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    Russian Economy General News: #11

    miketheterrible
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    Post  miketheterrible on Mon Mar 09, 2020 5:15 am

    Let's also take into account that Russia made $billions when oil was about $10/bbl and they sit on some of the highest reserves in the world. With Vostok oil, they will be pumping lots. Then there is the process industry which makes end goods and Russia is also counting on them too as Russia sells a lot of oil processed goods.

    They will find their financial sources. Using reserve money to fund the national projects is actually smart cause the return rate is already rather high so using it as investments is a great idea.

    But oil prices are gonna jump a bit as soon as this coronavirus passes. As China is hit hard and half the nation is still in lockdown.
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    Vann7

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    Post  Vann7 on Mon Mar 09, 2020 12:23 pm



    Russia says is ready to burn $ 150 Billions USD of their bank savings [Russia’s sovereign wealth fund ] to
    save the their gas station economy.

    Russia swiftly reacts to bloodbath in markets, says it’s ready for $25 oil

    https://www.rt.com/business/482638-russia-oil-prices-fall/


    So Russia is saying is ready to burn their savings.. Rolling Eyes wow if they so desperate to burn their
    money ,why bother doing business that have no future ? where is the energy profits ,if they later have to
    burn them? to rescue the nation ? Rolling Eyes

    So Russia is saying is ready to be losers.. and lose 150 billions dollars $$$ over the period of 6-10 years ,
    money they were saving , to handle a failed weak economy ,that they knew was very vulnerable for energy
    markets being so unstable.. and sensitive .. Neutral



    miketheterrible
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    Post  miketheterrible on Mon Mar 09, 2020 12:39 pm

    Vann, we all know you suffer from a case of stupidity but let me explain how things work.

    In terms of many countries, they will use the leverage of oil or gas or both as a method of accounting balancing if they plan to push development and programs. This is a way to funnel money into major projects. All the while they use savings in order to create liquidity for future programs if money isn't available.  So to fund the national projects, they need certain amount of money and they can tap it through their budget they get from oil and gas, which accounts for 6% of their economy.

    As of right now Urals is trading at 48.15/bbl meaning it still creates $8 per barrel profit for the budget. But the Russian government doesn't get that money directly. It only compares to against a specific item.  They could say the budget is set at based upon how much 1 ton of steel costs.
    miketheterrible
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    Post  miketheterrible on Mon Mar 09, 2020 1:24 pm

    The major pitfall is the coronavirus issue. Once this clears we will see an upswing in manufacturing from china and Italy which will be in demand oil and oil byproducts.

    Along with metals and other minerals.
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    Post  calripson on Mon Mar 09, 2020 3:17 pm

    "But accounting takes capital depreciation into a line item cost. Companies still have to cover capital depreciation and competitive-pressure driven retooling."

    The correct way to measure economic performance is on a free cash flow basis with the cost of capital factored in - accounting depreciation is an arbitrary set of rules that have importance only in relation to tax liability. The cost of capital is a weighted average of the entity's cost of debt and cost of equity. Many firms operate in a capital destructive mode - seemingly making accounting profits, but actually destroying capital over time. (I am referring to monetary capital and not physical assets.) The question of physical vs monetary measures of economics is a different animal.
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    Post  miketheterrible on Mon Mar 09, 2020 4:05 pm

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    Post  Hole on Mon Mar 09, 2020 6:11 pm

    In Crashing the Oil Price, Russia Just Told the World, 'No!'

    There is real power in the word “No.”
    In fact, I’d argue that it is the single most powerful word in any language.
    In the midst of the worst market meltdown in a dozen years which has at its source problems within global dollar-funding markets, Russia found itself in the position to exercise the Power of No.
    Multiple overlapping crises are happening worldwide right now and they all interlock into a fabric of chaos.

    Between political instability in Europe, presidential primary shenanigans in the U.S., coronavirus creating mass hysteria and Turkey’s military adventurism in Syria, the eastern Mediterranean and Libya, markets are finally calling the bluff of central bankers who have been propping up asset prices for years.

    But, at its core, the current crisis stems from the simple truth that those prices around the world are vastly overvalued.
    Western government and central bank policies have used the power of the dollar to push the world to this state.
    And that state is, at best, meta-stable.
    But when this number of shits get this freaking real, well… meeting the fan was inevitable.

    And all it took to push a correction into a full-scale panic was the Russians saying, “No.”

    The reality has been evident in the commodity markets for months. Copper and other industrial metals have all been in slumps while equity markets zoomed higher.
    But it was oil that was the most confounding of all.
    Most of 2019 we saw oil prices behaving oddly as events occurred with regularity to push prices higher but ultimately see them fall.
    Since peaking after the killing of Iranian General Qassem Soleimani oil prices have been a one-way trade. Down.

    Our inept leaders are trying to blame coronavirus as the proximate cause for all of the market’s jitters.

    But that masks the truth. The problems have been there for months, pushed to the back burner by incessant Fed intervention in the dollar-funding markets.
    The 2008 financial crisis was never dealt with, just papered over.
    The repo crisis of last September never ended, it’s still there.
    And it reappeared with ferocity this week as people sold dollars and bought U.S. treasuries pushing U.S. yields on the long end of the curve to absurd levels.

    Credit markets are melting down. Stock markets are the tail, credit markets are the dog. And this dog was run over by a bus.

    The Fed intervenes to keep short term interest rates from rising to preserve the fiction it is still in control.
    The market wants higher rates for short-term access to dollars.
    The Fed tried to help by cutting rates by 0.5% but all that did was tell people the Fed was as scared as they were. The selling resumed and gold bounced back to it’s recent high near $1690, only to be swatted down on the New York open this morning.
    That didn’t work either.

    And into this mess OPEC tried to save itself by asking for a historic production cut.

    OPEC needs this cut to remain relevant. The cartel is dying. It’s been dying for years, kept on life support by Russia’s willingness to trade favors to achieve other geostrategic goals.
    I’ve said before that OPEC production cuts are not bullish for oil just like rate cuts are not inflationary during crisis periods.
    But finally Russia said No. And they didn’t equivocate. They told everyone they are prepared for lower oil prices.
    The panic was palpable in the reporting on the meeting.
    “Regarding cuts in production, given today’s decision, from April 1, no one — neither OPEC countries nor OPEC+ countries — are obliged to lower production,” he told reporters after the meeting.
    OPEC’s Secretary General Mohammed Barkindo said the meeting had been adjourned, although consultations would continue.
    “At the end of the day, it was the general, painful decision of the joint conference to adjourn the meeting,” he told reporters.
    Earlier, Oanda analyst Edward Moya had suggested that a failure to reach an agreement could spell the end of OPEC+.
    “No-deal OPEC+ means the three-year experiment is over. OPEC+ is dead. The Saudis are all-in on stabling oil prices and they may need to do something extraordinary,” he said.

    There comes a point where negotiating with your adversaries ends, where someone finally says, “Enough.” Russia has been attacked mercilessly by the West for the crime of being Russia.

    And I’ve documented nearly every twist and turn of how they have skillfully buttressed their position waiting for the right moment to get maximum return to reverse the tables on their tormentors.
    And, to me, this was that perfect moment for them to finally say “No,” to get maximum effect.
    When dealing with a more-powerful enemy you have to target where they are most vulnerable to inflict the most damage.
    For the West that place is in the financial markets.
    Remember, the first basic fact of economics. Prices are set at the margin. The only price that matters is the last one recorded.
    That price sets the cost for the next unit of that good, in this case a barrel of oil, up for sale.
    In a world of cartelized markets the world over, where prices are set by external actors, it is easy to forget that in the real economy (regardless of your political persuasion) the world is an auction and everything is up for bid.
    High bid wins.
    So, the most important geostrategic question is, “Who produces the marginal barrel of oil?”
    For more than three years now, President Trump has supported his policy of Energy Dominance in a Quixotic quest for the U.S. to become that supplier. Trillions of dollars have been spent on building up domestic production to their current, unsustainable levels.
    This policy pre-dates Trump, certainly, but he has been its most ardent pursuer of it, sanctioning and embargoing everyone he can to keep them off the bid.
    What he could never do, however, was push Russia off that bid.
    The reason U.S. production rates are unsustainable is because their costs are higher per barrel than the marginal price especially when all other prices are deflating. Simple, straightforward economics.
    If they were, on balance, profitable then the industry as a whole would not have burned through a few hundred billion in free cash flow over the past decade.
    That’s where the Russians’ power comes from. Russia is one of the lowest cost producers in the world. Even after paying their taxes to the government their costs are far lower, close to $20 per barrel break-even point, than anyone else in the world when one factors in external costs.
    When you don’t owe anyone anything you are free to tell them, “No.”
    Sure, the Saudis produce at similar cash costs to the Russians but once you factor in its budgetary needs, the numbers aren’t even close as they need something closer to $85 per barrel.
    They can’t tell their people, “No,” you have to do without. Because the populous will revolt.
    Russia can ride out, if not thrive, in this low price regime because :
    the ruble floats to absorb price shocks in dollars.
    A majority of their oil is now sold in non-dollar currencies – rubles, yuan, euros, etc. – to lessen their exposure to capital outflows
    the major oil firms have little dollar-denominated debt
    low extraction costs.
    its primary governmental budget ebbs and flows with oil prices.
    All of this adds up to Russia holding the whip hand over the global market for oil.
    The ability to say, “No.”
    And they will have it for years to come as U.S. production implodes. Because they can and do produce the marginal barrel of oil.
    That is why oil prices plunged as much as 10% into today’s close on the news they would not cut production.
    There is a cascade lurking beneath this market. There is a lot of bank and pension fund exposure in the U.S. to what is now soon-to-be non-performing fracking debt.
    Liquidations will begin in earnest later this year.
    But the market is handicapping this now.
    I cannot overstate how important and far-reaching this move by Russia is. If they don’t make a deal here they can break OPEC. If they do make a deal it will come with strings that ensure pressure is lifted in other areas of stress for them.
    The knock-on effects of oil plunging from $70 per barrel to $45 over two months will be felt for months, if not years.
    And it is no shock to me that Russia held their water here. If they didn’t, I would have been surprised.
    This was Putin’s opportunity to finally strike back at Russia’s tormentors and inflict real pain for their unscrupulous behavior in places like Iran, Iraq, Syria, Ukraine, Yemen, Venezuela and Afghanistan.
    He is now in a position to extract maximum concessions from the U.S. and the OPEC nations who are supporting U.S. belligerence against Russia’s allies in China, Iran and Syria.
    We saw the beginnings of this in his dealings with Turkish President Erdogan in Moscow, extracting a ceasefire agreement that was nothing short of a Turkish surrender.
    Erdogan asked to be saved from his own stupidity and Russia said, “No.”
    This condition of producing the marginal barrel of oil in a deflationary world places Russia in the driver’s seat to drive U.S. foreign policy behavior in an election year.
    Talk about meddling in our elections!
    The Achilles’ heel of the U.S. empire is the debt. The dollar has been its greatest weapon and it is still king. And it is a weapon with a great deal of power but wielded only against the U.S.’s allies, not Russia.
    Markets will adjust and calm down in a few days. The panic will subside. But it will come back soon enough in a more virulent form. Today is a replay of 2007-08 but this time Russia is far better prepared to fight back.
    And when that happens, I suspect it won’t be the Saudis or the Turks that come running to Russia to save them, but the U.S. and Europe.
    At which point, I have to wonder if Putin will channel his inner Rorschach.

    Tom Luongo

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    Post  Viktor on Mon Mar 09, 2020 6:12 pm

    miketheterrible wrote:

    Assuming now the same financial "burden" 375bin Rubles can bought 375bin rubles / 10 (years) / 12 (months) / 100 000 rubles (paycheck per engineer) = 31 250 engineer specials

    i.e. 31 250 engineers x 10 (years) x 232 (working day per year) x (8 hours per day) = 580 000 000 working hours of engineer specialist Smile

    Now how much time does require to build a PAK-DA and S-500 and this and that

    in other words Putin has with the money said (and thats without calculating in 375bin on 3% and 15years) added 580 million working hours of engineers specialist to

    Russia military industry complex of !
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    Post  owais.usmani on Mon Mar 09, 2020 8:03 pm

    https://oilprice.com/Latest-Energy-News/World-News/Russia-Can-Live-With-25-Oil-For-Years.html

    Russia Can Live With $25 Oil For Years


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    Post  Vann7 on Mon Mar 09, 2020 9:08 pm

    owais.usmani wrote:https://oilprice.com/Latest-Energy-News/World-News/Russia-Can-Live-With-25-Oil-For-Years.html

    Russia Can Live With $25 Oil For Years










    Unfortunately for Putin , the west in coordination with Saudi Arabia ,they can bring down
    oil to $15  or $10 and keep it there for years... and finance the loses..  it hurt the west.. but
    it damage significantly way more Russia. Because most of the the Russian economy is dependent on
    energy business .  This is how Putin was deceived like the fool he is ,in economic development.  The previous
    oil war , started by Obama administration ,show the volatility of Russian economy to oil prices value.
    I even remember an interview with Putin , how the fool was bragging about that Americans can't harm the
    Russian economy by flooding the market with oil.. because it will damage the American energy industry profits
    too..  what the fool did not knew.. is that in the end that doesn't matter ,because it damage Russia economy more ,than American one.. because Russia economy is highly dependent on oil prices and American economy is not..  So what the obama administration was doing to hurt Russia and get it into recession ,as it happened ,
    and make Russia burn 200 billion dollars in the bank stabilizing the ruble.. was a controlled demolition , controlled chaos..  it will be like burning a house where you live.. but the fire will start in your enemy room first...and once your enemies neutralized ,then you extinguish the fire.. American are using a self destruction
    tactic with their war on oil prices.. it hurts them ,but hurts way significantly more to Russia.. this is why they have been producing as much fracking energy as they can.. even if business goes out of business.. the goal
    is to slow down Russia economy.. and they are doing a pretty descent job at it.. combine that with a conflict
    here or there.. like syria and ukraine and venezuela interfere are.. and this pressure even more Russia economy.
    because is Russia later the one that need to feed , and assist economically them.

    So Putin's development of Russia ,makes things a lot easier for the west.. to sabotage Russia economy..
    It was him that told that he wanted Russia to become the capital of sports..  Rolling Eyes this will allowed Putin
    to boost russia economy in the most laziest way , with tourism.. and how the west respond? they ban
    Russia from the olympics..  lol1   So this is the fucking problem of Putin ,he don't understand as long
    Russia follows the american system ,the american world , the american business leadership.. then west will
    be the ones who create the rules.. and it will be always in favor of the west and against Russia..
    Putin told to all its millionaires in russia to invest in commodities..  Suspect  in rice farming ,bananas ,wheat..
    food.. and how the west respond? helping all bordering nations like ukraine to farm exactly the same things that Russia is investing.. to create major pressure on any business that helps russia economy ,to minimize or neutralize their economy.  But if Russia goes and decide to become the capital of space explorations.. and manned space travel , and space tourism.. americans can't sanction that.. same way that they could not sanction huawei business with the world..no matter how hard trump tried.. the fact is Business leadership in modern business ,that nobody else have ,is a real powerful weapon ,that can be used to lure away nations from the US system and finish their empire.. The more successful a nation is with modern future like business ,the more powerful their influence in the world will be.. and this threatens the not only US leadership but its economy too.
    The west target Russian business.. putin need to do the same.. and fight back at US most influential prestigious business that more proud they are.. and use to influence the world into their orbit.. it can't continue ignoring the
    western leadership..as he have been doing.. by promoting distractions as sports and museums and expensive parks are .


    Had Russia had a digital economy , providing services ,advisory ,how's to do this or that, entertainment ,movies ,
    games.. and around small business sorta of ebay for russians ,then it will be impossible to sanction.. to trace.. especially if Russia have its own internet .. the future of the world will be for those that leads in modern business. and those nations that continues with the most basic and primitive forms of economy like Russia is, will be left behind and easily isolated its economy from the world..  Will not be surprised if US manage to block Russia energy deals with Europe ,and cut in half the economy of the country ,after they replace the current leadership in europe .

    Americans don't need money , they can print it...and because they are the leaders of the world development,
    other nations who desire to do business with americans  ,like the entire world ,will continue buying their debt.
    this is only possible when a nation have a system in place ,that is hold together , only thanks to US business power and business leadership. The US empire is only possible also.. because no other nation challenge it..
    Russia is not challenging it..  they only disobey when ordered to do something they don't want.. but still don't challenge it.. don't offer an alternative to the US system.. something that could truly end the conflicts in the world ,when leadership is shared or a new system is in place by competition that is more fair .

    in more news..

    Russia currency ruble at its lowest value since 4 years..  



    is great that the "chessmaster" Putin saved so much money ,to burn it later to cover the holes
    of its primitive gas station economy.. No



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    par far

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    Post  par far on Mon Mar 09, 2020 11:05 pm

    Vann7 wrote:
    owais.usmani wrote:https://oilprice.com/Latest-Energy-News/World-News/Russia-Can-Live-With-25-Oil-For-Years.html

    Russia Can Live With $25 Oil For Years


















    Unfortunately for Putin , the west in coordination with Saudi Arabia ,they can bring down
    oil to $15  or $10 and keep it there for years... and finance the loses..  it hurt the west.. but
    it damage significantly way more Russia. Because most of the the Russian economy is dependent on
    energy business .  This is how Putin was deceived like the fool he is ,in economic development.  The previous
    oil war , started by Obama administration ,show the volatility of Russian economy to oil prices value.
    I even remember an interview with Putin , how the fool was bragging about that Americans can't harm the
    Russian economy by flooding the market with oil.. because it will damage the American energy industry profits
    too..  what the fool did not knew.. is that in the end that doesn't matter ,because it damage Russia economy more ,than American one.. because Russia economy is highly dependent on oil prices and American economy is not..  So what the obama administration was doing to hurt Russia and get it into recession ,as it happened ,
    and make Russia burn 200 billion dollars in the bank stabilizing the ruble.. was a controlled demolition , controlled chaos..  it will be like burning a house where you live.. but the fire will start in your enemy room first...and once your enemies neutralized ,then you extinguish the fire.. American are using a self destruction
    tactic with their war on oil prices.. it hurts them ,but hurts way significantly more to Russia.. this is why they have been producing as much fracking energy as they can.. even if business goes out of business.. the goal
    is to slow down Russia economy.. and they are doing a pretty descent job at it.. combine that with a conflict
    here or there.. like syria and ukraine and venezuela interfere are.. and this pressure even more Russia economy.
    because is Russia later the one that need to feed , and assist economically them.

    So Putin's development of Russia ,makes things a lot easier for the west.. to sabotage Russia economy..
    It was him that told that he wanted Russia to become the capital of sports..  Rolling Eyes this will allowed Putin
    to boost russia economy in the most laziest way , with tourism.. and how the west respond? they ban
    Russia from the olympics..  lol1   So this is the fucking problem of Putin ,he don't understand as long
    Russia follows the american system ,the american world , the american business leadership.. then west will
    be the ones who create the rules.. and it will be always in favor of the west and against Russia..
    Putin told to all its millionaires in russia to invest in commodities..  Suspect  in rice farming ,bananas ,wheat..
    food.. and how the west respond? helping all bordering nations like ukraine to farm exactly the same things that Russia is investing.. to create major pressure on any business that helps russia economy ,to minimize or neutralize their economy.  But if Russia goes and decide to become the capital of space explorations.. and manned space travel , and space tourism.. americans can't sanction that.. same way that they could not sanction huawei business with the world..no matter how hard trump tried.. the fact is Business leadership in modern business ,that nobody else have ,is a real powerful weapon ,that can be used to lure away nations from the US system and finish their empire.. The more successful a nation is with modern future like business ,the more powerful their influence in the world will be.. and this threatens the not only US leadership but its economy too.
    The west target Russian business.. putin need to do the same.. and fight back at US most influential prestigious business that more proud they are.. and use to influence the world into their orbit.. it can't continue ignoring the
    western leadership..as he have been doing.. by promoting distractions as sports and museums and expensive parks are .


    Had Russia had a digital economy , providing services ,advisory ,how's to do this or that, entertainment ,movies ,
    games.. and around small business sorta of ebay for russians ,then it will be impossible to sanction.. to trace.. especially if Russia have its own internet .. the future of the world will be for those that leads in modern business. and those nations that continues with the most basic and primitive forms of economy like Russia is, will be left behind and easily isolated its economy from the world..  Will not be surprised if US manage to block Russia energy deals with Europe ,and cut in half the economy of the country ,after they replace the current leadership in europe .

    Americans don't need money , they can print it...and because they are the leaders of the world development,
    other nations who desire to do business with americans  ,like the entire world ,will continue buying their debt.
    this is only possible when a nation have a system in place ,that is hold together , only thanks to US business power and business leadership. The US empire is only possible also.. because no other nation challenge it..
    Russia is not challenging it..  they only disobey when ordered to do something they don't want.. but still don't challenge it.. don't offer an alternative to the US system.. something that could truly end the conflicts in the world ,when leadership is shared or a new system is in place by competition that is more fair .

    in more news..

    Russia currency ruble at its lowest value since 4 years..  



    is great that the "chessmaster" Putin saved so much money ,to burn it later to cover the holes
    of its primitive gas station economy.. No





    I did not read your whole post and I am not going to read the full post(mostly because you don't know much) but I read the very top and the very bottom and there is "fuck in" no way that the Americans will support anyone and Saudis at $10-$15 will be fucked and collapse. There was already a coup attempt in Saudi Fuckarbia.

    I don't think oil prices will go down more because there will be agreement of some sorts, maybe Russia is pressuring the Saudis to do something (make some sort of peace with Iran, maybe they are pressuring the Saudis to give up Syria.) But most likely the Saudis are throwing a hissy fit that that Russia rejected their proposal.

    To answer your question, has the "Chess master" Putin saved enough money to get through this crisis? Yes he has.

    In the coming days there will be idiots that will post a lot of bull shit in Jewish newspapers about Russia but it will be mostly false.

    Like this crap:

    "RUSSIA APPEARS UNPREPARED FOR MARKET CHAOS (AGAIN)."

    Had these idiots done there research, they would have known that Russia was the country that did the most to prepare for a economic trouble.

    https://southfront.org/russia-appears-unprepared-for-market-chaos-again/
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    Post  miketheterrible on Mon Mar 09, 2020 11:54 pm

    South front strikes again with its lack of knowledge on economics.

    The devaluation of the ruble means imports are more expensive but even in the turmoil of 2016 Russia weathered that quite well even though they initially blew money to support the ruble.

    Since access to foreign goods was mostly out of the question anyway, it was the domestic production that took over. This will mean further demand for domestic made goods anyway and so foreign markets lose out. While Russian products will be even cheaper and see more demand.

    Speculators as usual attack but they have little knowledge on Russia's economy.
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    Post  kvs on Tue Mar 10, 2020 12:05 am

    par far wrote:

    Like this crap:

    "RUSSIA APPEARS UNPREPARED FOR MARKET CHAOS (AGAIN)."

    Had these idiots done there research, they would have known that Russia was the country that did the most to prepare for a economic trouble.

    https://southfront.org/russia-appears-unprepared-for-market-chaos-again/

    The typical amateur drivel about the exchange rate being the most important thing in the universe. These idiots do not understand
    that the forex only means something to under-developed countries that depend on imports. Russia is one of a handful of countries
    on this planet that does not depend on imports. These idiots also fail to see how a forex drop offsets the oil price drop since Russia's
    economy operates on rubles and not dollars. These morons actually think that all economies operate on dollars. The retards!

    So the forex drop they trot out as "evidence" of Russia being "woefully unprepared" is actually proof of the opposite. Stupid forex speculators
    are buffering against the oil price decline. Those forex speculators all drink the NATzO MSM koolaid that Russia is a gas station posing
    as a country. Thus they are useful idiots for Russia.

    miketheterrible
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    Post  miketheterrible on Tue Mar 10, 2020 12:13 am

    Did you also see the part where they think domestic price increase and inflation are somehow two seperate things?

    Anyway, Russia increasing production as well so it will offshoot decline in more production anyway and the government plans to emphasize more on domestic economy so this may be the turning point where Russian government will aim at entirely diminishing needs of export as a driver to the budget and delete to the budget as the GDP overall - rely on Russians themselves.

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    Post  kvs on Tue Mar 10, 2020 12:28 am

    miketheterrible wrote:Did you also see the part where they think domestic price increase and inflation are somehow two seperate things?

    Anyway, Russia increasing production as well so it will offshoot decline in more production anyway and the government plans to emphasize more on domestic economy so this may be the turning point where Russian government will aim at entirely diminishing needs of export as a driver to the budget and delete to the budget as the GDP overall - rely on Russians themselves.


    The late 2014 and early 2015 inflation spike was due to the CBR letting the ruble "devalue" (loaded BS terminology) or ruble forex slide by over a factor of two.
    Tard-ass speculators achieved a miracle, they totally compensated the oil price drop by the forex slide. This time around they are not as effective and the
    oil price drop is not being offset fully by the forex slide. But at the same time, I expect any inflationary shock to be very small this time around. A lot
    of the previous inflation spike was due to business panic which also triggered a mini-recession. The current climate is very different.

    In terms of oil and gas dependence for exports, if you look at the last 20 years you will see a substantial decline. This makes sense since Russia exports
    about the same amount of oil as it did in 2000, but the economy has recovered to be bigger than of the USSR. So we are talking a factor over 2.

    And you are right, more emphasis on domestic production is a serious GDP boost. Russia has the technological and economic capacity for hard core
    import substitution and at the same time for value added exports. Every dollar of import elimination translates into 2 dollars of GDP (elimination
    of 1 dollar minus in GDP account for import combined with 1 dollar plus in the GDP account for domestic production startup). So forex drops
    stimulate the Russian economy to reduce imports further and at the same time make value added exports more competitive. No matter what
    NATzO wankers think, Russia has most of the world as its export market. It can offer great prices for world leading technology and can undercut
    over-inflated, corrupt western prices.

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    Post  Vann7 on Tue Mar 10, 2020 2:03 am

    Any country that needs to burn $ 150 BILLIONS ,from the savings account , to keep the nation economy afloat ,
    and not sinking like a titanic is a country with an extremely volatile and extremely dependent in oil.

    Russia economy will never be stable..when the west is in an undeclared war at russia. and Russia economy will never be stable with an idiot in power in Russia ,that is weak
    polite and to make things worse ,does not get a clue , of how to counter its enemies..

    All that US needs to do, to break Russia.. is to continue pushing oil prices low..
    while at the same time continue creating conflicts /wars, on countries ,regions
    that are allied to Russia ,so that this pressure the Russian economy for having to feed them ,
    arm them and provide security to them.. basically Russia is like a body guard that works for free.

    this is putin chessmaster move..
    -HAve lost billions of dollars helping venezuela to not collapse.. from US sanctions.
    -have lost billions of dollars helping cuba to not collapse.. from us sanctions
    -have lost even more billions of dollars in Syria ,trying to rescue that nation from a war and sanctions.
    -have lost billions of dollars because of US interference in ukraine..forcing russia to waste a ton of money
     there ,so they dont over run and cities running.

    And will continue losing billions of dollars ,the more wars and sanctions that Washington DC can
    very easily create..

    -it face a major potential war with Turkey , already the cease fire is crumbling and Erdogan asking more help
    to US to counter Russia in idlib.. this is being requested even after he signed a cease of fire , and threatening to restart the war if syria don't stop fighting their backed terrorist ... which seek to reverse syrian gains.
    if the war restart with turkey.. means more pressure in Russia economy..
    - Venezuela invasion... a new Syrian style war is being cooked in venezuela by US ,using drugs landlords militants instead of Alqaeda ,this will force Russia to build a military base and send a thousands of soldiers there.. just like in syria and with warships and combat planes..

    So what strategies have Putin to counter all this proxy wars , that US wage on Russia.. ?  
    He have nothing , zero strategy.. just turn the other cheek and bleed and heal their wounds..
    because he don't fight back.. neither with bullets to US ,neither with business.. the idiot all he does..
    is hope for Americans to "change theirs unscontructive behavior" and restore relations ,when they were never
    good.. never were restored .not even after soviet union collapse.  The west wants Russian blood.. and Putin
    ill advice policy of building better weapons ,just for show and nothing else.. is an invitation to nations to continue
    disrespecting Russia.. because no negative consequences will happen to them .

    Russian economy is doomed to fail.. because its weak and clueless President don't fight back. is completely passive , a punching bag , don't do anything to make it very painful for US , every war against a Russian ally and every sabotage on allies economy or Russia economy.. All that US needs to do is keep bleeding Russia ,
    keep increasing the conflicts and sabotaging the economy in zones important for Russia economy and it will sooner or later bring down the entire Russian state.. hopefully it happen sooner than later.. so that all putin defenders in this forum ,can finally shut up , since i have been warning for years already ,that Putin strategy
    is totally retarded..   the best way to stop an empire is to NOT support it.. [i] to not encourage its products , to compete directly with their enemies most important popular business that they use to influence
    the world.. this is the best way..  because the alternative is a war.. But what putin is doing , is the opposite.
    continues supporting the american world.. the american internet ,the american banking system ,continue allowing US business to lead the world.. and later the idiot ,don't understand why is Russia not respected in the
    world..

    the moron ,told just days ago.. when was in the middle of a fight with turkey ,that he wanted to develop his military in a way ,that nations will not want ever to fight Russia..and he will never achieve that by being Weak ,
    by not using its military against its enemies.. by allowing its soldiers and planes and bases to be attacked..
    Putin weakness and ignorance how to counter its enemies ,is the biggest threat to Russia national security
    and the biggest danger to Russian economy.. because no economic strategy he develop ,will work,, if it doesn't
    counters directly the american economy ,and their top business.. if it doesn't challenge US system in the world..
    with superior business (alone or in alliance with china) ,then it will never have a chance to save his country ,
    from being destroyed from the inside.. by bleeding their extremely vulnerable energy focused economy.


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    Post  GarryB on Tue Mar 10, 2020 4:08 am

    I am no economics expert but devaluing the ruble means $10 per barrel gives you more rubles now than it did last week before the devaluation... it effectively increases the value of oil no matter what its value is.

    And Russia has relatively low costs per barrel of oil... the countries this is going to really crush are Venezuela, and the US with all their fracking companies that are not making profit at $60 per barrel will be screwed and go under at anything less... pretty soon no bank will refinance their loans to keep operating and when they can't pump any oil at all then the house of cards collapses.

    With the interruptions of world trade with the corona virus this increase in production and reduction of prices wont mean a huge amount because demand is reduced, but when things go back to normal and demand increases it will make transport cheaper... but if it destroys the US fracking industry then supply will naturally do down which should boost the prices again.

    It is amusing... sometimes we are running out of oil and the price just goes up and up, but then the price goes down an enormous amount but the price of petrol at the pump drops a few cents but over the next few weeks recovers back up again... we are supposed to have competition but we really don't... they just make lots of money and pay their workers minimum wage...
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    Post  Vann7 on Tue Mar 10, 2020 9:24 am

    Russian stock markets fall by 10% after global oil price crash




    The Russian currency rebounded slightly after collapsing nearly eight percent versus the US dollar on Monday, currently trading at 72.2 against the greenback and 81.38 against the euro. The ruble’s rapid depreciation was caused by the collapse in global oil prices, with the Russian budget significantly dependent on crude.



    https://www.rt.com/business/482708-russian-stock-markets-crash/

    Even RT says.. it..      that the russian eocnomy is very dependent on crude oil..  Laughing
    The Russian economic minister also have told  it.. recently.. and i quoted him..
    as soon the oil prices collapse.. you see the ruble losing its value in half..   lol1  
    so the ruble will be worth of toilet paper for buying anything outside of Russia.
    and this will not be a problem if Russia was a true independent nation ,with alternative to
    the western business and alternative to asian business too that americans control.

    But Putin really thinks that he can continue developing Russia as a passenger in the american train
    and still hope to be treated fairly..  Rolling Eyes   The only possible solution to fix Russian economy
    forever and not allows its enemies to manipulate it.. is called ... I N D E P E N D E N C E .
    and Leadership too.. so that other nations follows Russian business world and not the american ones.
     
    Russia needs to create an alternative business world , (with china help) that can offer the world ,all the
    important business that US have ,that have now no competition ,but that are extremely important for
    nations development.. as it is internet , as it is a banking industry ,as it is computers for consumer use,
    as it is entertainment ,alternative for US it industry ,and silicon valley business, a new United Nations ,in Russia  territory and a new space station and a new economy based of modern business and not on things that are very
    easy for Russian enemies to target. Russia needs to split the world in half.. and lead in innovative modern business as china is doing , to pull away europe and rest of world from NATO and the US business orbit.
    None of  those US  sanctions will ever work . if Russia offer alternative to US business ,that are superior to theirs..  

    Trump economic war only works ,when they tell the world.. if you want to do business with us ,then you
    need to follow our system..this is only possible because of US business leadership.. but had Russia and china
    had strong competition ,superior to US modern business ,then people will have no longer to follow the american system.. the economy will sink.. when Huawei completely replace apple.. when Russian computers completely dethrone intel and amd.. when russia create its own world wide internet.. which they can do using satellites. when Russia modernize its economy based on innovative high tech ,space and digital business.  then Russia will become a true independent nation and sanction proof.. and oil wars proof too ,and then finally no nation will want to fight Russia.. if it leads the world with china with advanced innovative business.

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    Post  Austin on Tue Mar 10, 2020 9:58 am

    As long as inflation is in control a falling ruble is not bad but good for Russia specially its exporters.

    Considering Russian Ruble is full convertible and floating which means market decides the price of Ruble wrt to USD and Euro depreciation of Ruble during Oil prices fall is expected which balances the USD/Euro/Ruble exchange rate.

    These are just temporary phases which will last for few weeks as soon as Energy prices stabalise and stock market globally stabilises Ruble too will.

    The Russian Stock market is not an indicator of Russian Economy unklike Dow Jones US economy will freak out if Dow Jones goes down.
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    Post  miketheterrible on Tue Mar 10, 2020 10:26 am

    Entire world stock exchange is getting battered. We were starting to expect this but coronavirus helped push it.

    What sucks is now we are all waiting on China to come back from the crisis from CV and when manufacturing picks back up.

    Jason Kenney here in Alberta will see all he promised go down the drain as Canadian oil has been battered with being one of the lowest prices right now ($29/bbl) and oil is pretty much Alberta's one trick pony along with the concervatives economic policies. He (Jason) just gave $4B to oil tycoons in hope they will push oil development here. Instead they took it and fled back to Texas.

    Canada is in a rougher shape than anyone else in this mess. US will hold out longer than us in low oil prices.

    And Trudeau won't do shit as he is allowing the Indians (res Indians, not India Indians) set fire to our train carts (one of few transportation methods for oil and gas) out in Ontario cause they get away with anything.

    Holy shit Canada is screwed.
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    Post  kvs on Tue Mar 10, 2020 2:46 pm

    miketheterrible wrote:Entire world stock exchange is getting battered.  We were starting to expect this but coronavirus helped push it.

    What sucks is now we are all waiting on China to come back from the crisis from CV and when manufacturing picks back up.

    Jason Kenney here in Alberta will see all he promised go down the drain as Canadian oil has been battered with being one of the lowest prices right now ($29/bbl) and oil is pretty much Alberta's one trick pony along with the concervatives economic policies. He (Jason) just gave $4B to oil tycoons in hope they will push oil development here. Instead they took it and fled back to Texas.

    Canada is in a rougher shape than anyone else in this mess.  US will hold out longer than us in low oil prices.

    And Trudeau won't do shit as he is allowing the Indians (res Indians, not India Indians) set fire to our train carts (one of few transportation methods for oil and gas) out in Ontario cause they get away with anything.

    Holy shit Canada is screwed.

    Thanks for the input. If Canada has a hard time with bitumen sands extraction, you can bet your last penny that all the non-conventional frackers are
    bleeding red all over the place. And Trudeau really is a moron. His pandering to those fake (Elizabeth Warren style) aboriginals is obscene. He
    actually has the OPP and other provincial police arrest people clearing the road of debris. What a f*cking humanitarian!

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    Post  miketheterrible on Tue Mar 10, 2020 3:28 pm

    kvs wrote:
    miketheterrible wrote:Entire world stock exchange is getting battered.  We were starting to expect this but coronavirus helped push it.

    What sucks is now we are all waiting on China to come back from the crisis from CV and when manufacturing picks back up.

    Jason Kenney here in Alberta will see all he promised go down the drain as Canadian oil has been battered with being one of the lowest prices right now ($29/bbl) and oil is pretty much Alberta's one trick pony along with the concervatives economic policies. He (Jason) just gave $4B to oil tycoons in hope they will push oil development here. Instead they took it and fled back to Texas.

    Canada is in a rougher shape than anyone else in this mess.  US will hold out longer than us in low oil prices.

    And Trudeau won't do shit as he is allowing the Indians (res Indians, not India Indians) set fire to our train carts (one of few transportation methods for oil and gas) out in Ontario cause they get away with anything.

    Holy shit Canada is screwed.

    Thanks for the input.   If Canada has a hard time with bitumen sands extraction, you can bet your last penny that all the non-conventional frackers are
    bleeding red all over the place.   And Trudeau really is a moron.   His pandering to those fake (Elizabeth Warren style) aboriginals is obscene.    He
    actually has the OPP and other provincial police arrest people clearing the road of debris.   What a f*cking humanitarian!


    Because of fucks like him, we are gonna get some hardcore Jason Kenney like or even Jason Kenney as our next PM. And then we will truly be screwed.
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    Post  GarryB on Wed Mar 11, 2020 4:45 am

    Russia needs to create an alternative business world , (with china help) that can offer the world ,all the
    important business that US have ,that have now no competition ,but that are extremely important for
    nations development.

    You are dreaming... Russia can create anything they like, they would be alone in that alternative business world, which means it would make no sense... what they need to do is persist in the real business world... as Americas irrational and hostile actions as it lashes out at anyone and everyone it will continue to reduce its own power and turn countries to alternatives... if Russia leaves they wont be an alternative...

    You would have to be pretty small minded to think everyone is going to suddenly stop trading with the US and all trade with Russia... the facts of the matter are the EU most of the time are just as bad as the US anyway, so replacing a censored with an censored is no great deal...

    Russia needs to engage other countries and get trade deals where both sides benefit and can grow and develop and improve their lot without one side or the other getting control or leverage over the other...

    The purpose of the funds put aside for rainy days is to be able to use them when it rains.... it is raining.

    Suggesting Putin has failed because he is dipping in to his savings is dumb... not using them would damage the economy, which over time would result in a much bigger cost.

    As mentioned economies are being effected everywhere... this isn't just effecting Russia... there are plenty of problems to go around... and Saudi Arabia and Americas actions will have effects... and knowing Trump and Putin I think I know who is going to end up suffering the most... ironically Trump has the best and biggest hand in the game and his original plan to partner with Russia could have led to everything being much much better, but he foolishly was goaded in to changing his plans and now despite a winning hand is loosing to a better player.
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    Post  Vann7 on Wed Mar 11, 2020 9:18 am



    Saudi Arabia has upper hand in oil price war: Again Capital founding partner




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    Post  flamming_python on Wed Mar 11, 2020 9:42 am

    Vann7 wrote:

    Unfortunately for Putin , the west in coordination with Saudi Arabia ,they can bring down
    oil to $15  or $10 and keep it there for years... and finance the loses..  it hurt the west..

    etc...

    What you're forgetting about is China.

    If the West gets further into an economic war with Russia it will harm Russia, but Russia will still survive, and it will hurt the West - weakening its economy against China; and that's the thing they're most afraid of.

    It's in their interests to come to a compromise with Russia, and among other things lift the sanctions on Rosneft they've recently instituted. I think this is what Putin is shooting for, rather than some master plan to collapse the American and Saudi economies.

    Vann7 wrote:[b]
    https://www.rt.com/business/482708-russian-stock-markets-crash/

    Even RT says.. it..      that the russian eocnomy is very dependent on crude oil..  Laughing
    The Russian economic minister also have told  it.. recently.. and i quoted him..

    Not the entire economy. The budget; that's what the article even said.

    And the budget is a lot less dependent than it was 10 years ago.

    Back then it was only balanced with a $80 per barrel oil price. Now it's more like $40 per barrel break even, and budget spending has been running a surplus the last 2 years anyway.

    There's nothing wrong with loosening dependence on oil further.

    Contrary to your assessments, Russia is not some banana state making nothing other than oil and gas. A fall in the profitability of these sectors will hurt in the short-term, but in the medium-term it will only serve to divert investment into value-added production and other commodities.

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