One can long list problems faced by our economy after the economic reforms onset. But the most serious of them are: extremely low rates of economic growth and resource degradation of the economy, threatening the very existence of our country. Scientists, experts and politicians bring a lot of reasons of this and offer a variety of different methods and ways to remedy the situation. But it is extremely important to determine the main cause underlying these problems, because without its elimination it is impossible in principle to resolve them and all the measures taken will be ineffective or useless. That is, we are talking about the “key link”, pulling which one can pull out the whole chain of economic problems of our country. Publications and various speeches most often cite the bad investment climate or the practical unavailability of long-term and cheap loans as the main reason. But is it really so?

The article dwells on inflation processes in Russia. The main factors, which have significantly affected it, are identified and analyzed. The factors themselves are considered from monetary and non-monetary points of view. Particular attention is paid to non-monetary factors of inflation being its main source.

The lion’s share of credits allocated by banks to the population, is aimed at purchasing imported products and at stimulating economic growth of strategic competitors.

The crisis has shown that government together with the central bank can secure financial market stabilization by allocating additional funds to credit institutions for increasing risk reserves and mitigating effects of “toxic” assets accumulation.

In terms of consumption Russia was seeking to “catch up and surpass„ the West, but was doing so in a unique style of glare and poverty “all in one„.

It’s possible to say surely that for many centuries two models of relationship in society co-exist — control (diktat!) or partnership, and predominance of one or another component determines the type of corresponding public formation.

The crisis has not only significantly influenced the economy, but also considerably lowered the standard of living.