Thursday, October 12, 2017

Russia Feed — Russia’s inflation rate plunges to 2.8%; historic low

Central Bank resists calls for interest rate cuts despite inflation plunge
Russia Feed
Russia’s inflation rate plunges to 2.8%; historic low


Matt Franko said...

Keep cutting the rates and they will see their "inflation!" head towards zero...

Michael Norman said...

Right. Rate cuts = price cuts. Nobody in the mainstream, Nabiulina included, seems to understand.

Tom Hickey said...

Elvira Nabiullina is a neoliberal, along with Putin adviser Alexei Kudrin and PM Dmitry Medvedev. EN has strong backing from Putin.

The liberal faction is known as the "fifth column," since it wants Russia to Westernize and sacrifice national sovereignty to do so. Putin is, of course, opposed to this.

The liberals are disproportionately represented at the highest levels of the Russian government as holdovers from the liberalization put in place in the Yeltsin years that failed miserably. Russian at large were impoverished while the oligarchs became fabulously wealthy. Russia defaulted on its debt in 1998. That was the low point.

Since then liberals have not been popular among the Russian public and have not won much representation in the elected offices.

The liberal cohort is minuscule in Russia in comparison with the influence of these few people and the oligarchs that profited from privatization before Putin stepped in to stop it.

Conversely, Finance Minister Anton Siluanov comes out of the Soviet bureaucracy and might understand something of how finance actually works since the USSR funded itself as a currency sovereign, at least partially anyway.

The USSR performed quite well for some time:

From the Stalin-era to the early Brezhnev-era, the Soviet economy grew much slower than Japan and slightly faster than the United States. GDP levels in 1950 (in billion 1990 dollars) were 510 (100%) in the USSR, 161 (100%) in Japan and 1456 (100%) in the US. By 1965 the corresponding values were 1011 (198%), 587 (365%), and 2607 (179%).[23] The Soviet Union maintained itself as the second largest economy in both nominal and purchasing power parity values for much of the Cold War until 1988, when Japan's economy exceeded $3 trillion in nominal value.[24]

Wikipedia, /Economy_of_the_Soviet_Union