Russia » Economics
Author`s name Ольга Савка

Nothing Is Better Than Gold

Russian economists discuss an opportunity to put a golden ruble in circulation

In developed countries, almost every family has stocks or state bonds. Exchange news is the real information, people show their interest in it. They do not keep their savings at home, they make  money work for the economy, the money is invested in the real sector of economy, in the production of goods and export, in the development of new technologies, and so on. This is probably the reason why the living standard of developed countries seems to be a dream for the majority of the planet's population.

It seems that Russia has chosen the way of the world's poorest and hopeless countries. There are investment tools in Russia, but they are meant for a very narrow group of "insiders." Everyone else use notes of the American State Treasury. Russian governmental officials and bankers have been concerned about Russian people's wish to save their money at home, not in banks. The government arranged the bank reform, they passed the law about insuring people's deposits (which does not insure anything really). The result of those measures was ridiculous. The US dollar started going down, but Russians did not hurry to open bank deposits either. Therefore, the Russian bank system is not meant for saving funds and making investments. To all appearance, it is meant for something else. What if all Russians decided to bring all their money to banks one day? Nothing would change either way. Russian banks invest almost nothing in the country's economy - it is a rather risky thing to do. Most likely, that money would be used for purchasing a chalet in Switzerland or a house on Bermudas. The rest of the money would then be transferred to foreign banks in order to work for the economy of foreign countries (big money brings very good profit in developed countries without any risks). So why does Russia need such banks at all? Even Russian largest state monopolies have to borrow funds abroad.

Experts say that it is very hard to create an efficient and reliable investment tool in Russia. In fact, there are a lot of such tools in the country, but they are not used according to their purpose. Although, thee is a small group of people, who use investment tools, albeit for their personal interests only. Prices on land, apartments and other saving tools have been growing in Russia recently. The US dollar has exhausted such opportunities, and Russians do not see any other investment tool to use. However, Russian people reportedly possess up to 60 billion dollars in total - this money does not work for anything.

This "analytical suffering" will continue until the state pays   attention to the most ancient and yet most reliable investment tool - gold. Economists have been arguing about the golden ruble for along already, referring to the ten-ruble gold piece of Stalin's era and recollecting the incredible industrial growth that occurred during the ruling of Russian emperors Alexander III and Nikolay II. That was the time, when the Russian golden ruble was the most secure and stable currency in the world. However, economists do not make any decisions - politicians and officials of the Russian Finance Ministry and the Central Bank do. They are all certain that the state can grow rich without gold too. It probably can, but not the Russian Federation of the stability and moderate economic growth period.

Bloomberg reports, world prices on gold have reached the highest point over recent months - 367,8 dollars per ounce. The agency believes that the price of a troy ounce on the world market may exceed the level of $400 until the end of the current year. There is probably no other way. The US dollar has been a saving tool for the whole world, not for Russia alone. Investors do not know, where to invest, that is why they prefer to buy gold. American state bonds lose their attraction on account of the interest rate reduction.

RBC news agency reports that gold does not work in Russia as an investment tool. Producers sell gold to banks, and banks sell it on world exchanges, obtaining demising dollars or euro for gold bars. The euro has been growing lately, but it will inevitably crash some day.

A common person can hardly buy gold - it is rather difficult. In addition to that, it is hard for a common person to sell it too. Jewelry does not count, for people buy it as a work of art, which is then sold as precious scrap. Analysts believe that such a situation takes place because of the tough control of the state and the taxation burden.

In general, the circulation of gold in Russia is a market for a very small group of people, it is impossible for a common person to access it. For example, one has to pay the value added tax of 20 percent for purchasing gold. When selling gold, the tax is not reimbursed. In other words, this 20 percent will go straight to the state. In addition to that, any bank will have to provide the information to fiscal bodies about anyone who purchases gold. Golden coins are not imposed with value added tax, though, and the Russian Central Bank has already launched the series production of them. In addition to it, the Central Bank periodically informs about the increase of their sales. However, golden coins cause problems as well. One can not use them in a store, selling them back to the Central Bank is not profitable either.

Why doesn't Russia use the golden ruble yet? Investment tools are not meant for common people. Probably, the government wants to make Russians save their money in Russian banks. However, people do not trust the bank system anyway. Probably, they want to make Russians save their money in US dollars. A lot of experts believe that about two-thirds of all dollars are not secured with anything. The US Treasury has a goal to trace and destroy those dollars secretly.

To all appearance, Russia has agreed to become a place, where excessive dollars are saved. There is no one to claim this responsibility - they are not in power anymore. However, all people had to pay for their decisions. Nothing is better than gold.

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