USA launches another wave of crisis

There will be no technical default in the US in early August, but the threat of a second wave of the global financial crisis is increasingly more obvious, believes the president of the Association of Regional Banks (ARB) Anatoly Aksakov. He thinks that to minimize the damage to Russia, the authorities should step up the modernization of the economy and consider new targets for the investment of the state reserves, in addition to the traditional currency and gold, RIA Novosti reports.

In turn, the first deputy chairman of Bank of Russia Alexei Ulyukayev said that the Central Bank does not fear that the U.S. will declare a technical default on its obligations. "We are not concerned. First of all, I think it is impossible. Second, a technical default as such does not lead to a fundamental impact on the value of the securities and their yields. It will cause some minor fluctuations, but will not lead to fundamental consequences," said the first deputy chairman to the radio station" Echo of Moscow ".

Head of Sberbank German Gref also does not allow for the possibility of technical default in the U.S. and recommends that the Russian citizens keep their savings in the currency that they are planning to spend. "I don't even allow a possibility of the U.S. default. If this happens, it will have catastrophic consequences for the global financial system", Gref said. According to him, most of the bad news associated with the debt crisis in Greece is already over.

Meanwhile, according to Anatoly Aksakov, if the world economy is going to experience a new crisis, Russia needs to be prepared for it. "We should intensify the process of diversification and modernization of the economy. We may have to spend a part of the accumulated reserves for the purchase of modern technology abroad," said Aksakov. Part of the money should be left to mitigate the social impact of the second wave of the crisis, he added. He believes that the Russian authorities should think about diversification of foreign reserves, including investing in such currenciesas the Yuan or the Canadian dollar, as well as purchase of tangible assets, such as oil-and gas-bearing objects abroad. "They will bring income during any crisis, the only question whether we will be allowed to go there," he added. The reserve assets of the Central Bank can control fluctuations in the ruble caused by speculative and irregular operations with currency in the domestic financial market through foreign exchange intervention.

It is no secret that the main budget revenue in Russia, approximately 46-50%, comes from the oil and gas industry. The budget for 2011 is calculated by taking into account the oil price of $75 per barrel. Per today's quotations, the cost is over $103. However, the government continues to cry about the budget deficit and shortage of funds, justifying the imposition of new levies on the population and rising prices for electricity, gasoline, housing and utilities.

It is worth noting that at the moment Russian business is in no hurry to finance modernization projects, so the modernization is a heavy burden on the state budget. In a situation where for a few years there has been budget deficit, the issue becomes painful.

With regard to the funds existing in Russia - the Reserve and National Welfare Fund - now all proceeds go to the Reserve Fund to pay off the budget deficit and pension fund deficit. It is not surprising that the finance minister Alexei Kudrin has found a new way to revive the Stabilization Fund. However, at this time we are talking about reconstruction of the National Welfare Fund that has not been spent yet and that, in fact, was supposed to be spent on the support of the pension system.

According to Aksakov, the probability of a second wave of the crisis is caused by the fact that the expenses of the most developed countries are not supported by real income of the budget. "This should result either in a reduction of expenses or a devaluation of the national currencies," assumed the head of the ARB. However, it will not happen in the near future. Now on the background of not very favorable statistics, American authorities are preparing a new mitigation that will support the world's stock indices for some time, he said.

Recently, the IMF warned that the financial crisis in Greece, Portugal and Ireland could spread to other eurozone countries and Eastern Europe. Many observers do not preclude spreading of the debt crisis into the euro area in Belgium and France. As the experts mention in this regard, this is the first time when France is listed as a vulnerable country since the outbreak of the debt crisis in the area of ​​the single European currency. The EU and the IMF, in addition to Greece, are providing financial assistance to two other eurozone countries - Ireland and Portugal.

According to some experts, a technical default could start a chain reaction in the U.S. and around the perimeter of the developed markets. Financial assets from banks and other financial institutions will fall, followed by the banks' inability to pay the liabilities, and then a violation of the payment schedule, and customers' "raids" on the banks.

Anatoly Boltunov.

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Author`s name Dmitry Sudakov