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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

Pensions Paid in New Bills: Signal for Inflation?

26 June, 1999 - 00:00

By Mykola SAVELIEV, The Day
As soon as the election campaign began, grandfathers and grandmothers in
Lviv region suddenly started getting paid their pension arrears for two
to three months at one stroke. However, this was accompanied with price
hikes for sugar, buckwheat, and gasoline. Since no one believes in Mr.
Pustovoitenko's method of raising Pension Fund money by way of civil defense
exercises, and people know that everything in nature is intertwined, the
question of cause and effect arises.

"For three months I have been bringing people their pensions in absolutely
new crispy banknotes," a postwoman I know told me yesterday, "Of course,
they may be hammering home to me that old and worn-out notes are being
replaced by new ones. But they don't need to try to fool me. I can't recall
any such "renewal" of cash on such a scale. Most likely, somebody has ordered
that before the elections start the presses and print a little money for
pensioners, the decisive force in the elections. Hence, my dear, the jump
in prices for food. And if police want to find those guilty of price rises,
they need not come to Lviv."

INCIDENTALLY

As of January 1, 1999, the M0 money aggregate (money outside banks,
i.e., cash) was UAH 7.158 billion, according to NBU data, or 46% of the
total money mass, which exceeds several times the indices of the developed
countries. Incidentally, in the first quarter, owing to the NBU's strict
monetary policy, the money mass structure changed for the better: as of
April 1, the share of cash dropped to 39%. Then, however, this index rose
steeply to 45%, almost reaching its previous level.

 

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