Bonds will shrink? What does this mean? That is, the equivalent bonds of tens of thousands of rubles issued to them are not worth that much money?

This is not possible! Gilnenko sat up from the sofa. Since these equivalent bonds do not maintain their value, they must be replaced with rubles!

Yes, just like that, it’s changed to rubles! Gilnenko admired his mind very much. The Soviet Union had just disintegrated. In a few months, he had read a lot of Western economic books, which opened his eyes and knew how to hype it up so that his wealth could increase. The West is beautiful, and even if he sat at home, he could make money!

When Gilnenko quickly ran to the bank, he found that there was a long queue in front of the deserted state-owned banks in recent months. Citizens were hoping to exchange the equivalent bonds in their hands for rubles!

Faced with this situation, the Russian government departments were slow to respond, neither came out to refute rumors nor adopted any favorable administrative intervention measures.

The issuance of currency requires reserves. The initial issuance of currency was based on gold or silver and could be exchanged at any time to ensure the value of the currency. After that, the gold standard system ended and the issuance of treasury bonds was used to ensure the value of the paper money. Later, without the reserve and the issuance of currency at will, it will lead to serious inflation and currency depreciation, which also indicates the collapse of the national economy.

These equivalent bonds were originally made with state-owned enterprises as their principal and had great value. However, now, under the analysis of Western experts and scholars, the assets of these state-owned enterprises have been overvalued, which indicates that the equivalent bonds in their hands are not worth so many rubles at all!

In order to ensure that the equivalent bonds in their hands do not shrink, the panicked citizens began to exchange rubles one after another.

State-owned banks cannot cope with so many people, and the Russian government has not issued new rubles yet. They are all the original rubles of the former Soviet Union, and those currencies cannot support the huge exchange task of millions of rubles.

So, the black market trading began, and in the continuous exchange, these equivalent bonds were depreciating rapidly.

Only by selling state-owned enterprises and redeeming these equivalent bonds can this momentum be stopped! Therefore, with the suggestion of one American expert after another, Russia had to speed up the process of privatization of state-owned enterprises.

Who has enough funds to acquire those state-owned enterprises? Of course, it is financial institutions that hold a large number of equivalent bonds. Most of these financial institutions are opened by foreign companies!

This was a panic era. In order to prevent the depreciation of equivalent bonds, the Soviet government continued to prompt state-owned enterprises to be acquired by foreign companies. Those foreign companies also lowered the acquisition prices. The lowered acquisition prices also showed that those equivalent bonds were indeed shrinking, further promoting the depreciation and exchange of private equivalent bonds.

Within a month, a bond of 100 rubles of equivalent value can only be exchanged for one ruble of cash, which is equivalent to the wealth of the Soviets, and instantly shrank by a hundred times.

At this time, foreign companies were smiling. They used the deposits they had absorbed before to continuously acquire various Russian companies and used the money they borrowed from Russia to acquire Russian state-owned enterprises. This trick of making money is no longer effective in the West. In Russia, which has just started a market economy, it is simply an important means to make money.

In addition to the key military industry and national pillar enterprises, most state-owned enterprises have become companies controlled by foreign companies, and even the famous Northern Shipyard, which is mainly used to build nuclear submarines, almost became shipbuilding companies controlled by the Germans. Fortunately, the Ministry of Defense came forward in time, so the acquisition was not reached.

Russia has finally turned state-owned enterprises into private enterprises, but it is ironic that privatization has been given to foreign companies to hold shares.

The Russian government breathed a sigh of relief, privatization was finally over, they didn't know that the real storm had not begun yet!

At that time, those foreign banks attracted a large number of depositors with high interest rates. Those equivalent bonds were concentrated in foreign banks. They used these equivalent bonds to acquire Russian companies in large quantities, completing a gorgeous transformation, leaving only one tail behind. How to repay the principal and interest of those depositors?

Needless to mention the principal, even the interest is enough for these bankers to worry about. Although these equivalent bonds have long shrunk significantly, they cannot afford enough rubles to pay, and the money has been spent long ago!

This is the most critical step in the whole process. Speculators are all looking at the United States, and American experts really live up to their trust.

Summers, deputy secretary of the US Treasury, wrote a letter to the Russian Deputy Secretary of the Treasury, which detailed guidance on how Russia should formulate and implement economic policies. Privatization has been completed. Russia should then enter the fast lane of capitalism and take off at a high speed! Russia is still facing a big problem now, which is the black market transaction problem of ruble!

The black market transaction of rubles actually began in the Soviet era. After World War II and production resumed, the ratio of the Soviet rubles to exchange for US dollars was about 0.65 rubles to exchange for US dollars. At this time, rubles were more valuable than the US dollar. This situation continued until the 1980s. As the Soviet Union began the Afghan War, in order to impose sanctions on the Soviet Union, the Western world began to instigate oil-producing countries in the Middle East to increase crude oil production and reduce crude oil prices. The dozens of dollars per barrel of oil were reduced to several dollars. The Soviet Union's way of developing the economy was completely affected by exporting oil, and the ruble began to depreciate.

By 1989, the Soviet government announced the latest exchange rate, 6.26 rubles were exchanged for 1 dollar, which was nearly ten times depreciated compared to the initial stage. In this way, it was no longer cost-effective to go to the official to exchange rubles, and the private black market rubles exchange transactions became more and more intense.

In a free Western world, it is impossible to have black market currency transactions! If the Soviet Union's economic development becomes the pride of a free world like the United States, it is necessary to implement an open ruble policy, allowing the ruble and the US dollar to float freely, so that the underground black market ruble transactions will disappear!

If the senior advisers under Yeltsin were really economic experts at this time, they should know that there were many precedents. In the 1980s, the Hong Kong dollar crisis, the pound crisis, and the financial storm in Southeast Asia all started from the currency crisis! Free floating was implemented, and a strong foreign exchange margin was needed to support it. Otherwise, under the malicious sniping of international capital, Russia's economy would also be destroyed!

Unfortunately, the Russians at this time obviously did not realize this. After living under the Soviet system for so many years, their hatred of the Soviet Union, their planned economy, and their yearning for the free world made Russia hope that they could step past and enter the Western family in one step.

Therefore, after discussion, the suggestion of the US Deputy Secretary of Treasury was approved and the ruble exchange rate market was opened!

The decisive rulers of high-ranking policies will never see what the lower class really needs. History will give them a correct evaluation, and they will be crucified on the cross of history and be scolded by the Russians who came through that dark age.

After opening the ruble exchange rate market, the citizens of Russia are doing one thing, converting the ruble in their hands into US dollars!

At the beginning, the country issued equivalent bonds, but these equivalent bonds depreciated rapidly. The slowest person exchanged bonds of one hundred rubles were less than one ruble of currency!

Now that you can exchange freely, you naturally have to convert the rubles in your hands into US dollars! The US dollar is the currency of the entire Western world and is the most valuable. What if the rubles in your hands shrink significantly like the equivalent bonds a few months ago?

The citizens of Russia all rushed to the door of the bank, hoping to convert the ruble in their hands into US dollars. At the same time, the exchange rate of ruble against the US dollar began to fall rapidly.

One hundred rubles are exchanged for one dollar? The person at the end of the line couldn't accept it when he listened to the news from the person exchanged in front. However, when he reached the window, the latest exchange rate was already three hundred rubles were exchanged for one dollar!

The whole Russian citizens were crazy. The rubles in their hands were no longer valuable and had to be exchanged for US dollars! After the bank closed, they even lined up all night at the bank gate, waiting for the next day to exchange.

The panic of the depreciation of the ruble was staged throughout Russia, and many people's wealth disappeared overnight. They still couldn't understand what the alcohol was like?

What's going on? If you want to be a student, you have to pay tuition! You have to pay the price to learn from the West of the advanced free world model!

Every pore of capitalism is sinful. People of the former Soviet Union, have you forgotten what you said in your primary school textbook?

In Russia, there is only one kind of person who is the happiest person, that is, those who hold high debts.

Rubles are no longer valuable. Do you still want the deposits and interest you have now? Of course, I can give them all to you! Now the banks opened in the Western world are filled with rubles like waste paper, so you can do as much as you want!

The foreign exchange market of rubles finally collapsed completely. Half a month later, the exchange ratio between rubles and the US dollar had become 1,300 rubles for one dollar. The cold winter of the Russian economy has arrived like this.

The rapid depreciation of the ruble has led to rising prices. Now, there are still a wide range of goods on the shelves in domestic stores. However, Russian citizens no longer have enough money to buy them, and there are many zeros on the labels of those goods.
Chapter completed!