By the end of the 19th century, the capitalist economies were out of breath from the cyclically recurring crises. This was observed by Karl Marx, who was vowing that the capitalist system would collapse after the next crisis caused by the overproduction of goods. And everything told us that the prognosis of Marx was about to come true, because overproduction had become a chronic problem of the capitalist economies – more goods were produced than there were customers. Drastic measures were needed, and the solution was found – the pyramid of consumption was turned. If previously the man first produced and then consumed, now he first consumed and then produced. By the way it was achieved, four forms of socialism can be distinguished.
State Socialism, or the European model of socialism. In this model the distribution of public goods is a state affair. The reasoning is simple: the state removes the excessive efficiency of the companies through taxes and distributes it among the citizens.
Taxes have always existed, but in the 20th century they were collected, not only in favor of the ruling class (the bureaucracy) and public needs, but also to maintain the solvency of all its citizens, which naturally led to an increase in the tax burden. Actually, the money that the state gives to a citizen through various forms of social services and guarantees, are returned to the economy, when he buys goods and services for which he previously would not have had money, respectively, enterprises can easily expand the production of these goods.
But this concern about the proliferation of citizens turned to parasitic attitude. A striking example of this is Germany, where people prefer to grow old living on unemployment benefits, rather than look for a job, the payment of which may be below the public benefit. Thus, the businessman is between the hammer and anvil – high business taxes strike on the one hand and on the other wage workers do not allow to reduce costs by requiring payment not lower than the state standards. And the introduction of minimum wages became generally a lethal drug from poverty.
Of course businessmen have been shifting production to countries where there are no such problems for business. It reached catastrophic dimensions when China chose a path of capitalist development. China, with its relatively educated and hardworking people and very cheap working hands, has become the funnel, which has sucked in the entire world economy.

The second, which is very close to the first, is the Nordic model of socialism. We may call it public socialism, because the primary role in the redistribution of public domain in these countries does not belong to the state, but to local self-governed institutions – municipalities. Moreover, although the level of the social expenditure is even higher than in the rest of Europe, the degree of the governmentalization of the economy is significantly lower. Here such an unprofitable large-scale nationalization of industries didn’t take place, as in other European countries, where this was a way of trying to avoid social disruptions caused by massive dismissals from bankrupt enterprises. And though this model worked even better than the pan-European one, the outcome was the same – bankruptcy.
A special case is Japan. This model can be called “corporate socialism”. In Japan, the brunt of caring for workers is not on the state, but on the corporations in which they work. Corporations, for example, provide their employees with housing. The outcomes of such an economic system are not very good either- corporations have become totally unwieldy. Japan is already in the second decade of stagnation, despite all the efforts of the Government of Japan to revive the economy, be it the zero discount rate, or the maintenance of the low-rate of the yen. Japan is not competitive with the new Asian tigers of economy, which have no such an onerous social system for business.
And finally, the fourth model of socialism – the United States. By way of redistribution of wealth, we can define it as credit socialism. The main feature of this model is, of course, is the developed mortgage system, which is supported by the State. In this model, housing plays a role of locomotive of the economy as a whole, as the increased production in this industry gives a multiplied effect – the construction provides with contracting other industries.
This model of socialism owes its emergence to the Great Depression. Its first institution was the Federal institute for bank housing loans, which was established in 1932, and whose activities are exempt from federal and local income taxes. The bank is something middle between a credit union and the central bank for 12 private regional mortgage banks (by the way, at this moment 8 of these 12 banks are in fact on the verge of bankruptcy). But, of course, the most famous American mortgage institute is the Federal National Mortgage Association, better known as Fannie Mae, established in 1938 by Franklin Roosevelt. In 1968, from Fannie Mae was allocated from the Government National Mortgage Association Ginnie Mae, which deals with social housing, and the Fannie Mae was privatized, but it is still an organization that is sponsored by the U.S. government. In 1970, the U.S. government created the federal mortgage corporation Freddie Mac, which, in essence, is the same as Fannie Mae, but according to the original idea of the States it had to create competition and thereby lower the costs of the mortgage loan. In 1999, Bill Clinton squeezes through the facilitation of the provision of mortgage loan, and the final outcome of it is known to all of us.
The system worked as follows, a mortgage association buys mortgages from banks with the money received by the associations from issuing their own securities, which were bought by both national and foreign investors, including the government. The popularity of these securities was due to the fact that in any case the U.S. government itself would, as it happens, take the responsibility for the payment of these securities. It is a kind of worldwide financial vacuum cleaner for pumping money from the global economy and loading it into the United States. While for the sake of fairness it should be noted that, for example, the easy money of Arab sheikhs has simply nowhere else to go. That is the money earned by them in the export of oil in the United States, are brought back to America.
But the United States is not the only country that went on that path. From the U.S. experience of the “market” stimulation have benefited economies from so many countries around the world. A very impressive example, when the student has surpassed the teacher is Spain, where the mortgage is provided for a term of up to 50 years. By stimulating housing Spain has demonstrated over the past decade a staggering growth, but with the start of the global depression this bubble burst, too.
Thus, at the moment we have, a crisis of all the old capitalist economies, this crisis is not of a conjecture type, as it is often stated by government officials in public statements, claiming that the crisis will stop by itself within one or two years, for which it is only sufficient to boost up consumer demand and provide additional liquidity to banks, but it has touched the very system, affecting the way of formation of consumer demand in developed countries. But the assertion that the main victim of the crisis is the U.S. is not true – the numbers say otherwise.
Many may reasonably argue that not all comes down to cash, that in the modern economy the human capital is crucial. But according to this indicator the world leader is Taiwan. According to the latest testing of students in the framework of the program PISA, which was attended by 57 countries, including all 30 OECD countries, i.e. all countries have the official status of developed countries, Taiwan ranked first in the world by the level of mathematical knowledge, on the second position is Finland, on the third comes Hong Kong, Korea on the fourth, and on the fifth the Netherlands. And, for example, the United States was the 35th, and Russia the 34th. In the rating of the level of scientific knowledge students from Taiwan ranked fourth, the first was Finland, the second Hong Kong, Canada the third and the fifth Estonia. United States in this ranking is in the 29 position, and Russia, respectively in 35. Thus, the level of knowledge, both in the U.S. and Russia, is lower than the average among the countries that participated in the study. By the way, Kyrgyzstan in both ratings took the last 57th position. Unfortunately, nothing can be said about the level of knowledge of Kazakh students, because they were not tested, but considering the above mentioned figures, I am afraid that they would not be very good for Kazakhstan.
Knowledge is, of course, good, but without investment, it will not bear fruit. And then one should pay attention to what occupies the minds of the world powers. At a time when the United States and European countries spend the already holey budgets of their countries to support the banks and broken motor car companies, the Arab and Chinese sovereign funds have started buying up the world and especially the European economy. By the leaders of Western countries, such activity of the eastern investors is welcomed investors, because thanks to it is temporarily stopped the fall in stock indices, and the crisis seems to have ceased to grow rapidly. But the crisis did not go anywhere, as consumer debts to the banks, and bank debts towards each other continue to grow as a snowball.
By giving money to the banks, the governments, first of all, do not allow the financial system to become healthier, and secondly, they strengthen their own debt, and, thirdly, exacerbate the situation with the debts of financial sector. State leaders have forgotten the simple truth, that you cannot save the private sector at the cost of the bankruptcy of the state. And if Europe has already made its choice, the Europeans will be working in enterprises owned by Asians, the United States still has a chance to survive as a great power, but all measures taken up to this time by the U.S. government, force to have doubts as to this question. But I am confident that America has a plan for economic revival, only it is too radical to start bringing it into life now, the crisis has not yet gone so deep as to hold open the bankruptcy of the old economy, and to begin building a new one.

American auto concern Ford, the only one of the Detroit three which was able to avoid bankruptcy, will still receive almost 6 billion U.S. dollars from the government. That, however, is not for the purpose of saving the company from bankruptcy: Ford will receive funding for the development of «green» technology. Analysts, however, note that any credit from the government will support the auto company during the crisis.

The money will be allocated by the Ministry of Energy in accordance with the Energy Bill, adopted back in 2007, by which auto concerns are required to increase the fuel efficiency of their cars by 40 per cent by 2016. For this purpose concessional loans of U.S. 25 billion dollars are allocated; in addition to Ford other auto companies of the United States will also receive government support – Nissan will receive U.S. $ 1.6 billion under the organization of the release of electric vehicles in the country. Tesla will receive a further U.S. $ 465 million for manufacturing electric sport cars. As for Ford, it will be provideded 5.9 billion U.S. dollars for the purpose of modernization of 11 of its plants in five states, that according to the company, will increase the efficiency of 2 million cars a year, as well as for developing its own electric cars.

Representatives of the American Ministry of Energy also said that they are conducting negotiations in order to provide loans from the Chrysler eco-funds, and they intend to begin negotiations with GM, when the company emerges from bankruptcy procedures.

However, until now there is nothing to please them with. At the beginning of the week the World Bank (WB) published another negative forecast that the world economy will decline to 2.9 per cent this year. This projection finally frustrated investors and caused a sharp decline in world stock and commodity markets.

Meanwhile, just a few weeks ago, the investors and market participants were almost full of happiness. The American market had grown by about 40 per cent for the past few months, as investors had believed in the ending of the crisis and the imminent recovery of the global economy. However, the forecast WB deprived the investors of their dreams for happiness, and earlier this week the U.S. stock market closed with the biggest loss over the past two months, and the index S & P 500 dropped below the levels at which it concluded the last year.

The U.S. dollar managed to win back its losses slightly against the backdrop of heightened optimism; and the U.S. currency quotes grow each time the world market shares fall. “At the moment, all allegations of an early restoration of the world economy seem to be at least debatable. The market feels uncomfortable and this discomfort is reflected in the value of the shares”, – said Citigroup analyst Shiyam Devani.

In her turn, Tullett Prebon economist Lena Komileva believes that the recent rally in commodity and stock markets was due not just because of the positive economic statistics. According to her, after the gradual stabilization of the global economy, investors finally freely sighed and began to buy up shares of companies and commodity assets this spring . “But we should not forget that the stabilization and recovery are not synonymous. Until the financial markets get out of the crisis, it is not worth waiting for the restoration of the world economy ,” – adds the expert.

This assertion is difficult to be disagreed with. All the actions taken by the world’s Central Bank to exit the crisis has not yet yielded virtually any results. Moreover, as the head of Johnson-Illington Advisors, Hugh Johnson pointed correctly, consumers sell all that they can and reduce their spendings instead of increasing it. “It is hard to imagine the economic recovery in such circumstances”, – added the analyst. He estimated that the growth in the American economy could only begin by this year’s end, and that it would be extremely weak. “I think the world’s equity markets will adjust even at least by 5-15 per cent”,- he said.

It seems that this point of view is shared by the leading specialist for Harris Private Bank Investment Jack Ablin. According to him, the recent stock market rally was just another correction, and now “everything has returned to its own place.” Indeed, the investors are not too pleased with the statistics: unemployment in the United States is at the level of 26-year peak, while European banks, according to ECB estimates, will write off at least 283 billion U.S. dollars this year.

Strategists the French bank BNP Paribas believe that in order to return the confidence of the investors of the FED, which carries out the functions of the Central Bank of the United States, it should be understood that discount rates will remain unchanged in the nearest future. However, it should be noted that the lower refinancing rate will not have the best impact on the U.S. currency and may even eventually trigger a sharp rise in inflation. “In any case, the U.S. legislators will have to decide what is more important – economic growth or astable dollar,” – concluded the leading market analyst of FX Solutions Jozeph Trevizani.

The trade balance was positive in the amount of $ 31.3 billion, which is $ 38.8 billion less than that in January-April 2008. In the trade with foreign countries the balance was equal to $ 24.7 billion (down 34 billion dollars), and with the CIS countries – 6.6 billion dollars (a decrease of 4.8 billion dollars). Export of the Russian Federation in January-April 2009 amounted to $ 77.8 billion as against that of January-April 2008 – a decrease by 47.7%, including export to foreign countries – $ 65.5 billion (down by 48, 1%), and the CIS countries – $ 12.3 billion (down by 45.4%).

“Reduction of the value of Russia’s exports in January-April 2009 was due to a fall in average prices of exported goods and because of the physical volumes of export supplies”, – said FCS. The basis of Russia’s exports in January-April 2009 to foreign countries amounted to fuel and energy goods, the share of which in the commodity composition of exports to these countries amounted to 67.4% (in January-April 2008 – 72.8%).

Imports of Russia in January-April 2009 amounted to $ 46.5 billion, which decreased by 40.9% compared with that of January-April 2008, including from foreign countries – to $ 40.8 billion (down by 39.5%), and from CIS countries – 5.7 billion dollars (a decrease of 48.9%). “Reducing the cost of Russia’s imports in January-April 2009 is due to a decline in average prices of imported goods, and the collapse of their volume”, – said FCS. In commodity composition of imports from foreign countries the share of machinery and equipment accounted for 45.5% in January-April 2009 (in January-April 2008 – 55.5%).

The main trade partners of Russia in January-April 2009 among the foreign countries were: China, trade with which amounted to 10.7 billion dollars, Germany – 10 billion dollars, Netherlands – 9.5 billion dollars, Italy – 8.5 billion dollars, Turkey – 5.7 billion dollars, United States – 4.9 billion dollars, Japan – 4.5 billion dollars, France – 4.5 billion dollars, Finland – 4.1 billion dollars, Poland – 4 billion dollars.

Meanwhile, the positive trade balance of Russia on the methodology of the balance of payments in April 2009 decreased by 1.7% over March 2009 and reached 6 billion 688 million dollars, said the report published today by the Bank of Russia. In general, for January-April of this year the surplus was 26.442 billion dollars, which is 2.4 times lower than that of the same period of last year.

At the same time, as compared to April 2008, the trade surplus decreased 2.2 times (from 14 billion 835 million dollars).

Exports of goods from Russia in April 2009 compared with that of March 2009 increased by 0.5% and amounted to 21 billion 279 million dollars. Imports to Russia in April 2009 increased by 1.55% – up to 14 billion 591 million dollars. Export from the Russian Federation decreased by 47.1%, import – by 42.6% Compared with those of April 2008.

Thus, foreign trade turnover on the methodology of the balance of payments in April 2009 amounted to 35 billion 870 dollars, which is 0.9% higher than that in March 2009.

Russian GDP may decline to 6-7% and inflation may become below 10% while maintaining the trend of stabilization in the economy in 2009, predicts Oleg Vyugin, the president of the board of directors of MDM-Bank, ex-head of Federal Financial Markets Service. “If Russia’s economy is going towards stabilization, we can get a reduction of GDP at the level of 6-7% the following years, taking into account the effect of the fourth quarter of 2008. Inflation under such scenario may be less than 10%”, – said Vyugin.

The new work of the RF Ministry of Economic Development forecasts a fall in GDP in Russia by 6-8% this year, a number of officials and experts do not rule out a deeper downturn in the economy. The official forecast for inflation this year is 13%. “I would describe the present situation in the Russian economy as stabilizing. I think later (in the short term) we will flounder somewhere at the current level, which is now reached”, – said Vyugin.

In his view, the projections for the longer term can be built no earlier than autumn of this year. “This is due to the fact that consumers’ and producers’ views on the trends of development of economy and the strategy of their behavior results from the signals that they receive from the economy during a few months. I think that by the fall of this year final opinion on the further development of the Russian Federation can be formed on the model of the letter L, not W, as some think now, “- said Vyugin.

Not so long ago the figure was about 60%. As “RBC daily” writes, the first time since the beginning of the industrial revolution in the XIX Old and New Light will yield the palm to developing countries led by China.

CEBR previously predicted that the economic hegemony of the West would soon end, because even in 2007 China was the third in world economies, but the turning point was named in 2015. After the financial crisis made its adjustments, the process of redistribution of forces in the global economy only increased.

“The Center of the financial crisis is in developed countries, so a recession in the economy of the West is expected. As a result, developing countries, especially China, will increase their share in global GDP this year. This will accelerate the existing trend of moving the economic power from the Group of Seven major Developing States to developing countries”, – said Oxford University economist Linda Yue.

Thus, CEBR expects that China will become world’s second economy this year, thus getting ahead of Japan. The forecast is very realistic, since when the crisis began the Land of the Rising Sun has been experiencing a huge drop in demand for its products.

Analysts point out that all countries are facing the economic recession, but in developing countries it takes place in a mild form. And the recovery process there will be more successful. This can be seen even now. Over the past three months the stock market in Latin America showed an increase of 78%, East Asia (excluding Japan) – rose by 66%. For comparison: American index S & P 500 rose by only 35%.

Bill Gross, the head of one of the world’s largest asset management company Pacific Investment Management Company (PIMCO), also talked on the precariousness of the economic prospects of the absolute leadership of the U.S. last week. He pointed out that the growing budget deficit and uncertain prospects for further economic growth pose a threat to the highest credit rating (AAA) of the United States, which they currently have.

Shmatko, who did not go to Brussels, said that the situation was serious – gas «reality show» could happen again. He lamented that the EU is not enough active in this matter. «We have informed the management that, in our opinion, EU countries do not have a proactive position regarding this matter», – emphasized the minister.

In his turn, Vice Premier, Finance Minister Alexei Kudrin, reported on June 1 that the head of the Russian government Vladimir Putin had sent a letter to the International Monetary Fund (IMF), where he drew attention to the importance of financial support to Ukraine so that it does not disrupt deliveries of Russian gas to Europe.

Kudrin added that a similar letter was sent to the EU which, given the criticality of the situation simply must respond. «We believe that the EU should also be concerned to avoid failure. Ukraine is on the line where it is not able to fully provide payments for gas », – Kudrin emphasized.

Meanwhile, Ukraine ceased pumping predetermined volumes of gas into storages and, accordingly, ceased to pay for the lost fuel. The fact that she had almost nothing to pay for gas, Ukrainian Prime Minister Yulia Tymoshenko acknowledged at the meeting with Vladimir Putin, in Kazakhstan, May 22. She asked Russia to provide payment for gas transit for five years in advance, because that was the only way to solve the problem. But – she was refused.

The official representative of «Gazprom» Sergei Kupriyanov indicated that the shortage of fuel complicated Ukraine gas transit to Europe. «We are concerned about this situation and try to convey this concern to our colleagues in Europe. If now, in summer, underground storage facilities in Ukraine are not adequately filled, it will be very difficult for the Ukrainian colleagues to comply with their obligations to transport gas “, – he said.

Surprisingly there is no reaction from the EU yet. In March of this year it signed a treaty with Ukraine behind Russia’s back that it would modernize the Ukrainian gas transmission system. But Brussels is not in a hurry to invest in the salvation of the Ukrainian economy. And also the meeting of the European Commissioner for Energy and the head of the Minernego of Russia foiled. It is clear for everyone: if the gas crisis happens again, the sufferers will be European consumers.