Russian Economy General News: #5

zg18 wrote:Global buyers snap up Russian corporate debt

http://www.euromoney.com/Article/3503387/Category/7/ChannelPage/8959/Global-buyers-snap-up-Russian-corporate-debt.html

What! I was told that Russia was going to collapse because it could no longer reach the bountiful NATO credit market.

BB- --> C here we come.

http://www.kp.ru/daily/26454.3/3323999/


Russian Economy

Next year may be the last for the Reserve Fund. This was announced by Finance Minister Anton Siluanov. At the end of this year, "the reserve" will be 3.4 trillion. rubles. The estimated budget deficit in 2016 - 2.3 trillion. rubles. Total is a trillion. And with such unstable oil prices, as it is now, perhaps, that it is necessary to get into the fund "deeper". The government is trying to remedy the situation by cutting costs this way and that. As a result of the new budget, which is about to pass the first reading, we got crooked. It will still be refined. But approximate savings plans can be understood now.

40 or 50?

First is to find out where the government takes money to fulfill their basic obligations to us. Revenues in the budget continues to bring the VAT, excise taxes on cars, gasoline, tobacco, alcohol and income from foreign trade. According to calculations of the Ministry of Finance, which is about 10 trillion. rubles. Most will come from the sale of oil and gas. But how much - can be calculated only approximately. The draft budget for 2016 minutes

made assuming oil prices of $ 50 per barrel. Analysts make similar forecasts. But from the "shocks" no one is immune. Not long ago, the Economic Development Ministry suggested that "black gold" will drop to 40. This significant loss in the item "income".

- If today's oil prices and exchange rates continue, we can forego 900 billion. Rubles. Such risks we do have - admitted Finance Minister Anton Siluanov.

In such a situation, we would be greatly useful revenues not accounted for in the budget. For example, according to the Accounting Chamber, Russian companies owed the treasury 1.2 trillion. rubles. If the tax authorities will be able to collect at least part of the money, the oil could have been smooth out fluctuations.

Downloading military muscle

The biggest item of expenditure in the budget lies in the defense industry. [b]In the military, security and law enforcement officers the government is ready to allocate 5.1 trillion. rubles. This is 35% of total expenditure, or 8% of GDP (an indicator of the size of the economy)[/b].

- In view of the challenges that come from the outside, Russia's national security - is the priority, and the Supreme Commander, and deputies of the State Duma. This item of expenditure is not only untouchable, but also has the right to increase, - commented deputy chairman of the State Duma Defense Committee Viktor Vodolatsky.

Spending on social policies according to the draft budget are in second place. It is planned to allocate 4.4 trillion. rubles (it is 27.64% of total expenditure). These include: social benefits to the population, including pensions, various subsidies and allowances. It would seem that, compared with the current year allocated more funds. The amount has increased by 5.66% by 2015. But inflation (it will be at 12%) accurately will eat the difference.

IMPORTANT!

Wait whether pension indexation

Social spending most concerned about the Ministry of Finance. Hence the constant talk of raising the retirement age. Mol, then the budget will be able to save even more. But while the agency was able to push through only two ideas. The first - to index pensions much lower rate than laid down in the law. In the coming February will add only 4%, which is three times less than the real price growth this year.

The second idea - not to index pensions to working pensioners. These will be considered all those in the previous year officially worked for more than 6 months. Comforting point: sequestration will not affect the allocation of August, which is done every year, taking into account the earnings of retirees who continue to work. Thus, the non-working pensioners pensions will be indexed, as usual, in February 2016. And those who work will receive an individual increase in August. It will depend on the size of the official salary.

MEANWHILE

Science - zero, sport - one hundred

Under the blows were not only the incomes of pensioners. According to plans of the Ministry of Finance of 14 major items of expenditure under the budget reductions are six. Among them - by an evil tradition - the expenditure on education (minus 8%) and health care (minus 11%). But more than others to suffer the article "Utilities": it will cut costs by 41.4%.

- We can not without destructive consequences for the public sector, year after year to cut spending on education and health. If you reduce these costs, there will be no growth, no growth in labor productivity, and ultimately growth in GDP, - says Alexander Deriugin, director of the Centre for Research on regional reforms RANHiGS.

It is noteworthy that for the first time in the budget there is a separate article on science. She is now paired with the cost of "the development of the national economy" and called "science civilian." Its funding was reduced by 50 billion. Rubles, compared with last year. According to Finance Minister Anton Siluanov, it is not necessary - say, in the world of science is paying business.

Expenditure in 2016 on the development of physical culture and sports will make 70.3 billion. Rubles. Another 30 billion. Will be used to prepare for the World Cup in 2018. The budgeted money to help organizations TRP ("Ready for Labor and Defense"). And the prizes of Olympic champion at the Games in Brazil.

ALTERNATIVE MEASURES

But there were still options

Treasury offered to fill a variety of ways.

During the year, it sounded a few suggestions how to maintain and increase budget revenues.

✓ Progressive taxation. The scale of personal income tax rate to the mobile has been dubbed the "tax the rich." MPs from the party "Fair Russia" offer to leave the current rate (13%) for income up to 24 million. Rubles per year. Revenues from 25 to 100 million. Rubles should be taxed at 25%. From 100 to 200 million. - 35%. 200 million. - 50%. The bill's authors calculated that raising taxes for the rich will help increase revenue in 2016 by at least 150 billion. Rubles.

✓ Remove the oil cream. In September, the Ministry of Finance proposed to change the scheme for calculating the tax on mineral extraction tax (MET) on oil. Office suggested to use a lower rate of the dollar (44 rubles per dollar) in the calculation of non-taxable price of oil. Such a scheme would bring in a budget of over 600 billion. Rubles. But oil companies protested the exorbitant tax burden. And even made a collective letter to the president. The letter stated that the tax increase will reduce the production of "black gold" by 10%. As a result, they were left alone.

✓ Start the printing press. Finally, to cover the deficit can print money. The central bank could finance the budget. Not directly, of course, but through the provision of loans to banks. Then these banks will be given money to the government (for example, through the purchase of government bonds). In his last report to the anti-crisis presidential adviser Sergei Glazyev directly proposed controller release 7.5 trillion. rubles for five years, and printed money spent on investments in the economy. According to the financier Sergei Hestanova, the implementation of this idea will inevitably lead to hyperinflation, severe economic recession and the dollarization of the economy. Print extra money in a recession never led to an improvement in the situation.

BTW

How are oil and Budget

"If the dollar collapses, it will not find anyone. Neither Russia nor China. No! It will be huge and heavy economic disaster. " So said the chief editor of "financial newspaper" Nicholas Vardul in the program "The dollar against the ruble" on the radio "Komsomolskaya Pravda". The expert also explained how oil and associated budget, whether to buy currency and when the Russian economy out of the crisis (details)

^^^

✓ Start the printing press. Finally, to cover the deficit can print money. The central bank could finance the budget. Not directly, of course, but through the provision of loans to banks. Then these banks will be given money to the government (for example, through the purchase of government bonds). In his last report to the anti-crisis presidential adviser Sergei Glazyev directly proposed controller release 7.5 trillion. rubles for five years, and printed money spent on investments in the economy. According to the financier Sergei Hestanova, the implementation of this idea will inevitably lead to hyperinflation, severe economic recession and the dollarization of the economy. Print extra money in a recession never led to an improvement in the situation.

Isnt this what QE is about in Western Banks.

So with Russia its about Hyperinflation as Russia cannot export inflation to ROW as West does due to Reserver Currency Status

Russian private sector debt deleveraging , from debtor to creditor.



Now , world actually owes Russian private business $80 million.

thats exactly point , russian economy only looks ""tight"" because state and private sectors are massively returning debt ,deleveraging for foreign influence ... that reduces money in circulation and dolars are leaving country -means ruble is lower then it should be if things were normal.
but once debt is massively reduced, youll see very good gdp growth once money goes into investment and paychecks.

Russia's economic growth has been basically flat since 2011.



In order to achieve greater heights Russia needs economic growth. Right now it is not happening and according to most estimations Russian economic growth will remain basically flat for several years.

Has Russia already reached it's full economic potential and no further growth can be expected?

Economic growth in Russia has been basically flat since 2011:


Actually the level of GDP is right now at the same level as in 2008. This means that Russia has gone through almost a decade without growth!

In order to reach greater heights Russia needs economic growth, but right now it is not happening. According to most estimates the economic growth will remain flat in the coming years as well. So has Russian economy already reached it's full potential for no prospect for more growth?

Those assessments are nonsense.  If Russia's economy was stagnating then real wage growth would have been negative since 2011.
It was not and was actually over 5% per year from 2010 until 2014 (I am using inflation adjusted rates).

http://www.tradingeconomics.com/russia/wage-growth

Click on the 10 year graph.

Edit: Also, the plot posted by zg18 shows another factor: paying down foreign debt is a negative for GDP accounting. Borrowing
money abroad is a positive for GDP accounting.

Karl Haushofer wrote:Economic growth in Russia has been basically flat since 2011:


Actually the level of GDP is right now at the same level as in 2008. This means that Russia has gone through almost a decade without growth!

In order to reach greater heights Russia needs economic growth, but right now it is not happening. According to most estimates the economic growth will remain flat in the coming years as well. So has Russian economy already reached it's full potential for no prospect for more growth?

That is poor reasoning.  Look at the growth after 2009.  That would indicate that you are wrong.  The point of issue is quite a few reasons but there isn't such a thing as a "peak", as economics isn't natural or at least current economics isn't.  So stop trying to look at it like it is some sort of science or natural occurring thing.  Cause it isn't.  Two examples are China and US who lie and BS their way to high economic gains.

Russia approves Far East development strategy for 2015-2025

Russia and Cuba will create a joint venture for the assembly of trucks РИА Новости http://ria.ru/economy/20151107/1315398190.html#ixzz3qmVmI9DB

http://www.business-gazeta.ru/article/144630/

Police have detained in Moscow the leader of a criminal gang which siphoned $46 billion out of Russia

In Moscow police have detained Alexander Grigoriev, leader of a criminal gang which investigators consider the organizer
of a criminal association for the transfer of monetary resources out of Russia.

Investigators believe that Grigoriev, the former co-owner of several banks, "Western", "Transport", "Russian Land" and
"Doninvest", headed a criminal group of 500 individuals, which engaged in money transfer out of Russia. The group also
include about 60 banks including ones with government participation.

Evidence indicates that Grigoriev and his gang moved $46 billion out Russian in the last 4 years.

This case offers yet more evidence that the CBR is a compromised organization. It is failing in its duty of oversight in a
very bad way in addition to its ridiculous interest rate policy.

kvs wrote:http://www.business-gazeta.ru/article/144630/

Police have detained in Moscow the leader of a criminal gang which siphoned $46 billion out of Russia

In Moscow police have detained Alexander Grigoriev, leader of a criminal gang which investigators consider the organizer
of a criminal association for the transfer of monetary resources out of Russia.

Investigators believe that Grigoriev, the former co-owner of several banks, "Western", "Transport", "Russian Land" and
"Doninvest", headed a criminal group of 500 individuals, which engaged in money transfer out of Russia.   The group also
include about 60 banks including ones with government participation.

Evidence indicates that Grigoriev and his gang moved $46 billion out Russian in the last 4 years.

This case offers yet more evidence that the CBR is a compromised organization.  It is failing in its duty of oversight in a
very bad way in addition to its ridiculous interest rate policy.

That is a lot of money!  How do you suppose they will get that money back?  Good thing is, those banks I believe are gone and the authorities arrested him.  CBR I think has a lot of oversight and not due to compromised organization but pure incompetence much like the interest rate policy.  Good thing is, they are saying now that they see that there will be a further decrease in interest rates.  But this further gives ammunition to those who believe all bankers are criminals.

In other news:

State Duma Committee endorsed the crude oil export duty of 42% for 2016 РИА Новости http://ria.ru/economy/20151107/1315675192.html#ixzz3qp3IjgKe

MOSCOW, November 7 - RIA Novosti. The State Duma Committee on Budget and Taxes recommended the lower house of parliament adopted on first reading a draft law on the preservation of 2016 the rate of export customs duty on crude oil at a rate of 42%.
According to the Prime Minister, who has made the document, it will in 2016 further forward in the federal budget of 200 billion rubles.

somehow the policies will also force companies with refineries that are still running on older processing, to something newer.

kvs wrote:http://www.business-gazeta.ru/article/144630/

Police have detained in Moscow the leader of a criminal gang which siphoned $46 billion out of Russia

In Moscow police have detained Alexander Grigoriev, leader of a criminal gang which investigators consider the organizer
of a criminal association for the transfer of monetary resources out of Russia.

Investigators believe that Grigoriev, the former co-owner of several banks, "Western", "Transport", "Russian Land" and
"Doninvest", headed a criminal group of 500 individuals, which engaged in money transfer out of Russia.   The group also
include about 60 banks including ones with government participation.

Evidence indicates that Grigoriev and his gang moved $46 billion out Russian in the last 4 years.

This case offers yet more evidence that the CBR is a compromised organization.  It is failing in its duty of oversight in a
very bad way in addition to its ridiculous interest rate policy.

Dude, Central Bank kept Russia from tanking last year during assault on Ruble.

As for monetary crime, I believe that little enterprise used facilities similar to this one:

The Budget Committee of the State Duma supported the increase in the severance tax on gas, "Gazprom"

MOSCOW, November 7 - RIA Novosti. The State Duma Committee on Budget and Taxes recommended the lower house of parliament adopted on first reading a government bill to increase by 36.7% of the base value of the unit of reference fuel to be used in the calculation of mineral extraction tax for gas "Gazprom".
This will in 2016 further withdraw from the "Gazprom" and send to the federal budget, according to the government, 100 billion rubles.

PapaDragon wrote:

kvs wrote:http://www.business-gazeta.ru/article/144630/

Police have detained in Moscow the leader of a criminal gang which siphoned $46 billion out of Russia

In Moscow police have detained Alexander Grigoriev, leader of a criminal gang which investigators consider the organizer
of a criminal association for the transfer of monetary resources out of Russia.

Investigators believe that Grigoriev, the former co-owner of several banks, "Western", "Transport", "Russian Land" and
"Doninvest", headed a criminal group of 500 individuals, which engaged in money transfer out of Russia.   The group also
include about 60 banks including ones with government participation.

Evidence indicates that Grigoriev and his gang moved $46 billion out Russian in the last 4 years.

This case offers yet more evidence that the CBR is a compromised organization.  It is failing in its duty of oversight in a
very bad way in addition to its ridiculous interest rate policy.

Dude, Central Bank kept Russia from tanking last year during assault on Ruble.

Not really. Someone ordered them to stop propping up the ruble and to make it fully free floating. There were plans
to do this in the next few years already. Once the CBR stopped wasting money trying to force the exchange into some
range, it killed off the speculator attacks stone cold dead. They could no longer game this market and extract Russian
reserve money into their own pockets. There was never any chance of the ruble imploding in value. Russia has too
much weight in international trade to have its currency be grossly undervalued. And at the same time a collapsing
exchange rate gives Russian exporters a huge price advantage. This shields Russia's GDP from the devaluation and
also expands Russian export revenues and presence on international markets. All of this drives the currency exchange
back up.

The CBR's high interest policy is actually very detrimental to Russia's economy. The CBR valuation of the inflation
rate is excessive so it sets interest rates that are too high. This has actually been one of the prime reasons for the
underdevelopment of the Russian banking sector. Russian companies get cheap credit from foreign banks instead of
shopping for loans on the domestic market. This weak banking sector undermines Russia's economic potential and the
CBR is 100% at fault.

I have posted on this before. For most of the 2000s the Russian money supply was increasing 50% per year but the
inflation rate was under 13%. Whatever monetarist delusion that CBR operates under, Russia is not at risk of inflationary
shocks and a tight money policy is simply retarded. You could see this fact in action in late 2014 and early 2015 as
the inflation shock from the large ruble devaluation lasted until March of 2015. If Russia was in an economic regime
where inflation could grow easily this would not have happened. Instead the devaluation shock would have produced
a very long tail in the inflation spike with possible ringing effects where it would self-amplify due to negative feedbacks
on the economy. But in actuality the inflation spike was incredibly short lived.

http://thehill.com/blogs/blog-briefing-room/news/259476-ex-gao-head-us-debt-is-three-times-more-than-you-think

Ex-GAO head: US debt is three times more than you think

The former U.S. comptroller general says the real U.S. debt is closer to about $65 trillion than the oft-cited figure of $18 trillion.

Dave Walker, who headed the Government Accountability Office (GAO) under Presidents Bill Clinton and George W. Bush, said when you add up all of the nation’s unfunded liabilities, the national debt is more than three times the number generally advertised.

“If you end up adding to that $18.5 trillion the unfunded civilian and military pensions and retiree healthcare, the additional underfunding for Social Security, the additional underfunding for Medicare, various commitments and contingencies that the federal government has, the real number is about $65 trillion rather than $18 trillion, and it’s growing automatically absent reforms,” Walker told host John Catsimatidis on “The Cats Roundtable” on New York’s AM-970 in an interview airing Sunday.

The former comptroller general, who is in charge of ensuring federal spending is fiscally responsible, said a burgeoning national debt hampers the ability of government to carry out both domestic and foreign policy initiatives.

I will take this guy's claims over any of the Russia's debt is huge and unsustainable drivellers any day. The US is
engaged in accounting shenanigans while Russia, like a stupid little kid, lumps in Gazprom, Rosneft, etc. corporate debt
into the state debt category.

So the real state debt of the USA is 300% of its nominal GDP. The US is in worse shape than Japan. And it is the
special reserve currency status of the petro-dollar that enables the US to get away with such debt accumulation.
For now.

And hence why I think it is in Russias best interest to start asking for Rubles for its oil and gas. They will get a lot more Rubles from it anyway (similar amount to the exchange rate) but not have to rely on USD input and conversion itself. Recently Putin had a fit over the use of USD in the internal market in oil/gas transactions at the ports, and investigations are ongoing about it. To stop this, they can simply demand Rubles and get it over with. The USD has to stop being the main trading currency and conversion currency. Once that domination is gone, US cannot play these games anymore.

kvs wrote:http://thehill.com/blogs/blog-briefing-room/news/259476-ex-gao-head-us-debt-is-three-times-more-than-you-think

Ex-GAO head: US debt is three times more than you think

The former U.S. comptroller general says the real U.S. debt is closer to about $65 trillion than the oft-cited figure of $18 trillion.

I take a look at the US Debt Clock and see the $65 tril in "total debt" while $18 tril in "national debt".

Does Walker means $65 tril is that "total debt". Or I am wrong ?

https://i.servimg.com/u/f21/19/02/24/05/debtcl10.jpg

kvs wrote:

I have posted on this before.   For most of the 2000s the Russian money supply was increasing 50% per year but the
inflation rate was under 13%.   Whatever monetarist delusion that CBR operates under, Russia is not at risk of inflationary
shocks and a tight money policy is simply retarded.   You could see this fact in action in late 2014 and early 2015 as
the inflation shock from the large ruble devaluation lasted until March of 2015.   If Russia was in an economic regime
where inflation could grow easily this would not have happened.   Instead the devaluation shock would have produced
a very long tail in the inflation spike with possible ringing effects where it would self-amplify due to negative feedbacks
on the economy.   But in actuality the inflation spike was incredibly short lived.

Dont' you see a reason for RUssia Government not allowing Liberals to make loans in Russian banks so they later flee to the west with the money and not pay them.. ?

How about the influence aspect of all this? WOuldn't Russia have more influence in the west
if they have debt with American and European banks.. so if the west do anything stupid ,then Russia don't pay them?

If Russia was expecting a war with Americans.. in a decade or less ,will it make sense to
make big loans to your enemies before they start any war?  that way they will have to think
twice of any major hostile attack against Russia economy.

I could be wrong.. not an economist.. but The way i see it.. It is precisely this "disadvantage"
of the RUssian Cental bank (high interest ,forcing business to make loans in the west and not in RUssia) what makes Russia immune to economic isolation .. because if US /EU choose for example choose to freeze bank accounts of Russia in the west.. and cut all business relations
with Russia.. then Russia can simply not pay its debts with the west. ?

Lets say this in another way.. Do you see any advantage of having big debt with your enemies? Dont this create a form of control through your debt..? if relations completely break..you dont pay them.

Lets say this in another way.. if someone ask you $1,000 dollars loan..and later promise you $1500 back..in x time.. will it make sense to you ,to totally cut relations with that person if
he haven't paid its debt first? Will it make sense to you to just wait until that persons first pay its debt for any cut in relations?  THis is the reason why i think.. Is not in the interest of the kremlin to have very competitive Banks with the west in terms of Big loans and big money loans for major industries.. For the sole reason that Russia can use their debt as a political tool.
Russia total debt to American banks is like 600 to 700 billions dollars.. money that Russia can refuse to pay in case Americans freeze their bank accounts in the west or blocks Russia from the western financial industry.  THis means that it will be a very big blow to western economies
to totally block Russia from Business with the west.. since Russia can simply not pay any of its debt.

All said.. it looks to me.. that the more US and EUrope have investments in Russia ,through loans given to Russian companies and Russian government.. the more difficult it will be for the west to isolate Russian business with them. Because they have too much money invested there
and closing the doors to Russia business will be suicide for their banks and financial market.

This is why i see as a good idea that the Russian Central bank have investors from the west.
this makes Russia too connected with them to be easily isolated. which in effect makes Russia immune to economic blockade.. This was the major problem of Soviets that were not open their business and banking industry with the west and could be isolated their business easily..

Just look at the mistral issue.. Didn't this business contract between Russia and France created
a major division between US and France. that nearly makes france to reject US demands and go ahead with the sale?

Americans wants to isolate Russia from the world.. and the best way Russia can lift the siege
is precisely by doing long terms business with them that they cannot get out of them easily. Gazprom is one of those long term contracts.. Russia debt with American banks is another of those Cards Russia have.. ,and the heavy investments from Europe in Russia too. Germany will lose hundreds of billions in assets if it was to close relations with Russia.

So the way i see it.. it is on Russia interest that all those Russian Billionaires make their loans
not in Russia but in the west instead. That way they cannot betray Russia and flee with the money they are given. When it comes to Normal citizens loans ,small family business might be a different story. and it will benefit Russia to have special help to their small business with local banks.. Russians Billionaires feels citizens of the world..and they are the most likely citizens to be less patriotic and just take its money and invest it abroad.

OECD expects Russian GDP to shrink 4% in 2015, 0.4% in 2016

http://www.interfax.com/newsinf.asp?id=631702

MOSCOW. Nov 9 (Interfax) - The Organisation for Economic Co-operation and Development (OECD) expects Russian GDP to shrink 4% in 2015 and 0.4% in 2016, the OECD said in a statement.

The latest outlook is worse than the 3.1% decline and 0.8% growth that the OECD forecast in June.

The OECD gave its first 2017 forecast, which is for 1.7% growth. The organization previously forecast the transition to growth as early as the second half of this year.

"The economy is in recession. Falling oil prices, international sanctions and capital flight have reduced investment, domestic consumption and imports. The large depreciation of the ruble has pushed inflation to double digits and reduced real incomes, especially of the poorest. Recovery will be only gradual against the backdrop of an uncertain external environment and lack of structural reforms. Unemployment will rise from the current low levels. Growth is projected to turn positive in 2017 as exports strengthen and domestic demand recovers," the OECD said on November 9.

Annual inflation is expected to accelerate to 15.6% this year, from 7.8% in 2014, but subsequently to decelerate to 9.5% in 2016 and 6.1% in 2017. The inflation forecasts are better than the June outlook, which saw consumer prices rising 16.3% in 2015 and 7% in 2016.

Russia might have a budget deficit of 4% of GDP in 2015 and 3.2% in 2016, compared with 3.7% and 1.2% forecast in June. The deficit will likely narrow to 1.8% in 2017.

Russia will have a balance of payments surplus of 6.6% in 2015-2016 and 6.2% in 2017.

The Central Bank of Russia expects the economy to decline by 0.5%-1% in 2016 if oil trades at $50 a barrel, but the Economic Development Ministry and Finance Ministry expect it to grow 0.7%. Analysts told Interfax in a consensus forecast at the end of October that they thought GDP would fall 3.8% this year and that there would be zero growth in 2016.

What? Unemployment dropped. Lack of government reforms? Have they not paid attention to events recently? I think Inflation has been less overall so far than predicted. Capital flight has been reduced as well compared to last predictions.

Their reasoning don't reflect reality.

Unemployment: http://www.tradingeconomics.com/russia/unemployment-rate

Inflation: http://www.tradingeconomics.com/russia/inflation-cpi (they may be right about this, wont know till Jan 2016).

Capital Outflow lower than expected: http://tass.ru/en/economy/833592

Minimum Wage increasing: http://www.tradingeconomics.com/russia/minimum-wages

Ease of Doing Business (government reforms): http://www.tradingeconomics.com/russia/ease-of-doing-business

higurashihougi wrote:

kvs wrote:http://thehill.com/blogs/blog-briefing-room/news/259476-ex-gao-head-us-debt-is-three-times-more-than-you-think

Ex-GAO head: US debt is three times more than you think

The former U.S. comptroller general says the real U.S. debt is closer to about $65 trillion than the oft-cited figure of $18 trillion.

I take a look at the US Debt Clock and see the $65 tril in "total debt" while $18 tril in "national debt".

Does Walker means $65 tril is that "total debt". Or I am wrong ?

https://i.servimg.com/u/f21/19/02/24/05/debtcl10.jpg

If you read the article he is clearly talking about state liabilities and not private liabilities. So the $65 trillion is the actual liability
of the US government and not the total private + public debt.

Austin wrote:OECD expects Russian GDP to shrink 4% in 2015, 0.4% in 2016

http://www.interfax.com/newsinf.asp?id=631702

MOSCOW. Nov 9 (Interfax) - The Organisation for Economic Co-operation and Development (OECD) expects Russian GDP to shrink 4% in 2015 and 0.4% in 2016, the OECD said in a statement.

The latest outlook is worse than the 3.1% decline and 0.8% growth that the OECD forecast in June.

The OECD gave its first 2017 forecast, which is for 1.7% growth. The organization previously forecast the transition to growth as early as the second half of this year.

"The economy is in recession. Falling oil prices, international sanctions and capital flight have reduced investment, domestic consumption and imports. The large depreciation of the ruble has pushed inflation to double digits and reduced real incomes, especially of the poorest. Recovery will be only gradual against the backdrop of an uncertain external environment and lack of structural reforms. Unemployment will rise from the current low levels. Growth is projected to turn positive in 2017 as exports strengthen and domestic demand recovers," the OECD said on November 9.

Annual inflation is expected to accelerate to 15.6% this year, from 7.8% in 2014, but subsequently to decelerate to 9.5% in 2016 and 6.1% in 2017. The inflation forecasts are better than the June outlook, which saw consumer prices rising 16.3% in 2015 and 7% in 2016.

Russia might have a budget deficit of 4% of GDP in 2015 and 3.2% in 2016, compared with 3.7% and 1.2% forecast in June. The deficit will likely narrow to 1.8% in 2017.

Russia will have a balance of payments surplus of 6.6% in 2015-2016 and 6.2% in 2017.

The Central Bank of Russia expects the economy to decline by 0.5%-1% in 2016 if oil trades at $50 a barrel, but the Economic Development Ministry and Finance Ministry expect it to grow 0.7%. Analysts told Interfax in a consensus forecast at the end of October that they thought GDP would fall 3.8% this year and that there would be zero growth in 2016.

Actually these are very low numbers. If you consider the fact that the world is actually in a recession and the fact that Russia underwent a currency devaluation shock
that resulted in an inflation spike that significantly impacted consumer demand and production leading the the 2nd quarter contraction, then you have to admit that
there are serious rebound processes in Russia. Taking 2009 as a reference, Russia's GDP could have dropped 12-15%. My theory is that import substitution is actually
a major stimulus and offsetting most of the decline.

Vann7 wrote:

kvs wrote:

I have posted on this before.   For most of the 2000s the Russian money supply was increasing 50% per year but the
inflation rate was under 13%.   Whatever monetarist delusion that CBR operates under, Russia is not at risk of inflationary
shocks and a tight money policy is simply retarded.   You could see this fact in action in late 2014 and early 2015 as
the inflation shock from the large ruble devaluation lasted until March of 2015.   If Russia was in an economic regime
where inflation could grow easily this would not have happened.   Instead the devaluation shock would have produced
a very long tail in the inflation spike with possible ringing effects where it would self-amplify due to negative feedbacks
on the economy.   But in actuality the inflation spike was incredibly short lived.

Dont' you see a reason for RUssia Government not allowing Liberals to make loans in Russian banks so they later flee to the west with the money and not pay them.. ?

How about the influence aspect of all this? WOuldn't Russia have more influence in the west
if they have debt with American and European banks.. so if the west do anything stupid ,then Russia don't pay them?

If Russia was expecting a war with Americans.. in a decade or less ,will it make sense to
make big loans to your enemies before they start any war?  that way they will have to think
twice of any major hostile attack against Russia economy.

I could be wrong.. not an economist.. but The way i see it.. It is precisely this "disadvantage"
of the RUssian Cental bank (high interest ,forcing business to make loans in the west and not in RUssia) what makes Russia immune to economic isolation .. because if US /EU choose for example choose to freeze bank accounts of Russia in the west.. and cut all business relations
with Russia.. then Russia can simply not pay its debts with the west. ?

Lets say this in another way.. Do you see any advantage of having big debt with your enemies? Dont this create a form of control through your debt..? if relations completely break..you dont pay them.

Lets say this in another way.. if someone ask you $1,000 dollars loan..and later promise you $1500 back..in x time.. will it make sense to you ,to totally cut relations with that person if
he haven't paid its debt first? Will it make sense to you to just wait until that persons first pay its debt for any cut in relations?  THis is the reason why i think.. Is not in the interest of the kremlin to have very competitive Banks with the west in terms of Big loans and big money loans for major industries.. For the sole reason that Russia can use their debt as a political tool.
Russia total debt to American banks is like 600 to 700 billions dollars.. money that Russia can refuse to pay in case Americans freeze their bank accounts in the west or blocks Russia from the western financial industry.  THis means that it will be a very big blow to western economies
to totally block Russia from Business with the west.. since Russia can simply not pay any of its debt.

All said.. it looks to me.. that the more US and EUrope have investments in Russia ,through loans given to Russian companies and Russian government.. the more difficult it will be for the west to isolate Russian business with them. Because they have too much money invested there
and closing the doors to Russia business will be suicide for their banks and financial market.

This is why i see as a good idea that the Russian Central bank have investors from the west.
this makes Russia too connected with them to be easily isolated. which in effect makes Russia immune to economic blockade.. This was the major problem of Soviets that were not open their business and banking industry with the west and could be isolated their business easily..

Just look at the mistral issue.. Didn't this business contract between Russia and France created
a major division between US and France. that nearly makes france to reject US demands and go ahead with the sale?

Americans wants to isolate Russia from the world.. and the best way Russia can lift the siege
is precisely by doing long terms business with them that they cannot get out of them easily. Gazprom is one of those long term contracts.. Russia debt with American banks is another of those Cards Russia have.. ,and the heavy investments from Europe in Russia too. Germany will lose hundreds of billions in assets if it was to close relations with Russia.

So the way i see it.. it is on Russia interest that all those Russian Billionaires make their loans
not in Russia but in the west instead. That way they cannot betray Russia and flee with the money they are given. When it comes to Normal citizens loans ,small family business might be a different story. and it will benefit Russia to have special help to their small business with local banks..  Russians Billionaires feels citizens of the world..and they are the most likely citizens to be less patriotic and just take its money and invest it abroad.

One could see this sort of silver lining in the storm cloud that is the CBR. But at the end of the day these engagement policies could
have been enacted without having the Russian banking and finance sector be severely underdeveloped. Thanks to the CBR, western
financial companies make profits and Russian companies have no demand and can't grow and develop. This is a serious economic risk
and problem. You can see in Obama's smug, chauvinist expectation that Russia would be isolated and experience all sorts of "costs" from
the NATzO sanctions that NATzO expected the CBR-created weakness in Russia's financial sector to be an effective weapon against
Russia. I think Chinese financing played a big role in preventing NATzO's scheme from coming to fruition. It is interesting how the
Chinese financing receives almost no attention and it is nearly impossible on what scale it is occurring.

Russian Government May Sell 19.5% of Rosneft Shares in 2016

Read more: http://sputniknews.com/business/20151110/1029860889/rosneft-shares-government-selling.html#ixzz3r5kcCB1E