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22 Jul, 2009 07:05

“The crisis was caused by the irresponsible policy of the US authorities”

The former chairman of Russia's Central Bank Viktor Gerashchenko spoke to RT about the causes of the world’s money troubles, a global reserve currency and international financial organizations.

“In fact, I believe the crisis was caused by the irresponsible behavior of the Americans. They did not follow the IMF rules because they are the main contributor, the main donor in the IMF and World Bank. For many years the US has been living on credit borrowing from its own people, from other countries and foreign investors. The Americans could afford a large domestic and foreign debt. In addition, they basically devalued the dollar in 1970 by raising the price of gold from $35 per ounce, because initially they promised to exchange dollars for gold from the US Federal Reserve at this rate, to $70, and later to $72. So, essentially, the Americans violated the fundamental rule of maintaining the exchange rate of their national currency.”

“Money is printed in order to preserve the production rate in some companies. The US will continue printing dollars and pumping them into the economy for as long as they have the money to buy special paper.”

“In my view, the causes of the crisis are first of all the objective ones, of overproduction and so forth, but also, partially, caused by the irresponsible policy of the US authorities. You cannot live on credit at the cost of the rest of the world.”

“I believe that so far [Russia is] of small significance to the world economy. Indeed, we can propose some reasonable things like with more responsibility, but I believe our voice is still rather weak.”