Economic war is now a popular and hyped concept. But what is war money? Military (including occupation) money is about the unique collection of Stanislav Prokofiev, Rector of the Financial University under the Government of the Russian Federation, Doctor of Economics. Napoleon's secret printing house, which printed Russian rubles, of high quality, but with a mistake. The money that nazi Germany came up with for concentration camps and what they came up with to economically plunder the occupied territories even more? And how did the United States deal with the currency of its ally France? About all this in an interview aif.ru .
Vladimir Shushkin, aif.ru:
Stanislav Prokofiev:
I started collecting with not only occupation money, but I was also generally interested in the topic of war money. And when the money circulation was formed, how did people pay? How was the ancient Roman principle War Will Feed Itself implemented in modern wars? Collecting has absolutely nothing to do with my main job or scientific specialization. By specialization, I am engaged in budget funds management, and all my numerous scientific works are devoted to this. And as for the collection... of course, the key element was interest, which was fueled by the study of sources. I accidentally found two books. One of them is a post-war book by a professor of our university (FinU), Professor Alekseev. He tried to analyze money of the Second World War as a phenomenon. And then I got a book by Professor Sinilov in the early 90s. This is a short catalog of money that existed during the Second World War. And I decided to expand the collecting area, tried to reveal the evolution of the whole process in general.
I want to underline, I am still an economist, a financier, not a historian. This is an attempt to rethink in the historical context several historical events and related artifacts. Therefore, all the analysis that we are going to discuss today is primarily based on my knowledge, ideas as an economist, as a financier.
What is the meaning of military money and the statement “War will Feed Itself"? The fact is that the country that is attacking is trying to somehow shift the burden of the costs of maintaining its army, as well as military and civil administrations to the country it is conquering. — STANISLAV PROKOFIEV
What is the meaning of military money and the statement “War will Feed Itself"? The fact is that the country that is attacking is trying to somehow shift the burden of the costs of maintaining its army, as well as military and civil administrations to the country it is conquering.
— STANISLAV PROKOFIEV
Military money exists today, including in our unfriendly countries, such as the United States, Great Britain. But for the first time, Napoleon Bonaparte made war money widely known to the world. I tried to start my study with this. The fact is that initially monetary circulation in Russia was not conducted with paper money, but with metal. And the word ruble in Russian itself etymologically comes from the word chop (in Russian – rubit). Copper or silver coins were chopped, depending on their weight, the measure of value was determined. Only at the end of the 18th-beginning of the 19th century, a paper equivalent appeared. At first, in the form of currency bills, according to the information written in them that they were backed up by a circulating coin. They were issued at a primitive level, there were so few of them that the two signatures in them were made literally physically by officials of the Russian Empire who were responsible for their issue. And so, Napoleon decided to discredit these currency bills before invading Russia. For this purpose, the production of counterfeit currency bills was established in Paris, and these signatures, which I mentioned, they were already superimposed in a typographic way. All this was done in the deepest secrecy. It is known, for example, that the chief of the gendarmerie Pasquier accidentally discovered this printing house as part of a gendarmerie check. In the beginning, he was sure that this was a printing house for counterfeiting francs, and he immediately closed it. And only after the interference of the Napoleon's minister, it was reopened. The bad thing was the French engravings of that time did not make the difference between the letters Л and Д in the Russian alphabet. And since the letter Д appeared twice in the text of the standard currency bill in the words государственный (state) and ходячею (circulating), they printed Л instead of Д. Two spelling mistakes and another paper, thicker and more expensive, just this showed to the Russian Empire population that these were fake currency bills. Moreover, people of our country immediately identified and understood that it was a fake. Therefore, we can say that the experiment failed en masse. I will say even more, when our troops went on the offensive and when huge volumes of this prepared money were discovered, literally whole carts, then both the French and ours, after the occupation of France, demanded to exchange the equivalent of these fakes for the francs of that time. And it had to be done. What was the point of this experiment? But in general, what is the sense of military money and the statement War Will Feed Itself? The fact is that the attacking country is trying to somehow shift the burden of the costs to maintain its army, as well as military and civil administrations to the defending country. For this purpose, classical tools are being used to discredit the national currency and impose a new currency — imperative imposing, which will allow these preferences to be implemented. That's where the history of military money came from.
No, but it turned out more successfully with other countries. A big mistake was made, which enabled to distinguish visibly the difference between the genuine Russian and the fake French ones.
When Hitler was preparing for the Second World War, a whole group of practitioners and scientists was formed, who took a very systematic approach to how to conduct a financial war. — STANISLAV PROKOFIEV
When Hitler was preparing for the Second World War, a whole group of practitioners and scientists was formed, who took a very systematic approach to how to conduct a financial war.
The Prussian King Frederick the Great was the first to come up with counterfeit money back in the XVIII century. But metal money was originally used there. He simply reduced the weight of those monetary units thrown into the market, since they were made of silver. Thus, the nominal value was preserved, and their real weight was less, and due to this he received preferences. Napoleon thought of it with more creativity.
And the most massive case of military money use was already in the First World War, when Germany and Austria-Hungary quite systematically thought out the technologies and missions of such money. For example, conquering the European countries, Germany started occupation banknotes at the beginning of the war so that those monetary units that circulated inside Germany did not leave the borders, so as not to increase emissions, not to produce inflation and not to transfer the burden of military spending to their country's citizens. Therefore, there was a clear division: marks circulating inside Germany, and occupation marks. In Russia, this process became very difficult to be introduced. The Germans realized that it is not typical for Russians to use such a monetary unit as a mark in calculations among themselves. They are used to the ruble turnover after all. And then in 1913, the so-called emission banks were opened in Kovno and Poznan. This is such a military bank surrogate, but nevertheless they were nominally created, opened, and they began to print rubles in German primarily for the already conquered Poland. And kopecks were also in the banknote version. And further imperatively, under the threat of the death penalty, there was an attempt to replace rubles that were in circulation in pre-revolutionary Poland to impose rubles in German. Interestingly, then, during the beginning of the First World War, there was a significant shortage of metals (all the metal were melted down for the needs of the front), and to compensate for the lack of a small change coins, the tsarist government went to the issue of so-called money stamps. These are usually small stamps with portraits of sovereigns, which were in circulation not only in pre-revolutionary Russia, but also before 1920. Already in Soviet times, they were also used for a while. They replaced coins. But the old coins also circulated. So that's what the Germans did, they created a kind of ersatz coin, on one side there was an exact copy of what was on the royal coins — its denomination, year, everything was exactly like on real Russian ones. But if you turn it over, then it was written in German Gebiet OST — the region of the east. It was quite clear that this was no longer a Russian, but an occupation coin. For the first time, occupation coins appeared in the First World War both on the territory of the Russian Empire and for it. And this played a role, but insofar as Germany and Austria-Hungary were the losing sides in the First World War anyway, it did not save them from inflation, and the young Weimar Republic in the 20s simply choked on hyperinflation, had to carry out monetary reform, denomination. And when Hitler was already preparing the Second World War, a whole group of practitioners, scientists, who very systematically approached how to conduct a financial war, was formed.
Absolutely so. The Germans' plan was to introduce occupation Reichsmark valid for all countries that Hitler planned to conquer. In my collection there are two completely different banknotes of the same denomination, the year of issue is 1939, but one was intended for circulation within the country, and the second one was just an occupation tool for occupying countries. Moreover, there was a differentiated approach. Those countries that were most complementary to the fascists, first, the fascist administration in France (so-called the Vichy regime, which ruled part of the country under German control — Ed.), is the administration of Denmark and Norway, it was allowed to use local money under the control of the fascists, but clearly controlling the issue and monetary circulation. And occupation money was not introduced there. In some countries, for example, in Greece, the issue was controlled — the cash drachma in circulation was reduced to the amount required by the fascists, and a fascist seal with a swastika was placed on each bill, that it was verified, it could be applied. All the other means were seized, destroyed, and partially replaced with occupation money.
In the USSR, this trick obviously would not have succeeded, so there was a separate financial plan for the USSR. Before the Great Patriotic War, the chervonets of the late 30s and rubles of small denomination — 1, 3 and 5 rubles —circulated in the Soviet Union. Therefore, first, the German plan was to discredit the Soviet ruble. Discrediting was carried out in two ways: the first way — since our money was polygraphically quite simple, a large-scale production of counterfeit banknotes was launched, and they numbered many millions of rubles. When recently the Ministry of Finance was preparing materials for publication on the history of finance, the so-called red folder of the People's Commissar of Finance of the war years Arseniy Zverev was declassified, and many top-secret documents were declassified as well for the first time in 2019 and involved in scientific circulation. So, most of these were the reports of the then Deputy People's Commissar of Defense and Head of the Main Directorate of Counterintelligence SMERSH Abakumov to Comrade Stalin, where he reported on the captured saboteurs, about what volumes of brand-new money they had. There was an examination conducted jointly with the State Bank that they are indistinguishable from the real ones. The German printing machine worked without failures. This was necessary to flood the market with these unsecured money in huge quantities, so that the purchasing power of the ruble would decrease. Thus, it was devalued and created the basis for replacement by something else. This was the first way of such discrediting of the ruble. The second way was as follows: the money made by Gosznak and which lay in the vaults of the state bank for subsequent release into circulation, before the German offensive did not always have time to take. For example, the case that due to the rapid advance of German troops at the very beginning of the Second World War, funds that were in the storage of the Smolensk branch of the State Bank were completely requisitioned. And this money was also released into circulation uncontrollably for the same purpose — to prepare the population for the fact that the ruble no longer had any value, that it needed to be replaced. And then certain tools were prepared just for replacement. As I have already said, the materials are the same, the money at face value is both occupation and internal, and the first thing our money was imposed in the new territories, such money was called occupation, and not only banknotes, but also occupation coins. They differed from the internal ones in that there was a hole in the middle. That is, on those that circulated in Germany, there was a swastika in the center of the coin, and here, to reduce the cost of production, there was just a hole in the place of the swastika, and it was the same denomination.
The fascists immediately faced the fact that our population absolutely did not accept the money that they were trying to impose, these occupation marks and pfennings. Therefore, in 1941, money drafts of the German military administration were hastily prepared. There, the so-called imperial emission funds oversaw this. In a hurry, they prepared for production in Russian banknotes, chervonets, rubles intending to replace the USSR rubles with them. The production was planned to be opened in Kiev. But something went wrong. I managed to find evidence that these layouts were created, they are in my collection. It is unclear why their production could not be adjusted. Or it could, but they failed in circulation? Then the next step is taken, in 1942, in the Western Ukraine, in the city of Rivne, the so-called Central Issue Bank of the city of Rivne was created. And banknotes are printed under the name karbovans. These karbovans were printed in two languages — German and Ukrainian — and had a limited area of circulation. Western Ukraine and Western Belarus became part of the USSR literally on the eve of World War II outbreak, here the fascists had another important geopolitical goal: not just to flood the Soviet money market with money surrogates, but also to economically separate at least these regions from the USSR, and at most the entire Republic of Ukraine and the whole of Belarus. This issue took place and lasted for 2 whole years, until 1944. This was also occupation money. And this is very dirty money, since it was them who paid the monetary allowance, etc. The Russian Liberation Army (the army of General Vlasov, — Ed.), collaborators— elders, policemen, etc., including those who were captured, surrendered to the enemies. At that time, there was such a technology: our positions were fired not only from real guns, but also from so-called glass ones. They threw shells with agitation. In the collection there is a unique document of those years in Ukrainian. From the outside, they look exactly like a CPSU party card that could be carried in your pocket. But inside was the motto bayonet into the ground. It was the motto of those who wanted to surrender, it was a pass to captivity. And those who surrendered with this pseudo-party card were entitled to nominated there karbovants. Thus, until the 44th year they had circulation.
No, it was other money there. By their economic nature, it was similar to the money of concentration camps.
Let me remind you that ghettos are places of compact residence of the forcibly assembled Jewish population. If concentration camp money was centrally printed in Berlin and Hamburg, then ghetto money was made right on the spot. It necessarily contained elements of Judaism. These were either metal coins made of simple iron, or very simple bills, but necessarily with elements of Judaism in the design. When Jews were driven into the ghetto, they were told that they would be sent to the eastern lands, and for some time they believed these tales of the fascists. In fact, their fate was, as a rule, completely different. But nevertheless, since they were driven away quickly and allowed to take very few things with them, then, of course, they took the most expensive — heirlooms, precious metals, antique utensils, dishes — that had value that could be sold or exchanged. So in the ghetto, the circulation of other monetary units other than ghetto money was prohibited. And they had to be obtained somewhere. The fascists thereby very brazenly and shamelessly tried to circumvent the Hague Convention of 1907 on the Traditions of Land Wars in force at that time. The convention had a complete ban on taking anything from civilians. What about withdrawal, yes, but the purchase was not prohibited. Therefore, there was no other money in the ghetto. And in order to get ghetto money and get something to eat, it was necessary to sell something. And the pricing was set, of course, the most extortionate. For these metal coins, that is, for a song, heirlooms were surrendered, which were immediately sent to Germany. And at the expense of the collected funds, people could get extra food in the dining room, or buy something at a local store.
This is the whole essence of fascism. Manipulating the norms of law, and sometimes flouting them, when it is beneficial, to pursue a predatory, aggressive policy not only against prisoners of war, but also civilians. But they, of course, defended their citizens. Those soldiers, officers of the Wehrmacht who served in the German army, received special money surrogates — vouchers. Part of their salaries, at the request of the servicemen, could be transferred directly to their families, and special quasi-money was brought to the front line, which was given to them on their hands. This was done so that they would buy everything only inside the garrison, so that they would never go out and have financial relations with the population outside the theater of military operations. And this, again, economically benefited for the fascists. They took away goods for free, filled shops and canteens with them, and the soldiers paid with these vouchers inside the garrison. If a soldier was commissioned or demobilized, he brought the vouchers he had to his fatherland and there, at the rate of 1:1, he changed them to the Reichsmark, which ran inside Germany.
The Germans also had a quasi-money mechanism. The army needed a clothing allowance — it was especially difficult to survive the General Frost, i.e. the Russian winter. Wool was needed for the warm clothes of soldiers and officers. And they have learned to masterfully take away this wool from our population. In return, vouchers were issued in Russian and in the languages of the Baltic republics, because it was mainly in this region. If we talk about the RSFSR, then these were mainly such regions as the Leningrad, Kursk, Pskov regions — wool was requisitioned there first of all. In exchange, they gave out notes for textile points. Depending on how many kilograms of wool were given, such a sign was issued. Here we have a 3 kg badge in our collection, in exchange we were supposed to get a product from the German clothing service, well, for example, a sweater made of wool of a much smaller volume. The notes for textile points did not take root — I could not find a single fact confirming that according to this document, if it can be called that, one of our citizens received anything. That's how the money of fascist Germany functioned in brief.
They had 2 major allies — fascist Italy and the imperial Japanese government. Looking at fascist Germany, they also issued monetary surrogates already for those countries that they either captured or planned to capture. If we take Italy, then it was mainly about southern Europe and Africa. And there Mussolini's troops were actively fighting, and for each of the countries, the corresponding military money was also prepared. We have money from Algeria, Sudan, Ethiopia, and several other countries in our collection. They captured Albania, and there they imposed a military lek, also a quasi-currency. The principle of operation was similar to that used by Nazi Germany.
But in my opinion, the cynicism and arrogance of fascist Germany surpassed imperialist Japan. They took the issue as seriously as the Germans, and they declared everywhere that they wanted to build a zone of universal prosperity in East Asia. A whole economic program was thought out under the slogan of this zone. All the countries that the Japanese tried or planned to conquer were divided into 7 monetary zones. At the same time, China was the first to start with. Chinese historians in general now often argue with the statement that the Second World War began in the 39th year. They believe that it began much earlier — in 1931, when the troops of the Japanese government invaded China and occupied Manchuria. They came there first with the Japanese military yuan, and then, after 4 issues of this military yuan, they began to issue military yen. And they also tried to forcibly impose them in China. And as the area of military operations expanded, for example, Japanese military guilders appeared in Dutch. For the occupation, imagine Indonesia, which was at that time a Dutch colony, rupees were created, which were introduced into monetary circulation on the territory of occupied Burma. It was supposed to be India as well. Pounds were prepared for New Guinea and Oceania countries, and Japanese military dollars, which were introduced into the territory of captured Malaysia, Singapore, further of Australia and New Zealand. And this dollar, in their opinion, should have been circulating there. An interesting story was with the peso, which was issued for circulation in the occupied Philippines. When the Philippine military Japanese peso replaced the Philippine pre-war peso, resistance intensified within the Philippines itself. And the rebels issued their war money for the economic struggle with the Japanese peso. Parallel monetary circulation of both the Japanese peso and the rebel pesos of different provinces of the Philippines was partially established. After that, the Americans intervened, there was a big battle at Mindanao, which the American troops allied to us at that time won, and then they were able to replace both the Japanese military peso and the rebel pesos in exile with their military money. This was the very case when, for a short period of time, some monetary units were directly at war with each other. But the most cynical thing is probably that in 1942, on the eve of the second front possible opening as allies of Germany against the Soviet Union, the Japanese released money in Russian to the Japanese military administration. In their opinion (and by agreement with Hitler), in the event of a coalition victory, they should have got the entire vast territory of the USSR from the Ural Mountains to Kamchatka and Sakhalin. And that's why they immediately wanted to get access to minerals, to all the resources that were in our country at that time. And they were waiting for this, having prepared these banknotes for issue. But since the idea of a second front failed for them, they understood that they would also have to answer for it sometime, and they hastily destroyed this money in 1944. And at present, finding authentic bills of militaristic Japan in Russian is an almost impossible task, because they all went destroyed during the war. But nevertheless, the fact is it was done. That's how the money of our opponents fought.
It was not possible to find exact dates in historical sources. But the fact is known that in 1939, when the Second World War began in September, all this had already happened. Therefore, I assume that all this had been done a long time before.
It was all quite difficult. But the peculiarity of any military money is that, firstly, it is temporary, and secondly, it is introduced imperatively. That is, if it is not introduced, then the military administration immediately assumes punitive measures for those who refuse to accept them. Exactly the same was done on the territory of the USSR. Decrees were issued, rather short terms were given, during which it was necessary to exchange Soviet large banknotes for German surrogates. Another feature of this money is that it was initially inflationary in nature, since the exchange rate was set by the country that was advancing. They could build any course they wanted. At the beginning of the war, the exchange rate was, for example, 1:4, that is, 1 occupation mark was equal to 4 Soviet rubles. And after a couple of months, the course was 1:10. This predatory character was already laid in the foundation. It was immediately clear that it was impossible to replace the amount of money in cash, which was even in the occupied lands, with occupation money, karbovans. Therefore, it was decided as follows: the coins of the USSR were in circulation, at the same rate as the banknotes. Low-nominal bills, that is, 1, 3 and 5 rubles, were in circulation, but bills of 10 rubles and above were forcibly withdrawn. But then there were also gold coins in circulation, and a large nominal value of up to 25 rubles. This did not go under the penalty of death.
All money surrogates or war money are offensive money. It has some value only when the army that introduces it into circulation wins. As soon as the reverse process takes place, it depreciates to zero and is simply not needed by anyone.
Firstly, it was originally illegal money. In 1943, Stalin was offered an unplanned monetary reform. Drafts of money were developed, but they mostly also had such military content, they depicted tankers, pilots, gunners. Such drafts were prepared, and it was proposed to oust all the surrogates at once, to carry out this reform immediately in 1943. Stalin reviewed these materials but did not support them. He said that the priorities were different, there was a need to win the war, and there was no point getting involved in monetary reform. Therefore, the monetary reform took place later. And answering your question, I want to emphasize one more point. All money surrogates or war money are offensive money. They have some value only when the army that introduces them into circulation wins. As soon as the reverse process takes place, they depreciate to zero and are simply not needed by anyone. Therefore, answering this part of the question, we can say that they have simply depreciated. They were not collected by the population as an opportunity to form some kind of cash reserves. They were only used for a short time during the period when the occupying army was moving forward. But nevertheless, fake rubles were in circulation, rubles that were unscheduled through the requisition of state banks' funds were also in circulation. As a result, by the end of the war, there was no turnover of these quasi-coins on the territory of the USSR, but there was an excess ruble turnover, which made the ruble really seriously depreciated. The 1947 reform and the established exchange rates made it possible to normalize the country's monetary circulation.
The story of liberation money is very interesting. And it began with the opening of the second front. As you know, the Soviet Union has been striving for this for a long time and finally achieved it, Anglo-American troops in Europe landed in Sicily and Sardinia to liberate Mussolini's Italy in the first place. And then, in 1943-44, the first liberation money appeared. These were lyres in two languages: English and Italian, which were issued by the Anglo-American military command and were also imperatively introduced in the liberated territories. The experiment was quite successful, after which, first, the Americans thought about scaling it. Banknotes in German have already been issued — marks for Germany and shillings for Austria. Basically, of course, marks for Germany were in circulation. Their design somewhat resembled the design of modern dollars, and the appearance of large bills, and their shape. So, it all started with the USA. They developed a design, matrices, developed special paints, and they and the British, without coordination with the Soviet Union, which was more absorbed in the defeat of Nazi Germany than the release of these liberation money, began to implement them. After that, the Soviet Union also paid attention to this, and as part of the issue regulation the at the Potsdam Conference, a number of decisions were made on how to issue this money. A special trilateral commission was created from representatives of the USSR, the USA and England in order to regulate these issues. And then this brand, which many call the brand of liberation, was agreed upon in terms of volumes. And paper and paints — the Americans also handed over all this to the allies. And within the agreed emission volumes, each of the three allied countries has already issued them. They differed only in the details of the numbers, so that it was always possible to understand which of the allies this particular bill was issued. But it circulated on the territory of the entire liberated area.
In 1944 the Americans declared to the whole world that they did not recognize the De Gaulle government as the legitimate government of France. Consequently, they considered France to be their occupation zone, and if this is the case, then the Americans issued their military money for France. — STANISLAV PROKOFIEV
In 1944 the Americans declared to the whole world that they did not recognize the De Gaulle government as the legitimate government of France. Consequently, they considered France to be their occupation zone, and if this is the case, then the Americans issued their military money for France.
We are talking about France. France was one of the allied powers, but in 1944 the Americans declared to the whole world that they did not recognize the De Gaulle government as the legitimate government of France. Consequently, they consider France to be their occupation zone, and if this is the case, then the Americans have issued their military money for France. On the other side, they are absolutely identical to the liberation stamps, only the text on them was in French, and the French flag was depicted on the reverse side. It was a demonstration, in my opinion, of a huge disregard for the national interests of France, because again, the original nature of military money is such that whoever attacks uses the acquired funds of the territories that he occupies. And according to many French historians, these occupation stamps of the American army were circulated in France right up to 1946, after which the De Gaulle government legally organized normal monetary circulation with the national bank, and the francs of the French Republic reappeared in circulation. There was a famous story of the 60s, when the gold and foreign exchange standard of monetary circulation was adopted in the world. De Gaulle collected a huge mass of cash dollars, loaded them onto steamboats, which were popularly nicknamed golden steamer. The steamships were sent to America, to the Hudson Delta, and De Gaulle publicly demanded that the US administration exchange them for gold, which was eventually done. Many French historians believe that this was France's response a quarter of a century later to the national insult inflicted in the form of military money introduction for France issued by the United States. But the Americans also went further in another example, a ground operation was planned in Japan. But the Japanese surrendered, and there was no large-scale land invasion of the Allied armies on the territory of Japan. But the Americans proactively, without consulting especially with the allies, issued military Japanese yen and sena — this is an analogue of a small coin — for the possible conduct of a ground operation to liberate militaristic Japan. The USSR did not use them, and did not conduct a ground operation on the territory of Japan.
And what about the Soviet Union? The first country in Eastern Europe that our Red Army liberated was Romania. There, the first experience of introducing a liberation currency on the territory of a liberated country was undertaken. And it was the so-called Red Army ley. It did not last long, as any military banknote should, after which it was decided to focus on helping these allied countries to normalize their monetary circulation from the very beginning when liberating other central and eastern European countries. And it was not liberation money, not war money, that was already introduced, but assistance was provided in issuing regular money together with the governments and national banks of the respective countries. For example, in the United Czechoslovakia, and I remind you that before the war there was no such state as Czechoslovakia, a single country was formed only after the Second World War. That's where our State Bank and our State Sign immediately issued korunas in the relevant state languages: Czech and Slovak. And to make it clear that this is still money that was issued in the USSR, there was also an inscription in Russian, with a nominal value and with the name of the currencies. And such money has already been transferred, respectively, to the national banks of these countries, so that they normally organize money circulation. This technology has proven itself well. Perhaps, on the territory of all the countries of Central and Eastern Europe, except, perhaps, Hungary. In Hungary, a currency called pengoe was then in use. And a huge amount of pengoe was issued. In the hope that the government and the national bank will issue them in accordance with the monetary circulation rules, taking into account the volume of the commodity mass and the need for monetary policy. But, unfortunately, the rulers of Hungary of that period did not cope with this task, the issue was significantly exceeded in relation to the necessary one, hyperinflation began. And in order to reissue such a volume of funds, they again turned to the Soviet Union which considered it impractical, since it is expensive and difficult, but proposed to the Hungarian government to carry out a monetary reform with a denomination of 1000 times in 1945 and exchange them for new money, which took place on the basis of the old ones. But the Soviet Union issued a special protected stamp, which the national bank pasted on the old bills, thereby showing that this bill is denominated, and the value that is written on it should be divided by a thousand. That is, if it is a 10,000 pengoe bill, then with the stamp it immediately became 10 pengoe. We were able to carry out such a reform quickly. But it didn't help either. Anyway, there was significantly more money in circulation than necessary, and then already in 1946 it was decided to abandon the pengoe as such, a new Hungarian currency called the Hungarian forint appeared. And it already existed before the introduction of the euro. And it exists for now.
Concluding my story about military money, I once again want to emphasize that this is money intended for the creation of an economic mechanism by a country that either conquers other countries or liberates the corresponding countries, technologies for using the resources of the respective countries to reduce the functioning costs of the army and civil administration. And once again I want to remind you of military money signs. This is temporary money, which should always be replaced later by some permanent ones. This money is initially and inherently inflationary, which means that it is not subject to thesaurus, cannot and should not serve as a means of accumulation for the population. The issue of military money is not secured. And the fact that this money is always implemented imperatively. And it ends its life naturally.
Today, the dollar is trending towards remaining a reserve currency, but already of a regional rather than global nature. — STANISLAV PROKOFIEV
Today, the dollar is trending towards remaining a reserve currency, but already of a regional rather than global nature.
No, it doesn't fit that definition. It can be interpreted in any other way, you can talk about money of a certain expansion. But if more recently the dollar was considered a global reserve currency, then just the situation that developed after the start of special military operation and after the introduction of large-scale sanctions, many of which are openly confiscatory in nature, bypassing all international and domestic laws, then just very noticeably against this background, the dollar behaved like a currency that has ceased in my opinion, to have the character of a global backup. And confirmation of these words was the fact that many countries and the Russian Federation, long before the start of its own, replaced their holdings denominated in dollars with yuan, gold. And many other countries that, after the confiscation actions of the United States and its allies, are already carrying out these actions within this year, many countries have also begun to abandon the dollar in the structure of their gold and foreign exchange reserves. First of all, we are talking about China. Therefore, today the dollar has a trend towards remaining a reserve currency, but already of a regional, not global nature.
You know, it is extremely rare that this happens, and it happens, as a rule, also temporarily. There have been cases of direct use of the dollar in currency substitution in history, but this does not happen for a long time. And not just the dollar. For example, I happened to be on a business trip to Zimbabwe about 10 years ago, and just in Zimbabwe there was hyperinflation. It was calculated in thousands of percent per annum. And it was perfectly safe to have Zimbabwe's $5 trillion currency on hand, and it was impossible to buy a can of cola with this currency, it was so devalued. Then it was clear that the population's confidence in its currency was completely lost at the moment. It was largely replaced at that time by the South African Rand. It was a fairly short time period. At the same time, the party that is the issuer, i.e. in this case South Africa, had certain economic advantages from the circulation of its money on the territory of another country as the main currency. Therefore, the National Bank of Zimbabwe has learned lessons from what happened and has already started issuing updated Zimbabwean dollars, which were no longer subject to such high inflation.
In many countries, there are parallel currency movements, although this is wrong from the point of view of monetary circulation and sovereignty. The country's sovereignty is always accompanied by a sovereign currency. The reverse case also happens, but as a rule it is.
You can go to various auctions. One way or another, someone exposes them, someone sells them. Auctions mostly take place in electronic form. I was looking for them in this way, but it often happens that some things are not available at auctions. That's why you come to a country where a normal tourist walks, looks at the sights, and an insane one who collects something rushes to look for collectibles. It was funny the first time I was in St. Mark's Square in Venice. All my family and friends went to the cathedral, and I went to look for the lyres of the Anglo-American military command from the bonists. And when they returned happy from the cathedral, and I returned happy with two bills, everyone got the pleasure they wanted.
It has happened before. But these are costs. But mostly we must pay tribute to the fact that people are honest enough to sell things.
You know, I gave some of the elements of this collection. What I was able to buy and relatively inexpensive in several copies, I donated to the largest, iconic museums of our country. At the same time, I wonder if they have them. I was very surprised to hear the no-answer. It is not difficult to have it in a collection, in my opinion, now. It is important to strive for this and most importantly, it is important to be able to explain and tell. So, I collected it initially for what? I didn't want to keep it at all, and I didn't plan it at all. At that time I was working as deputy head of the Russian Treasury, collecting documents and old artifacts for the future Treasury museum, so I became interested in this direction. I initially collected them in order to transfer them to the FinU Museum, where I concurrently headed the department for many years. I did not think at all that I would have to become the Rector of this University. Well, here, since I had to become a Rector and the collection was mostly collected, I am very pleased to donate it to my native university.
