Russian Economy General News: #4

sepheronx wrote:

NationalRus wrote:

KomissarBojanchev wrote:If russia has an economy the same size as italy then italy is more powerful than germany because russia surpasses germany.

....

we dont

Larger army, second to Germany in Industrial production, and most known resources. Just because German goods has a higher fiat value to it, means little, especially when during a war where the GDP means squat.

sepheronx wrote:

NationalRus wrote:

KomissarBojanchev wrote:If russia has an economy the same size as italy then italy is more powerful than germany because russia surpasses germany.

....

we dont

Larger army, second to Germany in Industrial production, and most known resources. Just because German goods has a higher fiat value to it, means little, especially when during a war where the GDP means squat.

sepheronx wrote:GDP means nothing. Russia always had a weaker economy but always ended up as a major power. GDP is a theoretical calculation that was brought up in the 30's in US to compare various states with each other, but it was very hard to compare soviets as example because while they were not rich, they werent poor either and didnt have a stock exchange. Wealth in Fiat is based upon perception. If you break it down to this: trade physical metal and oil that is used in various ways for a piece of paper with the perception of value; does that actually make much sense?

As soon as the world moved away from gold backed currency, things got real ugly. Gold backing stopped around late 70's. Watch how US 'GDP' changed from then. Actually, biggest is 1990 to now. From a couple trillion to 18 trillion... while debt is..... same amount (109%). Then there is the idea of fudging numbers too. Now if the currencies are backed by something, it makes it very hard to fudge numbers.

sepheronx wrote:

NationalRus wrote:

sepheronx wrote:

NationalRus wrote:

KomissarBojanchev wrote:If russia has an economy the same size as italy then italy is more powerful than germany because russia surpasses germany.

....

we dont

Larger army, second to Germany in Industrial production, and most known resources. Just because German goods has a higher fiat value to it, means little, especially when during a war where the GDP means squat.

so we will change points of view till its fits us? maybe in 3 out of 30 angels we are ahead, and still ages behind including GDP, infrastructure, effieciency etc etc etc etc etc etc etc... pink glass view's again

Do you know where the concept of GDP comes from? Can you actually justify why a BMW, which is a car, costs 5x more than most other cars? Can you tell me why a German autocnc machine costs significantly more than a Chinese one? I bet you cant other than say "its better built" when that has been proven wrong through articles from lemon guide. Its perception, nothing more. German engineering is 21st century biggest lie, and this even came from Germans mouth. Especially when the metals needed came from Russia and the electronics used came from China. No different than a Mac computer using real basic components but charging a fortune for it, while using an open source bsd and calling it their own (mac osx). It comes down to marketing.  German engineering was something back in the second world war, and still didnt save them.

TR1 wrote:First of all, I would take a BMW over any Russian or Chinese shitbox any day.

They are excellent cars.

Now if you want to say that luxury markup is excessive, that is something else. Maybe. But does it matter? People are WILLING to pay that much for a BMW. Hence, its value is real.

It does not matter how much better value a cheaper car is, if people are not willing to exchange their labor/income for it.

higurashihougi wrote:

TR1 wrote:First of all, I would take a BMW over any Russian or Chinese shitbox any day.

They are excellent cars.

Now if you want to say that luxury markup is excessive, that is something else. Maybe. But does it matter? People are WILLING to pay that much for a BMW. Hence, its value is real.

It does not matter how much better value a cheaper car is, if people are not willing to exchange their labor/income for it.

Shitbox ? I don't think so.

Russian Lada's advantage is its excellent durability. That is the distinctive characteristic of Russian/Soviet goods.

But Lada consumed quite a number of fuel. For Russia where oil is cheap, it is not a problem. For some where else like Vietnam, it is.

Russian good's disadvantage used to be ugly appearance. But its quality is top.

flamming_python wrote:

TR1 wrote:First of all, I would take a BMW over any Russian or Chinese shitbox any day.
They are excellent cars.

Now if you want to say that luxury markup is excessive, that is something else. Maybe. But does it matter? People are WILLING to pay that much for a BMW. Hence, its value is real.
It does not matter how much better value a cheaper car is, if people are not willing to exchange their labor/income for it.

Funny thing is is that those Russian shitboxes might soon be sold in Europe to the unsuspecting consumer

With the dive of the Russian car market, some producers, I think it was Renault or Nissan which said it, are considering exporting their Russian-built cars to Scandinavia.

They are not as good quality as the originals built in France, Japan, etc...
But not neccesserily that bad either, often it's one of their locally-sourced parts that let them down.

flamming_python wrote:

TR1 wrote:First of all, I would take a BMW over any Russian or Chinese shitbox any day.
They are excellent cars.

Now if you want to say that luxury markup is excessive, that is something else. Maybe. But does it matter? People are WILLING to pay that much for a BMW. Hence, its value is real.
It does not matter how much better value a cheaper car is, if people are not willing to exchange their labor/income for it.

Funny thing is is that those Russian shitboxes might soon be sold in Europe to the unsuspecting consumer

With the dive of the Russian car market, some producers, I think it was Renault or Nissan which said it, are considering exporting their Russian-built cars to Scandinavia.

They are not as good quality as the originals built in France, Japan, etc...
But not neccesserily that bad either, often it's one of their locally-sourced parts that let them down.

The net inflow of money into funds investing in Russian shares continued its six-week streak, totaling $40.7 million for the week of 26 February – 4 March, in comparison with $80.1 million during the preceding week, according to the Emerging Portfolio Fund Research (EPFR).

Funds investing in shares in developing markets continued to grow during the three previous weeks, though at a diminishing pace with every week, according to Sberbank Investment Research.

The volume of inflows into these funds has not changed during the week of March 4, and reached $6.5 million according to EPFR Global. The MSCI EM index fell by 1.2% during the same week. Considering the low basis for comparison, the inflow of funds on an annualized basis increased once again to the level of .5% of assets, or $3.1 billion).

The leader among BRICS countries was India, whose inflows totaled .55% ($678.1 million) over the course of the week (the 12 month total was 7.4%, or $7.4 billion). China once again had comparatively weak results—an outflow of .12% ($341.1 million) in the course of the week, and 3.8% ($11.1 billion) over twelve months.

Investors are continuing to withdraw assets from Latin America--.75% ($216.3 million) during the week, according to Vesti Ekonomika.


Russia took the second place among the BRICS. Its total capital influx over the course of the year reached 1.1% ($525.2 million).

Therefore Russia is continuing to outpace developing markets, concludes Sberbank Investment Research.

The first fiddle is still played by funds oriented toward Russia (inflow of .11%, $34.3 million). Passive funds attracted .47% ($54.2 million), active funds lost .02% of assets ($4.6 million). During the week ending on March 4, RTS index increased by .1%, and Brent crude price rose by 3.2%.

J.Hawk’s Comment: This is unadulterated good news, especially in the rather gloomy international economic environment. To put it in plain English, Russia is considered to have an attractive investment climate, no mean feat after a decade of sanctions, credit rating downgrades, threats of more sanctions, even threats of military action and provocative NATO exercises on its border. All of these measures were not so much intended to hurt Russia’s economy directly as to create the impression Russia is surrounded, isolated, starved of capital, with its economy “in tatters”, to quote Barack Obama.

Who gets the credit for all this? Two sets of people:

The first is Russia’s economic team, which includes the Finance Minister Siluanov and Russian Central Bank Chair Nabiullina, both of whom are dependable, competent, and financially conservative. They understand that Russia still has not fully established itself as a sound post-Soviet economy, therefore they avoid taking any measures to put that reputation into doubt.

The second is Russia’s political team, with President Putin at the helm. They have managed to pursue an active foreign policy aimed at deflecting Western expansionism aimed at Ukraine and Russia, while at the same time not scaring away Western investors. The numbers cited above indicate that, amazingly, capital continued to flow into Russia even as fighting was raging on the Donbass and Ukraine’s economy was cratering.

Russia's international reserves in 2015 will be reduced by $ 50 billion, said Elvira.

"This year's gold reserves fell by $ 50 billion. This will include, including our operations to provide currency on a returnable basis," - she said.

March 1, the volume of Russia's international reserves amounted to $ 360.22 billion from $ 385.46 at the beginning of the year, falling for two months at $ 25.24 billion.

Capital outflow is projected at $ 100-110 billion. In addition, the Central Bank of Russia expects a decline of Russia's GDP in 2016 to 1-1.6%.

CBR expects in 2015 to reduce by half the net payments on foreign debt - to $ 65 billion compared to last year, said Elvira.

"Given the potential refinancing in international markets, we estimate the net external debt payments of $ 65 billion. This is about two times less than last year," - she appreciated. The head of the Central Bank expressed confidence that the ruble exchange rate in the current year, these payments will not be affected.

"The biggest debt payments fall this year in February and March," - reminded Elvira.

The Bank of Russia expects a positive balance of the current balance of the Russian Federation in 2015 at $ 64 billion.

Central Bank also maintains a forecast of the condition of conservation of sanctions until 2017. "We believe continued restrictions on Russian companies' access to capital markets throughout the forecast period," - said the head of the Central Bank.

Austin wrote:Elvira: Risks cooling economy may persist until I quarter of 2016

http://tass.ru/ekonomika/1826728

On the development of the economy

Russia's international reserves in 2015 will be reduced by $ 50 billion, said Elvira.

"This year's gold reserves fell by $ 50 billion. This will include, including our operations to provide currency on a returnable basis," - she said.

March 1, the volume of Russia's international reserves amounted to $ 360.22 billion from $ 385.46 at the beginning of the year, falling for two months at $ 25.24 billion.

Capital outflow is projected at $ 100-110 billion. In addition, the Central Bank of Russia expects a decline of Russia's GDP in 2016 to 1-1.6%.

CBR expects in 2015 to reduce by half the net payments on foreign debt - to $ 65 billion compared to last year, said Elvira.

"Given the potential refinancing in international markets, we estimate the net external debt payments of $ 65 billion. This is about two times less than last year," - she appreciated. The head of the Central Bank expressed confidence that the ruble exchange rate in the current year, these payments will not be affected.

"The biggest debt payments fall this year in February and March," - reminded Elvira.

The Bank of Russia expects a positive balance of the current balance of the Russian Federation in 2015 at $ 64 billion.

Central Bank also maintains a forecast of the condition of conservation of sanctions until 2017. "We believe continued restrictions on Russian companies' access to capital markets throughout the forecast period," - said the head of the Central Bank.