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    Russian Economy General News: #4

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    Karl Haushofer

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    Re: Russian Economy General News: #4

    Post  Karl Haushofer on Wed Jul 29, 2015 12:13 am

    But isn't Russia currently drilling more oil than ever? So Russian production is one of the keys that has driven the oil price down.


    Last edited by Karl Haushofer on Wed Jul 29, 2015 12:14 am; edited 1 time in total
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    sepheronx

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    Re: Russian Economy General News: #4

    Post  sepheronx on Wed Jul 29, 2015 12:14 am

    One thing I should point out, is one has to find what petrol prices are in Russia, Australia, Canada and what not.  Compare them.  Oil industries got hurt here, but oil companies whom own oil refineries are now making a killing through petrol prices.

    Karl Haushofer wrote:But isn't Russia currently pumping more oil than ever? So Russian production is one of the keys that has driven the oil price down.

    Each year they end up pumping more than before. Simply put, many wells that were being built, are built and running now. So it is only natural.

    The major issue now, is that economies of USA, China, Europe, etc are all slumping. In doing so, they managed to obtain a huge amount of reserves so now they are cutting back purchases, so prices have to drop in order for them to continue buying. You will keep on hearing about x or y countries reserves have increased. Simply put, they are not nearly consuming as much as they did before. Now with more players involved, it just over supplies the whole market.

    Russia may end up cutting production, but right now, they are obtaining same amount of roubles (or close to) as they did before when oil was worth nearly double. Simply due to exchange rates and oil being sold in USD or Yuans (now). They will make up for it in terms of volume I imagine.

    If Russia goes the route I think they will go at (relying mostly on domestic consumption/development) they will have slow growth. Real slow growth. But, they will have a more solid economy and real economy, with being effected the least from international situations. But, Russia will still continue to be a bigger exporter as its resources will always be in demand. And now it seems their products are in demand as well (food, machinery, etc) due to being cheaper to purchase.

    There is a saying when about losing weight as an example: If you lose too much too soon, you will gain a lot of it back easily. I feel it is similar to economics. You can grow real big and fast, but any situation/tremor, can also knock you down fast. This was real evident back in 2008/2009 for Russia. They were growing quite fast, then all of a sudden, market crashes and Russia went from a good 3 - 5% GDP increase to a -7 to -9% GDP increase, and that was quite the shock. This time, you will see that they have been far more prepared, and for having both sanctions against you and high inflation/interest rates, GDP drop will be roughly 2 - 3% this year with possible growth at the end of this year to early next year. That is quite impressive really, for a nation being sanctioned by the so called indisputable democracy that is the west.
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    KoTeMoRe

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    Re: Russian Economy General News: #4

    Post  KoTeMoRe on Wed Jul 29, 2015 12:27 am

    Karl Haushofer wrote:
    KoTeMoRe wrote:
    Karl Haushofer wrote:According to Finnish Taloussanomat the Gross Domestic Product of Russia decreased by 4,8% in June of 2015 compared to June of 2014. This is a steeper decline than I thought.

    The GDP also declined by 0,1% since May of 2015 so the monthly decline was not as big as the year-on-year decline.

    What do you make of this? Is cheaper oil the biggest factor in this decline?

    Not really, it's summer economy. A lot of cash is spent abroad...

    But wasn't the June of 2014 also a "summer economy"? What is different in this summer compared to a year before?

    Well given the Summer 2014 was the start of hard-sanctions ...Usually Summer is slow.

    Austin

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    Re: Russian Economy General News: #4

    Post  Austin on Wed Jul 29, 2015 9:00 am

    kvs wrote:
    Austin wrote:What is the negative effect of rising rouble due to lowering of prices , I saw today Rouble vs USD is at 60 , On the positive side the budget is taken care off.

    Will Rouble getting more weaker vesus Euro/USD lead to inflation and what else ?


    Given the response pattern so far the impact is small to negligible at this stage.   The main impact was when the ruble fell from the high
    30s to the 60s per dollar.   Then there was a surge of inflation with a peak annualizing to 36%.   But by March of 2015 the inflation spike
    basically disappeared as posted data showed in this thread (weekly inflation rates returned to March 2014 levels).   Fluctuations of 10
    rubles in the forex rate will not have any similar impact.   Russia's economy has adjusted to the new ruble exchange rate.    And this
    adjustment has been spectacular.    Instead of producing a self-propagating inflation surge last years, it died out in about 4 months.
    Anyone spouting about a weak Russian economy is contradicted by this data alone.

     

    So can we expect 10-12 % inflation in 2015 , is this what they are expecting ?

    Another aspect of low all prices is for companies who have to repay their loans this year is the less dollar they collect in the kitty , Rouble on the other had will be collected more.

    There is some manipulation of Gold going on in order to prop up USD and Stock Market globally , Its good time for CBR to increase their Gold Reserves.

    The current low Oil Prices may not last long , we need to see how Oil Behaves for the next 3-4 months atleast one quarter , The current low might just be a temporary thing before Brent reaches $60

    Austin

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    Re: Russian Economy General News: #4

    Post  Austin on Wed Jul 29, 2015 9:02 am

    CBR needs to target Gold Reserves of 5000T that would be the number they should target
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    Maximmmm

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    Re: Russian Economy General News: #4

    Post  Maximmmm on Wed Jul 29, 2015 10:20 am

    sepheronx wrote:

    Reason why Russian government was stating that they will see growth by Q4 this year or Q1 next year is not due to oil prices, more so that consumer confidence have increased in the last month or so and they are basing it off of that trend.  Russian consumers are number 1 for Russian economic growth.  No one is trying to kill off shale (maybe Saudi Arabia, I am not sure) by lowering prices.  Russia isn't doing it at least.


    I wasn't talking about foreign loans, but domestic ones. I agree with a lot of you points and you're absolutely right that the consumer is the driving factor for Russian growth, but a lot of that consumption has been made possible by loans. And if the rates are ridiculously high that story about the fishermen losing their boat becomes a lot more likely.

    Regarding cheap oil, sure we're getting the same amount of Roubles, but even though we like to shout about import-replacement there's a lot of goods we are still importing. Those are being made prohibitively expensive by the currency's fall, and we're not some juche country that can make everything we need at home. If oil stays low or falls even lower, the rouble will follow and every company that uses foreign parts or machinery is going to have serious issues. And since Russian salaries aren't paid in dollars, they can't pass that cost on to the consumer because they simply won't be able to afford it. Margins will tank and that puts a big break on the economy.
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    medo

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    Re: Russian Economy General News: #4

    Post  medo on Wed Jul 29, 2015 12:44 pm

    Not everything is as black as it seems. Russia have a fall in GDP, but part of the fall is also imports substitution. Let see. Prior sanctions Russia have to import polypropylenes, now with new production capabilities they produce it enough for all domestic needs and also for export and domestic is for sure cheaper than imported from the West and at the same amount of material it is lower GDP because of lower prices. Automobile industry also use higher share of domestically produced parts (carosery, engines, brakes, etc) and they are cheaper than those imported from the West, so lower prices of cars and lower GDP. Same is true for electronic components, domestic are cheaper and this again lower GDP. Russia is also substituting imports of industrial machinery with domestic ones and again some lowering in GDP. Than you have substitution of imports from Ukraine, etc. You have to know, that expensive imports are also part of GDP, but the large fall of importing also mean less money go out from the country and that domestic producers replace those imports and this mean only a grow in industrial and agronomy production. Than you have export, which bring less money as the value of Rouble is lower and the price of oil is down. But there is a change in export shares. Russia export less of crude oil and more of oil products, which have higher prices, be it fuels (diesel, gasoline, kerosine) or machinery lubricants or as different types of propylenes or polypropylenes or finished plastic products. Same goes for wood, export less timber and more wooden products, metals, etc. Rising of industrial production to replace 100% imports will also bring higher share of exports of full industrial products, which will bring more real money than exporting crude materials. Sanctions will simply teach Russian companies to invest profits into modernization and new capabilities instead of taking new credits.

    Russia will have a year or two of difficulties and problems, but you have to know, that Russia have all needed materials, energy and skilled work force at home, so they will not need imports, that taxes in Russia are low (I think tax is 13%) and Russia have very low debt, what mean, that the cost of the debt on Russian product will be minimal and with this Russian products will be far cheaper than Western products with the same quality as Russia will have the same modern industry and the same high quality materials. The West is simply loosing the Russian market and also is getting very big concurent in industrial products on foreign markets, because Russian products will be far cheaper because of high taxes and debts in the West.
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    Neutrality

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    Re: Russian Economy General News: #4

    Post  Neutrality on Wed Jul 29, 2015 1:10 pm

    The oil prices will spike in the near future, that's the one thing I'm certain about. Big oil companies have halted oil projects worth 200 billion dollars. When the reserves begin to dry up in both America and Europe, the prices will sky rocket. It's a double edged sword for Russia though. Right now the low oil prices force the Russian economy to reform. Fossils have a big share in Russian export and that needs to be reduced. Nabiullina already said that high oil prices will make them "lazy".
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    sepheronx

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    Re: Russian Economy General News: #4

    Post  sepheronx on Wed Jul 29, 2015 2:52 pm

    Maximmmm wrote:
    sepheronx wrote:

    Reason why Russian government was stating that they will see growth by Q4 this year or Q1 next year is not due to oil prices, more so that consumer confidence have increased in the last month or so and they are basing it off of that trend.  Russian consumers are number 1 for Russian economic growth.  No one is trying to kill off shale (maybe Saudi Arabia, I am not sure) by lowering prices.  Russia isn't doing it at least.


    I wasn't talking about foreign loans, but domestic ones. I agree with a lot of you points and you're absolutely right that the consumer is the driving factor for Russian growth, but a lot of that consumption has been made possible by loans. And if the rates are ridiculously high that story about the fishermen losing their boat becomes a lot more likely.

    Regarding cheap oil, sure we're getting the same amount of Roubles, but even though we like to shout about import-replacement there's a lot of goods we are still importing. Those are being made prohibitively expensive by the currency's fall, and we're not some juche country that can make everything we need at home. If oil stays low or falls even lower, the rouble will follow and every company that uses foreign parts or machinery is going to have serious issues. And since Russian salaries aren't paid in dollars, they can't pass that cost on to the consumer because they simply won't be able to afford it. Margins will tank and that puts a big break on the economy.

    You dont even live in Russia as you live in Canada. So please, stop with the "we" and "us" crap. I think no one else falls for it.

    Lets be real here, if you know something Russian gov doesnt, go tell them. Import substitution is real and already happening. I have pointed it out multiple times. May I make a suggestion and move yourself to the other threads, read a tad bit more, before posting? Because I have been here for quite some time, and people such as I, Austin, Viktor and others have posted more than enough in terms of investments, development and import substitution.

    Thanks.

    A "huge" portion of those imported goods are trivial at most (clothing brands that are not made in Russia like that crap Prada or whatever, or certain toys). Kaluga region will be making Yota phones as an example soon enough. Not to mention tooling plants have either modernized to make new CNC through own design or licensed design, or foreign companies opened up shop with around 50% or more localization of parts.

    You are also wrong about how majority of that growth was through cheap credit. Because if you were right, GDP would have dropped even further. As well, average debt amongst average consumer in Russia is roughly $144, meaning that it doesnt even come close to your belief. Most pay with cash.
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    sepheronx

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    Re: Russian Economy General News: #4

    Post  sepheronx on Wed Jul 29, 2015 4:35 pm

    Cheap credit helps corporations more so than individuals besides mortgages. Russian industries are now forced to obtain cheap loans through China or a mix between short term domestic loans and long term foreign loans. Rosneft recently pushed it for themselves.

    That said, it will make import substitution take longer but lets be real here - Russia is ripe to do nearly everything in development. It may not come from multiple small companies but through few major companies. But already Russia substituted all the way down to simple capacitors and transistors through a company in St.Pete

    If you want to know more, there is a import substitution section on sdelanounas.ru website. And lets be honest, that site is gold in information, as it doesnt rely upon anecdotal evidence that many push (such as yourself) here.
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    Maximmmm

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    Re: Russian Economy General News: #4

    Post  Maximmmm on Wed Jul 29, 2015 8:42 pm

    Agree to disagree then. I think as always you're a bit too optimistic in some cases. Sure a huge part of the import is easily replaced or forgotten, but some crucial things take years to replace. Naval production (turbines, electronics) is the obvious big-ticket example.
    As nice as some of the news on sdelanounas is (and I read it daily), not every new factory is guaranteed to stay in business.
    Hell we just had that moment of the farmer that talked to Putin closing down his business due to financial difficulties.

    I agree that long-term it's definitely a big benefit but unless they expect to tolerate a hard ride these next 2-5 years, we need government action to ease the transition. Maybe the loans are a bullshit idea, it's just my personal opinion.
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    sepheronx

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    Re: Russian Economy General News: #4

    Post  sepheronx on Wed Jul 29, 2015 9:23 pm

    Most of those will stay in business because they are either what is considered strategic industry or foreign funded like the Chinese autoplant.

    A farmer whom is complaining about his investment is one side of the story. How much do you want to bet he wasnt a good farmer? Is there more to it? Chicken farm in Kaluga failed in 2011 to being restarted this year due to demand. Actually, as I posted prior, food companies in Russia are seeing massive growth.

    Funny you mention marine electronics, as a Russian company has replaced a Ukrainian one for the very same thing. Turbines are being done in multiple ways - there is a Russian one in development/testing stage, and a german one being built in Russia. Clearly, the companies whom cannot do it, seem to attract foreign ones who can. And basics for electronics are made in Russia - microprocessors, semiconductors, etc etc so that is also not a problem.

    Iran has far less people than Russia and has a very diversified economy, that was sparked over 30 years of sanctions. Russia wont be any different and as evident very resilliant.

    Wanna know why I think your pessimistic views are BS? Like I said earlier - look at russia in 2008/2009 vs now. Seeing a possible 2.8% gdp decrease compared to 9% in 2008, while having sanctions in place and an oil glut, proves my point.
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    sepheronx

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    Re: Russian Economy General News: #4

    Post  sepheronx on Wed Jul 29, 2015 9:33 pm

    Also, there are far more options to provide funding to companies/regions for investments/development, than just banks. There are venture funds, there are investment funds, there are development funds, there are government key loans, etc. A lot of this is money saved up through trade surplus (which Russia has so far this year) and profits in oil sales, and these are then used for very real reasons. Rosneft was demanding money as an example to expand itself. Instead, Rus gov decided to use the money as guarantee towards Rosnefts development in a shipyard to build equipment and other industrial sites for far east. Agriculture bank gets funds through both the CBR to hand out as loans and various gov based funds to help agriculture development.

    Not all stories are of course a success story. But the ones that are not, usually has to do with multiple factors like bad investment time period, drowts, bad crop overall, etc. Yet, you can find many success stories too.

    Sdelanounas publicizes the news that is most evident. But last year, Russia had roughly 4M new small businesses. Maybe half of them survived, but that is still a lot. This year could be even more as more Russians are seeing new opportunities. I hear of more textile plants, more clothing shops, more furniture, etc etc. It is how it all goes - when there is a demand in the market, and it isnt met by foreign companies, usually domestic then takes control. Only reason why you dont see that here is because our fed gov in Canada through things like NAFTA effectively destroyed those chances and made us essentially a natural resource based country.
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    KomissarBojanchev

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    Re: Russian Economy General News: #4

    Post  KomissarBojanchev on Wed Jul 29, 2015 9:51 pm

    Since this shitty insidious "german good, russian garbage" mantra has evidently been embedded in the brains of russian buyers, then the only way for them to buy russian machinery and therefore support domestic industry is to shove it down their ignorant throats by protectionism. Every single member of the western empire has used this policy during their ascension and now it's Russia's turn.
    But ooohh noooo violation of muh free market Rolling Eyes

    Fuck german tractors.

    Fuck norwegian ships.

    Fuck swedish TIR trucks.
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    sepheronx

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    Re: Russian Economy General News: #4

    Post  sepheronx on Wed Jul 29, 2015 10:11 pm

    That is the beauty of sanctions. The decrease in the roubles value mixed in with politics has essentially created the enviornment where Russians have little choice but to buy Russian. Hence why rostechnazdor has increased both domestic and foreign sales. People whom were going to buy a dutch tractor now cannot afford it and buys russian. There will be some who buy the used foreign tractor or trawler, but if tariffs goes up, they wont even do that either.

    Other way is to force the foreign companies to buy/make the parts locally. The move to make Vladivostok free trade port will probably see a huge investments from foreign entities to set up manufacturing there.
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    Maximmmm

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    Re: Russian Economy General News: #4

    Post  Maximmmm on Wed Jul 29, 2015 10:24 pm

    sepheronx wrote:That is the beauty of sanctions. The decrease in the roubles value mixed in with politics has essentially created the enviornment where Russians have little choice but to buy Russian. Hence why rostechnazdor has increased both domestic and foreign sales. People whom were going to buy a dutch tractor now cannot afford it and buys russian. There will be some who buy the used foreign tractor or trawler, but if tariffs goes up, they wont even do that either.

    Other way is to force the foreign companies to buy/make the parts locally.  The move to make Vladivostok free trade port will probably see a huge investments from foreign entities to set up manufacturing there.

    Won't we run into issues with the economies of scale? Cheese production is up something like 29%, but when I go to the store tomorrow the price will still be a lot higher than a year ago. We may be able to build similar products but their higher prices may prevent them from selling well. Obviously that doesn't matter as much for industries where we already have scale like cars, but new ones may suffer.
    Plus consumers may hold off on large purchases, Lada is gaining a larger share of the domestic market, but overall car sales have tanked, even with the prices of domestically produced vehicles staying low.

    And I'm not trying to shit on our country here, I've just been visiting for a bit and there's some issues that aren't really that visible from the outside.

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    PapaDragon

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    Re: Russian Economy General News: #4

    Post  PapaDragon on Wed Jul 29, 2015 10:34 pm

    Maximmmm wrote:.........................................

    Won't we run into issues with the economies of scale? Cheese production is up something like 29%, but when I go to the store tomorrow the price will still be a lot higher than a year ago. We may be able to build similar products but their higher prices may prevent them from selling well. Obviously that doesn't matter as much for industries where we already have scale like cars, but new ones may suffer.
    Plus consumers may hold off on large purchases, Lada is gaining a larger share of the domestic market, but overall car sales have tanked, even with the prices of domestically produced vehicles staying low.

    And I'm not trying to shit on our country here, I've just been visiting for a bit and there's some issues that aren't really that visible from the outside.


    Recession.

    It takes time to fix stuff. 2016 should see improvement, that's when they should be out of recession according to number crunchers...
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    sepheronx

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    Re: Russian Economy General News: #4

    Post  sepheronx on Wed Jul 29, 2015 10:59 pm

    Maximmmm wrote:
    sepheronx wrote:That is the beauty of sanctions. The decrease in the roubles value mixed in with politics has essentially created the enviornment where Russians have little choice but to buy Russian. Hence why rostechnazdor has increased both domestic and foreign sales. People whom were going to buy a dutch tractor now cannot afford it and buys russian. There will be some who buy the used foreign tractor or trawler, but if tariffs goes up, they wont even do that either.

    Other way is to force the foreign companies to buy/make the parts locally.  The move to make Vladivostok free trade port will probably see a huge investments from foreign entities to set up manufacturing there.

    Won't we run into issues with the economies of scale? Cheese production is up something like 29%, but when I go to the store tomorrow the price will still be a lot higher than a year ago. We may be able to build similar products but their higher prices may prevent them from selling well. Obviously that doesn't matter as much for industries where we already have scale like cars, but new ones may suffer.
    Plus consumers may hold off on large purchases, Lada is gaining a larger share of the domestic market, but overall car sales have tanked, even with the prices of domestically produced vehicles staying low.

    And I'm not trying to shit on our country here, I've just been visiting for a bit and there's some issues that aren't really that visible from the outside.


    You don't get it, do you?  I thought researches job was to research.

    Production that just started doesnt mean that products are cheap.  Inflation hits all, domestic and imports, just not domestic prices jump as high.  When production starts, it takes time for it to drop in costs.  You also need to understand that EU's agricultural industry is heavily subsidized and Russian isn't at all.  Add to that, there will definitely be some companies taking advantage of lack of competition.  BTW, inflation for the month is 0% even after the roubles sudden drop in value. BTW, maybe you are too young to see it and only been in Vancouver, but did you know that Russia's increase in minimum wage of 7% is actually a much higher jump than anything found in Canada so far? Wages have never even came close to meeting inflation. So as people get paid more to meet inflation, those prices won't seem nearly as bad.

    BTW: http://russia-insider.com/en/business/impressions-moscow-point-improving-economy/ri8990

    Sounds like this guys is giving a different viewpoint than you are.  Are we to believe you or someone that is known?


    Last edited by sepheronx on Wed Jul 29, 2015 11:06 pm; edited 1 time in total
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    ExBeobachter1987

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    Re: Russian Economy General News: #4

    Post  ExBeobachter1987 on Wed Jul 29, 2015 11:04 pm

    sepheronx wrote:You don't get it, do you?  I thought researches job was to research.

    Calm down, Canadian.
    Maximmmm has the right to be sceptical.
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    sepheronx

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    Re: Russian Economy General News: #4

    Post  sepheronx on Wed Jul 29, 2015 11:07 pm

    ExBeobachter1987 wrote:
    sepheronx wrote:You don't get it, do you?  I thought researches job was to research.

    Calm down, Canadian.
    Maximmmm has the right to be sceptical.

    He too is Canadian and should actually put his skills to use then.

    As well, he can be sceptical all he wants, but that doesn't mean people cannot call him out on his bullshit.  He was the same at mp.net so I took him for a simple troll really.

    BTW, from your usual diatribe of BS, do you actually provide anything worth reading?
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    Maximmmm

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    Re: Russian Economy General News: #4

    Post  Maximmmm on Wed Jul 29, 2015 11:10 pm

    "One important caveat must be mentioned. As Russians constantly say, Moscow is not Russia and it might be that conditions outside Moscow are harsher."

    Average wages in the Capital are waay higher than in the rest of the country. So obviously the economic impact will be less severe there.
    I'm down in the Krasnodar region and when you talk to some of the folks here, the worries about prices and wages are more tangible.
    Let me clarify: I agree that the worst is over, I agree that we may return to a bit of growth at the end of the year and I agree that in the long-term there's a lot of benefits to be gained from the weaker rouble & sanctions.
    What I'm saying is that there are a few things the government could do to make sure consumers have it a bit easier while the economy reorients itself to the new realities. I didn't bring up the loans thing for an abstract reason, I brought it up because it kept coming up in conversation.
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    max steel

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    Re: Russian Economy General News: #4

    Post  max steel on Wed Jul 29, 2015 11:12 pm

    Karl Haushofer wrote:
    sepheronx wrote:

    There is also lack of spending within the country.  Consumer confidence has increased in end of june and July.  And I doubt those numbers as I am searching for it on other sites.  If you want economic news, Trading Economics is where to look at.
    So we have to wait for the August numbers.

    sepheronx wrote:

    What?  You got that backwards.

    Shale oil needs high prices to survive.  Cheap prices means that shale oil wont survive.
    Yeah, too tired to think straight now (4 hours of sleep last night!)

    What I was trying to say is that the shale oil can be only "destroyed" if the producers increase the production to halt the oil prices, but this will hurt the producers like Russia and Saudi Arabia more than it hurts the Americans, because Americans actually benefit from low oil price (and they get to keep their shale oil under ground for future use).

    Rising up oil production to "kill the shale" would be stupid for Saudis and Russians imo. It would be like shooting yourself in the foot.


    US oil reserves are less than Russian tapped reserves let alone untapped . Russia has its own Gulf of mexico still untapped in north
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    sepheronx

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    Re: Russian Economy General News: #4

    Post  sepheronx on Wed Jul 29, 2015 11:21 pm

    Maximmmm wrote:"One important caveat must be mentioned. As Russians constantly say, Moscow is not Russia and it might be that conditions outside Moscow are harsher."

    Average wages in the Capital are waay higher than in the rest of the country. So obviously the economic impact will be less severe there.
    I'm down in the Krasnodar region and when you talk to some of the folks here, the worries about prices and wages are more tangible.
    Let me clarify: I agree that the worst is over, I agree that we may return to a bit of growth at the end of the year and I agree that in the long-term there's a lot of benefits to be gained from the weaker rouble & sanctions.
    What I'm saying is that there are a few things the government could do to make sure consumers have it a bit easier while the economy reorients itself to the new realities. I didn't bring up the loans thing for an abstract reason, I brought it up because it kept coming up in conversation.

    And yet Krasnodar's prices on goods are also less:

    http://www.numbeo.com/cost-of-living/city_result.jsp?country=Russia&city=Moscow

    http://www.numbeo.com/cost-of-living/city_result.jsp?country=Russia&city=Krasnodar&displayCurrency=USD

    Yes, wages can suck in Krasnodar but that is also up to them to try and demand cost of living increase at work as unemployment is down compared to before. With Krasnodar having the least amount of unemployed people, sounds like Jobs are not scarce either.

    You know, I don't know about you, but I hated the cost of living in Vancouver. Hell, average home price being over $800,000 when I lived there, for a leaky shack of a home, petrol prices being roughly $1/L (when I lived there, now it is over $1.44) and foods being higher than Alberta, while still being far better climate for farming, when average wages was roughly $50,000 - $60,000 a year but seemed over inflated as it counted per household but never told that there were three families living in 1 home. But, people still survived and thrived and developed and Vancouver is still one of the most sought out places to live in. I bet Krasnodar, in terms of wanting to be away from a major city, having good climate and closer to the black sea is far more ideal for many who do have money to live there. As it is also a major industrial hub, it also seems to be plentiful of jobs too. Now that is 2013 levels, so I am not sure about now.
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    Maximmmm

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    Re: Russian Economy General News: #4

    Post  Maximmmm on Wed Jul 29, 2015 11:35 pm

    sepheronx wrote:
    And yet Krasnodar's prices on goods are also less:

    Yes, wages can suck in Krasnodar but that is also up to them to try and demand cost of living increase at work as unemployment is down compared to before.  With Krasnodar having the least amount of unemployed people, sounds like Jobs are not scarce either.

    You know, I don't know about you, but I hated the cost of living in Vancouver.  Hell, average home price being over $800,000 when I lived there, for a leaky shack of a home, petrol prices being roughly $1/L (when I lived there, now it is over $1.44) and foods being higher than Alberta, while still being far better climate for farming, when average wages was roughly $50,000 - $60,000 a year but seemed over inflated as it counted per household but never told that there were three families living in 1 home.  But, people still survived and thrived and developed and Vancouver is still one of the most sought out places to live in.  I bet Krasnodar, in terms of wanting to be away from a major city, having good climate and closer to the black sea is far more ideal for many who do have money to live there.  As it is also a major industrial hub, it also seems to be plentiful of jobs too.  Now that is 2013 levels, so I am not sure about now.

    Hate that shit, can't afford it. Only stay because my education is going well, I've got some ongoing projects I can't dump and I'm on track for a second degree in 2-3 years.

    I don't know how those number crunchers work, but currently I'm in gelendzhik and some of the prices are higher than in Moscow. I've also got family in Rostov and they're similar there. A lot of it depends on what you're buying. Some items are more expensive, some less. Overall though I wouldn't say the prices are lower enough for a significant relief.
    Although all that economics stuff aside, the city has become gorgeous over the past decade. The seafront is just a pleasure to be on. Still problems with city planning (it's nonexistent) and supplies (electricity output is shaky) but it really is a beautiful coastal town.

    What I will say in your favour is that the overall attitude of the hoi polloi is very very optimistic. The patriotic afterglow is still pretty strong (putin shirts are common) and people are ready to buckle down for a bit. I've seen not a single sign of despair or worry or anything in that regard. I'm just naturally a cautious person myself.
    avatar
    sepheronx

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    Re: Russian Economy General News: #4

    Post  sepheronx on Wed Jul 29, 2015 11:41 pm

    Maximmmm wrote:
    sepheronx wrote:
    And yet Krasnodar's prices on goods are also less:

    Yes, wages can suck in Krasnodar but that is also up to them to try and demand cost of living increase at work as unemployment is down compared to before.  With Krasnodar having the least amount of unemployed people, sounds like Jobs are not scarce either.

    You know, I don't know about you, but I hated the cost of living in Vancouver.  Hell, average home price being over $800,000 when I lived there, for a leaky shack of a home, petrol prices being roughly $1/L (when I lived there, now it is over $1.44) and foods being higher than Alberta, while still being far better climate for farming, when average wages was roughly $50,000 - $60,000 a year but seemed over inflated as it counted per household but never told that there were three families living in 1 home.  But, people still survived and thrived and developed and Vancouver is still one of the most sought out places to live in.  I bet Krasnodar, in terms of wanting to be away from a major city, having good climate and closer to the black sea is far more ideal for many who do have money to live there.  As it is also a major industrial hub, it also seems to be plentiful of jobs too.  Now that is 2013 levels, so I am not sure about now.

    Hate that shit, can't afford it. Only stay because my education is going well, I've got some ongoing projects I can't dump and I'm on track for a second degree in 2-3 years.

    I don't know how those number crunchers work, but currently I'm in gelendzhik and some of the prices are higher than in Moscow. I've also got family in Rostov and they're similar there. A lot of it depends on what you're buying. Some items are more expensive, some less. Overall though I wouldn't say the prices are lower enough for a significant relief.
    Although all that economics stuff aside, the city has become gorgeous over the past decade. The seafront is just a pleasure to be on. Still problems with city planning (it's nonexistent) and supplies (electricity output is shaky) but it really is a beautiful coastal town.

    What I will say in your favour is that the overall attitude of the hoi polloi is very very optimistic. The patriotic afterglow is still pretty strong (putin shirts are common) and people are ready to buckle down for a bit. I've seen not a single sign of despair or worry or anything in that regard. I'm just naturally a cautious person myself.

    Welcome to the real world, were prices always goes up and wages never meet inflation. Hopefully they will fix that. Give it time, and prices will drop simply because production will be large enough and the companies can reduce overall costs (which they will when sales drop, so to increase sales, they will eventually lower prices). On zerohedge, there was an article showing how prices changed and inflation over the years from around 1977 to now, and it was roughly 2500% for average goods, while wages was only 20%. If I can find the article again, I will post it here (I know I posted it on another thread a while ago). Look at Iran's sanctions and inflation. Inflation for various years was 18% year on year and it was like that for quite a few years. Eventually, prices dropped. This year, Russia was going to face deflation but that may not happen and just stay at 0% since rouble dropped in value.

    BTW, regarding that, I was completely correct in what I said they would do: http://www.rt.com/business/311049-ruble-bank-purchases-suspension/

    I said that they would buy more roubles and they did exactly that. They stopped purchase of foreign currency and increased purchase of roubles which helped bring the value up a bit.

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    Re: Russian Economy General News: #4

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