Russian Economy General News: #8

I'll just say that 1,5 economy increase by 2025 is delusional fantasy with government that Russia has now. With neoliberal 5th column like Medvedev, Siluanov, Nabiullina, Gref & co. controlling key institutions of Russian development it is miracle Russian economy is not nosediving in to oblivion as is. To expect any kind of serious growth with those scum sabotaging everything within their reach is ridiculously unrealistic.

Before there is any talk about serious economic development in Russia there first must be systematic purge of all pro western liberals from all government institutions and state own companies, as well as purge of all pro western oligarchs controlling major private enterprises.

GarryB wrote: Personally I think oil and similar such resources under the feet of the people belongs to the people and despite a bit of mismanagement by Government the decisions and profits should go to the people and not a few already wealthy individuals.

Garry, I have to say it loud: You are a COMMIE

ZoA wrote:I'll just say that 1,5 economy increase by 2025 is delusional fantasy with government that Russia has now. With neoliberal 5th column like Medvedev, Siluanov, Nabiullina, Gref & co. controlling key institutions of Russian development it is miracle Russian economy is not nosediving in to oblivion as is. To expect any kind of serious growth with those scum sabotaging everything within their reach is ridiculously unrealistic.

Before there is any talk about serious economic development in Russia there first must be systematic purge  of all pro western liberals from all government institutions and state own companies, as well as purge of all pro western oligarchs controlling major private enterprises.

How do you know that? why do you think Putin didn know what was done and didn't do anything about it? and you know what would be better right?

Bank of Russia may switch to neutral monetary policy more quickly

MOSCOW, February 16. /TASS/. The existing balance of risks suggests the possibility of a faster transition from moderately tight to neutral monetary policy, the Bank of Russia’s department of research and forecasting stated in the bulletin "What the Trends Say".

Head of Russia's major bank expects tightening of cryptocurrency market
"The economic activity continues to expand forming a path of slow but steady growth. The slowdown in growth at the end of 2017 was focused in specific sectors and was most likely caused by one-time factors, which may last in early 2018. The existing balance of risks speaks of the possibility of a more rapid transition from a moderately tight to a neutral monetary policy that can be completed already this year," the regulator says.

On February 9, the Board of Directors of the Bank of Russia at its first meeting this year decided to lower the key rate by 25 basis points to 7.5%. In its press release, the regulator noted that annual inflation remains at a consistently low level, while inflation expectations are gradually declining. "Short-term pro-inflationary risks have abated. Therefore the balance of inflationary and economic risks has shifted slightly towards the risks to economic growth. The uncertainty over the situation in global financial markets has increased. This year annual inflation is much less likely to exceed 4%. In this environment the Bank of Russia will continue to reduce the key rate and may complete the transition from moderately tight to neutral monetary policy in 2018," the regulator said.

The Board of Directors of the Bank of Russia will hold its next meeting on the key rate on March 23.

More:
http://tass.com/economy/990403



Sberbank became the leader in capitalization among the banks of continental Europe

MOSCOW, February 26. / TASS /. Sberbank became the leader in capitalization among the banks of continental Europe, it follows from the data of exchange trades. In particular, at the beginning of today's trading on the Moscow Stock Exchange, the value of Sberbank's ordinary shares reached 285 rubles per share, and preferred shares - 235 rubles per share.

Thus, the total capitalization of Sberbank at the Moscow Interbank Currency Exchange rose to 6 trillion 387.28 billion rubles, at the rate of the Central Bank of Russia on February 23 is € 91.73 billion. For comparison, the capitalization of the bank Banco Santander is now € 91.56 billion. At the same time, Banco Santander , according to Bloomberg , previously was the leader in capitalization among the banks of continental Europe, followed by Sberbank, BNP Paribas, ING Groep, Lloyds Banking Group, Intesa Sanpaolo, etc., at the close of trading on Friday.

Sberbank is the main creditor of the Russian economy and holds the largest share in the deposit market. The Sberbank group includes 14 territorial banks and more than 16.5 thousand branches in 83 constituent entities of the Russian Federation.

The number of retail customers of Sberbank in Russia exceeds 127 million and 10 million from abroad, the number of corporate clients of the group is more than 1.1 million in 22 countries of presence.

The main shareholder and founder of the Savings Bank is the CBR, which owns 50% of the authorized capital plus one voting share. Other shareholders of the bank are international and Russian investors.

Подробнее на ТАСС:
http://tass.ru/ekonomika/4988753

GunshipDemocracy wrote:
How do you know that? why do you think Putin didn know what was done and didn't do anything about it? and you know what would be better right?

He knew it and either did not care or did not have power to deal with it. Putin come to power as a compromise candidate between silivki faction and neoliberal pro western oligarch faction, and his hold to power was largely dependant on continuation of that compromise, thus he either did not care or could not openly confront neoliberals ripping of Russian's economy.

Personally i think he mostly could not confront them openly even when he disagreed with them. I'll show that with 2 examples.

1st is existence of so called "Stabilization Fund of the Russian Federation", which is rip-off scam concocted by that neoliberal peace of shit German Gref. Scheme that neoliberals are pushing is that any revenue generated by oil sales above certain price should not be invested in to Russian economy, but should be handed over to EU an US in  form of purchasing EU and US government debt / bonds (essentially forcing Russian economy to subsidise EU and US deficit spending) or by buying high risk foreign private asset (effectively forcing Russian economy to subsidise EU and US private stock and derivative markets). When Gref created that scam he explicitly insisted non of the fond resources should ever be invested in to Russia. During 2007 Putin spoke out against that, urging the fond to invest in Russian based corporations like Gasprom and Rosneft. Neolibrals did not want to hear of it and Putin was effectively ignored, and to this day fond is essentially ripping of significant percentage of Russian oil income and handing it out to EU and US governments and corporations. Putin does not seem to like it, but he is unwilling to do anything against it.
https://en.wikipedia.org/wiki/Stabilization_Fund_of_the_Russian_Federation

2nd example was Medvedev appeasement of EU and US during US/UK/France terrorist campaign against Lybia. During that time Putin was mostly keeping his mouth shut, made no open statement against such policy of craven appeasement, however number of individuals among siloviki faction were quite openly against it, going as far as accusing Medvedev of treason at the time:
https://www.reuters.com/article/net-us-russia-medvedev-video/mysterious-youtube-video-accuses-russias-medvedev-of-treason-idUSBRE9100Z720130201
When Putin took back presidency policy changed form spineless appeasement under Medvedev to policy of coitus confrontation.

Because of those examples and other incidents I think Putin is more on the side of siloviki in this unfortunate Siloviki-Neroliberal condominium that is governing Russia during last 20 years. However I also think Putin does not have guts to risk this condominium even when neoliberals are wreaking the country. And frankly if he does not have balls to do it maybe it's time for president that has. Maybe it would be for the best if communist party takes presidency and goes all Lenin on neoliberal asses.

I sure love your math. Care to share exactly how Russia would have grown through your methods?

miketheterrible wrote:I sure love your math.  Care to share exactly how Russia would have grown through your methods?

Glazyev roughly has the correct idea, but he is ignored.

His idea is to pump out cash like it's no tomorrow through the idea of quantitative easing. That doesn't work, especially long term.

miketheterrible wrote:His idea is to pump out cash like it's no tomorrow through the idea of quantitative easing. That doesn't work, especially long term.

No, it is not. Quantitative easing is method used by US, EU and Japan to inject liquidity in to speculative stock, bond and derivatives market, never in to production facilities, labour and consumption by general public. Glazyev demands exactly the opposite, injecting the credit to productive industry directly to facilitate production of material goods and demand for the same goods.

ZoA wrote:

miketheterrible wrote:His idea is to pump out cash like it's no tomorrow through the idea of quantitative easing. That doesn't work, especially long term.

No, it is not. Quantitative easing is method used by US, EU and Japan to inject liquidity in to speculative stock, bond and derivatives market, never in to production facilities, labour and consumption by general public. Glazyev demands exactly the opposite, injecting the credit to productive industry directly to facilitate production of material goods and demand for the same goods.

His was still print money. No thank

miketheterrible wrote:

ZoA wrote:

miketheterrible wrote:His idea is to pump out cash like it's no tomorrow through the idea of quantitative easing. That doesn't work, especially long term.

No, it is not. Quantitative easing is method used by US, EU and Japan to inject liquidity in to speculative stock, bond and derivatives market, never in to production facilities, labour and consumption by general public. Glazyev demands exactly the opposite, injecting the credit to productive industry directly to facilitate production of material goods and demand for the same goods.

His was still print money. No thank

Not necessary. They can always shoot oligarchs and take money of their cold dead hands.

On serious note there is no reason to fear printing money. Money is always being printed. Any time anyone takes a loan money is de facto being printed by issuing bank, and any time someone pays out a loan money is being  destroyed. This is how liquidity works. What is relevant is that there is right amount of money invested in right economic activity to facilitate full utilisation of labour and machinery. To  harbour this irrational phobia of issuing credit needed to facilitate this maximum utilisation of productive forces is both ridiculous and damaging.

ZoA wrote: I also think Putin does not have guts to risk this condominium even when neoliberals are wreaking the country. And frankly if he does not have balls to do it maybe it's time for president that has. Maybe it would be for the best if communist party takes presidency and goes all Lenin on neoliberal asses.

Oh then Putin is weak,stupid and incompetent politician. But If for example 20% people are not happy with Putin and have liberal views you'd kill them? get to gulags? What would you do with oligarchs? take their wealth?

Lenin came to power effectively shutting off  country from world economy, politic, sports and on cost of many years of civil war famine and interventions.  So this is better then current policy? Since 90s nothing hanged for better? damn

ZoA wrote:
On serious note there is no reason to fear printing money. Money is always being printed. Any time anyone takes a loan money is de facto being printed by issuing bank, and any time someone pays out a loan many is being  destroyed. This is how liquidity works. What is relevant is that there is right amount of money invested in right economic activity to facilitate full utilisation of labour and machinery. To  harbour this irrational phobia of issuing credit needed to facilitate this maximum utilisation of productive forces is both ridiculous and damaging.

hmmm and pouring empty money on inefficient government, lack of own manufacturing possibilities and leaky banking system all means go to industry and are efficiently spend nothing gets stolen, transferred to offshores? Didnt Zimbabwe try it before?

GunshipDemocracy wrote: get to gulags? What would you do with oligarchs? take their wealth?

Siberia is wast and underpopulated.

GunshipDemocracy wrote:hmmm and pouring empty money on inefficient government, lack of own manufacturing possibilities and leaky banking system all means go to industry and are efficiently spend nothing gets stolen, transferred to offshores? Didnt Zimbabwe try it before?

And it definitely did not work in China either, it was always and still is backward peasant country. And it is all because Chinise state owned banks provided so much cheap affordable credit to their industry. I'm sure if they only followed neolibelar austerity hysteria forcing perpetual liquidity crisis to their manufacturing sector  they would actually be global manufacturing powerhouse, fastest growing economy and rising global power. Alas fools allowed access to cheap credit to their industry and now they are being destroyed by hyperinflation and are forever doomed to remain backward underdeveloped nation. Poor China, if only they have listened the likes of you.

That's not how China did it at first. At first, they pumped ridiculous amounts of government money through forign and domestic loans to infrastructure. Once FDI just poured in, they then reduced interest rates after the ball was rolling. Not at first they didn't.

miketheterrible wrote:That's not how China did it at first. At first, they pumped ridiculous amounts of government money through forign and domestic loans to infrastructure. Once FDI just poured in, they then reduced interest rates after the ball was rolling. Not at first they didn't.

Not really. Chinse domestic infrastructure was created, and still largely controlled, by Chaise state owned companies, FDI has practically no significant direct role in Chinse infrastructure development, it was financed directly out from Chinse budget (taxes + money printing) or by copious cheap credit provided by Chinese state owned banks (printing money by sad banks). Role of FDI was mostly focused to economic zones where it exploited cheap labour for production of consumer goods for export, effectively providing China source of foreign currency needed to import equipment China did not have technology to manufacture itself, or import of natural resources it did not have in sufficient quantities.  

Given that Russia has pretty much all natural resources it would ever need, and is already punishing massive forex exchange surplus it has practically no need for FDI. It can pretty much completely developed on account of it's own credit. Russian economic position is vastly better then Chinese in say 1980, alas Russian leadership is vastly more infiltrated and corrupted by western interest, it is incapable to properly exploit it's advantages. Instead most of its productivity is squandered, underutilised, and wealth handed over to US and EU in return for nothing.

Nope, that isn't how it started.

miketheterrible wrote:Nope, that isn't how it started.

Ok. Please show me Chinese power plants, roads, train tracks, ports and so on owned by foreign private investors.

You didn't even read what I said, did you. I said China funded infrastructure but interests were high then. They also borrowed, then FDI came in. Learn 2 read.

Btw, here is interest rates in China. Click 10 year term

https://tradingeconomics.com/china/interest-rate

Check out in 1996.

China's external debt was rather on par to Russia since Putin paid off debt. But that's in %

Sorry, I may have misunderstood what your point is. However i don't see how interest rate in 1996 at abut 11% proves China was building it's infrastructure with foreign credit. In fact given inflation burst at the time those interest rates are not excessive, when adjusted CPI at that time they come well below 5% interest effective.

https://tradingeconomics.com/china/inflation-cpi

In fact those inflation bursts are indication of massive increase of domestic money supply because growth driven by foreign credit and imports is not typically short term inflationary. Furthermore when you compare Chinese GDP growth during 90s it is obvious they both peak at abut 1994/95 indicating that massive domestic credit supply that generates such inflation is also massively stimulating for economy if directed at infrastructure and industrial sector.

https://tradingeconomics.com/china/gdp-growth-annual

It is obviously inaccurate to claim Chinese infrastructure development during 1996, or 90s in general, was driven by foreign credit, and then only after that there was FDI by private sector. FDI to China free trade zones started to as far back as end of 70s, and escalated during 80s as US corporations started process of outsourcing production to areas with cheap labour. During all that time China state was never taker of significant foreign loans because sale of cheap labour was sufficient source of foreign currency to satisfy it's import needs, and domestic trade was facilitated by domestic credit provided by state owned banks. Given significant inflation rate  this domestic supply was quite copious and key for massive economic growth.

Maybe so, but that is where Russia is doing similar to China - keeping the overall debt low. Interest rates should be of particular importance here - China's interest rates were not very low for long time, even as of last year. Compared to the west.

General investment has to take this in consideration. Unless China used their own government funds to fund it at zero interest. Which then if China had such money back then, I'm surprised.

Russia isnt doing much different other than Federal Bank being slow as shit to lower interest rates, but do so anyway to prevent shocks. But it's already stated Russian government is side stepping them anyway at providing lower interest rate loans.

Outside of that, I don't see the current problem. Even CBR's plans haven't changed and they are growing rather fine. Especially the banks.

ZoA wrote:I'll just say that 1,5 economy increase by 2025 is delusional fantasy with government that Russia has now. With neoliberal 5th column like Medvedev, Siluanov, Nabiullina, Gref & co. controlling key institutions of Russian development it is miracle Russian economy is not nosediving in to oblivion as is. To expect any kind of serious growth with those scum sabotaging everything within their reach is ridiculously unrealistic.

Before there is any talk about serious economic development in Russia there first must be systematic purge  of all pro western liberals from all government institutions and state own companies, as well as purge of all pro western oligarchs controlling major private enterprises.

You are 100% correct. Monetarist maggots are sabotaging Russian economic growth. The myth that Putin is a tyrant in total control
is exactly a myth. Too bad the Russian public is not on the ball with these issues. They never had exposure to life in the west.

miketheterrible wrote:I sure love your math.  Care to share exactly how Russia would have grown through your methods?

Non sequitur post, totally devoid of any content.

kvs wrote:

ZoA wrote:I'll just say that 1,5 economy increase by 2025 is delusional fantasy with government that Russia has now. With neoliberal 5th column like Medvedev, Siluanov, Nabiullina, Gref & co. controlling key institutions of Russian development it is miracle Russian economy is not nosediving in to oblivion as is. To expect any kind of serious growth with those scum sabotaging everything within their reach is ridiculously unrealistic.

Before there is any talk about serious economic development in Russia there first must be systematic purge  of all pro western liberals from all government institutions and state own companies, as well as purge of all pro western oligarchs controlling major private enterprises.

You are 100% correct.  Monetarist maggots are sabotaging Russian economic growth.    The myth that Putin is a tyrant in total control
is exactly a myth.    Too bad the Russian public is not on the ball with these issues.   They never had exposure to life in the west.

Yes they did. It was 1993 - 2001

kvs wrote:

miketheterrible wrote:I sure love your math.  Care to share exactly how Russia would have grown through your methods?

Non sequitur post, totally devoid of any content.

Like your are better.

ZoA wrote:Sorry, I may have misunderstood what your point is. However i don't see how interest rate in 1996 at abut 11% proves China was building it's infrastructure with foreign credit. In fact given inflation burst at the time those interest rates are not excessive, when adjusted CPI at that time they come well below 5% interest effective.

https://tradingeconomics.com/china/inflation-cpi

In fact those inflation bursts are indication of massive increase of domestic money supply because growth driven by foreign credit and imports is not typically short term inflationary. Furthermore when you compare Chinese GDP growth during 90s it is obvious they both peak at abut 1994/95 indicating that massive domestic credit supply that generates such inflation is also massively stimulating for economy if directed at infrastructure and industrial sector.

https://tradingeconomics.com/china/gdp-growth-annual

It is obviously inaccurate to claim Chinese infrastructure development during 1996, or 90s in general, was driven by foreign credit, and then only after that there was FDI by private sector. FDI to China free trade zones started to as far back as end of 70s, and escalated during 80s as US corporations started process of outsourcing production to areas with cheap labour. During all that time China state was never taker of significant foreign loans because sale of cheap labour was sufficient source of foreign currency to satisfy it's import needs, and domestic trade was facilitated by domestic credit provided by state owned banks. Given significant inflation rate  this domestic supply was quite copious and key for massive economic growth.

People in this thread systematically ignore or are totally ignorant on the aspect of the interest rate relative to inflation.     The CBR sets the
prime rate at 7.5% when inflation is under 2.5%.    Actual rates seen by corporations are about 9% since no bank passes on the
prime rate to customers.    So Russian companies see a real interest rate (the lowest they can find) of 6.5%.     This is a ridiculously high
rate.   Western companies see rates of 4% (risky customers, blue chips get lower rates) with an inflation rate of 2% (actually more like 4%
given all the shenanigans used to understate the CPI).    That is western corporations pay real rates of under 2% down to zero.  

Nabiullina is a liar who claims Russia has inflation instability.   If that was true, then high interest rates would not systematically drive down the
CPI.   In fact, given the experience around the world, high interest rates could stimulate a higher CPI.    Russia is nowhere near inflation instability.
It is not a decaying developed economy.   There is a vast pool of unsatiated demand from the public and business sector for infrastructure
development and the gap can be seen in the standard of living.    It has improved a lot under Putin, but it is not saturated.  

I am getting sick and tired of this retarded spew about printing money.    We have monetarist fellow travelers in this thread spreading monetarist
BS.   Thick and rich.    The money supply is a function of the GDP size.  Full stop.   There is no conservation of money in macroeconomics.  
Monetarist maggots would have you believe that macroeconomics and microeconomics are identical and that a mom and pop corner shop is
equivalent to the whole economy.   This is pap for idiots.  

PS.  There is am implicit belief that Russia is using the outdated public savings model to finance its economy.   Large private savings are
a thing of the past when the global financial industry was not as developed.    Modern banks do not pay enough interest to justify savings.
You can get a 3% savings rate only with multi-year GICs in Canada.   I can not borrow any money for 3% from banks.  I am lucky to get
a 5% mortgage and personal loans are around 10%.    Regular savings accounts generate 0.1% interest and chequing accounts generate
zero.    Russian banks are not emulating western banks of the 1960s.   They are emulating modern western banks.

Chinese investors intend to implement projects in the Far East for $ 30 billion

Moscow. 7 March. INTERFAX.RU - The total cost of projects, which Chinese investors intend to realize in the Far East, exceeds $ 30 billion, Chinese Ambassador to Russia Li Hui said at the final meeting of the board of the Ministry of Economic Development in Vladivostok on Tuesday.

"The most active is the development of cooperation in the oil and gas industry, agriculture and the financial sector," the press service of the Primorsky Territory Administration quotes.

Today, China is the main source of investment in the Far East - 85% of all foreign investment falls on this country. About 20 Chinese enterprises operate within the territories of advanced development (TOR) and the Free Port of Vladivostok.

According to China's forecasts, in the next 15 years he will import goods worth about $ 20 trillion and attract foreign investments of $ 2 trillion. These funds will be invested in foreign markets, including joint projects with Russia.