In 1992-1993, the government began to print money and lend credit at a rapid pace. Along with the liberalization of prices parallel to privatization, this action caused hyperinflation, increasing the money supply by 30%.5 Due to large foreign currency deposits, the depreciation of the ruble increased through the years. Russia was forced to declare a debt default and the government placed a moratorium on all payments. In the decade leading to 2001, the GDP fell 39% (See Appendix A). .
Most of Russia's emerging problems were due to economic inequality, which was supported by privatization. Yeltsin introduced the shares-for-loans program which was meant to sell off government property. As written by the European Bank at the time, "Under the 'shares-for-loans' scheme implemented in 1995, many of the key resource-based companies fell into the hands of a small group of financiers, the so called 'oligarchs.' These oligarchs are accused of stripping assets from the companies bought, which "depressed investment and economic growth. Meanwhile the government failed to gain the planned profit from the sale of state enterprises and property.
Russians at this time felt unsatisfied, especially with increased unemployment and economic downturn. Due to radical political changes, social dissent grew, as traditional values were slowly lost. The price falling on such products as alcohol and tobacco, as well as increasing psychological stress, caused many people to engage in alcoholism and drug use. The rate of depopulation in Russia was a stable 1.6-2%, with more than half of the population aging and mortality rate rising (see Appendix A)11 There was an increase in suicides, estimated to be at 38 per 1000 people by the WHO.12 HIV/AIDS virus became widespread, causing lower life expectancy and infant mortality.
Political corruption and crime rates rose when the change of governments took place. .
"The use of direct violence became commonplace.