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    Russian Economy General News: #3

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    kvs
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    Re: Russian Economy General News: #3

    Post  kvs on Wed Dec 31, 2014 10:53 pm

    http://oilprice.com/Energy/Oil-Prices/Saudi-Facing-Largest-Deficit-In-Its-History.html

    The nearly 50 percent plunge in the price of oil during the past six months is expected to leave oil-rich Saudi Arabia with its first budget deficit since 2011 and the largest in its history.

    The budget, announced on Dec. 25, will include spending during fiscal 2015 of $229.3 billion, higher than in 2014, despite revenues estimated at only $190.7 billion, lower than in the current fiscal year. That would leave a deficit of $38.6 billion.

    All the yammering about Russia failing and how the Saudis will destroy Russia like they did the USSR. Hilarious BS.

    Kyo
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    Re: Russian Economy General News: #3

    Post  Kyo on Wed Dec 31, 2014 11:21 pm

    Some interesting economic data here:

    http://sputniknews.com/columnists/20141231/1016436434.html

    kvs
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    Re: Russian Economy General News: #3

    Post  kvs on Wed Dec 31, 2014 11:59 pm

    Kyo wrote:Some interesting economic data here:

    http://sputniknews.com/columnists/20141231/1016436434.html

    From the article:

    Now let’s take a look at Russian fundamentals. Russia’s government debt totals only 13.4% of its GDP. Its budget deficit in relation to GDP is only 0.5%. If we assume a US GDP of $16.8 trillion (the figure for 2013), the US budget deficit totals 4% of GDP, versus 0.5% for Russia. The Fed is essentially a private corporation owned by regional US private banks, although it passes itself off as a state institution. US publicly held debt is equal to a whopping 74% of GDP in fiscal year 2014. Russia’s is only 13.4%.

    And Russia is the country that is supposedly messed up. attack

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    Re: Russian Economy General News: #3

    Post  magnumcromagnon on Thu Jan 01, 2015 2:11 am

    kvs wrote:
    Kyo wrote:Some interesting economic data here:

    http://sputniknews.com/columnists/20141231/1016436434.html

    From the article:

    Now let’s take a look at Russian fundamentals. Russia’s government debt totals only 13.4% of its GDP. Its budget deficit in relation to GDP is only 0.5%.  If we assume a US GDP of $16.8 trillion (the figure for 2013), the US budget deficit totals 4% of GDP, versus 0.5% for Russia. The Fed is essentially a private corporation owned by regional US private banks, although it passes itself off as a state institution. US publicly held debt is equal to a whopping 74% of GDP in fiscal year 2014. Russia’s is only 13.4%.

    And Russia is the country that is supposedly messed up.  attack

    It's crazy how some of the most notorious character's on this forum (you know who you are) scream bloody murder, and impersonates Chicken Little and claim the sky is falling. In reality Russia and the other BRICS countries have remarkably low debt to GDP levels, if you take North America and the Eurozone, if you got rid of the immense deficits over night they would start looking less and less like 1st world countries and will start to devolve in to 2nd world countries within a 10 to 20 years span. Were already starting see this happening in places like Greece, Italy, and Spain.

    I'm tired of hearing our resident 'anglophile' claim the sky is falling, when Russia came back from far worse...such as depopulation of 20-30 million people post-WW2. So long as the Russian govt. doesn't engage in a massive austerity campaign, then over time the economy should recover.

    magnumcromagnon
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    Re: Russian Economy General News: #3

    Post  magnumcromagnon on Thu Jan 01, 2015 3:07 am

    If there was any question whether Lithuanian politics were dominated by delusional half-wits, question no more:


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    Re: Russian Economy General News: #3

    Post  Austin on Thu Jan 01, 2015 3:17 am

    Any reason why Rouble is falling now its 60 ?

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    Re: Russian Economy General News: #3

    Post  kvs on Thu Jan 01, 2015 3:22 am

    Austin wrote:Any reason why Rouble is falling now its 60 ?

    Because the forex market is not an optimal free market. There are some big players (Soros and friends) including
    state actors like the USA and UK (recall "Call me Dave" Cameron claiming credit for bringing down the ruble) that steer
    it. We will see anti-market pricing for the ruble for possibly years to come.

    Given the above sad facts, Russia needs to tax the hell out of forex transactions and exports which divert food
    to the west. It needs Draconian methods to crush speculators. Without this 5th column the scum that are
    attacking the ruble from abroad will have nothing to gain. They are hoping to undermine Russia from within
    by creating panic.

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    Re: Russian Economy General News: #3

    Post  Hannibal Barca on Thu Jan 01, 2015 4:59 am

    magnumcromagnon wrote:If there was any question whether Lithuanian politics were dominated by delusional half-wits, question no more:



    25 years passed since the end of the socialist joke and yet not a single major victory against USA have happened. This is the result of it.
    Like it or not Russia's size is to battle with USA, China and the likes and have an easy pass against midgets like Germany, UK and the likes.
    Either you confront and beat USA either you go down in history and get shredded into peaces.
    That's the price of a country with 17*10^6 km^2
    The sooner Russians realize this the better.
    A second Punic war is inevitable and better win this time...

    GarryB
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    Re: Russian Economy General News: #3

    Post  GarryB on Thu Jan 01, 2015 5:25 am

    A very low value rouble just makes Russian products rather more attractive... this should be an opportunity for Russian producers to look to export their goods more aggressively.


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    Re: Russian Economy General News: #3

    Post  AlfaT8 on Thu Jan 01, 2015 5:54 am

    Still waiting for Russia's Amazon. Twisted Evil

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    Re: Russian Economy General News: #3

    Post  Regular on Thu Jan 01, 2015 6:34 am

    magnumcromagnon wrote:If there was any question whether Lithuanian politics were dominated by delusional half-wits, question no more:

    Haha funny to see ex commies now holding Euros with smiles in their face.
    In my time I've seen 3 currencies change. Meh, as Lithuanian I don't see anything positive about accepting Euro.
    The propaganda about it was sickening. Not long ago Eurokomissar from Germoney said that we are joining thriving economical family. scratch
    Personally I don't think anything will change at all. Not when our main economical partner is Russia and we are not really western orientated when it comes to export so if we are not gonna re-orientate. It was said EURO will give 1.5 percent boost to GDP next year.
    We make Europe laugh by comparing our wages to theirs. Even Greece has bigger wages and pensions.

    http://en.wikipedia.org/wiki/List_of_European_countries_by_average_wage

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    Re: Russian Economy General News: #3

    Post  AbsoluteZero on Thu Jan 01, 2015 7:37 am

    Western media attacks Russia's new EEU

    Russia Starts A New Economic Union On New Year's And It Already Looks Like A Disaster

    it seems the business insider one of the many western news sources that is actively promoting alot of anti russian trashing

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    Re: Russian Economy General News: #3

    Post  GarryB on Thu Jan 01, 2015 9:56 am

    Still waiting for Russia's Amazon.

    A huge opportunity... Amazon didn't actually produce anything... all they did was got a large population of customers in contact with products from a wide range of producers and acted as the middleman... collecting all the money and making sure the product got to the customer...


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    Viktor
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    Re: Russian Economy General News: #3

    Post  Viktor on Thu Jan 01, 2015 5:47 pm

    Nice  and about time thumbsup

    I hope this will lead to superior thinking in comparison to previous one !

    Russia begins to "tax maneuver"

    @kvs tnx for explanation !

    and Im in need of another one Very Happy

    whats the correlation between these two titles?

    Russia's international reserves for the week decreased by $ 10.4 billion

    Russian banks demand at auction REPO 15 days - 2.7 trillion rubles

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    Re: Russian Economy General News: #3

    Post  kvs on Thu Jan 01, 2015 6:49 pm

    Viktor wrote:Nice  and about time thumbsup

    I hope this will lead to superior thinking in comparison to previous one !

    Russia begins to "tax maneuver"

    @kvs tnx for explanation !

    and Im in need of another one Very Happy

    whats the correlation between these two titles?

    Russia's international reserves for the week decreased by $ 10.4 billion

    Russian banks demand at auction REPO 15 days - 2.7 trillion rubles

    I really do not know what the CBR is using the reserve money for. The REPO auctions are not tied to the reserves. In this case 2.7 trillion
    rubles is around 50 billion dollars so it is not the same pot of money. Clearly the CBR does not need to use reserve money for loans
    so there are other machinations at play.

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    Re: Russian Economy General News: #3

    Post  Vann7 on Thu Jan 01, 2015 7:43 pm



    Interesting Keiser report.. in the end their guest in the show predict US dollar
    will cease to be the world currency ,and people will return to Gold and Silver standard.




    Even if 50% of that turns to be true.. and lets says BRICS and most Asia and latin america stop using dollars
    in most of their transactions.. The US GDP will pass the be cut in half.. at least... since a significant part of their GDP
    is based on selling paper dollars that people needs to use to buy energy for the agreements they created with the west.

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    Re: Russian Economy General News: #3

    Post  sepheronx on Thu Jan 01, 2015 7:51 pm

    Austin wrote:Any reason why Rouble is falling now its 60 ?

    Brent oil dropped from $60 to $57bbl, and add to the fact that Economics minister Ukelele or whatever the idiots name is talks too much, which gives ammo for speculators. So effectively, Russia and Russians are screwing their own currency.

    At $60/USD, it will make Russian products far more preferable. Right now though, there is a growing issue of domestic producers jacking up prices considerably, next to the imports. So they can cash in as most as they can. Which is price fixing and should be considered illegal.

    Eventually prices will have to go back or wages will have to adjust to meet this inflation.

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    Re: Russian Economy General News: #3

    Post  sepheronx on Thu Jan 01, 2015 8:37 pm

    AbsoluteZero wrote:Western media attacks Russia's new EEU

    Russia Starts A New Economic Union On New Year's And It Already Looks Like A Disaster

    it seems the business insider one of the many western news sources that is actively promoting alot of anti russian trashing

    They been that way for a long time.  Not surprising really.  They been predicting Russias downfall every year for years.  That said, EEU was Kazakhstans Idea and their comments are just silly.  Of course Kazakhstan said they can leave anytime and what not.  But they wont.

    And even if the currency value of the Kazakhstan is higher than Ruble, the products from Kazakhstan are still cheap due to much cheaper labor and production been around for a long time.  So the article is moot point. Tariff free trade would make the goods even cheaper.

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    Re: Russian Economy General News: #3

    Post  Vann7 on Fri Jan 02, 2015 12:57 am



    interesting too..


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    Re: Russian Economy General News: #3

    Post  Austin on Fri Jan 02, 2015 8:11 am

    kvs wrote:
    Viktor wrote:Nice  and about time thumbsup

    I hope this will lead to superior thinking in comparison to previous one !

    Russia begins to "tax maneuver"

    @kvs tnx for explanation !

    and Im in need of another one Very Happy

    whats the correlation between these two titles?

    Russia's international reserves for the week decreased by $ 10.4 billion

    Russian banks demand at auction REPO 15 days - 2.7 trillion rubles

    I really do not know what the CBR is using the reserve money for.  The REPO auctions are not tied to the reserves.  In this case 2.7 trillion
    rubles is around 50 billion dollars so it is not the same pot of money.   Clearly the CBR does not need to use reserve money for loans
    so there are other machinations at play.

    They intervened on Dec 30-31 with around $4 billion when Rouble reached 60 and beyond.

    The price of Oil Fall is small compared to the way Rouble is fluctuating.

    Could be some of those loans that companies has to pay by end of the year and rouble sold to buy USD

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    Re: Russian Economy General News: #3

    Post  Austin on Fri Jan 02, 2015 9:14 am

    As oil falls, Russia choked by military, social spending


    (Reuters) - Russian authorities are facing some unpalatable options as they try to keep the economy afloat - unless they can persuade President Vladimir Putin to curb massive military spending.

    Officials fear that without limiting the defense budget, the government will have to raise taxes, increase the pension age or print money to prevent the state deficit from running out of control.

    Despite a crisis brought on by diving oil markets and Western sanctions, they believe Russia can muddle through next year provided the price of crude, its dominant export earner, holds near current levels.

    But even at $60 per barrel, the present oil price is little more than half what the Kremlin needs to balance the budget, and it is quickly running out of money.

    Without radical action, the officials are much less confident about 2016-17 - and even sooner, should global oil prices continue their slide towards $40.


    One senior government source expressed concern about the effects of an unchecked deficit on one of Russia's two funds built up from past oil income.

    "If no spending is cut and revenue risks persist, we will have a deficit of 4 trillion rubles. The Reserve Fund will be spent within 18 months," he said. "In 2016 we will have no resources to meet our budget obligations. Not to mention 2017."

    At current exchange rates, 4 trillion rubles equates to $71 billion, not far from the $89 billion that the Reserve Fund now holds.

    Sanctions imposed by the European Union and United States over Moscow's role in the Ukraine crisis have deepened the problems: foreign investment is down sharply, more than $100 billion has fled abroad this year, Russian firms and banks have lost access to international capital markets and privatization plans are on hold.

    The central bank has had to spend heavily from its reserves, which have dropped to just below $400 billion from $510 billion at the start of 2014, to arrest a steep slide in the rouble.

    DEFENSE DRAIN

    Spending will be cut 10 percent next year but Finance Minister Anton Siluanov said last week that this was not enough to balance the budget. Expenditure is dominated by social and defense commitments, and Putin had set military investment as a priority even before the stand-off with the West began when Russia annexed Crimea from Ukraine in March.

    Out of total spending of 13.96 trillion rubles ($248 billion) in 2014, social benefits account for over 33 percent, and defense and security 32.5 percent.

    Next year, military spending will rise to 35 percent of the 15.51 trillion rouble budget. That means about $100 billion for defense and security at today's exchange rates.

    At the same time, the weaker rouble will lead to higher inflation next year by pushing up import costs, threatening Putin's reputation for safeguarding Russians' living standards.

    The lion's share of social spending goes on pensions, and this will rise sharply due a rapidly aging population unless the government takes radical action by raising the retirement age from 55 years for women and 60 for men.

    "Without cutting military spending and raising the pension age, we won't muddle through. What options do we have? Raise taxes and print money, which triggers a downward spiral of inflation and higher interest rates," the government source said.

    "DRAMATIC DEVELOPMENT"

    In the shorter term, the biggest economic risk would be a further plunge in oil prices, even if they bounced back rapidly. A drop to $40 for just a few days could inflict great psychological damage.

    Earlier this month, the rouble fell as much as 20 percent against the dollar in one day after oil plunged and the central bank raised its main interest rate sharply. The authorities were forced to impose informal capital controls to cool the panic and slow the flood of money out of the country.

    Putin has said formal capital controls are not on the agenda. Officials are anxious to avoid such drastic action as this would inflict long-term damage on Russia's international financial reputation: investors will put money into a country only if they believe they can take the profits back out later.

    "We won't introduce capital controls unless there is a dramatic development," said a top-level government source. "I don't know if $40 per barrel will trigger it. For our country it is very bad, it is a tragedy. But whether it will trigger capital controls or not, I just don't know," the source said.

    In December 2008, oil fell during the global financial crisis to around $36 but even then Russia did not reinstate capital controls.

    "This crisis is more psychological, more emotional than those we have seen in the past. But in principle, the situation is not very different from 2008. We can always switch to measures we used in 2009," the source said, naming state guarantees and direct funding of troubled companies among possible measures.

    However, former finance minister Alexei Kudrin said the current crisis was different because of the sanctions. "To come out of the crisis, the government and the president should settle the conflict with leading powers, mainly Europe and the United States," he said last week.

    However, the top-level government source held out little hope for an easing of tensions with Washington. "Relations with the United States are frozen," he said.

    ($1 = 56.2950 rubles)

    Austin
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    Re: Russian Economy General News: #3

    Post  Austin on Fri Jan 02, 2015 9:21 am

    Not sure why Russia maintains Capital Account Convertibility and No Capital Control , No BRICS country has either of these and even country having more bigger and vibrant economy than Russia has implemented these two.

    High time they go for capital control and reduce capital account convertibility at certain threshold

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    Re: Russian Economy General News: #3

    Post  AlfaT8 on Fri Jan 02, 2015 2:27 pm

    Austin wrote:As oil falls, Russia choked by military, social spending
    Reuters, really!? Suspect

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    Re: Russian Economy General News: #3

    Post  kvs on Fri Jan 02, 2015 2:29 pm

    These Russian officials need to be fired ASAP for fear mongering. Russia can run deficits just like Canada and the USA.
    I do not recall the enormous deficits in the USA being used to write America off.

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    Re: Russian Economy General News: #3

    Post  kvs on Fri Jan 02, 2015 2:53 pm

    http://johnhelmer.net/?p=12426

    Interesting synopsis of an interview with CBR head from the late 1990s to the early 2000s. His statement about Nabiullina
    is on the mark. He also brings up the vital aspect of capital accounts for exporters and controlling money flows:

    Asked what he had done at the CBR and would do now, Gerashchenko said: “Firstly, introduce certain controls. At the time [we] allowed to leave 50% of foreign exchange earnings for exporters to remain in their foreign currency accounts. In order not to lose, especially if they had to buy things to improve our own products, machines or other things. Here the CBR began to allow these foreign currency accounts. Then, when we started to improve things, we reached the point where 75% could be left on the foreign exchange accounts.

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