Russian Economy General News: #11

kvs wrote:The top video food basket was bought for 1053 x 0.017 = 17.90 Canadian dollars.    I do my own food shopping and there is
no f*cking way I could buy the same amount of food for under $50 Canadian.   She did not shop around and bought everything
at one grocery supermarket.   The ingredients are mostly of the primary sort as opposed to value added production so the
cost is lower (e.g. price for a few onions, eggs, etc.).   But the amount adds up quickly.  

The cost goes up for smaller quantities in Canada.   So buying a few of this and that is not all that cheap.

Those $15 worth of food equates to $700-800 in America, probably even more in cities like NYC/LA.

calripson wrote:Since you like objective measures, here is the link to the top ten global finishers in the IBM Collegiate Programming Contest held annually. (It is actually an impartial test of formulating mathematical algorithms and then coding them.

https://en.wikipedia.org/wiki/International_Collegiate_Programming_Contest

Winners

2019 Moscow State University
2018 Moscow State University
2017 ITMO (Saint Petersburg)
2016 Saint Petersburg State University
2015 ITMO
2014 Saint Petersburg State University
2013 ITMO


As an aside, there is one country that does not allow its best and brightest to compete in this contest? Anyone want to guess which one?


By the way, you will not find Qatar anywhere in the top 100 finishers.

Those contest are totally meaningless . This does not contradict in any way that
Russia economy is (largely) a gas station economy .  You can have the best programmers
in the world , the best engineers , the best mathematicians in the universe.. but if they are only
used by the state ,in medals e-penis competition contest , then your talent is wasted.

What is in question is not if Russia have good talent or not.. i don't think not even the west will
ever claim that Russia don't have good scientist or engineer talent. What the west claims
(and they are right..)   is that Russia is a gas station , what does russia make ?  

The contest that this was told , by obama , is on the presence of top developed nations .
That in comparison to most developed nations , there is very little to almost nothing
that Russia contributes to the world.. other than cheap gas prices and taxi to the ISS.

If master yoda Putin , alias the "chessmaster"  
used those talented programmers ,to create a competition to American software industry..
then HELL YESSS!!  that will be brilliant decision ,to invest heavily in Russia it software industry
to build total independence from the west software industry + build a global business that directly compete with them .

So in other words.. RUSSIA needs to do capitalism and compete with their top most influential business for capturing their world market. this is how western empires are defeated without firing
a missile. Being successful in high tech industry and entertainment industry ,provide more influence in the world ,than all putin nuclear weapons and hypersonic inventory.

But thats is not what is happening in Russia.. is all Putin does with their talent , is send them
to ibm epenis contest and nothing else for a stupid medal ,then this is another example of
a complete waste of talent.. So this is the other side of the story , those russian programmers ,
goes to those contest ,because they are jobless and they are recruited by american companies,
thanks to the massive ignorance of Russian president ,that don't invest on its scientific and engineer
talent.. other than for building wepaons .

whenever oil prices in russia collapse,, the russian ruble collapse.
whenever oil prices raise , the russian ruble value improve.. this is an example of an
economy extremely dependent on energy and almost nothing else.. why nothing else ?
because russia is undeveloped outdated economy . is not a global exporter of anything  , no one in the world ,can mention a single company in russia , unless they are fans of their weapons. this is the very definition of a very outdated nation with outdated business , when no civilian in the world can name a single company that comes from Russia.. why? because russia is not a major exporter of anything than the civilized world cares. And this outdated backwards development of Russia ,during
putin 20 years in power ,is what makes it very very easy for Americans to influence ukrainians , belarusians ,georgians ,latin americans ,the young generations but adults too ,who like progress
to their orbit.

look at this..
Trump have been unable to sanctions china entertainment social business.. wall street love technology and they refused to delist china high tech industry..  

And it comes only a day after the New York Stock Exchange refused to comply with a demand to delist three major Chinese telecommunications firms which had been blacklisted by the White House.

https://www.rt.com/op-ed/511677-trump-ban-chinese-apps-stunt/

So china is effectively building an economy that is more or less sanctions proof ,too important for the west to sanction. and this is what putin needs to follow example.. The entire russian industry is sanctioned without problems , because russia is  backward nation and their business not needed at all by any country . means they could replace those business easily with someone else .Russian billionaires lost 1/3 of their fortune do to this sanctions.. while at the same time china billionaires ,
during 2020 alone ,increased their fortune by hundred of billions of dollars..  and i posted that link earlier.

So unfortunately , obama was right.. Russia is an outdated nation ,a gas station (economy) and
it will never ever take off its economy ,at best it will only float and survive with a lot of help from china ,but if china restored relations with america and moved away from russia ,it will be the end
for putin and the end for russia parasite heavily dependent economy.   the only way russia can become a true modern nation ,is when putin is kicked from there and a new leadership in place ,that understand clearly ,that the only way russia can be saved ,and avoid a nuclear war ,is by challenging direct competition to US most popular and modern business that they use as a soft power to influence the world into their orbit. True independence from the western modern business ,and compete with them too ,to reduce their world influence and end their ability to blackmail nations..

when trump sanctioned venezuela and iran.. that did caused a lot of damage to their economies.
catastrophic damage.. all trump had to do is to say..  " any nation who wants to do business with us ,will need to follow our sanctions"   and this is exactly what happened ,everyone followed
US sanctions. because they need american business.

and this is why is extremely critical for russia existence ,to fight back the west and challenge
US ,not with politeness , or with olympic bullshit medals , but with business that directly compete
with the west.. not banana records , but business than challenges US silicon valley industry and take their clients away from them..  so building technology just for the sake of building it ,is not enough.
is to capture the western top business market ..as china is doing ,that have outpaces apple with huawei in smartphones sales.. this is what really hurts , not only damage the western economy ,but their influence ,their leadership in the world too and encourage nations and billionaires to disobey american sanctions why? because there are strong alternative to  them.

I just spent $15 on a jug of milk and some toquitos at 7-11.

Christ almighty.

I simply illustrated that your criticism of Russian education is way off the mark. The reason they run these contests is so talent can be identified by western companies and poached. All those talented Russian programmers will get big fat offers from Silicon Valley. That is why one clever country does not compete - it funnels its talent into its military industrial complex. That country of course is Israel.

The Ruble fluctuates with oil prices because the exchange rate is set by western bankers who can´t look further then the lenght of their dick.

The chinese economy is not sanctions proof.

1. China needs huge amounts of resources (coal, oil, gas) to come in from abroad. Most of the suppliers can be forced/manipulated/blackmailed by the western block. That´s why China is kissing Russias feet to get a bullet proof supplier of raw materials and high tech.

2. Most of the things the sweatshops in China produce are going to western countries. Trump raised a few tariffs and China was eager to make a deal. It will need a few more years until countries in the global south will and the peasants in China will be able to replace western buyers.

3. The biggest mistake of the chinese leaders was to copy the western financial system. According to estimates China has something between 15 and 25 Trill. $ in debt. A lot is state owned but the whole financial system would implode if they would eradicate these debts. That´s why China has to grow by 5+ % every year.

miketheterrible wrote:I just spent $15 on a jug of milk and some toquitos at 7-11.

Christ almighty.

Sounds expensive. Was that camel milk?

Hole wrote:

miketheterrible wrote:I just spent $15 on a jug of milk and some toquitos at 7-11.

Christ almighty.

Sounds expensive. Was that camel milk?

Standard fucking 3.5% milk. Milk at grocery stores (this was an emergency buy)are roughly $5 for a jug. Which is still abysmal since our dairy farmers dump excess milk down the drain instead of selling it.

Fuck this country.

Here there are farmer protets because milk and butter are getting cheaper and cheaper.

Here in America the government has to subsidize farmers as milk prices are at break even. The only farmers that get by are the Amish because they use family labor and do no have to finance expensive equipment. They are a very admirable people. I have dealt with them in business - never a need for a contract just a handshake. They work like dogs from dawn to dusk and never complain and are master craftsmen.

But they are bad electricians.

They are a very admirable people. I have dealt with them in business - never a need for a contract just a handshake. They work like dogs from dawn to dusk and never complain and are master craftsmen.

The west talks about values and morality, but they don't mean trust and honesty and integrity and human kindness... for values they mean profit and morality they mean what is mine is mine and what is yours is mine...

[quote="Vann7"]

calripson wrote:


whenever oil prices in russia collapse,, the russian ruble collapse.
whenever oil prices raise , the russian ruble value improve.. this is an example of an
economy extremely dependent on energy and almost nothing else.. .

Just looking through my notes.... From 2016/17. But Russia is always in this spot. Its probably higher now. Pretty strange for a country that makes nothing If you actually look at some data on economics and industry and knew how to interpret it, you'll see that its more complicated than what the US media tells you. If you think you can make a slogan out of the Russian economy, you'd be an idiot.

Real problems in the economy have less to do with oil and more with stimulating business growth.
Loans to businesses have always been too expensive and too hard to get, so there's an unnatural break on the speed with which companies can grow in Russia.

Maximmmm wrote:Real problems in the economy have less to do with oil and more with stimulating business growth.
Loans to businesses have always been too expensive and too hard to get, so there's an unnatural break on the speed with which companies can grow in Russia.

The loans for businesses that have a sufficient potential get cheap loans. The authorities already mentioned how they select which loans with interest rates subsidized by the government, should go to. Making it heavily available to any business isn't a good idea imo. It just makes many companies end up as reliant on loans to survive when a lot of these companies are not very profitable or functionable.

Backman wrote:

Vann7 wrote:

calripson wrote:


whenever oil prices in russia collapse,, the russian ruble collapse.
whenever oil prices raise , the russian ruble value improve.. this is an example of an
economy extremely dependent on energy and almost nothing else.. .

Just looking through my notes.... From 2016/17. But Russia is always in this spot. Its probably higher now. Pretty strange for a country that makes nothing If you actually look at some data on economics and industry and knew how to interpret it,  you'll see that its more complicated than what the US media tells you. If you think you can make a slogan out of the Russian economy, you'd be an idiot.

The flip side of a current account surplus is a capital account deficit meaning that there is a negative flow of money out of Russia. By definition they have to match as opposites. In practice this means there is very little direct or indirect foreign investment in Russia relative to its economy and plenty of wealthy Russians leak their money out of Russia into dollars and euros in offshore accounts.

No they don't. They haven't done so in two years due to sanctions.

If you are going to assume things and base off of 2008 beliefs, it's better you leave now

miketheterrible wrote:

Maximmmm wrote:Real problems in the economy have less to do with oil and more with stimulating business growth.
Loans to businesses have always been too expensive and too hard to get, so there's an unnatural break on the speed with which companies can grow in Russia.

The loans for businesses that have a sufficient potential get cheap loans.  The authorities already mentioned how they select which loans with interest rates subsidized by the government, should go to.  Making it heavily available to any business isn't a good idea imo.  It just makes many companies end up as reliant on loans to survive when a lot of these companies are not very profitable or functionable.

I dunno, if even until recently defense establishments had problems with high rates and bad terms on old loans, I doubt the situation is much better down the line.
I get what you mean though, but I'd rather see a healthy churn of companies rising and dying than some potential massive ones being held back.

How does a trade surplus translate into any "loss" of rubles? Sales in foreign currencies get converted to rubles inside Russia.
So there is an increased demand for rubles. Russia is obviously not subject to the Dutch disease.

The parking of profits offshore is an unrelated issue. And it is nowhere near as bad as it is painted. Look at America if you
want to see all sorts of offshoring and tax avoidance rackets. The Russian government is not starved of tax revenue because
Russia has a large trade surplus.

Maximmmm wrote:

miketheterrible wrote:

Maximmmm wrote:Real problems in the economy have less to do with oil and more with stimulating business growth.
Loans to businesses have always been too expensive and too hard to get, so there's an unnatural break on the speed with which companies can grow in Russia.

The loans for businesses that have a sufficient potential get cheap loans.  The authorities already mentioned how they select which loans with interest rates subsidized by the government, should go to.  Making it heavily available to any business isn't a good idea imo.  It just makes many companies end up as reliant on loans to survive when a lot of these companies are not very profitable or functionable.

I dunno, if even until recently defense establishments had problems with high rates and bad terms on old loans, I doubt the situation is much better down the line.
I get what you mean though, but I'd rather see a healthy churn of companies rising and dying than some potential massive ones being held back.

I have been harping on this point for years on this forum. The CBR under Nabiullina has been a prime element of sabotage of Russia's economy.
Her monetarist gang lie and lie about the inflation pressure in Russia and claim they need to impose an astronomic prime rate to "fight it". So
for years we had a prime rate of around 8% when the inflation was lower than this number. And this is remains true to day where the CBR
keeps the prime rate above inflation even though they admit that the CPI is now under 4%. Only banks see the prime rate. All consumers
including businesses see prime + markup. So even the best customers for Russian banks are seeing over 5.25% loan rates. And they only
see these "low" rates today. In 2019 they were seeing over 8.25% loan rates.

These rates are insanely high when it is possible to borrow abroad for under 4%. The CBR must set the prime rate to CPI - 2% as it is
in the west. This is justified by the need to develop the Russian economy. There is no inflation pressure under these conditions since
the economy and markets are not saturated (equilibrated). Small business people routinely complain that that borrowing costs in
Russia are intolerable. This is serious since it means that they have a hard time being established and those that do operate in this
environment are likely engaging in grey and black economic activity to survive.

miketheterrible wrote:No they don't. They haven't done so in two years due to sanctions.

If you are going to assume things and base off of 2008 beliefs, it's better you leave now

In economics Capital Account = -(Current Account) by definition. Doesn't mean that a negative capital account is bad, in fact it is good. It does mean that whatever current account surplus you run is effectively financing those countries (like the USA) running current account deficits. Germany, Japan and China all run current account surpluses. US, UK, and India run large current account deficits. (In the case of US and UK for consumption in the case of India for growth).

"Because all the transactions recorded in the balance of payments sum to zero, countries that run large trade deficits (current account deficits), like the United States, must by definition also run large capital account surpluses. This means more capital is flowing into the country than going out, caused by an increase in foreign ownership of domestic assets. A country with a large trade surplus is exporting capital and running a capital account deficit, which means money is flowing out of the country in exchange for increased ownership in foreign assets."

In terms of private capital, there was a $44 billion outflow in the first 10 months of 2020 from Russia, but large amounts of this come from foreign bank subsidiaries and Sberbank itself.

Capital acct deficit has a negative connotation. But if we agree that producing more than you consume and saving the difference is a good thing , then a capital acct deficit is what you want. Which is why power house economies like Germany , S.Korea and China have trade surpluses.

Comparing it to a household would look like this. If you were selling your assets like your house and car , and using the money for consumption , that money would be your capital account surplus. I guess if you can perpetually swindle banks and credit card companies to perpetually lend you money so that you could perpetually consume more than you produce , I guess it's a good thing. And that's what the imperial world does. The US , UK Canada ect. They perpetually swindle the world with their reserve currencies so that they can do into debt and deficit seemingly without limit. But there has to be a limit. And the US will find it eventually.

The Ruble isn't a reserve ccy in the Bretton Woods system. All Russia has to do is wait out the Bretton woods system. And undermine it. By buying gold. Which it is doing.

"This means more capital is flowing into the country than going out, caused by an increase in foreign ownership of domestic assets"

Yes. Just like the household example. The US is selling it's assets and its debt to consume. Capital flowing in. Sounds good eh ? It really isn't.

As far as what the US actually produces , it's basically an 8 or 9 trillion GDP economy. The rest is imperial grift. 8 or 9 trillion is something. But it's not the 20 trillion number that everyone trots out.

8-9 trillion is basically Germany and Russia combined

"Because all the transactions recorded in the balance of payments sum to zero, countries that run large trade deficits (current account deficits), like the United States, must by definition also run large capital account surpluses. This means more capital is flowing into the country than going out, caused by an increase in foreign ownership of domestic assets. A country with a large trade surplus is exporting capital and running a capital account deficit, which means money is flowing out of the country in exchange for increased ownership in foreign assets." wrote:

This is clearly not happening in Russia which has maintained a large trade surplus for the last 20 years without any substantial investment
outside its borders and vice versa. There are some critical assumptions above that have to be proven and not just asserted. The only
regime that this assertion can be remotely relevant for is for a developed economy or banana republic. The excess money literally has nowhere
to go and so goes offshore. For a developing economy there is enough internal demand for the "excess" money. But for banana republics which
are not even developing really, there is no domestic development demand since they are in a perverse Dutch disease regime where only
the commodity sector is developed. The trade money inflow has nowhere to go because there is basically no economy outside of
the commodity sector. Russia is not in this regime whatsoever.

I guess a better term for Russia and real developing economies is transition economies since the term developing is applied to all sorts of
stagnant banana republics that are not actually developing.