Russian Economy General News: #1

Huge money will be spend on Sochi OI 2014 but that money is meant to develope whole region not just OI. The list of project includes


- New airports (could be even new planes)
- New rails, trains, stations etc
- New highways
- New telecomunication (infrastructure, equipment for 4G netwoork etc)
- New medical facilities
- New stadiums, arenas etc
- New hotels, apartments, villages etc
- New artificial islands like in Dubia (Federation Island )
- New sewer, water supply systems and other necessary infrastructure
- New hydroplants, termoplants etc
- New powerlines and whole new energy system
- New sea ports
- New ski resorts, cable cars etc
- Huge marketing, promotion etc
- Safety of the whole region
- Functioning of the whole event and the staff etc
- etc

Here is a link that describes by my opinion only part of it

http://en.wikipedia.org/wiki/2014_Winter_Olympics#Sochi_Olympic_Park_.28Coastal_Cluster.29

sepheronx wrote:

AlfaT8 wrote:

sepheronx wrote:
I remember when not long ago, early this year, US was praising its growth, which was around 1% and yet Russia is stagnating with higher growth rate.

Really i thought it was 4.1% as mentioned below, or am i misunderstanding something?
US Real GDP Growth is at 4.10%

Maybe, buy 1.4 or so was first quarter. Could be higher but numbers can be scewed as gdp growth is accountrd for debt growth as well, as debt pretty much is on par with nominal gdp. Although, many enterprises have moved to automation this year so production is moving back home. Something which Russia needs to mimic.

Ok, i think i got it, what you meant was that earlier this year during the early quarters the U.S praised it's ~1% growth, i mistook that as the yearly growth.

As for the jobs coming back home, automation (mostly 3D printing) will definitely help, but will it be enough, cause for a corporation the aspect of automation+cheap labor sound like the Holy Grail of Maximizing profit, in Russia's case it would definitely solve a lot of manufacturing issues, which can only strengthen Russian industry as far as i can see.

Yes, highly automated industry is the future, and aside from quality intelligent and innovative workforce you need lots of raw materials, and who exactly has both? murica and rus and also canada and aus.

Not Russian but Chinese internal debt has grown to 58 % of GDP

http://www.bbc.co.uk/news/business-25553058
China has local government debts of 17.7 trillion yuan ($2.9tn), up 70% from three years ago, according to an official report.

China has a total government debt of about 58% of its economic output.


"While China's total government debt remains low by the OECD standards, the pace of the rise is still alarming," said ANZ Bank economists Liu Li-Gang and Zhou Hao.

"This national debt audit result could indicate that China's local government debt almost doubled in about two-and-a-half years."

Viktor wrote:Austin, have you any links/info that point to dependence/part of oil and gas/ mineral export as part of Russian GDP?

I managed to dig up this WB report but its no latter than 2011. 

LINK

Sorry saw this now , actually no dont have 2013 figures but this

http://data.worldbank.org/indicator/NY.GDP.TOTL.RT.ZS

says 22 % , it would be around the same i would guess

http://www.zerohedge.com/news/2013-12-31/russian-banks-buy-1814-tons-gold-2013

wow! With Central bank , total gold buying spree for 2013 is 300 metric tons!

Supporting Russia's Economic Energy

Makes Good Read for Statistics

Russia's Oil Industry Is Doing Fine, Which Is Great News For The Kremlin

7 Reasons That Russia Is Not The Soviet Union

zg18 wrote:http://www.zerohedge.com/news/2013-12-31/russian-banks-buy-1814-tons-gold-2013

wow! With Central bank , total gold buying spree for 2013 is 300 metric tons!

MOSCOW, Dec 31 (PRIME) – Russian banks bought 181.4 tonnes, or 5.834 million ounces of gold in 2013, which is 8.3% more than in 2012, a Finance Ministry source told PRIME on Tuesday.

“Gold still protects investors from currency risks and is the core of currency reserves of each country given the current economic instability,” the source said.

“For banks, this is good business -- they give credits to mineral developers which repay the banks with the gold they mine. The bulk of gold is later bought by the central bank to replenish its gold and hard currency reserves.”

The Russian Gold Union says the country’s gold mining will increase 4.7% to 205 tonnes in 2013, while the overall production of the yellow metal will increase to 240 tonnes.

Russia’s monetary gold reserves increased by 56 tonnes to 1,014 tonnes as of December 1.

Sberbank bought 48.5 tonnes of gold, more than any other bank in 2013. VTB bought 38.9 tonnes, Gazprombank 29.1 tonnes, Nomos bank 19.6 tonnes, Lanta bank 8.6 tonnes, Asian-Pacific Bank 6.7 tonnes, Baikalinvestbank 6.5 tonnes, Promsvyazbank 4.8 tonnes, Uralsib 3 tonnes and FIA-Bank 1.9 tonnes.

http://www.1prime.biz/news/_Russian_banks_increase_2013_gold_purchases_83_to_181_tonnes/0/%7BE6AA56B0-A062-492D-9189-16414C3859BF%7D.uif

Were missing data for December , so by Dec. 1 , 239 tons of gold were purchased by CBR and commercial banks. For years we only received info about CBR , so this is new for commercial banks , this tells a lot. Russia and China buy everything they dig up from the ground. Chinese also buy a lot through Hong Kong exchange.

Part of the plan to dethrone Dollar.

Nice start of the 2014 ....   

Gazprom boosts gas exports to Europe by 24 percent in 2013

Hannibal Barca wrote:Part of the plan to dethrone Dollar.

RMB will never replace USD as reserve currency. The same was said about the yen decades ago and China faces the same problem multiplied by several times.

Vladimir79 wrote:

Hannibal Barca wrote:Part of the plan to dethrone Dollar.

RMB will never replace USD as reserve currency.  The same was said about the yen decades ago and China faces the same problem multiplied by several times.  

a) what problem?

b) back in the 80 s when Japan's economy was still going strong USA had 30% of global GDP. Now has 20% and soon 15% Hard to have the reserve currency with such a small share

c) Japan is a tiny island with 1/15 of US size and half the population with 1/3 of the US industrial output in 1990. A loser of WW2, a US puppet since then with dozen of US bases and a titanic debt. China is the biggest industrial country, bigger than US, with 4 times the population and very very soon to be BY FAR the biggest economy of the planet by any estimate:
http://en.wikipedia.org/wiki/List_of_countries_by_future_GDP_%28PPP%29_estimates
http://en.wikipedia.org/wiki/List_of_countries_by_past_and_future_GDP_%28nominal%29
In 2013 surpassed US as an energy consumer as well:
http://www.usdebtclock.org/energy.html

d) China, unlike Japan is a nuclear and conventional military power. It already builds a navy with the intention to be bigger than US. Builds at least 2 and to some other sources 4 aircraft carriers simultaneously and at least two stealth programs in the same time. Capacity that is unthinkable for US economy and industry

e) Unlike Japan, China has super-powerful allies like Russia, India, Brazil, Indonesia that work towards making China the no1 economic power by creating world banks together, signing titanic trade agreements, providing political leverage, working together to dethrone dollar and destroy Eurozone/Europe/NATO, co-collect precious metals, trading in RMB and working as China's big hand.

f) RMB is already appreciating for years and the last two years reached prime time as we say:  
http://www.bloomberg.com/news/2013-12-03/yuan-passes-euro-to-be-second-most-used-trade-finance-currency.html

If you want I continue this until i reach point (z) in no time, but you got a sample I guess.

Stratfor and the most apreciated US strategists, investors and market people already grand this as an inevitable development and so many more.
Anything else is stupid redneck wishful thinking.

Last, a good synopses of the aforementioned. Not that I want to make a case by this, just I like the way he presents it:

Hannibal Barca wrote:

a) what problem?

b) back in the 80 s when Japan's economy was still going strong USA had 30% of global GDP. Now has 20% and soon 15% Hard to have the reserve currency with such a small share

c) Japan is a tiny island with 1/15 of US size and half the population with 1/3 of the US industrial output in 1990. A loser of WW2, a US puppet since then with dozen of US bases and a titanic debt. China is the biggest industrial country, bigger than US, with 4 times the population and very very soon to be BY FAR the biggest economy of the planet by any estimate:
http://en.wikipedia.org/wiki/List_of_countries_by_future_GDP_%28PPP%29_estimates
http://en.wikipedia.org/wiki/List_of_countries_by_past_and_future_GDP_%28nominal%29
In 2013 surpassed US as an energy consumer as well:
http://www.usdebtclock.org/energy.html

d) China, unlike Japan is a nuclear and conventional military power. It already builds a navy with the intention to be bigger than US. Builds at least 2 and to some other sources 4 aircraft carriers simultaneously and at least two stealth programs in the same time. Capacity that is unthinkable for US economy and industry

e) Unlike Japan, China has super-powerful allies like Russia, India, Brazil, Indonesia that work towards making China the no1 economic power by creating world banks together, signing titanic trade agreements, providing political leverage, working together to dethrone dollar and destroy Eurozone/Europe/NATO, co-collect precious metals, trading in RMB and working as China's big hand.

f) RMB is already appreciating for years and the last two years reached prime time as we say:  
http://www.bloomberg.com/news/2013-12-03/yuan-passes-euro-to-be-second-most-used-trade-finance-currency.html

If you want I continue this until i reach point (z) in no time, but you got a sample I guess.

Stratfor and the most apreciated US strategists, investors and market people already grand this as an inevitable development and so many more.
Anything else is stupid redneck wishful thinking.

a) massive debt

b) Chinese banks and corps are in no position to dictate international currency.  The banks are junk grade and corps have no branding.  Japan had the banks and brands.

c) Chinese consumption hardly grows at all and continues to decrease as share of GDP.  Its natural resources are quickly being drained and a mountain of debt is piling up.  

d) China is a copycat lacking innovation.  It can't even build turbofans.  Most of their engines from marine to aviation are imported.  Being so reliant on others limits their strategic position.  

e) China has allies like India?   The only ally China has is itself.  Everyone in the region hates them and the rest tolerate it.  Russia and Brasil aren't going to war for China.

f) RMB is pegged to USD so any fluctuation is minor and engineered.  Everything is going to change when they entire debt crisis.  

g) Even their top leaders reveal GDP is fake.  They can't even figure out how much debt they have.

z) China is running on a bubble economy.  The house of cards will crash.

The standard world reserve currency the dollar is a hard ground for every country to cut it off from own countries buisness and finance banking.

Why is that so?

First of all everyone knows there are only 2 banks on this planet who are allowed to print as much money as they want without any counter value in the real world, no gold,silver,land or any kind of material resources. This banks are the Federal Reserve Bank in NY and the ECB (Euro Central Bank)Commission in Brussels which belongs to FED and is controlled by only Goldmann Sucks Ex- or current managers. Everyone who doesn't believe they belong each other or the later belongs to the FED can research it for themselfs, there is not a single man or women that does not have its roots tied to Goldman Sucks or direct to the FED. Also not the FED nor the ECB are bound to any laws they are completley private banks, you can't sue them you can't elect the commitee or council like it is currently the case in the ECB, of all unelected undemocratic oligarchy who control the finance of each EU member from Brussels. Never was the money from the ESM (Euro Stability Mechanism) used to payback or safe a country from bankrupcy.

Ok, lets take a look why the Dollar is the world reserve currency.

The case today is for every country for every national Central Bank, they can only print as much money as much "free" dollars are floating on the digital market. They print own currency and have immidiatley to purchase "trade" their own currency against the "free" floating dollars on the digital market. Just because every country with their central banks have to trade their own printed currency against dollar gives the US its Top 1 income of money for the country because over 150++ countries are using it as a reserve currency and are not allowed to print their money like the FED or ECB.

This system was establided through the last two centuries through the lead of the Rothschild family who started their bank carrer in frankfurt and expanded across europe. This family controlls today majority of banks.
The Rothschild family has also during 19th century to 20th century financed several "revolutions" like the October revolution where the jewish bolshewism came to power. In france during last years of the 19th century. They financed several wars for the same goal to establishe this exact monopoly of one currency and the monopoly of their law.

"Give me the power of the money and it will not matter any more who is commanding".
   -   Mayer Amschel Rothschild

So what is the Problem, why people are not ignoring this?

There are several national laws bounding, in most cases into the constitution, a country to stay with this current trade of the dollar as the reserve currency.

This laws go above any presidental power and are in most cases like in russia even out of the reach of any court or any instance.


Here a video about the case and mechanism of Centralbanks. Made by Nikolaj Starikow.

The video is in russian, couldn't find with subtitles.




The problem are our own central banks who are within this corrupt net and are working explecit for this selfruling system.

If we want to dethrone this imperial finance doctrine it has to be done either from the top (FED) or from all other organs (national central banks).

Answer to Vlad79:

Sorry saying, probably the most ignorant post I came across in the 3 years I read this forum.

You said nothing about the links and the facts presented. Probably you are so preoccupied that you dismiss anything.

No reason to debate. As I continuously say I am not here to argue for anyone or take sides.
I merely gather information and I give back some of my own to pay back when I can.

Anyway for the people that may care and read the unfounded rumors of Vladimir, 3 "points" that being repeated again and again
to look like they are different in each repetition   : and a stupid paradox that when mention you immediately know that the person in front of you
has no idea what he is talking about   

1) A hypothesized inter-banking debt of China. No evidence what soever pure speculation from pro Westerners and Communists who bite their tongue
for the new capitalist block buster China. Again from OFFICIAL American sources: http://www.usdebtclock.org/world-debt-clock.html
No public nor external debts. Obviously no private debt either in China. So what left for which we have no data? Oh yeah inter-banking debt!
So lets call it banking debt    like Kim Jong Un's dogs eating his uncle story:
http://www.reuters.com/article/2014/01/06/us-korea-north-jang-idUSBREA050DP20140106

2) China copies technology. Indeed she lacks in some areas. If this was not the case she would be already the sole superpower given anything else being the same.
Given the money, the manpower and the industrial output and the fact that the most advanced producer aka US is in dire straights  this will not last for long.

3) Even if Russia will not involve in a war against US for China I find it hard to believe that France will nuke Russia to help US either.
Additionally, find it hard to believe that Vietnam or Burma hates China but loves US. Please, let us not be silly   

The paradox: Either China has weak internal consumption or bubbles and inflation problem in it's economy. She can't have both in the same time. Yakies.
The answer is: She doesn't have inflation problem else her currency wouldn't appreciating. She doesn't have weak internal consumption else she would't have medium inflation despite her currency appreciation. She does have a reasonable problem of "heated economy" though.
Quite normal for an economy which hits 10% for 35 years now!

Additional comments:

-Natural resources drain: crap

-Being so reliant on others limits their strategic position: total crap. ridiculous to call a country with huge fiscal and trade surpluses with no debt and the biggest reserve deposits reliant to the country which has fiscal DEPOSIT, trade DEFICIT and one of the nastiest debts worldwide

-RMB is pegged to USD so any fluctuation is minor and engineered: care to read the facts? the yuan APPRECIATING around 3% ANNUALLY FOR YEARS. How the hell is this happening if their where pegged?   

-Fake GDP? All sources about China's GDP are Western sources which are biased AGAINST China.

nuff said. Quod Erat Demonstrandum.

Hannibal Barca wrote:for the new capitalist block buster China. Again from OFFICIAL American sources: http://www.usdebtclock.org/world-debt-clock.html

Are you sure the data is correct , Russian Public Debt to GDP ratio is 10.5 % but the clock shows 15 %

Forget this official clocks, there are always and will always be black numbers and they are higher than what the countries officialy admit.

Officially Germany has 2.2 trln while the black numbers estimate above 3 trln USD Euro debts and growing.
The same case is for every country. They cover up unemployeed numbers, debts and inflation especially in Dollar and Euro, they handle it like there is no inflation at all.

Austin wrote:

Hannibal Barca wrote:for the new capitalist block buster China. Again from OFFICIAL American sources: http://www.usdebtclock.org/world-debt-clock.html

Are you sure the data is correct , Russian Public Debt to GDP ratio is 10.5 % but  the clock shows 15 %

This is as official as it gets for US. It is controlled by US States Treasury.
Don't care about minor differences it's country has it's own definitions about what is what.
Aka what classifies as public debt, what is state bonds what is federal gov debt etc.

Ok Thanks.

My own view is US Economy will implode over period of time as they are accumulating far higher Debt then they GDP is growing and they are in no position to repay those debts.

Every one is talking about Debt Bubble and Housing Bubble in the US.

As far as China Currency getting reserve status thats possible but its bit far away .....the problem is China is not growing as fast as US Economy is going down with Money Printing or QE.

We might see some mixed bag currency or IMF SDR or some combination involving Gold and mix of these as sort of reserve currency

I don't think we will see any reserve currency for sometime as soon the dollar is gone, i think the economy will try to orientate by economy camps to try to maintain a certain influence and will end up to be consomued by bigger camps.

A clarification:

I said that US dollar will be dethroned and is going to happen. Given a timetable for such things is stupid.
Equally, we all know, as well, that Euro-zone will face massive exits (at least), but arguing when this is going to happen is pure speculation cuz political factors play also a major role.

Give an example: From the beginning of Soviet stagnation it was clear that a perestroika was going to happen. When was going to happen or if the resolution of USSR was going to follow was too much to say, but knowledgeable people knew that the problem of communist economies was SERIOUS. Gravely serious.
China faced the same with Mao, but handled better and transformed faster.

Whether RMB was going to replace dollar is of minor importance. ANYTHING that may replace dollar will be China controlled and this is all that matters.
Simple, the guy with the biggest economy and the biggest trade has the reserve currency, the most diplomatic alliances and the biggest navy.
Tight up people with money relations and the rest come natural.

Nice ... production capacity of Russia is growing.

Digest of new production in 2013

Over the past year in Russia opened more than 200 medium and large new productions, including projects implemented in existing enterprises. Among the new factories, workshops and manufacturing units with an investment of 106 to 1 billion rubles, 51 launched with the participation of foreign investors, 133 built "from scratch".

what is russias trade surplus for year 2013 now thats in wto ,any data?
also guess the last country in net exports   
http://en.wikipedia.org/wiki/List_of_countries_by_net_exports

Hannibal Barca wrote:A clarification:

I said that US dollar will be dethroned and is going to happen. Given a timetable for such things is stupid.
Equally, we all know, as well, that Euro-zone will face massive exits (at least), but arguing when this is going to happen is pure speculation cuz political factors play also a major role.

Give an example: From the beginning of Soviet stagnation it was clear that a perestroika was going to happen. When was going to happen or if the resolution of USSR  was going to follow was too much to say, but knowledgeable people knew that the problem of communist economies was SERIOUS. Gravely serious.
China faced the same with Mao, but handled better and transformed faster.

Whether RMB was going to replace dollar is of minor importance. ANYTHING that may replace dollar will be China controlled and this is all that matters.
Simple, the guy with the biggest economy and the biggest trade has the reserve currency, the most diplomatic alliances and the biggest navy.
Tight up people with money relations and the rest come natural.

The whole Dollar vs multi-polar debate is interesting. However, I think there is a lot of spin and misconception surrounding it.

Post the Great Patriotic War/WW2, the US and the Dollar assumed a possession at the head of the table for itself, Canada,W Europe and a few other places. But ofcourse it never held sway over the Warsaw Pact, or the 3rd World to any extent.

In 1971, exchange rates became freely convertible, and the Dollar took on a new role. That was an enhanced role as banker to much of the West, and some of the 3rd World. Upon the dissolution of the Warsaw Pact, the Dollar's influence increased. But at the same time, new powers emerged - most notably China, and also other emerging markets.

Now, the Dollar doesn't have new markets to capture. It has the Euro as a rival, and also BRICS/other places.
In terms of international trade, the US and the Dollar have been powerful in recent times, very powerful. But the high water mark of say the late 90s was NEVER going to continue. America was never all powerful in the first place.

America is really at a crossroads. Its debt isn't like most countries debt. Because the debt is effectively... to itself and a few others. It doesn't default to itself, it just lets inflation cut it some slack. So inflation is what it must consider.

America's creditors are willingly (or atleast *knowingly*) exposing themselves to it. Its not like consumer credit where you can send the debt collectors round, and take the TV.

The results of it all are there for us to see already. Reduced military meddling and invasion. Welfare cuts. More manufacturing at home, less in China (there is less differential now). And a lowering of the Dollar vs commodities and emerging currencies like the RMB.

The Euro and Western currencies are linked to the Dollar. These countries are linked in trade, military and politics too. But the link may wane somewhat. Its all well talking about the RMB as the new global reserve currency. But we must remember, the Dollar was never "the" single true global reserve currency. It was simply the main currency for one bloc, for some time.

The West and other countries aren't part of some great family with China. They aren't inextricably linked, they don't particularly trust it. They didn't overly trust America, but in that case, there was an interconnection, and a predictability.

The emerging countries are catching up with the West. We are seeing substantial transfers of wealth from West to East. I think we are heading to a more multipolar World. But we will see the continuation of various groupings in blocs, albeit a little more blurred perhaps. In other words, more multipolarity, but no totally dominant China. Because, for one reason, China will have its own problems moving ahead..