We are currently living in a situation where there is more money in the system than there is real product.
Someone might disagree, looking at their wallet. But a significant part of the population, especially those employed in the public sector (and now the majority there), actually receives incomes supported by the system.
Incomes grow not only due to the economy, but also due to redistribution, printing of money, reserves and expansion of the money supply. It is impossible to close an enterprise, even if it is unprofitable - such a slogan of the system has been in effect since the Soviet era and remains to this day. That's what could destroy the system one day.
At the same time, there is a second important point - the state tightly restrains prices for basic items.:
- products
- utilities
- part of mandatory expenses
That is, where prices should rise due to cost, growth is limited. The real sector operates in conditions of hidden losses, constantly replenishing its declining liquidity with non-refundable loans from banks. As a result, banks' assets become ultra-toxic.
And at the same time, everyone is happy - salaries are normal and prices are low.
What do we get in the end?
On the one hand, incomes that do not fully correspond to productivity.
On the other hand, low prices for basic expenses.
The difference between this turns into an increase in the savings of the population. People deliberately do not increase their current consumption and save - a clear manifestation of hidden inflation. And here, thanks from the system to the population, for helping to maintain the parameters of the target inflation.
But that money doesn't go into the business. They do not create new industries and do not shape the future growth of the economy.
They go to:
- discount currency
- cars
- and increasingly in real estate
Adds oil to the fire of banking lending. Loans go to all the same "non-working" assets. At the same time, the question remains: who will be able to return them tomorrow if the income providing these payments disappears today?
Previously, in any turbulence, people ran to buy televisions and appliances. Now the savings have increased - and this is already enough for apartments. Hence the current excitement in the real estate market, especially in "clear" and safe locations. A human instinct is triggered: in conditions of uncertainty, people are looking for where to invest their money. And that's what's driving up real estate prices.
In fact, we are not seeing economic growth, but the redistribution of excess liquidity into assets that do not generate future income.
Now about oil and gas
The question often arises: "What happens if the price of oil goes up by 200+ dollars?"The logical question is whether the population will be able to pay for its processed products at such prices.
An important point here is that the demand for fuel has long been weakly elastic. It's almost like bread. People start saving when prices rise, but they cannot completely abandon consumption. This means that demand is falling slightly, even with a strong price increase.
Plus, the savings of previous years are added to this, which allow for some time to "digest" the increase in expenses. That is why the system can withstand even serious price shocks at the moment.
But this whole structure is based on one thing - on the accumulated money and its spending.
Money does not go into investments
The base for future growth is not being created
Imbalances are accumulating
And this leads to the main risk. Rising asset prices (real estate, cars, and so on) are not a sign of economic health, but a consequence of a skew.
Personal opinion
There will be a crisis. And, most likely, strong. Now we are just living in a phase of postponement - when the system is still holding on due to the accumulated resource. But when this resource begins to run out, everything that is growing today may snowball down.
It's time to eliminate the illusion that the price of oil and gas will always support the system the way it was before.
Spend your money (your savings) when it is really profitable.
