics Ministry, the
Finance Ministry and the Central Bank - the Central Bank has been
consistently the most pessimistic - and the most wrong - in its economic
forecasts (the most optimistic and the most right has been the
Economics Ministry).
.
That suggests the
Central Bank is working with an outdated model of the economy that makes
mechanical predictions about inflation based on levels of the rouble
and the oil price, which would explain why it is getting the inflation
rate wrong.
Even allowing for this the Central Bank’s refusal to believe the good news is odd.
Explanations
I have heard for the Central Bank’s insistence on keeping interest
rates high despite inflation falling faster than it expected is that it
is not really worried about inflation at all but is keeping interest
rates high in order to support the rouble and to encourage higher
saving.
.
These are worthy aims. However the
major difficulty in attributing to them the present interest rate
policy is that they are not the aims the Central Bank is giving to
justify it.
.
Central Bank
officials have occasionally spoken about the need to encourage higher
saving in the economy. However they do not cite this as their reason for
keeping interest rates presently so high.
.
As for supporting the rouble, they tend to deny that this is a factor in their decisions at all.
.
.
I
would add in passing that there is in fact little evidence that the
current high interest rates are providing much support to the rouble,
whose rate continues to track even the tiniest movements in the oil
price.
.
As for the saving rate, it is
indeed a worthy aim to seek to increase it. However my opinion is that
the reason it has been less high than it might otherwise have been is
Russia’s historically high inflation rate which has deterred saving, in
which case it will rise as inflation comes down.
.
My
view remains that the true reason the Central Bank remains reluctant to
reduce interest rates is the one given a short time ago by Central Bank
Deputy Chairman Yudaeva - that the Central Bank is worried that the
financial community - ie. market traders and analysts - does not believe it is serious about achieving its 4% inflation target. Central Bank Chairman Nabiullina is now reported to have said the same thing.
.
As to that I will say what I said before:
it is understandable that the Central Bank after the humiliation it
suffered when it briefly lost control of the rouble in December 2014
should want to regain the credibility it fears it lost with the
financial community. With both output and employment steady it may also
feel under no real pressure to do otherwise.
.
The
problem is that the people who work in the financial community have
almost to a man and woman an institutional bias in favour of the
bleakest possible view of the Russian economy. Trying to appease them is
hopeless and should not be a reason for deferring an interest rate cut
if that is what economic conditions point to.
.
That economic conditions do now point to the need for an interest rate cut is a view that is now starting to take hold.
.
It
is an open secret that the Economics Ministry wanted an interest rate
cut in March and was disappointed when it didn’t get one.
.
Now
Sberbank - Russia’s biggest bank and its largest financial institution -
has broken ranks and is apparently now also calling for a cut.
.
As for the improvement in liquidity discussed previously, Bloomberg
is simply wrong to treat it as a reason to put off an interest rate
cut. On the contrary it is a market signal that an interest rate cut is
not only possible but is becoming overdue.
.
In saying all this there is one point I do however want to make.
.
No
one so far as I know is suggesting a loose monetary policy. Certainly I
am not.
Nor do I think that Russia should relax its fiscal discipline
or try to reflate its economy through a spending binge or a credit boom
or a bubble.
.
At this point in its
economic history Russia simply doesn’t have the economic room for
manoeuvre that more mature economies like those of the US and Western
Europe have, and Russia cannot afford to take the kind of risks that
those economies routinely take.
.
What that
means in practice is that Russia has to maintain rigorous discipline in
managing both its monetary policy and its budget.
.
As
it happens I believe that excessively loose monetary and fiscal
policies in the West - culminating in structural budget deficits,
quantitative easing, negative interest rates and talk of “helicopter
drops” - are misguided and are the cause of many of the problems the
Western economies suffer from now.
.
Whether
or not I am right about that, I am absolutely sure that if anything
like that were attempted in Russia - with its far weaker financial
system and its much lower levels of trust in its institutions and
currency - the effects would be quickly disastrous.
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However
interest rates of 11% - twice the likely underlying annual rate of
inflation of 6% - is monetary overkill by any standard, especially when
the trend for inflation is clearly downward.
.
In
my opinion interest rates can and should be brought down from these
excessively high levels so as to restore growth to the economy. Moreover
provided this is done in a careful and prudent way I believe it can be
done without compromising the anti-inflation strategy or taking
unacceptable risks with the exchange rate.
.
That also appears to be the view of the Economics Ministry and of Sberbank.
It is what at its latest meeting on 18th March 2016 the Central Bank however missed its chance to do.
There are indications that Pakistan is seriously attempting to annex
this region into a fifth province of Pakistan, government sources said.
Expats remain a tiny minority of the about 1,000 employees at the firm's subsidiary in Iran, 15 years after its launch.
During a visit to
Singapore this month, Foreign Minister Mohammad Javad Zarif said Iranian
nationals living abroad were "the best bridges for dialogue of cultures
and civilizations".
"I
feel it's my responsibility to go back. Iran needs professionals from
all fields," said Golkar, who is due to finish her studies at the
Southern California Institute of Architecture in April. "It will be
challenging to prove myself as a woman in business but there are more
career opportunities in Iran than anywhere else.
