Why are the rates on bank deposits lower than inflation? Deposit rates will approach inflation Does inflation affect deposits in banks?

Inflation: the essence of the cause, types. Socio-economic consequences of inflation. Features of inflation in the Russian economy. Anti-inflationary policy.

Inflation is usually interpreted as the depreciation of paper money due to its release into circulation in amounts exceeding the needs of commodity circulation, which is accompanied by an increase in commodity prices and a fall in real wages.

In conditions of inflation, different types of prices change unevenly: some prices increase rapidly, others rise slowly, and others remain unchanged.

Deflation is the withdrawal from circulation of a part of the surplus money supply issued during inflation, accompanied by a general decline in the average (general) price level.

Inflation rate (price growth rate) - the relative change in the average (general) price level. In macroeconomic models, the inflation rate can be represented as:

where P is the average price level in the current year, and the average price level in the last year is P-1

The average price level is measured by price indices.

Depending on the factors giving rise to the inflationary process, one can distinguish "demand" inflation and "cost" inflation.

Level demand inflation will depend on the shape of the aggregate demand curve and is determined by the following factors:

average annual rates of economic growth of the economy;

the position in the labor market and the current level of full employment;

dynamics and growth rates of aggregate demand components;

the ability of business agents to predict future price increases.

Cost inflation arises as a consequence of an increase in average unit costs and a decrease in aggregate supply. With the simultaneous growth of inflation and unemployment during a period of decline in production, a state of the economy arises, called stagflation. The aggregate supply shrinks as firms lose some of their profits as a result of higher average costs. If at the same time the aggregate demand does not change, then the average price level begins to grow - this leads to an increase in the rate of inflation.

Reasons for the increase in average production costs:

growth of wages, outstripping the rate of growth of labor productivity;

higher prices for raw materials;

increase in taxes;

a change in the structure of the market towards its greater monopolization.

Commodity prices can rise regardless of the state of the monetary sphere. This is due to changes in the dynamics of labor productivity, cyclical and seasonal fluctuations, structural shifts in the reproduction system, market monopolization, state regulation of the economy, the introduction of new tax rates, devaluations and revaluation of the monetary unit, changes in market conditions, the impact of foreign economic relations, natural disasters, etc. Therefore, not every price increase is inflation

The combination of many causes of inflation depends on the specific economic conditions in the country. In the last decade, inflation in many countries has become a chronic phenomenon, a constant factor in the reproduction process.

Inflation can be open and suppressed. TO open inflation includes moderate galloping and hyperinflation, which differ in different levels of inflation (rate of price increase). At moderate (creeping) inflation prices increase by no more than 10% per year. In this situation, the population and the company have the opportunity to navigate the economic situation, prepare for the upcoming price increase and at least partially offset the negative consequences for themselves. This inflation allows prices to be adjusted to match changing conditions of production and demand.

When galloping inflation, price increases range from 20 to 200% per year.

At hyperinflation the rise in prices is measured in tens of thousands of percent, this situation has a destructive effect on social production and begins to threaten the economic stability of the country. Hyperinflation is usually the result of extraordinary events - wars, political revolutions, territorial changes. The most disastrous consequence of hyperinflation is the impossibility of planning long-term investments, which negatively affects the economic development of the country. In a hyperinflationary environment, significant losses are incurred by the owners of savings exposed to accelerated depreciation, the lenders who provide loans. The winners can be managers of prosperous corporations, citizens who invest in real estate.

Suppressed inflation may not be accompanied by price increases. In this case, the depreciation of money is expressed in a deficit (lack of goods) and queues.

For anti-inflationary regulation, two types of economic policies are used:

a policy aimed at reducing the budget deficit, limiting credit expansion, curbing money supply, regulating the growth rate of the money supply within certain limits in accordance with the GDP growth rate (targeting);

a policy of price and income regulation to link the rise in earnings with the rise in prices. One of the means is the indexation of incomes, determined by the level of the subsistence minimum or the standard consumer basket and coordinated by the dynamics of the price index. To curb undesirable phenomena, limits can be set for increasing or freezing wages, issuing loans, etc.

In order to develop specific methods of curbing inflation, it is necessary to determine its nature, to highlight the main factors promoting inflationary processes. Inflation can be monetary or predominantly structural; its sources can be excessive demand (demand inflation) or outstripping growth in wages and prices for materials and components (cost inflation).

In our country, we should talk about a special form of inflation, generated by specific conditions, contradictions of the transition period. In contrast to the West, in Russia the inflationary process is difficult to contain and regulate. Inflation is supported by a general structural imbalance in the national economy. Income growth outstrips industrial production growth, which leads to demand inflation. Currently, the Government is withdrawing the surplus money supply from the economy and placing it in the stabilization fund.

The essence of inflation lies in the fact that the national currency depreciates in relation to goods, services and foreign currencies that maintain the stability of their purchasing power. Some Russian scientists add gold to this list, giving it still the role of a universal equivalent, along with money.

Socio-economic consequences of inflation

Depreciation of incomes of the population Increasing social stratification Destruction of the country's monetary system Impossibility of investment Lack of a basis for economic growth

1 ... Inflation leads to the fact that all monetary incomes (of both the population and enterprises and the state) actually decrease. This is determined by the differences between nominal and real income. Nominal (cash) income is the amount of money that a person receives in the form of wages, rent, profit or interest. Real income is determined by the number of goods and services that he can buy for the amount of nominal income. If nominal income remains stable or grows more slowly than inflation, then real income falls. That is why people with fixed incomes suffer the most from inflation. If the growth of income outstrips the rate of inflation, then the financial condition (of a family, a firm) improves.

2. Inflation redistributes income and wealth. So, debtors get rich at the expense of their creditors. Moreover, debtors win at all levels, since a loan is taken with one purchasing power of money, and returned when much less can be bought for this amount. So, people who received a loan for the development of summer cottages, and enterprises in which there is an excess of accounts receivable over accounts payable, benefit from inflation. The government, which has accumulated a large national debt, also wins, since inflation gives it the opportunity to pay debts in rubles, which have a lower purchasing power.

So, inflation redistributes income and wealth at the expense of those who give money, based on a normal and long-term financial agreement (interest rate for a loan), in favor of those who postpone payments.

Inflation increases the value of real estate. Therefore, families and firms that have a significant share of real estate in their ownership (buildings, house, land, apartment) become richer.

3. During the period of inflation, prices for commodities that are in demand on the market rise. Therefore, the population and enterprises strive to materialize their rapidly depreciating funds into stocks as soon as possible, which leads to a shortage of funds from the population and enterprises. The result of the rush purchase of materials is an increase in demand inflation. In order to prevent it, a tight monetary policy of the state is needed.

4. Inflation leads to the fact that it is not profitable for anyone to make long-term investments, since money of one purchasing power is invested, and income from investments is received with money of a different purchasing power. Only those investments that provide profitability higher than the rate of inflation turn out to be expedient. Moreover, the longer the investment period, the greater the depreciation.

5 ... Inflation also leads to depreciation of the firm's amortization fund, which complicates the process of normal reproduction. Inflation also diminishes the real value of all other savings, be it a bank deposit, bond, insurance, or cash. People try not to save. Firms also direct a significant part of their profits to current consumption, which leads to a further reduction in the financial resources of society, curtailment of production.

6. Inflation leads to hidden confiscation of funds from the population and enterprises through taxes. This is due to the fact that taxpayers, due to an increase in nominal income, automatically fall into a higher taxation group. As a result, a part of the income from the population and enterprises may be withdrawn, which does not represent profit and should have been directed to current costs. In order to avoid this, the developed countries of the West are indexing tax rates taking into account the rate of inflation.

7 ... Considering the socio-economic consequences of measures to save public funds, it should be noted that the expected economic effect from their implementation does not exceed 1.7% of the expenditure side of the federal budget. At the same time, a mechanical decrease in the number of public sector institutions, accompanied by the release of a significant number of civil servants, entails incomparably higher costs, including the need for employment and social protection of laid-off public sector workers, as well as serious problems with ensuring the proper quality of public administration, education and health care. ... An increase in the workload for each of the employees who remain on the federal budget will not be accompanied by an increase in their wage funds, as a result of which the outflow of the most qualified personnel employed in the public sector to the business sector will continue. In the long term, this process will inevitably lead to further degradation of secondary and higher education, deterioration in the quality of mass medical services, the destruction of existing scientific schools and collectives, and a general decrease in the cultural and intellectual potential of society.

In addition, the lack of federal budget funds allocated to finance education, health care and culture cannot be overcome by transferring a part of federal institutions to the jurisdiction of regional administrations. The constituent entities of the Federation do not have free resources to ensure the life of the institutes, clinics and libraries transferred to them, due to the fact that their own items of expenditure in the relevant areas are overloaded to the limit with obligations at the regional level. Even such an economically developed region as Tatarstan, according to the results of the 1st quarter of 1998. was able to fulfill budgetary assignments in the field of education, health care and culture only by 10-11%. Despite the fact that in other constituent entities of the Federation the relative indicators of budget financing may be higher, the regions (with the exception of Moscow) do not have additional funds to maintain the former federal facilities.

8. The analysis shows that inflation at low rates can be a stimulus for the development of production, but it leads to an even greater disruption of economic processes. As a result, the rate of inflation increases and society is threatened with hyperinflation, which carries with it devastating consequences, up to and including economic collapse. The most dangerous consequence of hyperinflation is that production activities become ineffective, and there is a landslide switch to intermediary activities. It is becoming more and more profitable for firms to accumulate raw materials and finished goods in anticipation of future price increases, which leads to increased inflationary pressures. Mass production curtailment begins.

In such a situation, normal economic relations are destroyed. Entrepreneurs don't know what price to charge for a product, and consumers don't know how much to pay. Suppliers want to get money as quickly as possible, since the latter is instantly depreciated. Credit relationships are broken. The budget deficit and public debt are growing. Money actually ceases to fulfill its functions. As a result, there is a crisis in the financial and monetary sphere. Production and exchange are moving to a standstill, and as a result, economic, social and even political chaos can ensue.

In general terms, inflation is when you receive less goods and services for the same amount of money. At first glance, the reasons for this situation are obvious: either there is too much money (the state prints, citizens massively spend their savings), or there are fewer goods (deficit), or the turnover of money is accelerating (there are many available loans).

At the same time, an ordinary person is most worried about - how to protect your savings from impairment? But if food prices go up and car prices go down, is it inflation or deflation? What is the actual inflation rate in the country? Do deposit rates cover this impairment? And what is inflation in general? What are the reasons for it? And is inflation always bad?

What is inflation

Journalists often like to research the prices of grocery baskets (“Big Mac Index” or “Olivier Salad Index”). But for those who do not eat Big Macs and Olivier, but love apples and duck, the inflation rate may be different. In addition, prices for some goods (potatoes) may fall seasonally in summer and rise in winter. And for some goods (cars) - on the contrary, for example, in connection with sales by the end of the year. In one region, oil may rise in price, in another, it may fall in price, and with socks or haircut services, the situation may be quite the opposite.

Therefore, a method is needed to calculate inflation in the country as a whole, regardless of what exactly each person spends their income on. To do this, consider the general change in prices (index) for a very wide range of goods and services. Here the first catch is hidden - which goods and services are included in the calculation.

In Russia, this indicator is called the deflator index. The entire volume of production in the current year (GDP) is taken in prices of the current year, and is divided by the same volume of production, but in prices of the last year. In 2013, the deflator index was 106.5%. That is, the official inflation rate in the Russian Federation is + 6.5%. If the index turned out to be less than 100, then deflation would have taken place (the same set of goods, on average, fell in price over the year). Data on indices since 1998 can be found on the website www.gks.ru, in the official statistics section (national accounts / gross domestic product / annual data / deflator indices).

Differences in inflation indices in different countries

In the United States, a similar method is called the Consumer Price Index (CPI), but there the comparison is made based on the volume of production not of the current, but of the last year. In addition, there are significant differences, which goods / services are included in the concept of “volume of production”. So in the United States, imported goods are included, and not only new products are taken into account. Therefore, if the Russian index underestimates the level of inflation (and all imported goods have been “thrown out” of it), then in the USA, on the contrary, the inflation index overestimates it.

It is clear that the state statistical bodies can manipulate the numbers, as well as change the calculation methods, for their own political purposes. But there are virtually no other relatively reliable sources of information on inflation. And independent research, even on the example of one's own consumption, is quite troublesome.

Do deposit rates cover inflation?

A legitimate question arises as to what indicator should an ordinary investor be guided by. If you look inside the inflation index, then it consists of:

• Food prices (2013 + 7.3%)
• Prices for non-food products (+ 4.5%)
• Service prices (+ 8%)

The best deposit rates (in small, little-known banks) are now about 10% per annum. In larger banks - lower, about 8-8.5%. It turns out, even if we assume that a certain conventional person mainly eats and uses basic services and does not buy practically anything from clothes, then his inflation will be higher than the official 6.5%, somewhere between 7 and 8%. It turns out that the deposit rate of 8.5% covers this impairment. (Additionally, you can see the indices by region, and regional deposit rates, they may differ from the all-Russian ones).

But to what extent do these inflation rates (7-8%) also reflect the reality for certain groups of the population, for whom food makes up the majority of their spending? Of great interest are “Consumer price indices for goods and services in the grouping of the classifier of individual consumption” (section “Prices”).

Top 20 most expensive goods in 2013 (and this is official information):

In this case, is it worth keeping money on the deposit?

Yes, in the picture above, there are completely different figures for price increases. For example, potatoes in 2013. went up in price by 43%. eggs by 28%, cheeses by 20%, vegetables by 18%. Obviously, for a hypothetical student or bachelor who constantly consumes eggs and potatoes, cheese and salad (provided that other expenses are minimal and the salary does not increase), the personal inflation rate would be in the region of 20-25%. That is, the deposit rate, even 10%, does not cover it. But at least part of the money will be saved. Read more about investment prospects in 2014 in this article.

Since a lot of people are involved in the economy of the country and the world, whose decisions are difficult to calculate in advance, even professional economists cannot make accurate predictions about where it will be more profitable to invest this year. In view of this, it will be correct to distribute funds in shares in different instruments. Part on ruble deposits, part on foreign currency, a very small part in mixed mutual funds and / or metals, part in cash (rubles and foreign currency).

How the rates on deposits and bonds have changed in relation to inflation over the past 10 years can be seen in Fig. 03.

Bank deposit rates and inflation

Banks are guided in their activities by the inflation rate and the rate of the Central Bank. And the Central Bank regulates the rate of turnover of money in the economy just through the refinancing rate, lowering or raising it. Those. making money cheaper (and encouraging lending) or making it more expensive. The ultimate goal of central bank manipulation is to reduce inflation.

In advanced economies, inflation is extremely low. For example, in 2013:

• in the USA + 1.5%.
• in the Eurozone + 1%
• in the UK + 2.1%
• in Switzerland + 0.3%
• in Japan + 1.6%

But very low inflation is not always good. It is believed that lowering prices (deflation) below 1-2% is harmful to the economy. Because incentives to produce are lost, economic growth falls, after which the population spends even less, and prices fall even lower. Trapped like this for many years

Savings are a huge boon to the economy. It is both growth today and a prerequisite for growth tomorrow. It is both an investment resource and a remedy for inflation. But mistakes in the management of savings on the part of the economic authorities can turn everything upside down and then savings become the cause of inflation and many other troubles in the economy. This is exactly what happened back in 1992 in Russia. Two approaches: reliable instruments and the advantages of bonded savings, will allow Russia to quickly create a significant supply of long-term money and increase GDP, while significantly reducing inflation.

TASS / Interpress

Savings as a boon

Not all the money people make is spent. The desire to have supplies "for a rainy day" is an ancient quality of human nature. It all started with the food supplies of primitive people. But since mankind invented money, some of these reserves have been deposited in monetary form.

But then it was precisely such a deferred consumer demand (backed by the savings of citizens, that is, effective demand) that played a large positive role in the post-war economic boom in the United States.

GDP growth while creating savings

The emission of money, accompanied by the growth of savings, directly contributes to the growth of GDP. Let's just think about what will happen if the state (in the broad sense of the word, that is, including the Central Bank) issues some amount of additional money, but all of it goes into savings? It may seem surprising to some, but at the same time, GDP will grow by at least the amount of money issued.

This is easiest to imagine in a socialist state (for example, in the USSR). Suppose the State Bank issued an additional 1 billion rubles, which went to pay wages to workers who are building, say, a power plant. And at the same time, household deposits in the State Bank grew by the same 1 billion rubles. For the State Bank, everything looks as if "how much has gone and has come." But at the same time, the workers produced goods, and this caused an increase in GDP. Note that the liabilities of the State Bank to depositors have increased at the same time. The amount of deposits of the population has also increased, and, consequently, its well-being.

An example from the socialist system is provided only because it is easier to imagine. You can even imagine that 1 billion rubles went into savings not on a voluntary basis, but on a “voluntary-compulsory” basis, for example, by distributing government bonds according to a list of orders (for interesting materials on government loans in the USSR, see and)

But in fact, the same happens in any capitalist economy. Imagine that the Russian Central Bank issues and sells the so-called Bonds of the Bank of Russia (OBR) in the amount of 1 trillion. rubles and a maturity of 5 years. This will mean that the owners of this 1 trillion. rubles agreed (for a certain compensation, for example, for interest) to postpone the use of this money for 5 years. But GDP was produced by these owners (when making money). For the Central Bank, such an operation makes it possible to issue new money in the amount of 1 trillion. rubles without fear that this will accelerate inflation. And if the Central Bank makes such an issue, then it will turn out almost exactly the same as the above "Soviet" example, differing only in the amount.

GDP growth with spending savings

But the effect of the availability of savings is not limited only to the growth of GDP in the creation of savings. It is very important that the availability of savings means a high potential demand for goods and services. In the example above, Americans who worked for the defense industry during the war spent relatively little on consumption and saved relatively a lot. And the presence of these savings created a huge potential for growth in the production of goods and services for these people after the war. Moreover, there was no uncontrollable surge in inflation - deflation was already observed in 1949.

They say that a good merchant will always sell a pair of shoes to a man with a five-thousandth bill in his hands, standing barefoot on the hot asphalt (var. - on a snow-covered sidewalk). In the sense that if a person needs something and he has enough money, then there are many willing to offer him a solution to his problems.

The “shift worker” from the above example, who has savings due to work in an oil or gas field, is also a desirable (for producers and sellers) consumer of various goods and services, such as apartments, cars, household appliances and much more.

A huge number of people with significant savings is a "paradise for sellers" (and, therefore, for producers) of goods and services. And, undoubtedly, the growth of citizens' savings contributes to the creation of such a favorable climate for the development of the economy. Moreover, a "seditious" thought suggests itself: it is the presence of demand that is the most important condition for the development of business and investment, the most important component of a "good business climate". And if there is no demand, then no other factors will help (for example, low interest rates on loans or “institutions” often mentioned in speeches by some politicians and economists, etc.).

In other words, GDP grows when savings are created. But it also grows when they are spent, and producers begin to produce goods and services for deferred demand.

Savings as an investment resource or long-term money

The growth in savings also has a beneficial effect on the economy due to the fact that investment is facilitated. Many macroeconomic models (theories) directly assume the identity of savings and investments. If the savings are long-term (such as the five-year OBRs mentioned above), then the investment can also be long-term. For example, if a depositor has deposited money in the bank for 5 years, then the bank is able to more confidently offer an investment five-year loan to an entrepreneur for this amount. Although there is a problem of early withdrawal of the deposit, and we will talk about this further.

The importance of long-term money for the economy is obvious. The President of Russia is also talking about this. Vladimir Putin... “We need cheap and long-term money to finance the economy. I ask the government and the Central Bank to think about mechanisms for solving such problems, "he said in his address to the Federal Assembly in December 2012, noting that" long-term money is the savings of citizens, enterprises, pension money, and so on. "

Simple numerical example

Above, we examined the numerous positive aspects of both the process of accumulation of savings (GDP grows, and inflation does not arise or, at least, it is contained even in the absence of "commodity provision" of money), and the presence of a large volume of savings in the economy (there is a high potential demand for goods and services, there is "long" money for investment).

Now imagine that they tell you about a certain country that deposits in banks and the stock of cash of the population of this country is several times higher than the stock of goods in wholesale and retail trade. Moreover, over time, the gap between the indicators only widens. ( Table 1 ).

Table 1. The ratio of the population's money and inventory in a fictitious country (at the end of the year, billion units of local currency.)

From what we have learned about the positive properties of savings above, we can say that in this country, things are doing very well with savings.

• First, there is a process of accumulation of savings (people are ready to “create” GDP, working not for goods, but for money; inflation is probably low or absent at all).
• In addition, a large amount of savings means a high potential demand from the population. This is a “paradise” for an entrepreneur who can offer goods and services that meet the needs of the population.
• And finally, a large amount of savings means that there is money in the system (and, judging by the growth of cash reserves over the years, “long”) that can be used as an investment.

Maybe this is somewhat similar to the United States during the Second World War, when there was a shortage of goods, and the population's savings were growing and were a prerequisite for the post-war boom? Or is it some other country? The example is much closer to Russian economic history.

Savings in the "Through the Looking Glass"

You can be surprised as much as you like, but the information given earlier in Table 1 refers to the USSR. It is given in the table to the article of the Russian economist Andrey Illarionov... This is what a fragment of this table looks like for 1985-1990 (see. Table 2 ). As you can see, the numbers in it are absolutely the same as in the table 1 given earlier.

Table 2. The ratio of the population's cash and commodity stocks in Russia (at the end of the year, billion rubles)

Get ready, now we will find ourselves in a kind of economic "Through the Looking Glass". And there, as you know, the state of affairs is brought to the point of absurdity. And savings in this "Through the Looking Glass", according to some economists, is not good at all, but evil.

It is hard to believe. Was the situation in the USSR almost the same (that is, as good) in the early 1990s as it was before the post-war economic boom in the United States? And on the example of the United States, we saw that this is not so much a reason for inflation as a prerequisite for economic growth. But only when you look at savings as a blessing, and not as an evil.

And here we find ourselves in "Through the Looking Glass", in which the presence of large savings is not an opportunity, but a problem. Indeed, according to some economists, the growth of citizens' savings was not a good, but an evil. So Vladimir Nazarov, an employee of the Gaidar Institute for Economic Policy, in the material with the telling title "The Soviet Pyramid: Why the Deposits of the Citizens of the USSR Were Fictitious", gives slightly different data on the same indicators. But the trends in his data are similar: the population's savings are growing, their “commodity supply” is declining, and in 1990 it also makes up about 13% of the money.

Only now he does not interpret this data as a blessing: “... the Soviet leadership created the illusion of large savings, giving citizens the opportunity to periodically buy something at fixed prices. People saw: if you stand in line for a long, long time, make the necessary connections, pay someone else a little more, you can turn your savings into goods and services. The problem was that if everyone wanted to do it at the same time, nothing would come of it. It was one big pyramid of illusions, and the contributions of Soviet citizens were at the base of this pyramid. "

Moreover, Mr. Nazarov argues that it was precisely the large savings of Soviet citizens that forced Egor Gaidar, who actually led the economic policy in Russia in late 1991 - early 1992, to pursue a policy that led to the destruction of savings. "... Gaidar's government did not legalize the destruction of property, but only liberalized prices, after which not Gaidar, but the market itself showed what the savings of Soviet citizens were worth: they cost exactly as much as can be bought with socialist illusions.", says Nazarov.

Yegor Gaidar himself writes about this in his book "Days of Defeats and Victories": “Almost from the very beginning of perestroika, the money stream was flowing from the state tap, not that incredibly generously, but clearly exceeding the state's capabilities. Not finding a drain, that is, the necessary goods, the money settled on deposits in savings banks ... This is the money overhang ".

Another metaphor: if all the tickets for the concert (performance, etc.) you are interested in are sold out, you can try to find a person right before the concert who has these tickets and who will agree (perhaps not disinterestedly) to give them to you and not go to the concert ...

Note that the bond-money system is self-regulating. Holders of bonds and holders of money, concluding transactions in the market, set the prices of bonds. And this automatically sets their profitability, and hence their attractiveness.

If there are a lot of sellers of bonds on the market, then this leads to a fall in the prices of these bonds. But this drop in prices makes buying bonds more profitable. As a result, all other things being equal, there will be more people willing to purchase such bonds among the “money owners”.

Consider an example with securities. For the sake of simplicity, we will consider them absolutely reliable, so as not to be distracted by assessing the probability of refusal to pay the debt (default). If you buy for 90 rubles a bond with a par value of 100 rubles with maturity in 1 year, then in a year you will receive an income of 11.1% per annum. If the owners of the bonds urgently need money and sell them, for example, for 80 rubles, you will already receive 25% per annum!

Higher yields attract more buyers to buy bonds, which increases demand for them, and this, in turn, increases their prices. As a result, a certain equilibrium price is established.

Case One: US National Debt

The US federal government debt is about $ 18 trillion. Almost all of this debt is placed in the form of securities (conditionally, the same bonds). On the one hand, this means that citizens, firms, financial institutions and even foreign countries have savings of $ 18 trillion.

Remember the worker from our example who, instead of spending money, puts it in a long-term bank account, but creates GDP in the process? Just like him, these holders of US debt (more precisely, the first buyers of these debt obligations) participated in the creation of US GDP in the amount of $ 18 trillion, but at the same time agreed not to spend the money earned, but set aside it in the form of savings.

Probably, Yegor Gaidar (and Vladimir Nazarov) would have been horrified to realize what a gigantic "money overhang" it is. After all, the annual GDP of the United States (about 17.7 trillion dollars in 2014) is less than the amount of this debt. And the money supply M2 in the United States is "only" about 12 trillion. dollars is also significantly less than the federal government debt. But, surprisingly, nothing terrible is happening in the United States. Nobody perceives the huge debt of the state as a “money overhang”. There is no threat of inflation, a fall in the dollar exchange rate (at least from the public debt) in the United States. The fact is that everything works according to the system shown in Diagram 2. And this system is almost impossible to destroy, even if you strongly desire it. Moreover, in the case of instability, this the system automatically works to strengthen the dollar which underlies it.

Consider a hypothetical situation when all foreign holders of the US government debt (in total, they own bonds worth about $ 6 trillion, which is about a third of the total debt) decided out of malice to sell all their bonds in order to undermine the financial system in the United States.

• Selling a large volume of bonds means falling prices. "Demolitionists" will come out of assets at a loss.
• The sale of a large volume of dollar assets means an increase in the demand for dollars. So the dollar rate will rise. And instead of inflation and the collapse of the dollar, the "demolitionists" will receive a strengthening of the dollar and the absence of inflation in the United States.
• A fall in bond prices will mean that they will become a more profitable investment (see the example above for a 100-ruble bond for 90 or 80 rubles). This will attract other investors both domestically and from around the world. Bonds will start buying and prices will quickly return to their original levels. If necessary, the role of the buyer can be played by the US Federal Reserve with an “unlimited” resource of dollars in the form of a “printing press”.
• Finally, the United States Department of the Treasury, in charge of debt repayment, can also take advantage of the situation. After redeeming bonds that have fallen in price, it can pay off its debts, saving money on it.

In a sense, it is impossible to undermine this system from the outside. Only the United States itself can break this trouble-free machine, for example, by refusing to pay its debts, denominated in its own currency.

Although there is one more way to undermine this system - "in Gaidar style". But more on that below.

On the one hand, "history does not tolerate the subjunctive mood." And to argue "what would have happened if ..." is often a thankless task, in practice it is often unverifiable. Again, it's easy to be smart in hindsight; after everything has already happened.

On the other hand, they “learn from mistakes”. And if you can't learn from someone else's mistakes, then it's a good idea to at least analyze your own. That is why it is very important to understand what could (if possible) be done to preserve the accumulations of Soviet times. And there was a solution. And his understanding can help in conducting economic policy in Russia today.

What happened in early 1992? Everything was very much like a vicious circle. The main thing that destroyed the savings of citizens (and not only citizens, but also organizations) was inflation. And the main cause of inflation was ... savings of citizens (and funds of enterprises), which poured into the consumer market. Everything is exactly as shown in diagram 1.

During the Soviet years, the savings of citizens did not flood the consumer market due to the physical constraints of the market (the notorious deficit, closely related to the administrative setting of prices). Everything is the same as in the above example of the United States during the Second World War. In 1991, restrictions ("freezing") were also introduced on a part of the deposits, which was charged in order to compensate for the rise in prices in April 1991.

In the same way, non-cash funds of enterprises could not enter the consumer market. It was generally special money, the transformation of which into wages or cash in Soviet times was very strictly regulated. In other words, in the USSR there were no such barriers, which are shown in Scheme 2, between the savings of citizens (enterprises) and money in the consumer market. But the border between savings (and non-cash money of enterprises) was not at all arbitrary, as in Scheme 1. There were barriers of a different kind.

In January 1992, these barriers were lifted and the savings of citizens and, easily cashed in the new conditions, funds of enterprises immediately poured into the consumer market.

Metaphor: Not far from the dam, down the river, there was a town. Water from the reservoir helped irrigate fields during drought. The water falling from the dam drove the mill down.

A new Ruler came and blew up the dam. The city was blown away by the water rushing on it. Many people suffered and died. The mill stopped working. During the drought that came soon, there was nothing to irrigate the fields. Some of the residents left these places forever in search of a better life.

To all reproaches the Governor answered: “This“ water canopy ”has always hung over you. Only thanks to me after the explosion of the dam you were able to understand how dangerous it was. But now this reservoir does not exist, and you can feel all the delights of a quiet life without a “water shed”.

The reason for the monstrous inflation in 1992 was not the money overhang in the form of savings of citizens (and non-cash funds of enterprises), but the fact that all the barriers between money in the consumer market and these savings were destroyed. Surprisingly, Gaidar's defender, Vladimir Nazarov, even credits Gaidar with the destruction of these "dams."

In April 1991, in the course of the so-called "Pavlovian reforms", prices were significantly increased. So that the deposits of citizens do not depreciate, a decision was made on compensation. But it was impossible to take advantage of these compensations right away - they were credited to special compensation accounts, from which money could be withdrawn only after 3 years (i.e. in 1994).

But “thanks” to Gaidar, all and all kinds of “dams” collapsed, preventing the flow of money from pouring into the commodity market and spinning inflation. This one was also destroyed, about which Mr. Nazarov writes, as an undoubted merit of Gaidar. "E.T. Gaidar and B.N. Yeltsin did not refuse compensation, on the contrary, they opened access to compensation accounts for citizens, in which people had previously been denied by the Soviet leadership for a period of 3 years. " There are also the words of Gaidar himself: “... I did not freeze the savings of the population, I thawed the savings of the population. If someone froze the savings of the population, it was Valentin Sergeevich Pavlov, the last prime minister of the Soviet Union. He really froze the savings of the population when he raised prices in the spring of 1991. I thawed them. "

Everything is relative. We have already written above that the accumulation system in the USA is very stable, and that it can only be “blown up” from within, for example, by refusing to pay off debts. But there is one more way: "in Gaidar style." Let's try to imagine how this could happen.

Oil painting:

• Problems arise in the US economy (something like the 2008 crisis is fine)
• Someone like Gaidar gets all the full economic power in the United States.
• The presence of a large US national debt is declared the main problem
  • "Our national debt of $ 18 trillion exceeds our annual GDP!"
  • "Such a debt has accumulated as a result of the populism of the previous authorities!"
  • The presence of barriers between savings and the money supply (see Chart 2) is declared a “freeze” of savings, which was (unfairly) invented by the previous authorities.
  • All savings are announced to be “unfrozen”. To do this, all bonds are converted into cash dollars in a matter of days.
    • "The market will show what these savings are really worth"

What happens next? As we said, the money supply in the United States is now about $ 12 trillion. dollars. Sharply added to them 18 trillion. dollars accelerate inflation to unprecedented levels. In the fire of inflation, not only savings are “burned out”, the money supply is also “burned out”. Indeed, having nominally increased, in terms of its real purchasing power, it sharply "shrinks". The economy is sinking deeper and deeper into the abyss of the crisis.

“The market itself has shown what the savings of Soviet American citizens are worth: they cost exactly as much as you can buy on socialist illusions "(this is a slightly modified quote from Nazarov, which was quoted earlier).

The reader can come up with the title of the picture himself.

Was there a correct solution to the problem of "Soviet" savings of citizens in Russia? Yes, it did. The correct solution would be a decisive transition to the configuration shown in diagram 2. For this, it was necessary to take only two steps:

• Step one. Transfer all deposits of citizens and non-cash funds of enterprises into long-term bonds of the Bank of Russia (for example, 5, 10, 15, 30 years), indexed annually (or more often) to the level of consumer inflation.
• Step two. Create a trading infrastructure to trade these bonds.

Please note that the first step without the second means only "freezing" the deposits (for the same 5, 10, 15, 30 years) without the possibility of using them. This, of course, cannot be considered fair (although even this option is better than what actually happened).

If such bonds are allowed to trade and the appropriate infrastructure is created, then people in dire need of money can sell their bonds. At the same time, as shown in diagram 2 and in the case of the US government debt, this does not cause inflation, but on the contrary, creates a demand for (cash) money, which only strengthens the local currency and the monetary system.

These two steps would solve many problems at once:

1. There would be no inflation caused by the elimination of savings and the cashing of funds of enterprises.
2. Citizens in dire need of money would be able to get cash by selling their savings in the form of bonds.
3. Other citizens who have a cash reserve, instead of "pressure" on the consumer or foreign exchange market, could purchase these bonds based on interest income and the formation of long-term savings.
4. Enterprises could also sell their bonds or receive loans secured by these bonds from the Central Bank or commercial banks.
5. The Russian stock market would receive a powerful impetus (in reality, it received the first noticeable impulse much later, only with the beginning of the so-called "GKO pyramid")
6. The possibility of using savings in the form of bonds in the privatization process could be envisaged.
7. The Bank of Russia would be able to regulate the money supply in the country (by buying or selling bonds) and would have a market indicator of the sufficiency of the money supply (high yield on the bond market is a sign of a shortage of money).

To be fair, it should be noted that the transition to the market was necessary. It was precisely the absence of market relations in the USSR that led to the fact that the huge savings of citizens were not perceived by anyone as a potential demand. Above, we said that many solvent buyers are “heaven” for an entrepreneur. But, alas, there were not enough entrepreneurs in the USSR.

It turned out to be a kind of collision: the transition to market relations opened up opportunities for entrepreneurs, but reduced the main opportunity (in the form of buyers' demand) several times for many years.

There is one more point worth paying attention to. It is proposed to issue bonds not to the state (Ministry of Finance), but to the Bank of Russia. The difference is that the Ministry of Finance is limited in its actions by the framework of the budget. But there is no need to spend budget money on this. In the performance of the Central Bank, the operation becomes similar to the process of exchanging money in a denomination. In January 1998, in exchange for old bills, people were given exactly the same purchasing power, but with fewer zeros. It is the same in the proposed scheme: instead of their deposits, people would be offered (instead of bills) bonds of similar value, but with an increased number of zeros.

When the tenge depreciated sharply in Kazakhstan in August 2015, the President of Kazakhstan Nursultan Nazarbaev instructed the National Bank of Kazakhstan (mind you, not the Government!) to carry out compensation similar to the one described by us: "I instruct the National Bank to introduce a mechanism for compensating time deposits of individuals that were opened in tenge as of August 18, 2015"

Conclusions for modern Russia

Based on the properties of savings described above, we can formulate two practical advice to the economic (and, possibly, political) leadership of the country.

For the growth of savings in Russia, it is necessary to create tools

The growth of savings of the population (and not only the population) in Russia is not only necessary for economic growth, but also quite possible. To do this, you just need to create the appropriate tools and sell them. Instruments are understood as securities that would be reliable and would not raise doubts among investors.

Such securities could well be issued by the Central Bank (since it is not bound by budgetary restrictions), and this fits well with its duty to observe price stability and regulate the amount of money in the economy (including the liquidity of the banking system).

There are only three main requirements for these securities: they must be denominated in rubles; they must be "long"; they must protect investors from the main risks inherent in ruble investments. The specific types of such securities can be determined in the course of consultations with market participants, i.e. as a result of a kind of marketing research. But "on the surface" are ideas, for example, of such papers:

1. "Inflation protection"- OBR, the face value of which is regularly indexed in accordance with data on consumer inflation.
2. "Ruble dollar"... - OBR, the denomination of which changes with the change in the dollar exchange rate.
3. "Ruble Euro"- OBR, the denomination of which changes with the change in the euro exchange rate.
4. "Ruble basket of currencies"- OBR, the denomination of which changes with a change in the basket of currencies calculated in a certain way

Let's look at a numerical example. Let's say the Central Bank sells $ 7 trillion of such instruments within a year. (The question immediately arises - what money will they be bought with? Answer: with the same money for which the currency is bought, for example. In the end, this is just a matter of price, ie the discount with which the securities will be sold). And then the following effects will be achieved:

• The pressure on the foreign exchange market will ease (the situation may even "turn around" - an inflow of foreign exchange will begin).
• The volume of long-term money in the economy will grow by 7 trillion. rubles
• 7 trillion. rubles, the so-called "collateral base" will grow, which, firstly, allows banks to lend to OBR holders for a long period with virtually no risk, and secondly, the banks themselves receive loans from the Central Bank against OBR collateral.
• The Central Bank will be able to issue additional rubles without the threat of causing inflation
• GDP will grow (thanks to this operation alone) by 7 trillion. rubles (which is about 10% of GDP)

When, within a certain period of time, the volume of OBR on the market reaches and exceeds the volume of the M2 money supply, the Russian financial system will acquire unprecedented stability (see above the case about the US government debt).

It is often impossible to correct mistakes of the past. Fortunately, Gaidar's mistake, which led to the destruction of savings, is correctable (in contrast to the fate of people distorted in the 1990s).

In it, I described in detail how to choose a deposit depending on financial goals. Now you need to find out whether it is advisable to use a bank deposit in an investment portfolio. And for this you need to find out the profitability of this instrument.

Some statistics. Now I will show you a comparison of the average rate on deposits in Russian banks and inflation in Russia for 6 years. For clarity, the comparison result will be in the form of a graph.

It can be seen from the graph that profitability rarely exceeds inflation, so a bank deposit is clearly not suitable for long-term capital formation.
Of course, as you can see on the chart, there are periods in which the rate on bank deposits outstrips inflation. Such moments can and should be used, especially if other types of debt investments (bonds, for example) cannot provide the same yield at this moment. It is better to make a deposit for a year. So you have a better chance that your investments will outstrip inflation in terms of profitability.

But, of course, a bank deposit should not be the basis of your investment portfolio (make up a large part of it). True, there are times when fluctuations in the value of an investment portfolio harm its owner, both mental and physical. In such cases, of course, it is necessary to compose an investment portfolio mainly of debt investment instruments.

But you have to learn one simple thought: the return on bank deposits is the minimum that you can get from the financial market without any mental effort.

So what do we have based on the information we have?

For what purposes is a bank deposit suitable?

Accumulation of a certain amount in a short period of time.
Temporary preservation of funds from the influence of inflation.

For what purposes is a bank deposit not suitable?

Accumulation of the amount for large purchases (real estate).
Long-term investment in order to generate income above inflation.

I hope you now understand when it is profitable to use a bank deposit and when it is not.
Until next time.