The formation of stable industrial growth traditionally depends on external conditions and takes time, which is necessary to complete the ongoing structural changes in the economy.
External conditions?
Russia has available resources and the Russian government, including the Central Bank of Russia, has the means to create both demand and investment. The inflation rate is decreasing, and the exchange rate is about where the government wants it. Exports, especially arms, are growing and Russian agriculture is taking off.
2 comments:
They'll do it after we do it... which does not look the least bit likely...
BTW they are buying gold, this is actually going the exact 180 direction from MMT...
Actually, the Central Bank of Russia buying gold makes sense in that Russia is a gold producer. The mining companies sell their output to the banks (the biggest one is state owned) for rubles, and the the banks sell the gold to the Central Bank of Russia, which pays in rubles, thereby creating "debt-free" munnie. It's a way of getting rubles into the economy off-budget and without increasing private debt.
The cb just expands its balance sheet by creating rubles as a liability and adding gold as an asset.
Gold is also a reserve that always a cb to "save" in a real asset that is quasi-financial instead holding a reserve currency.
CBs use gold operationally.
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