Russian Economy General News: #2

Central Bank of Russia added 37 metric tons of gold in September , making total reserves at 1151 metric tons.

http://en.itar-tass.com/economy/755964

Is it me, or are westerners becoming more stupid. If anything, they need to start lifting sanctions as Russia signed the minsk deal, so russian stance was helping west. But it appears they want to tighten more sanctions, till what? Till they leave Crimea, which isnt Ukraine? Guess the west is so pissed off they screwed up so badly they are using sanctions to showcase their temper tantrum.

sepheronx wrote:http://en.itar-tass.com/economy/755964

Is it me, or are westerners becoming more stupid. If anything, they need to start lifting sanctions as Russia signed the minsk deal, so russian stance was helping west. But it appears they want to tighten more sanctions, till what? Till they leave Crimea, which isnt Ukraine? Guess the west is so pissed off they screwed up so badly they are using sanctions to showcase their temper tantrum.

Its a rare opportunity for US where the Europeans and US have applied comprehensive sanctions on Russia .... And Obama has personally made sure Europe put those tough sanction even arm twisting EU as Biden said it.

So dont expect the sanctions to go not even 1 % as long as Obama is the President.

Dont Ask and Dont Expect is what Russian leadership should look out for.

Russia’s 2015-2017 budget relies on optimistic forecasts

I would say Russia should budget with Ural Price at $80 and if its higher they should invest that money in economy or save the money.

Today the budget is pegged at $96 for next 3 years , I have my doubts

Austin wrote:Russia’s 2015-2017 budget relies on optimistic forecasts

I would say Russia should budget with Ural Price at $80 and if its higher they should invest that money in economy or save the money.

Today the budget is pegged at $96 for next 3 years , I have my doubts

They mentioned before that they were going the old method of pegging it at $60. But I agree with you.

Saudi Arabia is now dropping output so prices may surge again.

http://www.rg.ru/2014/10/15/patrushev.html

Austin wrote:http://www.rg.ru/2014/10/15/patrushev.html

Interesting Interview with ex FSB Chief Nikolai Patrushev

How the CIA and Saudi Manipulated the Oil Price to create serious problem to Soviet Economy and ultimately brought it down.

I always wonder why didnt the Soviet Attacked Saudi Oil Fields and brought the who thing down.

At that time, major US presence over their. Add to that, Soviets didnt think it would bring it down. The ex fsb guy is just giving the loose term. In reality, soviet economy was military first, everything else dead last and this, could not sustain itself in its current form (current at the time). It fell because shitheads like Gorby and Yeltsin made it fall. Instead, they coild have reformed the economy by brining military tech to the civil market and allowed more freedom in business prospects (making it easier to create a company in ussr) while changing it to competitive wage system.

But, of course, you have politicians who just like in everything else, ruin something.

Right now, this isnt a sequal of this. As much as Russians love gaining moola for oil, in the end, they know they cannot rely on it. Hence why they said they can go back to old measurments of aroun$60 per barrel. They also have a totally different economic system than soviet union thus why many new businesses are springing up to make goods as alternatives to the west. This sich system can sustain itself more than a direct gov control all one.

That was then, this is now:



There is no room today for 1980s style market manipulation. Remember all of the OPEC oil wars of the past? When was the
last one you remember?

I hear that Saudia Arabia is already cutting production.

As I suspected, the whole "corruption charges placed on Hungary" were nothing more than politicized non-sense directed toward Viktor Orban for not being more Russophobic:

US diplomat tells Hungary to back EU, criticizes PM Orban over Russia stance

Good Read

Dollar exceeded 42 rubles for the first time in history, who attack our currency

Nice

Medvedev approved passport modernization project BAM and Trans



Economic Development: Russian GDP for 9 months increased by 0.8%

Investing in Russia safer than abroad — Russia's Federation Council speaker

MOSCOW, October 27. /TASS/. Investing in Russia is safer than withdrawing money from the country, Russian Federation Council Speaker Valentina Matviyenko said in an exclusive interview with TASS.
"I think people who are currently trying to withdraw their capitals from Russia and build a bridgehead in the West are making a big mistake. Yes, we have bureaucracy, yes, there are enough excessive restrictions for businesses, but all the same the risks are much lower here," Matviyenko said.
She said in Russia money is protected better, while no one knows what happens to it abroad "in a year or five."
"The rules of the game may be changed unilaterally. The origin of capitals will seem suspicious or there will be another pretext to find fault with. The accounts will be blocked, other measures will be taken and you won’t prove the truth," she said.

Western countries may tighten sanctions against Russia — Moody’s
"In my view, it is way more reliable to invest in domestic economy - construction of roads, housing, other large projects," Matviyenko added.
"The government plays the role of a key investor or of a guarantor in the implementation of large-scale projects, passes laws aimed at supporting Russian products’ manufacturers during the period of the country’s adaptation to the rules of the WTO [World Trade Organization]." She said. "We would like domestic businesses to take into account interests of the country. We would like the businesses not to abuse the so-called optimization of taxes, not to channel income into offshore zones and to more actively invest in the national economy. To sum it up, we want businesses to show patriotism."
The full text of the interview will be published on the TASS news agency's English website on October 28.

This is still being questioned? Any person who moves their money abroad, is an idiot. Simply put, they are making a big risk. Already a lot of oligarches are screaming because they had their assets stripped/frozen in foreign countries thanks to the sanctions. And I think if someone does this, they should be given punishment. Or at least, if they lose their money, TS.

Of course investing back home is far better and less risks. heck, doing business in Russia is not any harder than China and so many still use the concept of bureaucracy getting in the way. Yet, per year, millions (about 3 - 4) of new companies start up, only half of them survive though because of poor planning and what not, but they blame the government. So the other half survive and yet, not a complaint (besides maybe taxes, which everyone complains about everywhere).

Rouble Fall is really Troubling , Today it still fell  42.71.

http://www.rg.ru/2014/10/29/korzina-site.html

It seems CBR has spent $30 Billion defending the rouble fall in October alone and in past 6 months since Jan it spent total 40 billion USD

I wonder how low Rouble will fall till end of this year.

Kudrin has said to stop defending rouble and let it free float next month instead of Jan 2015.

I hope CBR does not burn USD just to defend rouble , Speculators and Hedgers are making a good time now.

who is it troubling for? Russian GDP had a growth in september. Industrial production is up. USD being.burned away is good as it is de-dollarization, which they want. Central Bank is doing their own thing but it never works. So they are doing currency swaps again. $50B rather than just spending USD. It is mostly to pay off debt.

The value of USD to Ruble really doesnt matter anymore. Unless they are forced to pay their tab, which they can decide to default on. Which wouldnt make a difference since Russia is barred from western loans. So this talk of Ruble to USD is really just bogus. Only people effected are consumers who want iPhones. I think the average person can live without that. But benefit of having USD now is to pay off any debt. What a lpt dont realize is if the Ruble free floata, its value is gonna drop even further.

A lot are de-dollarizing. Heck, even US ally UK is moving towarda a Yuan bucket.

Btw, austin, this should make you happy (unless your Hindu). India will increase sales of meat, specifically beef, to Russia by 2 - 3x current amount.

magnumcromagnon wrote:As I suspected, the whole "corruption charges placed on Hungary" were nothing more than politicized non-sense directed toward Viktor Orban for not being more Russophobic:

US diplomat tells Hungary to back EU, criticizes PM Orban over Russia stance

So here's an update on the U.S. State Dept's concerted multilateral attack on Russia's economic ally in the EU/NATO, looks like Soros foundations have drummed up they're usuall useful idiots:

Tens of thousands of protesters rallied in Hungary despite the government's amendment of a controversial internet tax bill. The demonstrators say the country is turning anti-democratic and drifting away from the EU.

100,000+ rally in Hungary over internet tax despite govt concessions (PHOTO, VIDEO)

You got to be f*cking kidding me, the EU democratic? They same EU who hand-picks their presidents oligarchical instead of actually holding democratic elections...

Nice  

IMF: Russia increased its gold reserves to 1,149 tonnes

and something interesting ...

Superjet found the first customer in Europe

http://www.vlmairlines.com/vlm-airlines-to-pioneer-long-range-sukhoi-superjet-in-europe/

Great!

sepheronx wrote:who is it troubling for? Russian GDP had a growth in september. Industrial production is up. USD being.burned away is good as it is de-dollarization, which they want. Central Bank is doing their own thing but it never works. So they are doing currency swaps again. $50B rather than just spending USD. It is mostly to pay off debt.

The value of USD to Ruble really doesnt matter anymore. Unless they are forced to pay their tab, which they can decide to default on. Which wouldnt make a difference since Russia is barred from western loans. So this talk of Ruble to USD is really just bogus. Only people effected are consumers who want iPhones. I think the average person can live without that. But benefit of having USD now is to pay off any debt. What a lpt dont realize is if the Ruble free floata, its value is gonna drop even further.

A lot are de-dollarizing. Heck, even US ally UK is moving towarda a Yuan bucket.

De-Dollarisation is a nice slogan for now and it would take 10 years atleast to dedollarise the Russian Economy if they are serious about it.

Rouble is pegged against USD/Euro basket and Rouble is Free Floating Capital Account Convertible

So if CBR burns its currency at the rate it did in October it wont have any forex left in 8-9 months leading to 1998 financial crisis.

Best option now and likely one is to raise interest rates from 8 % to may be 10-12 % and let rouble fully free float from November rather than Jan 2015.

CBR cant keep defending rouble fall every time.

Jesus you got me into this. Austin you are not very successful with women, are you?

Austin wrote:

sepheronx wrote:who is it troubling for? Russian GDP had a growth in september. Industrial production is up. USD being.burned away is good as it is de-dollarization, which they want. Central Bank is doing their own thing but it never works. So they are doing currency swaps again. $50B rather than just spending USD. It is mostly to pay off debt.

The value of USD to Ruble really doesnt matter anymore. Unless they are forced to pay their tab, which they can decide to default on. Which wouldnt make a difference since Russia is barred from western loans. So this talk of Ruble to USD is really just bogus. Only people effected are consumers who want iPhones. I think the average person can live without that. But benefit of having USD now is to pay off any debt. What a lpt dont realize is if the Ruble free floata, its value is gonna drop even further.

A lot are de-dollarizing. Heck, even US ally UK is moving towarda a Yuan bucket.

De-Dollarisation is a nice slogan for now and it would take 10 years atleast to dedollarise the Russian Economy if they are serious about it.

Rouble is pegged against USD/Euro basket and Rouble is Free Floating Capital Account Convertible

So if CBR burns its currency at the rate it did in October it wont have any forex left in 8-9 months leading to 1998 financial crisis.

Best option now and likely one is to raise interest rates from 8 % to may be 10-12 % and let rouble fully free float from November rather than Jan 2015.

CBR cant keep defending rouble fall every time.

Isnt pegged. Dunno where you got that info from. Its pegged against USD in terms of trade with countries whom trade in USD, not with countries they agreed to trade amongst their own currencies. They may accet it if they export oil and gas, but who knows how long that will last.  So if Russia agreed with country x that each other currencies are tradeable in their respective currencies, then they can determin the value of each other currencies. Dumping USD has nothing to really do with this since ruble is a convertable currency.

that is why most other are happy cause internal debt and domestic sales are done in Rubles. So dumping USD now means more ruble than was available last year. Increasing interest rates will just cause more problems in the future than so called helping anyone. It was the interest rates that has hurt more businesses than the ruble rate. Interest will always exist and interest rates here are higher, much higher, than what they claim it is.

1998 had not much to do with forex. It had to do with a not existing gdp of around $190B tied with lack of industry and no savings, and high debt. If they lost their forex now, they wouldnt default or be in same predictament. If they decided to dedault, it would hurt foreign loaning agencies than Russia since Russia does not have access to western credit anymore anyway. Russian debt is 16% of gdp. Their forex is simply to help leviate the debt. In the end, its useless. Unless people decide they wont accept rubles. In that case, russia doesnt have to trade with them. If in case other countries want to buy from Russia (which we both know is a net exporter) then technically Russia can decide on what terms. In this case, Russian forex will always exist since they agreed to trade in their respective currencies rather than USD. Dumping USD is good in this case if it ends up useless for Russia anyway. Better get rid of it now by dumping it to maybe another currency like Yuan.

Btw, yesterday, USD didnt sell. Lol.

Only obstacle I see is the WTO. Technically, it is useless since sanctions cannot be a thing under it. So in this case, Russia can forgo any formalities of the WTO and do trade as they please. Which, isnt what the Rus gocernment is wanting to do. They want easier trade. Which may work against them later unless they push the concept of trading in each other currencies rather than USD. Rial and Ruble, Euro and Ruble and Yuan amd Ruble. These I think are what has been agreed upon in trades (Rial and Ruble is the respective trade between Iran and Russia coming up). I think Russia also does Cuban and Argentina Peso for Ruble as well.

I dont think CB methods of helping the ruble is even supported by the government. Putin made it clear sometime back he wont try to 'save' the ruble. Reason why is Russia is a next exporter and a lower ruble value means increased sales due to goods being cheaper. All depends what happens but Russia is a domestic consumer market and the value of the ruble to usd makes little difference internally.

http://m.rbth.com/news/2014/10/24/russia_to_move_gradually_towards_floating_ruble_rate_using_reserves_for__40878.html

Well, we can put our minds at ease then, since Putin wants free floating currency and keeping eye on forex/gold reserves.

A new Doing Business Ranking for 2015 has just been released. Russia jumped up from 64th to 62th rank overall with an increase of 1.62 points overall.

Moldova jumped by 17 places with a +3.79 points, China jumped up by 3 places with +1.26 increase, India dropped by 2 places with +1.19 increase, Brazil jumped up by 3 places with + 0.62 point increase. US remained at the same place with a slight 0.002 increase.

I'm now waiting for the 2015 issue of the Index of Economic Freedom. In the 2014 issue Russia sustained a moderate improvement.

As Sa'iqa wrote:A new Doing Business Ranking for 2015 has just been released. Russia jumped up from 64th to 62th rank overall with an increase of 1.62 points overall.

Moldova jumped by 17 places with a +3.79 points, China jumped up by 3 places with +1.26 increase, India dropped by 2 places with +1.19 increase, Brazil jumped up by 3 places with + 0.62 point increase. US remained at the same place with a slight 0.002 increase.

I'm now waiting for the 2015 issue of the Index of Economic Freedom. In the 2014 issue Russia sustained a moderate improvement.

What? They were at 92 before... That would make it a jump of 30 positions, unless we are talking about different rankings here.