Lately, there has been a lot of talk about the disappearance of Russia's Central Bank head Elvira Nabiullina.
Various theories have been put forward: illness, a bitter confrontation with Putin, arrest, fleeing abroad, or an attempt to resign. But someone who effectively works for the Kremlin mafia and holds such powers and such a position cannot simply resign or move abroad.
The explanation is very simple - Nabiullina is under home quarantine ahead of a personal meeting with Putin to discuss Russia's increasingly critical economic problems. They are also likely to discuss lowering the key interest rate, an idea Putin raised at his latest meeting with the government. And whatever Putin demands is carried out.
Nabiullina is expected to take part in a press conference on the key rate on June 19. What exactly will be announced is an interesting question.
Under current conditions, the Central Bank of Russia cannot lower the key rate and must announce a rise. But the intentions of Nabiullina's team conflict with the plans of the Russian government and Putin. Therefore, the rate will most likely be lowered.
Recently, the Russian State Duma rushed through a law that effectively strips itself of any control over the budget. Less than a week passed between PM Mishustin’s introduction of the bill and its adoption, and all three readings were approved in a single day.
The Russian government can now:
▪️Increase spending beyond the budgeted amount without amending the budget itself and without reporting on the purposes and reasons for the overspending;
▪️Borrow money on the domestic market in excess of the national debt limit;
▪️Grant regions deferrals on budget loans until 2030.
Simply put, whereas previously budget changes - including an increase in the deficit - had to be approved by the State Duma because the budget is a law, and thus all such changes required amendments to the law, now such a procedure isn’t even required; the government can borrow as much money as it wants and spend it however it wants.
This was done to allow unlimited spending on the war.
It also means that the Russian government effectively admits that it is incapable of planning the budget even for the current year.
Despite all the problems in the Russian economy, nobody plans to cut spending. On the contrary, military expenditures will continue to rise, and the deficit covered by borrowing will keep growing. Military spending will become unlimited.
Under such conditions, neither the Finance Ministry nor the Central Bank will be able to conduct coherent policy or plan effectively.
Therefore, everyone in Russia will pay for the continuation of the war.
This will primarily affect bank deposits, and the poorest segments of the population will suffer the most.
A few more words about the St. Petersburg Economic Forum.
Russia's chief economist, Central Bank governor Elvira Nabiullina, did not attend the St. Petersburg Economic Forum. Because she has no good news to deliver and nothing to say.
Instead, the ideologues of Russian fascism attended: Dugin, Malofeev, and Bezrukov. The economy has completely turned into ideology.
This says a lot about the state of the Russian economy and Russia as a whole. Agony.