10 November 2008
Mikhail Khazin is the Russian economist,who has written several books on economic situataions in Russia and all over the world. Things he has written in his books were and are coming true untill now. Also, he was the deputy head of the Presidential Economic Department in 1997. As he says in the interview, his first task back then was to prepare a report for former President Boris Yeltsin about the economic situation. After looking at the situation of the economy, Mr. Khazin realized that the crisis was anavoidable somwhere in late summer or early fall of 1998,unless country’s economic policies were changed. Mikhail Khazin together with his group introduced the solution to avoid economic crisis of 1998, but higher echelons did not take any view of it at all, only Eltsin read it himself. Later, in the summer of 1998 Mr. Khazin and others were fired from presidential administration, because they tried to stop a business project called:”State Treasury Bills— Exchange Rate Corridor.” This project was the most significant financial scheme of the post Soviet period. And, as he has predicted, the economic crisis gave way in August 1998. Even personally speaking, i do remember those times, majority of people lost everything, and others who were prepared, gained on the other hand.
Mikhail Khazin did not gave up after he was fired, and continued looking and searching for the reasons behind the crisis. Firstley, he started studyng the US financial system,and surprisingly enough found unprecedented parallel.
This parallel, the economist explained in such a way, that T-bill market had been sucking all the juices out of the Russian economy back then, the same way US financial market was sucking resources out of the whole planet.
And that is when after this parallel was noticed and explained, Mikhail Khazin published an article in 2000 summer in the magazine “Ekspert”,which was called “Is the US digging for an Apocalypse”. In which he has expanded his ideas about unavoidable economic crisis in the US,which would be like the financial collapse in Russia (1998).
Mr. Khazin in this interview also expalained his perception of the current Financial Global Crisis, which started from US. We, normal people, who are not involved that much into finance and economy, might think that it is strange that the Global Crisis started from US, because the standard of living there was always better, than in Russia for example, but the economist gives answers. Mr.Khazin states that US was coming closer and closere year after year to the financial collapse, because almost everyone in US has been livivng in dept for many years. Household debt now in US is more that $ 14 trillion. Wall street tried to postpone this crisis, but this was just a gasp for air before an inevitable death.
In 2000,Mikhail Khazin together with his team predicted this Global Financial crisis, which is taking place now, the only uncertainty they had was the timing. Back then Mr. Khazin estimated that 25% of US economy would dissapear due to the Financial crisis. Though,looking today at the situation, Khazin claimes that the number is closer to one third of the US economywhich may dissapear, if not more. If this estimations would come true, then it would mean that unemployment would rise uncontrollably, which would lead to horrible deppresion. US is trying very hard to rescue the economy, but Khazin thinks that all the efforts can be useless. As his last words in the interview was : “In 2-3 years, the US will face a crisis similar to the Great depression”. This is frightening and disturbing, i personally think. I could say that i dont trust what Khazin is saying, but on the other hand, i know from my relatives and parents, that things/events he has predicted before in economy and financial markets, were and still are coming true.
My next post is going be about problems Russian Oligarchs are facing due to the crisis and which outcome they may face. This post is going to be based on interview with Mikhail Khazin as well.
Posted by maria
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