KP: Which traits does your wife value in you the most?
Gerashchenko: What is there to value? I made a big mistake 48 years ago. Value me or not, you can't do anything over again.
KP: She didn't get angry at you for, let's say, having a small salary?
Gerashchenko: That never happened. She always knew what I was doing. We studied at the financial institute together and then started working together. She was based out of a department at the State Bank, and I was working at the Foreign Operations Department.
KP: Where do your children work today?
Gerashchenko: Are you from the newspaper Children and School or something?
KP: I'm just interested. At a bank, no?
Gerashchenko: My son served in the Navy Seals in the north for two years, toughened up and became a man. He did play rugby earlier in his youth, though. They said to him: "Quit school, you'll play in a professional league with the best." He asked me: "What should I do?" I said: "Kostya, you'll play for what, 5 years, and without any injury, I hope. But then what will you do? Become a trainer?" So he decided to go to school. He worked at Sberbank — and then at a commercial bank. Now he's a department head.
KP: Does his last name help him at all?
Gerashchenko: I don't think so. They wanted to make him the head of the Credit Department. But I told him: "Son, first go through the ranks at the Troubled Loans Department so you understand the mistakes of the clients, as well as the bank.
KP: Do you confer with each other?
Gerashchenko: No. Sometimes we exchange our thoughts, though. We're on different levels. He talks with my oldest grandson more about these kinds of things. He worked at a department of a French bank.
KP: And I bet they run over to you and ask: "Dad, or Grandpa, what's going to happen to the dollar?"
Gerashchenko: Of course not. They understand that no one can give a concrete answer to the question. But what I tell them is the dollar is overvalued. At the moment, the U.S. is saying: "How about we all meet at the 'Big 20' and discuss the future map of the currency world?" I don't know what kind of proposal the U.S. can offer the Big 20. Only one, maybe, which is to live according to your means and not inflate any financial bubbles. But you also can't just take the surplus dollars that are floating around now and burn them. There are people, companies and even countries who invested in these dollars. Who can you take them away from?
KP: Maybe they'll implement some overall control of the dollar? And Russia will also control the dollar?
Gerashchenko: How? How can the U.S. allow someone to control its national currency?! Maybe they'll also give us an inventory of their nuclear weapons?
KP: I remember you saying that the real price of the dollar was 16 rubles after the default in 1998.
Gerashchenko: I said the 30:1 exchange rate of the ruble to the dollar was related to an increased demand on the dollar. How much, let's say, would you have had to pay for a cart of consumer goods in rubles? And then how much would you have had to pay for the exact same cart, but in dollars? If you look at things this way, then the dollar should have been worth 16 rubles after the default.
KP: And today?
Gerashchenko: And today I no longer have anything to do with this stuff. When they call me and ask these types of questions, I say: "Call the Central Bank. Why are you bothering me?"
KP: In what currency do you keep your savings?
Gerashchenko: I have a deposit account in rubles at Sberbank — not very large. Less than the insurance coverage.
KP: That's less than 700,000?
Gerashchenko: Yes. I also have a card account in euro at the Moscow branch of a European bank. It's the first bank in the country to open cards in euro. It's very convenient if you go to Europe. My wife also has an investment account in dollars at a bank that plays the market in China, which is why the percents are good — 15 or 16.
KP: So you have rubles, dollars and euro
Gerashchenko: An insignificant amount in euro — around 5,000.
KP: You're not afraid something might happen to your savings?
Gerashchenko: I'm not afraid of anything.
"We don't have a crisis on our hands yet, just splatters of champagne"
KP: The Central Bank is moving huge sums of money from our gold reserves to support the ruble. Will the reserves last long?
Gerashchenko: I'm not following the events too closely. A very reputable magazine asked me if I'd be interested in writing a column for them. I said: "Are you what, nuts?" If you want to write a column, then you have to sit down and read everyday, pick up information somewhere. Why do I need all these worries?
KP: What do you think? Could the ruble become the reserve currency?
Gerashchenko: That's plain silly. The concept of a "reserve currency" doesn't even exist. They used to say: "Freely convertible currency." Now they say: "Freely usable currency..." It's a currency employed in trade operations between countries. We're afraid to even give the Belarusians two lousy billion in credit. We don't want to. And essentially, 90 percent of Belarus' exports go to Russia. Refrigerators, cargo vehicles, and all of their industrial products. Why are we playing the fool? I'm not referring to you, but rather our financiers — as if they don't know a thing.
KP: So we should lend Belarus financial aid? And Iceland, too?
Gerashchenko: I don't know about Iceland. It's difficult for me to say because the tax on their vodka is high. And we drink vodka.
KP: You're badmouthing all the financiers. But then Kudrin, it seems, was right to build up the Stabilization Fund, or should the money have been invested in the economy as opposed to being kept in the West.
Gerashchenko: If they had invested in the housing sector, maybe everything would be okay.
KP: But the housing bubble swelled — just as we saw happen with the financial markets. Today Khrushchev-style apartments cost $6,000 per square meter in Moscow. The bubble won't burst?
Gerashchenko: In principle, things should move downwards. Of course the sector has become inflated. That's because they weren't investing, and building too little. They were raking in bribes to use land for construction. They weren't actually inflating a bubble, but rather bribes instead.
KP: It's not too late to beef up the economy?
Gerashchenko: Well, the U.S. is completely in the dumps now... If it weren't for your female readers I'd be a bit more articulate in this regard. But anyway, they've decided to invest here and there. Because we're talking about the well-being of the country, and keeping the crisis from becoming worse than it would be if we just let things slide. Why have all the countries in the world decided to have their government interfere in the crisis? Even though they are all adherents to a free economy. There just isn't any other choice. They've slipped up.
KP: And have we?
Gerashchenko: We haven't yet. But the fact that we pay too little attention to the real economy is wrong.
KP: Plants and factories?
Gerashchenko: Yes. Manufacturing. Why are we flying on old Boeings? They're second-hand. Why can't we make them ourselves? Why did Boeing lower the prices of their planes by 40 percent after Sept. 11, 2001? What was their profit margin before that?!
KP: Let's take 1998 and today... Are these two different things?
KP: Has the peak of the crisis passed, or is the worst yet to come?
Gerashchenko: I think we're just seeing the splatters of the champagne. They have a crisis, in the U.S. For the moment, the crisis only concerns our financial markets, where the West has come to be involved. And our banks that actively cooperate with foreign agencies. But the repercussions could be far worse. We might face a recession, too, and construction will freeze. And construction is basically the generator of the economy. This is the case in all developed nations.
"The caviar was black"
KP: You were also a deputy...
Gerashchenko: Yes, I was — in the Rodina party. But I left after 6 months. They didn't even let me into the Budget or Banking committees in the State Duma. They didn't want anyone around who understood a darn. That's when it became clear to me that it's just a mickey-mouse outfit.
KP:Would you enter politics again? Would you join up with the democrats or the Communists?
Gerashchenko: If the Communist Party of the Russian Federation (KPRF) said to me: "Why did you join Rodina?" I would say: "You didn't invite me, did you?"
KP: Would you join them if they did invite you?
Gerashchenko: It depends for what reason. KPRF is a party without a future.
KP: And the democrats? They're creating a new party now.
Gerashchenko: They don't have the necessary base...
KP: What about working as an advisor to the state?
Gerashchenko: I make them feel uncomfortable. Why do they need to consult with me? In all honesty, though, the chairman of one of our largest banks consulted me the other day and asked me what to do. I told him not to keep their money abroad, but rather to direct their funds into the economy. And that's what they're doing now.
KP: So they took your advice after all?
Gerashchenko: The chairman of the bank invited me to lunch. But I think he had been asked "from above" to meet with me. He called and said he wanted to see me and get my advice.
KP: So you advised him for free?
Gerashchenko: Well, yes. But on his territory — with caviar. I told him I was allergic to fish. But I tried it anyway. I didn't eat the whole jar.
KP: Was the caviar red or black?
KP: And is it worth investing in women?
Gerashchenko: It's a horrible waste of money.
KP: In diamonds, then?
Gerashchenko: Diamonds? For women...?
KP: In what, then?
Gerashchenko: In the family.
KP: What's best to do during a crisis, save or spend?
Gerashchenko: To keep calm.
KP: And have children?
Gerashchenko: Why not? If it happened, don't have an abortion.
Viktor Vladimirovich Gerashchenko was born in 1937 in Leningrad. He graduated from the Moscow Financial Institute. He climbed the ranks from run-of-the-mill accountant in 1960 to chairman of the Soviet State Bank from 1989-1991. He was chairman of the Central Bank twice from 1992-1994 and 1998-2002. He was elected as a deputy in the State Duma in 2003. In 2004, he left to serve as chairman of the board of YUKOS. Today he is retired. He is married with two children, four grandchildren and one great-grandchild Sergey. He holds an honorary doctorate in economics.
Читать русскую версию: Виктор ГЕРАЩЕНКО: «США доигрались! А мы - еще нет»