It’s early October, 1998 in Moscow, smack in the middle of the Asian Contagion fiat money melt-down that swept half the world, including Russia.
I met my first Russian babushka today. I’d seen large numbers of them looking for help — and warmth — in Moscow’s palatial “Metro” subway system because the Russian government is no longer paying the “Social Security” it owes them.
I’d never met one up close and personal though.
I needed bottled water — they tell you not to drink the municipal water in Russia, the Philippines, etc. — unlike other places where they mislead you into thinking it’s OK. So I put on a sweater, and jacket, unlocked both apartment security doors, and pushed the button for the two-man elevator.
I made my way around to our ‘resident’ food shop on the first floor and there she was.
She looked over 70, her face all lines and wrinkles, and although she really was wearing a babushka, she wasn’t shabbily dressed, probably what we would call “middle class.”
She had bought a loaf of Russian white bread. She was fretting — just slightly — about something. Maybe it was the freshness, as she was gently poking the sample loaves on top of the neighboring glass display case.
She pointed at a can with a picture of what looked like corn on the label. The clerk, with no detectable expression, went to the can and my babushka asked her something in Russian.
Now I speak only about three words/phrases of Russian, the most obvious being “das vedanya,” but it was perfectly clear she was asking the price. When the clerk responded, Ms. babushka shook her head gently “nyet,” — my second Russian word/phrase — and pointed to what looked like canned olives. The clerk picked up a can and brought it toward the counter. Again she was asked the price.
With a wistful head-shake, babushka picked up her bread, turned away from the counter, and discovered me watching. She came toward me, and with the look in her old blue eyes of a disappointed kid looking in the window at a Christmas party, told me how incredibly expensive things were.
Yes, it was in Russian, but I understood perfectly.
I had three freshly printed 100 ruble notes, pronounced “rubble” by native Russians — like the remains of a demolished building. At today’s exchange rate, each was worth a little less than $6.
Three months ago, the ruble had been worth three times as much. But then the Yeltsin government, in cahoots with the Russian Central Bank and at the urging of the IMF (International Monetary Fund) once again “emitted” — that is printed — another huge batch of rubles, thus again seriously increasing the supply.
By The Law of Supply and Demand, this caused the value of the ruble to drop precipitously to today’s rate. They’d be worth even less tomorrow. Economists call that hyper-inflation.
Following the prescriptions of the ivory-tower economic and social engineers from the IMF/FED/World Bank axis in Washington D.C. had, as usual, created havoc. Insiders like former World-Bank Chief-Economist Joseph Stiglitz call the fore-ordained result “The IMF Riot.”
The Russian government followed these prescriptions in order to get IMF loans. But by embedded bankster “logic,” that loan money must go to pay off old debts the Russian government owes, mostly to IMF affiliated U.S. banks, not to pay back-pensions owed to hungry old babushkas.
Forewarnings of American Social Security‘s unfunded trillions flashed before my eyes.
I gave her one of the 100 ruble notes.
She thought I was Russian — I can’t tell the difference between Russians and Americans by appearance either — and looked up into my face with some mixture of wonder and gratitude which I can’t even begin to describe. She thanked me, very gently, in Russian. I didn’t cry.
She went immediately to the booze counter, a main feature of almost all Russian shops. I thought, “Well, I don’t blame her,” but then I saw that she was buying eggs, which they sell there too. They put them from the egg cartons into a plastic bag, and you have to be very careful not to bump them. I knew she’d be very careful.
As I was making my purchases, she was surveying the shelves, apparently to figure out the most prudent way to spend her little fortune.
The Russian “minimum wage” is 86 rubles, $4.77 at today’s rates, recently up from 83 rubles. But that’s $4.77 per month, not per hour.
Here in the remains of workers’ paradise, the prototype for America’s “minimum wage” is the amount that, according to the government, will prevent one man from starving for one month.
This definition is a throwback to Yevgeni Preobrazhensky’s theory of “Primitive Socialist Accumulation,” the economic prescription Soviet leaders used to build their heavy industry — which they did by squeezing the peasants’ living standards to an emaciating minimum and skimming off their “surpluses” as they called them.
Not surprisingly, “minimum wage” is black humor among Russians.
I wonder how long 100 rubles — at today’s rate — will last one gentle little Russian babushka.
“Babushka,” by the way, translates as “grandmother.”
As I was leaving, she came over, gave me that look again, and blessed me.
If there is a God, he had better bless that gentle little Russian grandmother instead. As for Russia’s government and central bank, the IMF, World Bank, and Washington D.C., they can all . . .
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