Military Forum for Russian and Global Defence Issues


    Russian Economy General News: #4

    Maximmmm
    Maximmmm

    Posts : 59
    Points : 60
    Join date : 2015-07-27
    Location : Vancouver,Canada

    Russian Economy General News: #4 - Page 36 Empty Re: Russian Economy General News: #4

    Post  Maximmmm on Tue Jul 28, 2015 7:33 pm

    Karl Haushofer wrote:Oil price has really been dropping and it looks like it will go under $50 per barrel soon. Maybe this is because of the Iran deal?

    Do you think the Russian economy can return to growth even with the current oil price?

    Depends entirely on the survival & strength of the rest of the economy. Low Rouble means our exports are looking a hell of a lot more attractive to everybody and if ex-USSR countries and asia take up the purchasing slack, we can maybe squeak 1%ish next year.
    avatar
    Vann7

    Posts : 4582
    Points : 4686
    Join date : 2012-05-16

    Russian Economy General News: #4 - Page 36 Empty Re: Russian Economy General News: #4

    Post  Vann7 on Tue Jul 28, 2015 9:12 pm

    Russia have a serious problem with incompetence... on their leadership. .
    Even their own media is infiltrated by 5th column and or western "exceptionalism" parasites.

    Russian ruble hits 60 against US dollar, close to erasing 2015 gains

    http://www.rt.com/business/310963-russian-ruble-hits-60-against-dollar/


    And not im not basing thing on that headline alone .. i have been following RT for long..
    and i see how they never question More .. the information that comes from middle east. and just copy paste whatever is told by UK human rights NGO ,anti Syrian troll ,
    and post as news . Their reporting about Syria have been catastrophic Bad.. falling short of accusing the Syrian Government of indiscriminately killing civilians women and children for fun.

    and call "Rebels" the terrorist the Syrian army fighting (alqaeda/isis/alnusra/Fsa).  All this is fixed a bit somehow by Video Reports inside from the broadcast report.. but in many times i have seen ,how the news editors at RT.com looks more and more like more continuation of western propaganda.  even if the report is technically correct like the above title.. the intention is what is clear to predict always a negative outlook and doom of Russian economy.

    Professional Journalism ,should not rely on Rumors or Opinions and try to push them as Facts. It only needs to report exactly what happened.. and allow people to form their own
    opinions.. And leave their "Oh my God Russia is doomed" .. away of their reports and leave opinions for Economist and Analyst. In other words the news needs to be reported by the experts..on the subject.. and not by an editor of news..

    Online media..more than Anything.. the website RT.com.. role should be.. to be a messenger
    and NOTHING ELSE.. and leave their stupid opinions away of any report.

    Unless you have been following RT.com for long you will not see ,why i think they have Junk ,
    garbage on their staff ,trying to align with western media style reports.. You see important News not covered.. and the snowden crap sometimes covered 1/3 of RT.com online reports.
    The coverage of Ukraine is a bit better.. but their middle east report is basically copy/past of what SYrian Observatory of Human Rights.. a 1 man british organization that receive their info from British government who oppose assad says in london..

    sputniknews.com news in the other hand is showing far more professional their news..
    and with more images and news that matter.  I really think some heads needs to be Roll
    on RT.com.. no idea what the head in charge of RT have in this.... the problem is not their Air
    transmission..but the online website.. that many times follows the same western propaganda.
    And i have seen this incompetence again and again in a website that is supposed to be OBjective. You also have the genius , of the people hiring staff ,that are married with US military ,and later quits on Air..but thats another story. Im really surprised the west have not been more effective in countering RT ,"another point of view" ,or at least most times it is.. because with the incompetence they have will be no surprising.

    The way the Russian RUbble "erasing gains" in 2015 made it look.. as if the whole Russia economy will sink to December 2014 levels.. ,completely ignoring Russia lowered the interest rate ,and controlled the inflation and reserves grew.. and all the gains Russia have a achieved on its local economy and industry..The Ruble alone is not indicative of Russia economy state ,yet none of this is explained in the whole article.. why i believe editor or news should keep
    their opinions away from any report.. unless they have any plans to educate people what really
    the Ruble on 60 means for Russia.



    Last edited by Vann7 on Tue Jul 28, 2015 9:31 pm; edited 1 time in total
    sepheronx
    sepheronx

    Posts : 7090
    Points : 7358
    Join date : 2009-08-06
    Age : 30
    Location : Canada

    Russian Economy General News: #4 - Page 36 Empty Re: Russian Economy General News: #4

    Post  sepheronx on Tue Jul 28, 2015 9:24 pm

    @Vann

    At first, I thought RT and Sputnik were two of the same, but I find that RT and Tass have far more in common. And I dont agree that it is all just fifth columnists infiltration but pure laziness in their journalism. Your right, they seem to pull more copy+paste type articles from other sources, but their investigative journalism and counter points are usually good. Sputnik on the other hand just loves to troll but does use points/facts brought up during interviews and twitter posts.

    But dont be surprised by any of this. RT, Russia Insider, Sputnik, Tass, Ria, Lenta, etc have all seemed to have contradicting articles that fall even as far as an hour apart. Where they will post about dangers of devaluation of currency, while next article is about how good it can be as well.

    If Russia intervenes too much in local media, then they will prove westerners right about the allegations of Russia controlling all media in that country.

    We can safely assume that there are both good and bad points.
    Good:
    - cheaper productions
    - more competitive prices for export
    - increase local production to lower domestic costs

    Bad:
    - domestic consumers would lower their spending as now imports are expensive and domestic may rise a bit
    - Paying off debt that is owned by foreigners becomes harder.


    In the end, this currency is going to flip flop for a while till Russian government can somehow get rouble out of speculators control (its free floating yet people tied it to oil prices).
    avatar
    Karl Haushofer

    Posts : 747
    Points : 740
    Join date : 2015-05-03

    Russian Economy General News: #4 - Page 36 Empty Re: Russian Economy General News: #4

    Post  Karl Haushofer on Tue Jul 28, 2015 9:32 pm

    Maximmmm wrote:
    Karl Haushofer wrote:Oil price has really been dropping and it looks like it will go under $50 per barrel soon. Maybe this is because of the Iran deal?

    Do you think the Russian economy can return to growth even with the current oil price?

    Depends entirely on the survival & strength of the rest of the economy. Low Rouble means our exports are looking a hell of a lot more attractive to everybody and if ex-USSR countries and asia take up the purchasing slack, we can maybe squeak 1%ish next year.

    The price of exports if only one aspect. Quality is another. Russia will not turn into exporting powerhouse just by lowering the value of its currency. This has never worked. There needs to be a constant industrial evolution/revolution throughout Russia for Russia to become another Germany.
    Maximmmm
    Maximmmm

    Posts : 59
    Points : 60
    Join date : 2015-07-27
    Location : Vancouver,Canada

    Russian Economy General News: #4 - Page 36 Empty Re: Russian Economy General News: #4

    Post  Maximmmm on Tue Jul 28, 2015 9:46 pm

    Karl Haushofer wrote:
    The price of exports if only one aspect. Quality is another. Russia will not turn into exporting powerhouse just by lowering the value of its currency. This has never worked. There needs to be a constant industrial evolution/revolution throughout Russia for Russia to become another Germany.

    True, that's why it'll be crucial to see if the economic growth up to this point & reforms have produced companies that are able to act on the opportunity. It's not the 90's anymore where we can't export anything because our factories simply can't compete, there's several strong industries that have been developing.
    One of the best examples is Rosatom, which was in a sad state in the 90's, but now has a fat order book.

    But I must say, if oil drops and stays below 50 we're gonna have serious issues.
    avatar
    Karl Haushofer

    Posts : 747
    Points : 740
    Join date : 2015-05-03

    Russian Economy General News: #4 - Page 36 Empty Re: Russian Economy General News: #4

    Post  Karl Haushofer on Tue Jul 28, 2015 10:06 pm

    Maximmmm wrote:
    True, that's why it'll be crucial to see if the economic growth up to this point & reforms have produced companies that are able to act on the opportunity. It's not the 90's anymore where we can't export anything because our factories simply can't compete, there's several strong industries that have been developing.
    One of the best examples is Rosatom, which was in a sad state in the 90's, but now has a fat order book.
    I agree that Rosatom is currently probably the best success story of Russian exports. Hopefully we are going to see more and more Russian companies being able to compete internationally, and also in non-arms and non-nuclear sectors.

    Maximmmm wrote:
    But I must say, if oil drops and stays below 50 we're gonna have serious issues.
    I'm afraid it will stay low for a long while because Iran will add so much new crude oil to the world market while the global economy is in a downturn. Russia will have to deal with a low oil price for years. This will be a big test for the Russian government because there will be a lot less money for social expenditures and Russia will also have to tie up a lot of capital for investments if it ever wants to become a global industrial power.

    All of this means that the Russian pensioners and poor will be worse off than they have been in 2006-2014. And the share of Russians who live under the poverty line will also increase.

    Since Russia will not have the "easy" oil money to cover these social expenditures it may have to increase taxes and make them progressive.

    And Russia should force the oligarchs to bring back their money from western tax heavens and make it really hard and expensive to transfer domestic capital out of Russia.
    Maximmmm
    Maximmmm

    Posts : 59
    Points : 60
    Join date : 2015-07-27
    Location : Vancouver,Canada

    Russian Economy General News: #4 - Page 36 Empty Re: Russian Economy General News: #4

    Post  Maximmmm on Tue Jul 28, 2015 10:16 pm

    Karl Haushofer wrote:
    I'm afraid it will stay low for a long while because Iran will add so much new crude oil to the world market while the global economy is in a downturn. Russia will have to deal with a low oil price for years. This will be a big test for the Russian government because there will be a lot less money for social expenditures and Russia will also have to tie up a lot of capital for investments if it ever wants to become a global industrial power.

    All of this means that the Russian pensioners and poor will be worse off than they have been in 2006-2013. And the share of Russians who live under the poverty line will also increase.

    Since Russia will not have the "easy" oil money to cover up these social expenditures it may have to increase taxes and make them progressive.

    And Russia should force the oligarchs to bring back their money from western tax heavens and make it really hard and expensive to transfer domestic capital out of Russia.

    You know, the price of oil is never certain. Saudi Arabia is running a massive budget deficit and while they have massive reserves, they won't last beyond 10 years. Who knows what they might do. Furthermore at the end of the day if the global economy picks up a bit and India starts growing at something close to its potential, we'll see a lot of the excess oil diverted there.
    But yeah pensioners have it hard and it's only gonna get harder. Just as we seemed to have recovered from the 2008-9 recession, the Ukraine thing happened and our economy tanked. Really bad timing.

    Like I said before, cheap loans, cheap loans and less bureaucracy.
    Look at the domestic fisheries. They use second hand ships bought from abroad instead of purchasing at domestic shipyards because 1. domestic yards are too focused on military orders 2. they don't have the access to cheap credit they need to purchase new ships. 3. The lax regulations allow them to use unsafe ships that should have been scrapped a long time ago.

    Right there are a bunch of opportunities to make business run smoother and lead money back to the domestic economy, and the country is full of similar situations. Our bureaucrats need to start looking at making things run at least at 90% efficiency.
    KoTeMoRe
    KoTeMoRe

    Posts : 3990
    Points : 4007
    Join date : 2015-04-21
    Location : Krankhaus Central.

    Russian Economy General News: #4 - Page 36 Empty Re: Russian Economy General News: #4

    Post  KoTeMoRe on Tue Jul 28, 2015 10:18 pm

    Karl Haushofer wrote:
    Maximmmm wrote:
    Karl Haushofer wrote:Oil price has really been dropping and it looks like it will go under $50 per barrel soon. Maybe this is because of the Iran deal?

    Do you think the Russian economy can return to growth even with the current oil price?

    Depends entirely on the survival & strength of the rest of the economy. Low Rouble means our exports are looking a hell of a lot more attractive to everybody and if ex-USSR countries and asia take up the purchasing slack, we can maybe squeak 1%ish next year.

    The price of exports if only one aspect. Quality is another. Russia will not turn into exporting powerhouse just by lowering the value of its currency. This has never worked. There needs to be a constant industrial evolution/revolution throughout Russia for Russia to become another Germany.

    I hope Russia never becomes a Germany. Germany is artificially compressing its purchasing power of its majority and its commercial neighbors and having the biggest accountability failure in the post Cold War era. The moment the Euro hits 1.3 USD again German exports will become as difficult to shift as they were back in 2009.
    Russia needs to export what can be exported and offer also an attractive transformation and assembly industry, because right now it's heavily invested towards raw material. But the most important thing is stay away from the housing bubble. Russians tend to reinvest in brick and stone, this is a sign of a healthy middle class, but it will not last.

    For that it needs to reinvest the CIS space, balance the trade with Asia and hope that the current Agro-failure in Europe lowers the prices so much that 5 to 10% of the farmers get bankrupt. Which in return should re-establish some margins but foremost allow for Russian (and RoW) farmers to reacquire the fixed capital that stands in Europe, financed by the CAP largesses.


    It has to be a long term plan and this can't happen if the Russian state doesn't pick a direction regarding the trade balance surplus. Russia should not bet on investment heavy exports that aren't vital. By having a renewed agricultural sector, Russia can earn roughly 2 to 5 billion USD when it spends about 10 to 15 bln. It's something I've never understood, how Russia doesn't want to rejuvenate its agro sector.
    sepheronx
    sepheronx

    Posts : 7090
    Points : 7358
    Join date : 2009-08-06
    Age : 30
    Location : Canada

    Russian Economy General News: #4 - Page 36 Empty Re: Russian Economy General News: #4

    Post  sepheronx on Tue Jul 28, 2015 10:35 pm

    Wtf are you guys on about? Industrial revolution, not rejuvinating agro, major problems with low oil prices?

    Have no one here paid attention to what has been posted?
    I already posted the facts that Russias exports in power equipment surpasses military products this year, agriculture has increased significantly (hundreds of %) and agriculture equipment exports are up. Actually, it is the assembly industries hurt the most as they still require to import the expensive garbage from west and assemble in house. It is local producers whom are fairing far better, especially in automotive this is noticeable. Oil and gas accounts for 18% of Russian GDP, and devaluation of rouble plays into hands of government as they end up with close to same amount in rouble terms as before ($90/bbl at 35Rub/usd exchange vs $50bbl at 60rub/usd exchangr).

    Biggest lie of 21th century is german engineering and it is becoming evident.
    KomissarBojanchev
    KomissarBojanchev

    Posts : 1440
    Points : 1601
    Join date : 2012-08-05
    Age : 22
    Location : Varna, Bulgaria

    Russian Economy General News: #4 - Page 36 Empty Re: Russian Economy General News: #4

    Post  KomissarBojanchev on Tue Jul 28, 2015 10:43 pm

    Since we've seen an evident thaw in russia-saudi relations,together with mutual interests like destroying the western shale oil industry, I hope The 2 together with OPEC would cook up a plan to artificially increase oil prices by hundreds of % like in 1973, to suddenly drive the economy of the empire to a standstill. Russia and OPEC will effectively have an oil monopoly, so the west, unlike the last oil crisis, will have noone with  cheap oil in large enough quantities.

    And even if the west does find an alternative, the immediate economic damage will be so extensive that it will take a very long time to recover to pre-crisis levels.

    GIVE THE WESTERN NEOLIBERAL EMPIRE A TASTE OF THEIR OWN MEDICINE
    avatar
    Karl Haushofer

    Posts : 747
    Points : 740
    Join date : 2015-05-03

    Russian Economy General News: #4 - Page 36 Empty Re: Russian Economy General News: #4

    Post  Karl Haushofer on Tue Jul 28, 2015 10:53 pm

    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?
    KoTeMoRe
    KoTeMoRe

    Posts : 3990
    Points : 4007
    Join date : 2015-04-21
    Location : Krankhaus Central.

    Russian Economy General News: #4 - Page 36 Empty Re: Russian Economy General News: #4

    Post  KoTeMoRe on Tue Jul 28, 2015 10:54 pm

    sepheronx wrote:Wtf are you guys on about? Industrial revolution, not rejuvinating agro, major problems with low oil prices?

    Have no one here paid attention to what has been posted?
    I already posted the facts that Russias exports in power equipment surpasses military products this year, agriculture has increased significantly (hundreds of %) and agriculture equipment exports are up. Actually, it is the assembly industries hurt the most as they still require to import the expensive garbage from west and assemble in house. It is local producers whom are fairing far better, especially in automotive this is noticeable. Oil and gas accounts for 18% of Russian GDP, and devaluation of rouble plays into hands of government as they end up with close to same amount in rouble terms as before ($90/bbl at 35Rub/usd exchange vs $50bbl at 60rub/usd exchangr).

    Biggest lie of 21th century is german engineering and it is becoming evident.

    We all read the same sources, the issue is that milk extraction & conditioning still gets done with 80's Kolkhoze leftovers. Exporting is cool but there is a specific lack of dedicated agriculture investment. And currently this can be instafixed by buying almost brand new systems in Europe that get sold on slashed prices in the Middle East and Africa because of a huge surcapacity in Europe. Assembly lines hurt because they were owned by the same guys who'd sanction Russia. IE those were dedicated lines. In the same vein Europe has no issues with those DFI's in Russia, but forbids the Gas/pipeline combo. By playing the devaluation the Russian state is pulling the same kind of shit as the German one but on steroids. They hoard hard cash, repay debts, play on the change and therefore keep the Russian public deficit under the 10% threshold. While that's all cool, it hurts the Russian part of economy that needs a buoy to learn to swim. So far it can't compete because competition is also collaboration is a mass of projects that because of sanctions need to be hold at bay or adapted to the substitute partner. Not actually funny for people who had plans.

    En economy can't be managed like a bank portfolio and that's why the state has a specific place in a market economy. I just hope the Sanction-Era economy doesn't become a norm.



    avatar
    Karl Haushofer

    Posts : 747
    Points : 740
    Join date : 2015-05-03

    Russian Economy General News: #4 - Page 36 Empty Re: Russian Economy General News: #4

    Post  Karl Haushofer on Tue Jul 28, 2015 10:55 pm

    KomissarBojanchev wrote:Since we've seen an evident thaw in russia-saudi relations,together with mutual interests like destroying the western shale oil industry, I hope The 2 together with OPEC would cook up a plan to artificially increase oil prices by hundreds of % like in 1973, to suddenly drive the economy of the empire to a standstill. Russia and OPEC will effectively have an oil monopoly, so the west, unlike the last oil crisis, will have noone with  cheap oil in large enough quantities.

    And even if the west does find an alternative, the immediate economic damage will be so extensive that it will take a very long time to recover to pre-crisis levels.

    GIVE THE WESTERN NEOLIBERAL EMPIRE A TASTE OF THEIR OWN MEDICINE

    Wouldn't "artificially driving up the oil price" mean that Russia and Saudi Arabia would stop selling oil? There is no other way to do this as I understand.

    Easier said than done. Saudis can't afford their oil trade and neither do the Russians.
    KomissarBojanchev
    KomissarBojanchev

    Posts : 1440
    Points : 1601
    Join date : 2012-08-05
    Age : 22
    Location : Varna, Bulgaria

    Russian Economy General News: #4 - Page 36 Empty Re: Russian Economy General News: #4

    Post  KomissarBojanchev on Tue Jul 28, 2015 10:57 pm

    Karl Haushofer wrote:
    KomissarBojanchev wrote:Since we've seen an evident thaw in russia-saudi relations,together with mutual interests like destroying the western shale oil industry, I hope The 2 together with OPEC would cook up a plan to artificially increase oil prices by hundreds of % like in 1973, to suddenly drive the economy of the empire to a standstill. Russia and OPEC will effectively have an oil monopoly, so the west, unlike the last oil crisis, will have noone with  cheap oil in large enough quantities.

    And even if the west does find an alternative, the immediate economic damage will be so extensive that it will take a very long time to recover to pre-crisis levels.

    GIVE THE WESTERN NEOLIBERAL EMPIRE A TASTE OF THEIR OWN MEDICINE

    Wouldn't "artificially driving up the oil price" mean that Russia and Saudi Arabia would stop selling oil? There is no other way to do this as I understand.

    Easier said than done. Saudis can't afford their oil trade and neither do the Russians.
    With shale oil destroyed and alternative energy in it's infancy, Russia, OPEC and Iran would become the sole oil suppliers in the world so the wetsren empire would have to still buy from them.
    KoTeMoRe
    KoTeMoRe

    Posts : 3990
    Points : 4007
    Join date : 2015-04-21
    Location : Krankhaus Central.

    Russian Economy General News: #4 - Page 36 Empty Re: Russian Economy General News: #4

    Post  KoTeMoRe on Tue Jul 28, 2015 10:58 pm

    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...
    sepheronx
    sepheronx

    Posts : 7090
    Points : 7358
    Join date : 2009-08-06
    Age : 30
    Location : Canada

    Russian Economy General News: #4 - Page 36 Empty Re: Russian Economy General News: #4

    Post  sepheronx on Tue Jul 28, 2015 11:00 pm

    KoTeMoRe wrote:
    sepheronx wrote:Wtf are you guys on about? Industrial revolution, not rejuvinating agro, major problems with low oil prices?

    Have no one here paid attention to what has been posted?
    I already posted the facts that Russias exports in power equipment surpasses military products this year, agriculture has increased significantly (hundreds of %) and agriculture equipment exports are up. Actually, it is the assembly industries hurt the most as they still require to import the expensive garbage from west and assemble in house. It is local producers whom are fairing far better, especially in automotive this is noticeable. Oil and gas accounts for 18% of Russian GDP, and devaluation of rouble plays into hands of government as they end up with close to same amount in rouble terms as before ($90/bbl at 35Rub/usd exchange vs $50bbl at 60rub/usd exchangr).

    Biggest lie of 21th century is german engineering and it is becoming evident.

    We all read the same sources, the issue is that milk extraction & conditioning still gets done with 80's Kolkhoze leftovers. Exporting is cool but there is a specific lack of dedicated agriculture investment. And currently this can be instafixed by buying almost brand new systems in Europe that get sold on slashed prices in the Middle East and Africa because of a huge surcapacity in Europe. Assembly lines hurt because they were owned by the same guys who'd sanction Russia. IE those were dedicated lines. In the same vein Europe has no issues with those DFI's in Russia, but forbids the Gas/pipeline combo. By playing the devaluation the Russian state is pulling the same kind of shit as the German one but on steroids. They hoard hard cash, repay debts, play on the change and therefore keep the Russian public deficit under the 10% threshold. While that's all cool, it hurts the Russian part of economy that needs a buoy to learn to swim. So far it can't compete because competition is also collaboration is a mass of projects that because of sanctions need to be hold at bay or adapted to the substitute partner. Not actually funny for people who had plans.

    En economy can't be managed like a bank portfolio and that's why the state has a specific place in a market economy. I just hope the Sanction-Era economy doesn't become a norm.




    Agriculture industries have real investment.  Look it up if you want.  I already posted them here on this forums.

    http://sdelanounas.ru/blogs/?search=продукты%20питания

    Thank you Sanctions, as this is really boosting Russian agriculture. BTW, some agriculture industries in eggs especially that were shut down in Kaluga region due to cheap EU goods, reopened due to sanctions.


    Last edited by sepheronx on Tue Jul 28, 2015 11:04 pm; edited 1 time in total
    avatar
    Karl Haushofer

    Posts : 747
    Points : 740
    Join date : 2015-05-03

    Russian Economy General News: #4 - Page 36 Empty Re: Russian Economy General News: #4

    Post  Karl Haushofer on Tue Jul 28, 2015 11:01 pm

    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?
    avatar
    Karl Haushofer

    Posts : 747
    Points : 740
    Join date : 2015-05-03

    Russian Economy General News: #4 - Page 36 Empty Re: Russian Economy General News: #4

    Post  Karl Haushofer on Tue Jul 28, 2015 11:04 pm

    KomissarBojanchev wrote:
    Karl Haushofer wrote:
    KomissarBojanchev wrote:Since we've seen an evident thaw in russia-saudi relations,together with mutual interests like destroying the western shale oil industry, I hope The 2 together with OPEC would cook up a plan to artificially increase oil prices by hundreds of % like in 1973, to suddenly drive the economy of the empire to a standstill. Russia and OPEC will effectively have an oil monopoly, so the west, unlike the last oil crisis, will have noone with  cheap oil in large enough quantities.

    And even if the west does find an alternative, the immediate economic damage will be so extensive that it will take a very long time to recover to pre-crisis levels.

    GIVE THE WESTERN NEOLIBERAL EMPIRE A TASTE OF THEIR OWN MEDICINE

    Wouldn't "artificially driving up the oil price" mean that Russia and Saudi Arabia would stop selling oil? There is no other way to do this as I understand.

    Easier said than done. Saudis can't afford their oil trade and neither do the Russians.
    With shale oil destroyed and  alternative energy in it's infancy, Russia, OPEC and Iran would become the sole oil suppliers in the world so the wetsren empire would have to still buy from them.

    Shale oil can only be destroyed if other oil producers halt the production long enough to rise the prices up to make shale oil not profitable.

    The problem is that once the production is up again the oil price will also go down and shale oil will become profitable again.
    sepheronx
    sepheronx

    Posts : 7090
    Points : 7358
    Join date : 2009-08-06
    Age : 30
    Location : Canada

    Russian Economy General News: #4 - Page 36 Empty Re: Russian Economy General News: #4

    Post  sepheronx on Tue Jul 28, 2015 11:05 pm

    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?

    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.

    Karl Haushofer wrote:
    KomissarBojanchev wrote:
    Karl Haushofer wrote:
    KomissarBojanchev wrote:Since we've seen an evident thaw in russia-saudi relations,together with mutual interests like destroying the western shale oil industry, I hope The 2 together with OPEC would cook up a plan to artificially increase oil prices by hundreds of % like in 1973, to suddenly drive the economy of the empire to a standstill. Russia and OPEC will effectively have an oil monopoly, so the west, unlike the last oil crisis, will have noone with  cheap oil in large enough quantities.

    And even if the west does find an alternative, the immediate economic damage will be so extensive that it will take a very long time to recover to pre-crisis levels.

    GIVE THE WESTERN NEOLIBERAL EMPIRE A TASTE OF THEIR OWN MEDICINE

    Wouldn't "artificially driving up the oil price" mean that Russia and Saudi Arabia would stop selling oil? There is no other way to do this as I understand.

    Easier said than done. Saudis can't afford their oil trade and neither do the Russians.
    With shale oil destroyed and  alternative energy in it's infancy, Russia, OPEC and Iran would become the sole oil suppliers in the world so the wetsren empire would have to still buy from them.

    Shale oil can only be destroyed if other oil producers halt the production long enough to rise the prices up to make shale oil not profitable.

    The problem is that once the production is up again the oil price will also go down and shale oil will become profitable again.

    What? You got that backwards.

    Shale oil needs high prices to survive. Cheap prices means that shale oil wont survive.


    Last edited by sepheronx on Tue Jul 28, 2015 11:06 pm; edited 1 time in total
    kvs
    kvs

    Posts : 6196
    Points : 6331
    Join date : 2014-09-11
    Location : Canuckistan

    Russian Economy General News: #4 - Page 36 Empty Re: Russian Economy General News: #4

    Post  kvs on Tue Jul 28, 2015 11:06 pm

    Please stop with the oil price crash nonsense.

    Let's take this BS narrative from NATO and follow it to its logical conclusions:

    1) The fraction of oil and gas in the GDP of Russia was 13% in 2013. (nominal prices)

    2) Oil fell by 50% from $100 to $50.

    3) Russia's GDP fell by 2.2% (http://www.gks.ru/wps/wcm/connect/rosstat_main/rosstat/ru/rates/46880c804a41fb53bdcebf78e6889fb6)

    4) NATO's sanctions on Russia did not have zero economic impact, especially considering the vital aspect of banking for
    all economic activity and hence growth.


    In the above we have a paradox or logical contradiction. There is clearly a missing process.

    5) The ruble devalued by about 50%.

    The conclusion is that the ruble devaluation has nullified totally the impact of the oil price decline. The 2.2% GDP drop
    is due to the impact of sanctions and the impact of ruble devaluation. Oil prices contribute some small fraction of this
    drop.
    sepheronx
    sepheronx

    Posts : 7090
    Points : 7358
    Join date : 2009-08-06
    Age : 30
    Location : Canada

    Russian Economy General News: #4 - Page 36 Empty Re: Russian Economy General News: #4

    Post  sepheronx on Tue Jul 28, 2015 11:08 pm

    kvs wrote:Please stop with the oil price crash nonsense.  

    Let's take this BS narrative from NATO and follow it to its logical conclusions:

    1) The fraction of oil and gas in the GDP of Russia was 13% in 2013.  (nominal prices)

    2) Oil fell by 50% from $100 to $50.

    3) Russia's GDP fell by 2.2% (http://www.gks.ru/wps/wcm/connect/rosstat_main/rosstat/ru/rates/46880c804a41fb53bdcebf78e6889fb6)

    4) NATO's sanctions on Russia did not have zero economic impact, especially considering the vital aspect of banking for
    all economic activity and hence growth.


    In the above we have a paradox or logical contradiction.   There is clearly a missing process.

    5) The ruble devalued by about 50%.

    The conclusion is that the ruble devaluation has nullified totally the impact of the oil price decline.   The 2.2% GDP drop
    is due to the impact of sanctions and the impact of ruble devaluation.   Oil prices contribute some small fraction of this
    drop.

    I would say that the biggest to that 2.2% drop is from the consumer markets major decline.  People started to "tighten the belt" which is what helps perpetuate a downfall in economics.  Consumers and taxation brings in majority of Russia's GDP.

    They will end up substituting this loss through growth in consumption of domestic made goods, especially agriculture which is in the 10's of billions of dollars worth.

    Another article:
    The growth of food production is catching up with the decline in imports
    kvs
    kvs

    Posts : 6196
    Points : 6331
    Join date : 2014-09-11
    Location : Canuckistan

    Russian Economy General News: #4 - Page 36 Empty Re: Russian Economy General News: #4

    Post  kvs on Tue Jul 28, 2015 11:12 pm

    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.

    sepheronx
    sepheronx

    Posts : 7090
    Points : 7358
    Join date : 2009-08-06
    Age : 30
    Location : Canada

    Russian Economy General News: #4 - Page 36 Empty Re: Russian Economy General News: #4

    Post  sepheronx on Tue Jul 28, 2015 11:31 pm

    Maximmmm wrote:
    Karl Haushofer wrote:
    I'm afraid it will stay low for a long while because Iran will add so much new crude oil to the world market while the global economy is in a downturn. Russia will have to deal with a low oil price for years. This will be a big test for the Russian government because there will be a lot less money for social expenditures and Russia will also have to tie up a lot of capital for investments if it ever wants to become a global industrial power.

    All of this means that the Russian pensioners and poor will be worse off than they have been in 2006-2013. And the share of Russians who live under the poverty line will also increase.

    Since Russia will not have the "easy" oil money to cover up these social expenditures it may have to increase taxes and make them progressive.

    And Russia should force the oligarchs to bring back their money from western tax heavens and make it really hard and expensive to transfer domestic capital out of Russia.

    You know, the price of oil is never certain. Saudi Arabia is running a massive budget deficit and while they have massive reserves, they won't last beyond 10 years. Who knows what they might do. Furthermore at the end of the day if the global economy picks up a bit and India starts growing at something close to its potential, we'll see a lot of the excess oil diverted there.
    But yeah pensioners have it hard and it's only gonna get harder. Just as we seemed to have recovered from the 2008-9 recession, the Ukraine thing happened and our economy tanked. Really bad timing.

    Like I said before, cheap loans, cheap loans and less bureaucracy.
    Look at the domestic fisheries. They use second hand ships bought from abroad instead of purchasing at domestic shipyards because 1. domestic yards are too focused on military orders 2. they don't have the access to cheap credit they need to purchase new ships. 3. The lax regulations allow them to use unsafe ships that should have been scrapped a long time ago.

    Right there are a bunch of opportunities to make business run smoother and lead money back to the domestic economy, and the country is full of similar situations. Our bureaucrats need to start looking at making things run at least at 90% efficiency.

    I Dont think you seem to understand economics or the term tanking.

    Take a look at gdp figures, rates and all of now vs 2008/2009 and compare the situations then come back to us.
    avatar
    Karl Haushofer

    Posts : 747
    Points : 740
    Join date : 2015-05-03

    Russian Economy General News: #4 - Page 36 Empty Re: Russian Economy General News: #4

    Post  Karl Haushofer on Tue Jul 28, 2015 11:40 pm

    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.
    sepheronx
    sepheronx

    Posts : 7090
    Points : 7358
    Join date : 2009-08-06
    Age : 30
    Location : Canada

    Russian Economy General News: #4 - Page 36 Empty Re: Russian Economy General News: #4

    Post  sepheronx on Wed Jul 29, 2015 12:09 am

    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.

    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.

    Here is what I gathered from the times of reading Zerohedge and the likes:
    The world is in an upcoming economic crisis. Countries like Russia, whom have a more "real" economy than most, are going to see a brunt of it in the beginning. Why? because of lack of cheap credit. But, with them not having cheap credit, they dont owe anyone anything (well, they currently still do and a lot of this money owed is to foreign entities). Growth through many parts of the world has been quite artificial and even a huge part of Russia's in the recent past was also artificial. All of this is due to cheap credit that Maximmmm or whatever his name is believes is key here to growth. It is key to growth. But not the growth one should expect and one should want.

    Let me ask this simple question, in relation to the trawler comment from Maximmm: What happens, if these fisherman buys a brand new boat on credit, and then has a bad year, or two? They will go bankrupt and still end up owing money to someone else.

    What credit has done is effectively made people assume they are rich, so they spend more. But this is more that they don't have or own. This is now property of the bank until you pay off that debt. But what happens if things go wrong and you cannot pay that debt off? The bank will take your property or assets of value, and you are left with nothing. Now two issues arise: You and what little you have left (with now 0 access to credit anyway (or cheap ones at least) and or still owing money to the bank even though you have nothing (depends on the terms of the bankruptcy)) and the bank now has assets they paid hands over fist for in terms of a loan, and will either have to sell it to reduce their loss, or take the whole loss.

    What happens if that fisherman pays for a cheap trawler, even if it is from abroad, used? Well, if they have a bad year, at least they wont lose their trawler unless they have to try to make up the loss when/if they move onto some other industry. But they wont owe anyone money.

    I agree that Russian government should be concentrating more on development for domestic equipment needed for development of agriculture and food products. We are already seeing increases in exports of Rostelsmash as an example. But that isn't enough. It needs to be aimed directly at the domestic economy. Still, people fall for propaganda and will purchase that overtly expensive dutch tractor that was assembled in Russia but all parts imported. In the end, does it actually run better? I don't know as I find it real hard to get the data. So that is why it seems to be more myths than facts involved in purchasing industrial goods.

    Lack of cheap credit is hurting industries that are needing the money to expand or new enterprises trying to start. But the question is, is the foreign loans a good idea? No, as evidence points to now, as the industries become too tied with the foreign entities and now you can lose your lively hood due to politics of foreigners. Russian CBR should be the ones providing the cheap loans actually. And they could easily do it. But they wont, as they live in Austerity land, which never proven to work, but cause more trouble.

    So, growth is now coming from peoples pockets, and people spending real money, on real products made internally. At least in agriculture sense they are (as I have pointed out). But it will take years till many agriculture industries really thrive from all of this and they make their money back from their own investments.

    What does the future withold? Who knows. Maybe crowedfunding as a means of obtaining loans will become a thing and individuals can invest in whatever they want, easily through profile funding. Will it happen? Maybe not. Should it happen? Why not. CO-OPS could be a thing for Russia that will bring it to a new generation of real economic development.

    And whom is a living example of all of this? Iran. Their inflation is high, their investments are low from government, yet they still grew in the 30 years of sanctions and their banks/economy was untouched by the 2008 crisis.

    Sponsored content

    Russian Economy General News: #4 - Page 36 Empty Re: Russian Economy General News: #4

    Post  Sponsored content


      Current date/time is Fri May 29, 2020 3:18 pm