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    Russian Economy General News: #3

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    Re: Russian Economy General News: #3

    Post  Regular on Tue Dec 30, 2014 11:07 pm

    I wonder how new sanctions packet will affect Russia. US is striking iron when its hot.

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    Re: Russian Economy General News: #3

    Post  sepheronx on Tue Dec 30, 2014 11:13 pm

    Regular wrote:I wonder how new sanctions packet will affect Russia. US is striking iron when its hot.

    What new sanctions packet? Any new ones wont make a difference. They already hit as hard as they could unless they want to totally destroy oil in their own nation, my nation and plenty other allied nations. Outside of that, Russia is now completely limited from foreign funding and alike. Actually, worst they can do is bar Russian companies from US market and US companies from Russian market, pulling out the manufacturing plants (subsiquently enough, a lot of people losing jobs and more capital outflow). But at that point, Russian market will be prime for the taking for any other companies wanting to get in but too much competition.

    Trade among Russia and US was around 2% of total Russian trade. Else, they just bar more people from entering US from Russia. Oh noes!

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    Re: Russian Economy General News: #3

    Post  flamming_python on Wed Dec 31, 2014 1:04 am

    TR1 wrote:
    sepheronx wrote:It all depends. Have they lost income and savings? They spent their own money on junk.

    Uh yes. Income is not keeping up with inflation by a long shot. How about old people and their pensions? Once again, they get put out to the pasture like in the 90s.

    Old people and their pensions got raised a lot in recent years.
    All social benefits did.
    It's a case of 1 step back, but a few steps forward were taken earlier on so no biggie.

    Compare that to Europe and the austerity measures; most of South and Eastern Europe got hit hard; some of Northern Europe too. Pension ages went up, social benefits got cut-down. Family tax benefits nullified. Additional taxes levied. Regional subsidy cuts. Healthcare cuts. Lowering of minimum wages. Public sector employees laid off in their thousands.
    That hasn't happened in Russia. Nothing like it. Not in 2008 either, during the GDP plunge. Actually more social support to vulnerable parts of the population has been introduced since then, raises in military pay, more pro-birth government support and some government programs for SMEs, innovative companies, etc... too

    For sure Putin didn't create an economic miracle. But then what would you call Europe's situation over the last 5 years in comparison? Do you know what their unemployment levels are like? In Russia it's among the lowest of any major country in the world, growth or no growth.

    Savings got kicked in the balls with devaulation and currency scrambles.

    Unfortunately yes, but still it's not 1998. It's not even 2008. Actually, everyone's savings are more or less alright, considering that for now all that this affects is spending power on foreign imported goods, and holidays abroad. Of course there will be a correction, but its magnitude will rather depend on whether the Central Bank and Russian government can get the rouble under control. If they can, and stabilize it in the 50s to a dollar, perhaps the high 40s, then the impact won't be too great.

    At the end of the day - savings are mostly about one thing - saving for property. Property prices haven't gone up, at least not any more than they've been growing in all the years before. If property prices actually end up falling, just perhaps, well then actually people's savings will end up being worth more than they were before. It's perfectly possible. Just goes to show that a little devaluation against foreign currencies is not the end of the world, nor the end of the economy.

    As for spending on junk, most people care about that much more than Armata MBTs or supposed foreign policy independence. It is the same in any nations populations.

    I care about Armata MBTs cheers

    Anyway, yes most people are apolitical, they don't hold any grudges against Europe or anything. But at the same time, there is a sort of understanding here, that the crisis is artificial and due to political tensions.

    TR1 wrote:And who do you think will contract more next year, the big EU states or Russia?
    Which population has lost more in real income? Savings?
    Seriously, should we sit here and go "Well thank fuck Germany is barely growing this year, that really makes things better for us in comparison". Come on.

    Think about it for a second. Their purchases from us are assured. They've put no sanctions on our exporters. And most of what they buy are raw materials that they need one way or the other. The value-added products we produce - may actually get more popular there as now they're cheaper due to the deevaluation.

    When it comes to the other way 'round however, we find that in terms of them exporting to us; they've mostly either sanctioned themselves, been sanctioned, or been priced out of our own market.
    All those multi-billion dollar deals Western oil/gas conglomerates secured in some of Russia's (and the world's) largest oil and gas fields - now they're all on hiatus due to the prohibition on selling oil-drilling tech to Russia. Stupid isn't it? What do you think is easier - for them to find other mega-gas & oil fields and win contracts in them, or for Russia to purchase tech/bring in partners from Asia and/or develop the neccessery technology by itself? In fact this is a synonym for most of the 'economic damage' that Europe has inflicted on Russia. Most of it has actually hurt itself more. Russia helped out with the agricultural bans of course. And as for the rest of the stuff, and Europe does export a lot of stuff to Russia; it's become a whole lot more expensive in Russia and people/companies will prefer Russian domestic alternatives instead more and more.
    Russian companies win, European companies lose.
    Russia is one of Europe's largest trading partners - they export over $100 billion in goods, and nearly $20 billion in services to Russia each year. Yet under US pressure and their own misguided policies; they're losing the Russian market.
    Yet is Russia losing the EU market? No, not at all, in fact it might even strengthen its positions there.

    The key factor is that Europe needs what Russia produces. But by and large, Russia doesn't need what the EU produces - given that there are alternative suppliers in Asia, and among its own companies in some cases. A lot of important stuff, Russia has encouraged to be set-up production for in Russia; wood processing plants, automotive plants, consumer goods production, etc... a lot of European companies have set up production in Russia, and now they will be even more encouraged to do so; given that the country is less keen on imports now and more keen on domestic production.

    Or take the South Stream cancellation. So fine, Europe and the US pressured Bulgaria into creating problems for South Stream. The US wanted it to be cancelled, Europe wanted Russia to go along with the 3rd energy package. Result? Russia cancelled it, made a new pipeline deal with Turkey.
    US got what it wanted. Did Europe? Hell no. Here they had a chance for their poorest members, to gain hundreds of millions of dollars yearly in transit fees from Russia. For Bulgaria, Hungary, Greece, Italy - to receive gas cheaper than via any other means. For thousands of jobs to be created in construction, local engineering enterprises to be involved, hundreds of European specialists to be trained and employed by Gazprom and other involved partners. And they blew it.
    Now Turkey takes home the prize; they'll be controlling everything, and Europe will get more expensive gas. Gazprom's involvement will end at the Greek-Turkish border and they don't care what happens to the gas after it crosses into Europe. Russia loses a little, as it strengthens Turkey's hand (who is a competitor), and gives Turkey a discount - but Europe loses a whole lot more.

    The main way that Europe hit Russia, is with the withdrawal of investment, bank loans, some high-tech joint-ventures, military-tech joint-ventures, etc... I mean these things hit the European partners as well, but it hit Russia too.
    Otherwise - the bulk of the damage has been done by the US, and its oil price manipulation, speculation on the ruble and other financial instruments; rating downgrades of Russian assets and banks, controls on liquidity, anti-Russian economic propaganda for the investors by the US media machine, etc...
    And the US is virtually not suffering at all. Its allies are. But not the US.

    So yeah, between the US and Russia - the US is not going to feel it one bit. The EU though - has been doing nothing but shooting itself in the foot. And with their own mass-protests, lack of confidence in politicians, spying scandal with the US, and other internal problems; not to mention the economic issues; unemployment, continuing austerity, sliding back into recession - they're the ones who really can't afford a confrontation with Russia. Russia itself can hold out for years. Europe - nope.

    Do I really need to go on?

    No change can fundamentally happen while the country is ruled by a kleptrocratic elite, a brainwashed bought off population and an upper class of theieves.

    You can say that about any country. Media is government-controlled, population is shaped by its own consumerist desire and what Putin says, the oligarchical elite are hopelessly corrupt and nepotism reigns supreme, etc... sure. My point is that you'll hardly find many countries to take examples from.

    It is fundamentally incompatible with entrepreneurship and honest business. Please, don't post some token product as proof that Russia is moving up in the world.  

    Russia did actually move up in the business rankings in recent years. There have been some measures to support SMEs.
    Illegal practices and all sorts of law-breaking did start getting cracked down starting from 2008-2009 or so; across all of Russia's legal landscape - slowly, Russia's courts have begun to be taken seriously.

    Maybe the tighter wallets of 2015 will make those have-nots rethink their feelings regarding who they support politically.

    Certainly not Navalny & co. though. People know who secures their interests - and who doesn't.

    Actually I am glad oil has plumetted. Time to wake up and see Putin's economic "miracle" for what it really is.

    I'm glad too. It's a hell of a drug, but now's the perfect opportunity for Russia to diversify.

    As for miracle - Putin actually did promise a miracle back in 2012. 6% economic growth. Like we're China or summit. Well I wanted to believe it. But of course it turned out to BS. And I do actually blame him - he hasn't done enough. He hasn't made the government do enough. He hasn't made the Central Bank be more flexible. He hasn't driven more reforms, or done more to improve foreign perception of Russia's investment climate. The man's not a reformer, he's a stabilizer. He has stabilized Russia, but it's time for Russia to enter a new era.

    TR1 wrote:2015 is gonna be great. The government is being obstinate on any idea of cutting the military budget. They don't want to eat away at the entire reserve fund to cover the budget shortfall.

    The military budget shouldn't be cut. One of the deputy ministers made the case against it earlier on. She basically made the point that to cut the program half-way through - would actually make the whole thing much more expensive later on, when the process of re-equipment and modernization has to be resumed from scratch or from hiatus. Because of course it will have to be resumed anyway - 60% of the Russian military's equipment is out of date, a far more critical situation than in any NATO country - and it isn't getting any newer. In that she's completely correct - continuing with the program in full is the most cost-effective option; rather than pausing and starting and pausing and starting and incuring huge costs.
    Of course, when it comes to things like Aircraft Carriers, those can be put on the back-burner, but then there were never any real plans for them drawn up anyway; most of the big spending is down to modernization programs to equipment in dire need of it (MiG-31BM, T-72B3, Su-30SM, Kirov cruisers, Su-25SM, Kuznetsov carrier), while others are focused on next-generations of equipment that in many cases are replacing tech from the 70s completely (PAK-FA, Su-34, Kurganets/Bumerang, Armata MBT, Tornado MLRS, Gremyashyj corvettes, Gorshkov frigates, Mi-28N, new power generation/electronics/communications equipment, Tigr vehicles, Typhoon trucks). In some cases the old stuff was produced outside the USSR or otherwise can't be produced again at all and bringing in new generations is thus even more of a priority (PAK-DA, Sarmat, Ivan Gren, Iskander-M, Il-112, Voronezh EW radars, Yak-130, Military satellites & GLONASS).
    Only a minority of programs really attempt to improve on newish tech or replace things that are already modern and capable (Pantsir-S1, Koalitsiya artillery, Volk vehicle, S-400, BMD-4Ms, Yars, Ratnik infantry set, Lada sub, Buk-M3).

    The other point is that military spending is a driver of the economy, essentially its a way for the government to reinvest tax money back into the economy without incurring inflation. Just about all that money goes back into Russia, into Russian enterprises, many of which are securing export orders with the help of R&D and new developments that their cash flows from Russian MoD orders partially fund. Some of these enterprises are moving into dual-use technologies too, and making new products for the consumer markets. Of course government support forever is hardly a good outcome, but in this case the stimulus is temporary, until the winding down of the rearmament program in 2020 or so - and until then for the next 5 years, the military spending will help strengthen Russia's next breed of high-tech industrial companies.

    One last thing. Whether we like it or not, agree with the politics, decisions or not - we all have to accept that the likelihood of conventional conflict, at least on some limited scale, between NATO and Russia - has gone up considerably. Already we have military tensions at the border - or rather in the airspace. That could extend to naval tensions as it did in Sweden. Then land border tensions. There has been a sharp increase in rhetoric - and mainly from the NATO side. Some NATO members are even openly calling Russia a terrorist state. Others are now getting as involved in the Ukrainian conflict, as Russia is; moving the whole thing closer to a proxy-war - right in the middle of Europe.
    It's not excluded that the Baltic retard leaderships and their hordes of loyal nationalists won't start provoking ethnic Russians in their respective republics. Who knows what this could lead to.
    But I am pretty sure that fully-equipped, very modern conventional forces, and enough of them to cover all of Russia's borders with Europe - are more important now than at any point since the collapse of the Berlin wall.

    They need to spend money subsidizing Crimea now as well

    Well I didn't see you or anyone else complaining - when they took it over.

    which given old oil prices wouldn't have even been an issue, but now will eat away at pension fund.

    Over 70% of the Russian population supported the Crimea reunification/annexation/etc... at least it was a decision of the people. I think they'll be honest enough, to at least blame themselves if they end up paying for it - a big part of the reason the Crimea was annexed is because Russian domestic opinion would have it no other way. And Russian domestic opinion, while mallable and faultable and only human, is genuine - and is actually a potent force in Russia, unlike in many countries in Europe and North America where it's simply either ignored, or manipulated to whatever the political elite decrees.

    I wonder how long it will take for people to start getting angry when their government welfare and subsidies fall, or at best don't adjust for the inflation at all.

    I don't think people will be angry at the government. Like I said, it's a fight we picked ourselves. I didn't support the annexation of the Crimea. But I did support helping the Donbass, and I standby that decision and am ready to answer for the consequences. Most of the Russian population supported the Crimea annexation. About half supported involving Russia further in the Ukraine; specifically the Donbass rebellion; perhaps more.
    I doubt any opposition movement will ever rise to prominence - on the slogan of 'Putin led us into messing into Ukrainian internal affairs!'. The Russian opposition politicians who publicly voiced similar views have pretty much been disowned - not that Russian society is so nationalistic; it's just that their duplicity is astounding, and it's impossible to feel any sympathy with the Ukrainian side regardless; they're a bunch of retards and criminals.

    If there's any anger against the government - it's the one coming from the other side - that Putin didn't do more to help the Novorussians. But they're not really a potent force for the moment either.

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    Re: Russian Economy General News: #3

    Post  GarryB on Wed Dec 31, 2014 3:08 am

    The Crimea will be an even more useful new part of Russia... it is my understanding that it is a very good holiday destination... they speak Russian, they will now accept Russian money, and there is good weather in the summer and plenty of historically significant places and things to see there... I would say its potential as a holiday destination for any Russian would have just multiplied 1000 percent just for these reasons alone.


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    Re: Russian Economy General News: #3

    Post  sepheronx on Wed Dec 31, 2014 3:42 am

    GarryB wrote:The Crimea will be an even more useful new part of Russia... it is my understanding that it is a very good holiday destination... they speak Russian, they will now accept Russian money, and there is good weather in the summer and plenty of historically significant places and things to see there... I would say its potential as a holiday destination for any Russian would have just multiplied 1000 percent just for these reasons alone.

    Not only is it a massive tourist destination (prior to annexation, most of the tourists going to Crimea were from Russia), making it a cheap vacation for most Russians, but it is also a massive agricultural and semi industrial economy too. If I am not mistaken, certain gadgets that were made for the Ukrainian tanks like fire control and optics were made in Crimea. As well, they have tooling plants and electrical companies that create modern electrical grid equipment. Crimea has more of an economy than one thinks and would provide a lot in terms of taxes over the years after the right amount of investments. Actually, the biggest investments Russia can make for it is a bridge to it (for highway and railway) as well as nuclear power plants and other electrical systems to help provide energy. Possibly even a desalting plant to bring drinkable and irrigation water from the Black Sea.

    Plenty of opportunities for Russia in Crimea.

    As for the rest, because of the wests heavy influence in the banking system in Russia, in terms of credit and alike, as well as FDI, Russia will get hit hard for the next couple of years till they can balance out their economy. Chances are, Agriculture and heavy industrial equipment will become a front runner for Russia's economy both domestic and export. Already Russian agricultural equipment, construction and engineering equipment as well as trucks, mining equipment and energy equipment is becoming popular in the international market (none western countries), thus it will only improve later on, especially if Russia becomes more aggressive in their workings with African and Latin American countries (whom are still semi-untapped markets and this is where Russian goods could do very well due to prices).

    That all said, reason why they wont cut the military budget, or at least not stop the modernization program (they need 70% modernization by 2020, it could be pushed back to 70% modernization by 2023 or so to help economically) is because the MIC is 25% of Russia's industrial strength. At that, they are the major reason why the tech industry is semi-booming in Russia as well as the use of materials being created for end use (composite materials as example). Cutting the budget will actually hurt the economy big time, possibly as much as the oil glut. Stretching out the budget can still guarantee work and production, but may slow down a bit, rather than halting altogether.

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    Re: Russian Economy General News: #3

    Post  GarryB on Wed Dec 31, 2014 5:36 am

    NATO can scream all they want, but their thugs use the same methods too

    But when they go for regime change is it for good reasons, but when Russia does it it is Imperial Aggression that has to be stopped.. don't you realise Putin is Adolf Hitler in 1937... I am surprised no one has said this to deflect away the fact that Obama could be described in this way better.

    Do as I say, not as I do...


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    Re: Russian Economy General News: #3

    Post  Austin on Wed Dec 31, 2014 5:54 am

    TR1 wrote:According to Siluanov- budget might have shortfall of 2.6 trillion rubles next year.
    http://lenta.ru/news/2014/12/30/siluanov/

    Russian budget revenues in 2015 decreased by 2.6 trillion rubles. According to Tass , this is the TV channel "Russia 24" said Russian Finance Minister Anton Siluanov.

    "Next year will be a very difficult budget situation. We see here and reduced revenue base. The budget was calculated based on the price of oil to $ 100 per barrel, based on a forecast of economic growth of 1.2 per cent - all this will not "- he said.

    Siluanov noted that the budget provides for large amounts of loans in the domestic market, but in the current economic situation it is also impossible.

    To date, the Reserve Fund of Russia is about 4.9 trillion rubles. According to the minister, the rapid use of these funds will lead to "eating away the reserves." He added that the Ministry of Finance is permitted in the case of the need to use up to 500 billion rubles of that money, however, and there may not be enough.

    "We have agreed that all ministries and departments will reduce their budget spending by about ten percent, and is the first step. (...) I am sure that this is not the last step, we have to act further to reduce costs, the transfer of appropriations at a later date ", - concluded Siluanov.

    Russian President Vladimir Putin on December 3 signed the law "On the Federal Budget for 2015 and the planning period of 2016 and 2017". Its main characteristics for 2015 were determined on the basis of projected GDP in the amount of 77 498.0 billion rubles and the inflation rate not exceeding 5.5 per cent.

    Projected total revenues of the federal budget is 15 082.4 billion rubles, including the estimated amount of additional oil and gas revenues of the federal budget - 344.3 billion rubles, expenditures - 15 513.1 billion rubles

    Posted Translation in Full.

    So 2.6 Trillion budget deficit , Wonder how much does that mean in budget deficit percentage terms ? About 17 % less projected revenue.

    Reserve Fund Today has http://www.minfin.ru/en/reservefund/statistics/amount/index.php?id_4=5817 4.3 trillion roubles.

    There are couple of options

    1 ) Continue with high budget deficit like 3-4 % like India or even US does it.

    2 ) Reduction of 10 % spending will help reduce the budget deficit

    3 ) Other reduction I can think of is Defence Funding.

    Total Defence Funding for 2015-2017 is ~ 9 trillion.

    Reducing 1.5 trillion or 500 billion each year is quite feseable , These funding can be rolled over to 2015-2025.

    Need to take into account like 3 years of Oil Price of $50-60 , US and its Stooge Saudi would no doubt try to keep it down As far as Possible.



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    Re: Russian Economy General News: #3

    Post  Austin on Wed Dec 31, 2014 6:04 am

    kvs wrote:

    If it is just fine for the whole of freaking NATO to run huge budget deficits and run up debt to 100% of GDP, then it is more than fine for Russia
    to run a budget deficit in times of need.

    I see, again, ludicrous double standards.   The US had $1.5 TRILLION deficits after Obama took over from Bush.   So Russia can't
    even have a $100 billion deficit and must have a surplus?   Even pipsqueak Canada had a $50 billion deficit recently.  

    Exactly , 2.6 trillion rouble budget deficit for 2015 todays dollar term is $42 billion ( 1 trillion ~ 16 billion USD )

    And US/Europe runs 90 % plus Debt , In fact their economy is so screwed up that it wouldnt be an Economy if not for the fraud and ponzi scheme they are running Laughing

    The whole Western Economy today is Phoney and Bubble Economy that would crash due to its own contradiction

    There is no concept of Economic Discipline in West Economy that Russia tries to follow so religiously



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    Re: Russian Economy General News: #3

    Post  Austin on Wed Dec 31, 2014 10:56 am

    kvs any one , Any idea what they are trying to say ?


    CB: Russia's international reserves cover the money supply by 71%


    The ratio of the money supply and international reserves is one way of assessing the adequacy of international reserves


    MOSCOW, December 31. / TASS /. Covering foreign exchange reserves of the money supply (M2, cash and non-cash money in circulation) for 11 months in 2014 increased from 64 to 71%

    This conclusion follows from the published statistics on December 31 CBR.

    As explained earlier the first deputy chairman of Russia Ksenia Yudaeva, the ratio of the money supply and international reserves is one way of assessing reserve adequacy.

    On 1 December 2014 the volume of Russia's international reserves fell to $ 418.88 billion, but because of the devaluation of the ruble reserves now cover a larger volume of money supply than at the beginning of the year (71%). M2 money supply for 11 months decreased by 2.5% to 30.63 trillion rubles.

    At the beginning of 2014 foreign exchange reserves were at $ 509.595 billion, which covers 64% of the money supply M2 on January 1, 2014 - 31.405 trillion rubles.

    During the economic crisis of 1997, the most stable in terms of the coverage ratio of the money supply turned Hong Kong, the volume of international reserves that exceed the money supply by 15 times.

    According Yudayeva, Russian reserves enough for a year of imports, their "much in terms of GDP," but not all of the money supply is covered, celebrated in June the first deputy chairman, stressing that "enough reserves to control the situation on the case of financial instability. "


    Last edited by Austin on Wed Dec 31, 2014 3:44 pm; edited 1 time in total

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    Re: Russian Economy General News: #3

    Post  Vann7 on Wed Dec 31, 2014 12:43 pm

    A report that shows how the "model of freedom in the world" and "progress" ,how  TR1's lovely USA gov is supplying weapons to ISIS through their so called "freedom fighters". A German lawnmaker (not kremlin propaganda as TR1 calls it) told he have evidence that Obama weapons ends on ISIS hands . what a surprise? Rolling Eyes

    Who could have guessed there is no such a thing like "moderates terrorist" in Syria.  Rolling Eyes
    Anyone knew the fraud of "Obama moderate fighters",the fraud in trying to label islamic terrorist in good or bad..including majority of real americans..only TR1 and others Obama dick suckers support American Government actions of fueling the violence in Syria and Ukraine . Which is nothing more than a proxy war against Russia economy. Is not a surprise that US always attack nations that are important for Russia economy whenever that is possible.



    Meanwhile TR1 complains that Russia is supplying light armor to Novorossiya fighters to defend civilians..
    he have no problems.. with the genocide of thousands of ethnic Russians in Ukraine ,just for being Russians..
    some of them burned alive..his only concern is territorial integrity of a nation which Government do not represent all Ukrainians ,that have been hijacked by US by removing his democratically elected leader by force ,provoking a civil war.  Any serious independent American politician in USA defend Russia position , but TR1 believe How dare the Russian government defend their Nation security at problems happening in their border.? how dare Russia interfere and help the million of ethnic Russians that do not want be part of NATO asking for help. How dare Russians keep Putin in power for their economic problems? AS if it was his fault the fall of oil prices..  and US economic attack on them. I can't believe TR1 you are are stupid as you show.. you have to be a CIA paid NGO troll just hired to spread Bullshit and non sense. in Russia military forums. Because if not.. then you are the more Cynic person in the world.
    You always put Big blinders to not see the whole picture on anything , and only focus in one thing at a time and completely ignore everything else.   So if an african prisoner in thrown into an arena with lions and he kills one.. TR1 will complain about the injustice in killing the lion because of animal rights. lol1 He is 100% identical to the Trolls that post always at RT forums ,saying the same propaganda script again and again.. but never debating any argument they bring.

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    Re: Russian Economy General News: #3

    Post  sepheronx on Wed Dec 31, 2014 2:54 pm

    Cutting defense spending now would be a bad decision unless it does not effect modernization of the armed forces (procurement). As I mentioned before, MIC is 25% of the industrial industry of Russia and possibly more than half of the tech industry. What you are suggesting austin, would effectively help decrease GDP and long term budget overall as companies would lay off their employees (defense is one of the largest, if not largest, in terms of employment in Russia) and the amount of tax revenue will drop significantly as well increase poverty thus the increasing overall costs on social benefits. This his how it is all tied together. So if they cut procurements, then it will utterly destroy a huge portion of Russias industrial and manufacturing base, and leave plenty without a job.

    So this is why they wont cut it. Although, professional soldiers wages should be cut, as they are one of the highest earners in the country. And Shelve some R&D for a while like the new destroyer. Simply concentrate on building newer vessels.

    The biggest money loss is beurocracy and social welfare. Cutting overall jobs will kill the economy (this is what US wants), so procurement has to stay the same.

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    Re: Russian Economy General News: #3

    Post  sepheronx on Wed Dec 31, 2014 3:10 pm

    http://itar-tass.com/en/economy/770159

    This is big, that has gone unnoticed. If they do this, than either forex will be a very diversed set of currencies and or other nations will have to have Rubles as reserve currency.

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    Re: Russian Economy General News: #3

    Post  magnumcromagnon on Wed Dec 31, 2014 3:15 pm

    sepheronx wrote:

    The biggest money loss is beurocracy and social welfare. Cutting overall jobs will kill the economy (this is what US wants), so procurement has to stay the same.

    Cutting social spending is a terrible idea (and is far from a waste of money), austerity never works on it's own terms, it didn't work for the Weimar Republic, it didn't work for Yeltsin in the 90's, and it's not working for Greece now. The biggest weight bearing entity on the economy is not money being wasted but revenue not being collected. The Moscow Derivatives Exchange (where the head of it is a friend of John McCain, and a supporter of Maidan in Ukraine) is full of untaxed wealth of the 5-th column monetarists, if you slap a 2% 'Wallstreet Sales Tax' it could easily rake in tens of billions of Dollars of tax revenue while simultaneously weakening the monetarists, killing two birds with one stone.

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    Re: Russian Economy General News: #3

    Post  sepheronx on Wed Dec 31, 2014 3:21 pm

    http://itar-tass.com/en/economy/770141

    Didnt know a petrol shortage in Russia. Good business to open up more petrol plants for domestic and foreign consumption.

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    Re: Russian Economy General News: #3

    Post  sepheronx on Wed Dec 31, 2014 3:45 pm

    magnumcromagnon wrote:
    sepheronx wrote:

    The biggest money loss is beurocracy and social welfare. Cutting overall jobs will kill the economy (this is what US wants), so procurement has to stay the same.

    Cutting social spending is a terrible idea (and is far from a waste of money), austerity never works on it's own terms, it didn't work for the Weimar Republic, it didn't work for Yeltsin in the 90's, and it's not working for Greece now. The biggest weight bearing entity on the economy is not money being wasted but revenue not being collected. The Moscow Derivatives Exchange (where the head of it is a friend of John McCain, and a supporter of Maidan in Ukraine) is full of untaxed wealth of the 5-th column monetarists, if you slap a 2% 'Wallstreet Sales Tax' it could easily rake in tens of billions of Dollars of tax revenue while simultaneously weakening the monetarists, killing two birds with one stone.

    Actually, what I find funny is how taxation in Russia is so low compared to a lot of countries, but they have a ridiculous amount of people that do not pay taxes as they are paid under the table. After some adjustments to taxation, Russia raked in ridiculous amounts of money earlier this year, while taxes are still very low.

    I didnt say cut social spending but privatize some aspects of it and or change how its done. For instances, if people make a large sum per year, then maybe they can get their own health insurance to reduce overall costs on medical care.

    Or go to a floating tax system rather than fixed rate of 14%. This will bring in loads of money. If Russians want to live the western socialist style, then charge them like a western system does. Make equivelant of $60,000 a year? 24% income tax...

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    Re: Russian Economy General News: #3

    Post  Austin on Wed Dec 31, 2014 3:46 pm

    Russia’s international reserves hit new 5-year low at $388.5 bln as of Dec 26

    http://itar-tass.com/en/economy/770162

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    Re: Russian Economy General News: #3

    Post  kvs on Wed Dec 31, 2014 3:47 pm

    It just points to the fact that the CBR's reserves are almost 3/4 of the M2. This gives the CBR a lot of intervention power on the domestic
    market. For example, to secure the banking system in case of panics.

    This is one of the pluses of not having an inflated "financial industry" economy like the USA. The USA cannot hope to stabilize its financial
    system if a panic develops.

    Austin wrote:kvs any one , Any idea what they are trying to say ?


    CB: Russia's international reserves cover the money supply by 71%


    The ratio of the money supply and international reserves is one way of assessing the adequacy of international reserves


    MOSCOW, December 31. / TASS /. Covering foreign exchange reserves of the money supply (M2, cash and non-cash money in circulation) for 11 months in 2014 increased from 64 to 71%

    This conclusion follows from the published statistics on December 31 CBR.

    As explained earlier the first deputy chairman of Russia Ksenia Yudaeva, the ratio of the money supply and international reserves is one way of assessing reserve adequacy.

    On 1 December 2014 the volume of Russia's international reserves fell to $ 418.88 billion, but because of the devaluation of the ruble reserves now cover a larger volume of money supply than at the beginning of the year (71%). M2 money supply for 11 months decreased by 2.5% to 30.63 trillion rubles.

    At the beginning of 2014 foreign exchange reserves were at $ 509.595 billion, which covers 64% of the money supply M2 on January 1, 2014 - 31.405 trillion rubles.

    During the economic crisis of 1997, the most stable in terms of the coverage ratio of the money supply turned Hong Kong, the volume of international reserves that exceed the money supply by 15 times.

    According Yudayeva, Russian reserves enough for a year of imports, their "much in terms of GDP," but not all of the money supply is covered, celebrated in June the first deputy chairman, stressing that "enough reserves to control the situation on the case of financial instability. "

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    Re: Russian Economy General News: #3

    Post  Austin on Wed Dec 31, 2014 3:52 pm

    ^^ Thanks kvs

    Can some one tell me how much Forex does Russia Earn Each year to add to its kitty.

    The forex today stands at $388 billion and  December 2013 it was $512 something.

    So between Jan 2014 and Dec 2014 how much forex was added via exports/surplus etc ?

    Seem like Russia is not adding Forex but draining it.

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    Re: Russian Economy General News: #3

    Post  Vann7 on Wed Dec 31, 2014 3:53 pm

    sepheronx wrote:Cutting defense spending now would be a bad decision unless it does not effect modernization of the armed forces (procurement). As I mentioned before, MIC is 25% of the industrial industry of Russia and possibly more than half of the tech industry. What you are suggesting austin, would effectively help decrease GDP and long term budget overall as companies would lay off their employees (defense is one of the largest, if not largest, in terms of employment in Russia) and the amount of tax revenue will drop significantly as well increase poverty thus the increasing overall costs on social benefits. This his how it is all tied together. So if they cut procurements, then it will utterly destroy a huge portion of Russias industrial and manufacturing base, and leave plenty without a job.

    So this is why they wont cut it. Although, professional soldiers wages should be cut, as they are one of the highest earners in the country. And Shelve some R&D for a while like the new destroyer. Simply concentrate on building newer vessels.

    The biggest money loss is beurocracy and social welfare. Cutting overall jobs will kill the economy (this is what US wants), so procurement has to stay the same.


    Somewhere it was posted ITAR news..where Russia defense minister told they will not cut defense budget.. regardless of the weaker ruble and western sanctions. That they defense spending will actually increase in 2015 by 20% and by 40% in 2017. Even Ukraine is increasing its defense spending.. as broken as they are.. Russia have many ways to handle western sanctions and low oil prices. In my opinions cuts cannot be done neither in Defense because they create technological jobs and move thousands of companies in Russia. Neither in Space exploration for same reason. The best place for a nation to do cuts when they are under high security risk of a war is social programs..

    If i was Putin ,i will cut the sports spending budget by 90%. if not 95%. and make That every player be responsible for their own training and thats it... Winning is not really important in any sport competition other than bragging rights. The building of infrastructure and roads however is very positive.. It promotes Business internal ones and external when you enter a city that is new with modern infrastructure and new roads. So Russia should continue to welcome any international event ,like Sochi and FIFA 2018 stadiums.. but cut most of the budget for training.

    Social Wellfare is important.. but in the short time in moment like this..that Russia is under major attack ,it should be the last priority of Russia. It have to be done right however.. or you will end with social unrest and protesters everywhere.

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    Re: Russian Economy General News: #3

    Post  kvs on Wed Dec 31, 2014 3:56 pm

    magnumcromagnon wrote:
    sepheronx wrote:

    The biggest money loss is beurocracy and social welfare. Cutting overall jobs will kill the economy (this is what US wants), so procurement has to stay the same.

    Cutting social spending is a terrible idea (and is far from a waste of money), austerity never works on it's own terms, it didn't work for the Weimar Republic, it didn't work for Yeltsin in the 90's, and it's not working for Greece now. The biggest weight bearing entity on the economy is not money being wasted but revenue not being collected. The Moscow Derivatives Exchange (where the head of it is a friend of John McCain, and a supporter of Maidan in Ukraine) is full of untaxed wealth of the 5-th column monetarists, if you slap a 2% 'Wallstreet Sales Tax' it could easily rake in tens of billions of Dollars of tax revenue while simultaneously weakening the monetarists, killing two birds with one stone.

    This is an excellent point. These vacuous financial transactions need at least a 1% tax. Here in Canada I am sick and tired of the f*cking social engineering.
    The gubbermint actually taxes the interest people get on money that has been taxed before. The problem is that they pretend that the inflation rate is
    zero when they calculate this interest. GICs only yield 2.x% which is basically at official inflation level and actually much less. There should be
    no tax on interest at or below inflation level. Instead of tax raping the people, the parasites in Ottawa should tax the speculators and also stop giving
    the oil industry massive tax breaks.

    Putin's government should stop emulating the vermin in NATO. Keep the taxes on the people low and tax all the wheeling and dealing by business.
    They will screech like fight taxation tooth and nail, but they are the ones that should be paying. If they threaten to move abroad, then they should
    lose access to the Russian market. This way they can decide the cost-benefit ratio of their racket.

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    Re: Russian Economy General News: #3

    Post  Austin on Wed Dec 31, 2014 3:59 pm

    I was hoping they would add like $100 to Forex but it seems to me that due to low Oil Price and subsequently Gas Price which is linked to oil , They would be fortunate to add even 40-50 billion in 2015 in forex kitty if average Oil price is at $50-60 in 2015

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    Re: Russian Economy General News: #3

    Post  sepheronx on Wed Dec 31, 2014 4:18 pm

    Austin wrote:I was hoping they would add like $100 to Forex but it seems to me that due to low Oil Price and subsequently Gas Price which is linked to oil , They would be fortunate to add even 40-50 billion in 2015 in forex kitty if average Oil price is at $50-60 in 2015

    They are currency repo usd to banks (which will end up back at CBR) but gold is mined in Russia, and they are ever increasing it. Petrol is the next thing to look at for sales outside of Russia, and building more petrol plants.

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    Re: Russian Economy General News: #3

    Post  par far on Wed Dec 31, 2014 4:39 pm

    flamming_python wrote:
    TR1 wrote:
    sepheronx wrote:It all depends. Have they lost income and savings? They spent their own money on junk.

    Uh yes. Income is not keeping up with inflation by a long shot. How about old people and their pensions? Once again, they get put out to the pasture like in the 90s.

    Old people and their pensions got raised a lot in recent years.
    All social benefits did.
    It's a case of 1 step back, but a few steps forward were taken earlier on so no biggie.

    Compare that to Europe and the austerity measures; most of South and Eastern Europe got hit hard; some of Northern Europe too. Pension ages went up, social benefits got cut-down. Family tax benefits nullified. Additional taxes levied. Regional subsidy cuts. Healthcare cuts. Lowering of minimum wages. Public sector employees laid off in their thousands.
    That hasn't happened in Russia. Nothing like it. Not in 2008 either, during the GDP plunge. Actually more social support to vulnerable parts of the population has been introduced since then, raises in military pay, more pro-birth government support and some government programs for SMEs, innovative companies, etc... too

    For sure Putin didn't create an economic miracle. But then what would you call Europe's situation over the last 5 years in comparison? Do you know what their unemployment levels are like? In Russia it's among the lowest of any major country in the world, growth or no growth.

    Savings got kicked in the balls with devaulation and currency scrambles.

    Unfortunately yes, but still it's not 1998. It's not even 2008. Actually, everyone's savings are more or less alright, considering that for now all that this affects is spending power on foreign imported goods, and holidays abroad. Of course there will be a correction, but its magnitude will rather depend on whether the Central Bank and Russian government can get the rouble under control. If they can, and stabilize it in the 50s to a dollar, perhaps the high 40s, then the impact won't be too great.

    At the end of the day - savings are mostly about one thing - saving for property. Property prices haven't gone up, at least not any more than they've been growing in all the years before. If property prices actually end up falling, just perhaps, well then actually people's savings will end up being worth more than they were before. It's perfectly possible. Just goes to show that a little devaluation against foreign currencies is not the end of the world, nor the end of the economy.

    As for spending on junk, most people care about that much more than Armata MBTs or supposed foreign policy independence. It is the same in any nations populations.

    I care about Armata MBTs cheers

    Anyway, yes most people are apolitical, they don't hold any grudges against Europe or anything. But at the same time, there is a sort of understanding here, that the crisis is artificial and due to political tensions.

    TR1 wrote:And who do you think will contract more next year, the big EU states or Russia?
    Which population has lost more in real income? Savings?
    Seriously, should we sit here and go "Well thank fuck Germany is barely growing this year, that really makes things better for us in comparison". Come on.

    Think about it for a second. Their purchases from us are assured. They've put no sanctions on our exporters. And most of what they buy are raw materials that they need one way or the other. The value-added products we produce - may actually get more popular there as now they're cheaper due to the deevaluation.

    When it comes to the other way 'round however, we find that in terms of them exporting to us; they've mostly either sanctioned themselves, been sanctioned, or been priced out of our own market.
    All those multi-billion dollar deals Western oil/gas conglomerates secured in some of Russia's (and the world's) largest oil and gas fields - now they're all on hiatus due to the prohibition on selling oil-drilling tech to Russia. Stupid isn't it? What do you think is easier - for them to find other mega-gas & oil fields and win contracts in them, or for Russia to purchase tech/bring in partners from Asia and/or develop the neccessery technology by itself? In fact this is a synonym for most of the 'economic damage' that Europe has inflicted on Russia. Most of it has actually hurt itself more. Russia helped out with the agricultural bans of course. And as for the rest of the stuff, and Europe does export a lot of stuff to Russia; it's become a whole lot more expensive in Russia and people/companies will prefer Russian domestic alternatives instead more and more.
    Russian companies win, European companies lose.
    Russia is one of Europe's largest trading partners - they export over $100 billion in goods, and nearly $20 billion in services to Russia each year. Yet under US pressure and their own misguided policies; they're losing the Russian market.
    Yet is Russia losing the EU market? No, not at all, in fact it might even strengthen its positions there.

    The key factor is that Europe needs what Russia produces. But by and large, Russia doesn't need what the EU produces - given that there are alternative suppliers in Asia, and among its own companies in some cases. A lot of important stuff, Russia has encouraged to be set-up production for in Russia; wood processing plants, automotive plants, consumer goods production, etc... a lot of European companies have set up production in Russia, and now they will be even more encouraged to do so; given that the country is less keen on imports now and more keen on domestic production.

    Or take the South Stream cancellation. So fine, Europe and the US pressured Bulgaria into creating problems for South Stream. The US wanted it to be cancelled, Europe wanted Russia to go along with the 3rd energy package. Result? Russia cancelled it, made a new pipeline deal with Turkey.
    US got what it wanted. Did Europe? Hell no. Here they had a chance for their poorest members, to gain hundreds of millions of dollars yearly in transit fees from Russia. For Bulgaria, Hungary, Greece, Italy - to receive gas cheaper than via any other means. For thousands of jobs to be created in construction, local engineering enterprises to be involved, hundreds of European specialists to be trained and employed by Gazprom and other involved partners. And they blew it.
    Now Turkey takes home the prize; they'll be controlling everything, and Europe will get more expensive gas. Gazprom's involvement will end at the Greek-Turkish border and they don't care what happens to the gas after it crosses into Europe. Russia loses a little, as it strengthens Turkey's hand (who is a competitor), and gives Turkey a discount - but Europe loses a whole lot more.

    The main way that Europe hit Russia, is with the withdrawal of investment, bank loans, some high-tech joint-ventures, military-tech joint-ventures, etc... I mean these things hit the European partners as well, but it hit Russia too.
    Otherwise - the bulk of the damage has been done by the US, and its oil price manipulation, speculation on the ruble and other financial instruments; rating downgrades of Russian assets and banks, controls on liquidity, anti-Russian economic propaganda for the investors by the US media machine, etc...
    And the US is virtually not suffering at all. Its allies are. But not the US.

    So yeah, between the US and Russia - the US is not going to feel it one bit. The EU though - has been doing nothing but shooting itself in the foot. And with their own mass-protests, lack of confidence in politicians, spying scandal with the US, and other internal problems; not to mention the economic issues; unemployment, continuing austerity, sliding back into recession - they're the ones who really can't afford a confrontation with Russia. Russia itself can hold out for years. Europe - nope.

    Do I really need to go on?

    No change can fundamentally happen while the country is ruled by a kleptrocratic elite, a brainwashed bought off population and an upper class of theieves.

    You can say that about any country. Media is government-controlled, population is shaped by its own consumerist desire and what Putin says, the oligarchical elite are hopelessly corrupt and nepotism reigns supreme, etc... sure. My point is that you'll hardly find many countries to take examples from.

    It is fundamentally incompatible with entrepreneurship and honest business. Please, don't post some token product as proof that Russia is moving up in the world.  

    Russia did actually move up in the business rankings in recent years. There have been some measures to support SMEs.
    Illegal practices and all sorts of law-breaking did start getting cracked down starting from 2008-2009 or so; across all of Russia's legal landscape - slowly, Russia's courts have begun to be taken seriously.

    Maybe the tighter wallets of 2015 will make those have-nots rethink their feelings regarding who they support politically.

    Certainly not Navalny & co. though. People know who secures their interests - and who doesn't.

    Actually I am glad oil has plumetted. Time to wake up and see Putin's economic "miracle" for what it really is.

    I'm glad too. It's a hell of a drug, but now's the perfect opportunity for Russia to diversify.

    As for miracle - Putin actually did promise a miracle back in 2012. 6% economic growth. Like we're China or summit. Well I wanted to believe it. But of course it turned out to BS. And I do actually blame him - he hasn't done enough. He hasn't made the government do enough. He hasn't made the Central Bank be more flexible. He hasn't driven more reforms, or done more to improve foreign perception of Russia's investment climate. The man's not a reformer, he's a stabilizer. He has stabilized Russia, but it's time for Russia to enter a new era.

    TR1 wrote:2015 is gonna be great. The government is being obstinate on any idea of cutting the military budget. They don't want to eat away at the entire reserve fund to cover the budget shortfall.

    The military budget shouldn't be cut. One of the deputy ministers made the case against it earlier on. She basically made the point that to cut the program half-way through - would actually make the whole thing much more expensive later on, when the process of re-equipment and modernization has to be resumed from scratch or from hiatus. Because of course it will have to be resumed anyway - 60% of the Russian military's equipment is out of date, a far more critical situation than in any NATO country - and it isn't getting any newer. In that she's completely correct - continuing with the program in full is the most cost-effective option; rather than pausing and starting and pausing and starting and incuring huge costs.
    Of course, when it comes to things like Aircraft Carriers, those can be put on the back-burner, but then there were never any real plans for them drawn up anyway; most of the big spending is down to modernization programs to equipment in dire need of it (MiG-31BM, T-72B3, Su-30SM, Kirov cruisers, Su-25SM, Kuznetsov carrier), while others are focused on next-generations of equipment that in many cases are replacing tech from the 70s completely (PAK-FA, Su-34, Kurganets/Bumerang, Armata MBT, Tornado MLRS, Gremyashyj corvettes, Gorshkov frigates, Mi-28N, new power generation/electronics/communications equipment, Tigr vehicles, Typhoon trucks). In some cases the old stuff was produced outside the USSR or otherwise can't be produced again at all and bringing in new generations is thus even more of a priority (PAK-DA, Sarmat, Ivan Gren, Iskander-M, Il-112, Voronezh EW radars, Yak-130, Military satellites & GLONASS).
    Only a minority of programs really attempt to improve on newish tech or replace things that are already modern and capable (Pantsir-S1, Koalitsiya artillery, Volk vehicle, S-400, BMD-4Ms, Yars, Ratnik infantry set, Lada sub, Buk-M3).

    The other point is that military spending is a driver of the economy, essentially its a way for the government to reinvest tax money back into the economy without incurring inflation. Just about all that money goes back into Russia, into Russian enterprises, many of which are securing export orders with the help of R&D and new developments that their cash flows from Russian MoD orders partially fund. Some of these enterprises are moving into dual-use technologies too, and making new products for the consumer markets. Of course government support forever is hardly a good outcome, but in this case the stimulus is temporary, until the winding down of the rearmament program in 2020 or so - and until then for the next 5 years, the military spending will help strengthen Russia's next breed of high-tech industrial companies.

    One last thing. Whether we like it or not, agree with the politics, decisions or not - we all have to accept that the likelihood of conventional conflict, at least on some limited scale, between NATO and Russia - has gone up considerably. Already we have military tensions at the border - or rather in the airspace. That could extend to naval tensions as it did in Sweden. Then land border tensions. There has been a sharp increase in rhetoric - and mainly from the NATO side. Some NATO members are even openly calling Russia a terrorist state. Others are now getting as involved in the Ukrainian conflict, as Russia is; moving the whole thing closer to a proxy-war - right in the middle of Europe.
    It's not excluded that the Baltic retard leaderships and their hordes of loyal nationalists won't start provoking ethnic Russians in their respective republics. Who knows what this could lead to.
    But I am pretty sure that fully-equipped, very modern conventional forces, and enough of them to cover all of Russia's borders with Europe - are more important now than at any point since the collapse of the Berlin wall.

    They need to spend money subsidizing Crimea now as well

    Well I didn't see you or anyone else complaining - when they took it over.

    which given old oil prices wouldn't have even been an issue, but now will eat away at pension fund.

    Over 70% of the Russian population supported the Crimea reunification/annexation/etc... at least it was a decision of the people. I think they'll be honest enough, to at least blame themselves if they end up paying for it - a big part of the reason the Crimea was annexed is because Russian domestic opinion would have it no other way. And Russian domestic opinion, while mallable and faultable and only human, is genuine - and is actually a potent force in Russia, unlike in many countries in Europe and North America where it's simply either ignored, or manipulated to whatever the political elite decrees.

    I wonder how long it will take for people to start getting angry when their government welfare and subsidies fall, or at best don't adjust for the inflation at all.

    I don't think people will be angry at the government. Like I said, it's a fight we picked ourselves. I didn't support the annexation of the Crimea. But I did support helping the Donbass, and I standby that decision and am ready to answer for the consequences. Most of the Russian population supported the Crimea annexation. About half supported involving Russia further in the Ukraine; specifically the Donbass rebellion; perhaps more.
    I doubt any opposition movement will ever rise to prominence - on the slogan of 'Putin led us into messing into Ukrainian internal affairs!'. The Russian opposition politicians who publicly voiced similar views have pretty much been disowned - not that Russian society is so nationalistic; it's just that their duplicity is astounding, and it's impossible to feel any sympathy with the Ukrainian side regardless; they're a bunch of retards and criminals.

    If there's any anger against the government - it's the one coming from the other side - that Putin didn't do more to help the Novorussians. But they're not really a potent force for the moment either.



    Very well said and very well explained flamming python, Russia is getting hit but so is Europe. One more thing to add is that Russia can turn to the BRICS countries(and they have already done), if they need help. The sanctions on Russia don't have to do anything with the situation in Ukraine, it has more to do with oil and Russia helping Assad, thus derailing the greater Irsarel project. The Zionists are the one doing this, cutting defence budget is ludicrous and dangerous, the modernization plan can be pushed back a few years but for the love of god don't cut the defence budget.

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    Re: Russian Economy General News: #3

    Post  Austin on Wed Dec 31, 2014 4:52 pm

    Yes the sanctions has nothing to do with Russia nor would sanctioning help in solving the problem , much like the Gay propoganda that MSM carried during Sochi was little to do with Olympics.

    Its a good opportunity for Russia to reorient its Economy and Financial system.


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    Re: Russian Economy General News: #3

    Post  sepheronx on Wed Dec 31, 2014 5:04 pm

    Austin wrote:Yes the sanctions has nothing to do with Russia nor would sanctioning help in solving the problem , much like the Gay propoganda that MSM carried during Sochi was little to do with Olympics.

    Its a good opportunity for Russia to reorient its Economy and Financial system.

    +1

    Agreed.

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