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    Russian Economy General News: #11

    miketheterrible
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    Post  miketheterrible Thu Mar 19, 2020 10:26 am

    Should I mention no one here uses rt as a source cause it's usually shit?
    kvs
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    Post  kvs Thu Mar 19, 2020 4:45 pm

    Austin wrote:Russian rouble is a floating currency so there is a balance between appreciation and depreciation of Rouble versus Dollar.

    Due to this the CBR does not have to burn reserves to support Ruble as it did earlier during 2014 crisis where there was a hard pegging of Ruble versus Dollar and CBR had to defend the peg.

    The only thing CBR needs to be worried is inflation.

    More ever few weeks of bad performance or good performance will not make any impact , they will have to average out Ruble performance over yearly , half yearly or quarterly basis.

    There was not hard peg in 2013/14. The CBR had a range of exchange rates to which it intervened to keep the dollar. Once the full blown speculative attack
    started in late 2014 it became clear that this policy only served to feed free money to NATzO financial saboteurs. Once the intervention policy was terminated
    the ruble became instantly a fully floating currency. The NATzO juggernaut that launched its attack in late 2014 managed to drop the ruble exchange by over
    a factor of two. Instead of being a success this was epic self-snookering and fail because it totally nullified the oil price drop in ruble terms.

    As for inflation. The CBR is clearly engaged in economic sabotage by pretending there is an inflation problem with the CPI being around 3%. Unlike the
    USA, Russia does not use dirty adjustment tricks to hide inflation (such as negative price adjustments on goods under the name of hedonics adjustment).
    The real US CPI is closer to 6% and you can see this in food prices which are going up about 10% per year. Following the CBR criminal behaviour the
    prime rate in the USA should be somewhere around 14%, instead it is zero.

    kvs
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    Post  kvs Thu Mar 19, 2020 4:48 pm

    Big_Gazza wrote:
    Vann7 wrote:It looks like the 5th column liberals also have infiltrated in RT.com..
    and that economist world wide are also conspirators..  lol1

    Economists working for international capital interests are expected to provide cover for their corrupt paymasters.

    RT wrote:Speaking to Moskovsky Komsomolets, economist Eugene Gontmacher highlighted that the ruble had actually strengthened against the dollar at the end of 2019, and subsequently, “it seemed to our authorities that the economy is no longer so dependent on energy exports.”

    Gontmacher argues that the recent movements of the ruble have proven that this is far from the case and that the Russian economy clearly “did not overcome the dependence” on oil. Brent crude, which started the year at 66 dollars per barrel, now sits below $30.

    What a fucking idiot...  This flaming dickwad calls himself an economist?   Laughing  Laughing  Laughing  Laughing  Laughing  Laughing  Laughing

    Consider the relative movements of oil price (urals blend) vs the ruble price:\

    Date             Urals          Ruble           Ruble/barrel
                       Price          Price


    Mar 10         32.00          71.08           2,297

    Mar 18         24.65          80.96           1,995

    So 23.0% drop in oil price (in USD) only results in a 13.1% drop in ruble revenue for same volume, yet this retard moron doesn't understand the dynamic....

    The fact that RT prints such nonsense should be taken as proof that its not a propaganda mouthpiece of the Kremlin as it is usually claimed (by Russias enemies) but exercises journalistic indepedence to a significant degree. Well, it should be, but we all know it won't cuz the Enemy doesn't care about trivial things like facts and truth...

    This "economist" should be charged for a form of libel. He is spreading the lie that Russia's GDP depends on oil when oil and gas account for under 7% of
    Russia's GDP including all the employment and hardware purchasing. That is, the 7% is not nominal oil and gas sales, it is the whole industry.

    And this lying sack of shit would prefer for Russia to import oil and gas, I bet. Russia consumes 50% of the oil it produces.

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    Arrow

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    Post  Arrow Thu Mar 19, 2020 5:05 pm

    Russia with such low oil prices will have problems. That's 50% of their exports. Many industries are associated with the raw material industry, so it is not a total of 7% but much more. At such prices, the cuts will be huge.
    PapaDragon
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    Post  PapaDragon Thu Mar 19, 2020 5:19 pm

    Arrow wrote:Russia with such low oil prices will have problems. That's 50% of their exports. Many industries are associated with the raw material industry, so it is not a total of 7% but much more. At such prices, the cuts will be huge.

    Not even the Ukrainans claim that 50% of Russia's exports are oil

    Less than 40% of exports are petroleum (oil, gas and other associated products combined)

    Prices of gas haven't changed a single percentage

    25% of Russian budget comes from oil taxes not direct sales of oil

    They were running 30 billion dollars budget surplus last year

    They have 150 billion allocated for this in National Welfare Fund

    There will be no cuts for at least half a decade, probably longer

    Long story short: learn to read



    kvs
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    Post  kvs Thu Mar 19, 2020 6:02 pm

    Arrow wrote:Russia with such low oil prices will have problems. That's 50% of their exports. Many industries are associated with the raw material industry, so it is not a total of 7% but much more. At such prices, the cuts will be huge.

    You assume that Russia's exports account for 100% of its GDP. They don't:

    https://russian-customs.org/fcs-data-on-exports-and-imports-of-russia-for-the-2019/

    Russia exported $424.6 billion US dollars worth in 2019. Russia's nominal forex GDP was $1.638 trillion US in 2019.
    If you do the naive division in nominal terms, then you get a 25.9% dependence. But the GDP actually only cares
    about the trade balance and not exports. Imports cost dollars, so Russia's GDP dependence on trade is exports minus
    imports, or $177.2 billion US. This gives 177.2/1638.0 = 10.8%. If Russia had a trade deficit it would need to net
    borrow money every year to offset it, just as is the case for the USA and Canada.

    But GDP accounting is absurd so this borrowing is considered a positive for the GDP and not a negative.






    Big_Gazza
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    Post  Big_Gazza Fri Mar 20, 2020 12:09 am

    Arrow wrote:Russia with such low oil prices will have problems. That's 50% of their exports. Many industries are associated with the raw material industry, so it is not a total of 7% but much more. At such prices, the cuts will be huge.

    Buddy, this single-minded BS of yours is why we all call you a troll. My advice to you is to stop emabrassing yourself in a public forum. Razz
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    Post  Vann7 Fri Mar 20, 2020 2:35 am

    kvs wrote:
    Arrow wrote:Russia with such low oil prices will have problems. That's 50% of their exports. Many industries are associated with the raw material industry, so it is not a total of 7% but much more. At such prices, the cuts will be huge.

    You assume that Russia's exports account for 100% of its GDP.   They don't:





    again wrong..


    https://www.trtworld.com/europe/how-oil-prices-impact-russia-s-economy-22067



    Russia is the second biggest oil exporter in the world, making its economy vastly dependent on the global oil market. Oil and gas exports constitute 40 percent of the total federal budget revenue of Russia.



    GDP does not equals real economy ,real nation economy..= net profits  .

    If for example a businessman only income comes from selling luxury cars.. lets says mercendes benz cars..
    and they buy each one from the factory at $100,000 dollars.. each.. then they later sale at retail those
    cars for $140,000 .. so how much is the businessman real profit?  $140k  or $ 40k ?

    Real economy is net profits.. what remains left after your expenses..

    and Russian economy ,its energy exports  accounts for 40% of Russia budget.. .. What a Face

    for comparisons American economy net profits in energy exports are about 5% of its nation economy.. lol1

    So this is why americans can bring down oil prices to its knees..FOREvER!!!!!
    they don't care ,they can very easily manage the loses with a loan to their energy sector..
    in fact thats what trump is going to do... they do want piece of shit this oil war.. they want to break
    Russia in a milion of pieces the Russian economy..and the easiest way is  driving down oil prices ,that affect
    also natural gas prices..  and the alternative of not fighting an oil war with russia ,is a military war , either
    use biological weapons ,as they did to china ,that is very unpredictable the consequences or bombs and missiles war . so for US is millions times better and easier an oil prices war. hands down.. because US shale industry
    is merely a small profit in their pockets.. only about 5% .

    If we include the domestic energy market profits.. then easily from 50% to 60% of Russian economy is affected
    by oil prices.. Shocked

    it could be even more , because Oil and natural gas industry in Russia are among the top business in generating
    jobs for Russia.. from security services ,to engineers for pipelines ,to scientist in research for new oil fields..
    from miners to dig holes in new zones.. and those pipelines are also expensive.. not free.. Russia needs to pay
    a big debt caused by its energy industry.

    So Putin's bet on energy industry is an incredibly short sight strategy ,specially knowing how easy is for americans every 5-8 years to collapse oil prices.. it was oil prices collapse.. combined with the arms race ,combined with the afghan war .. what sink soviet union economy.. and ended on its civil unrest and failure.

    So americans hits Russia economy big hard.. trump and obama had putin by the balls.. with their oil war.
    And Russia response ? is putin's politeness and its call for restoring relations  Rolling Eyes  

    Russia economic gas station model is not only Outdated for a nation with the capabilities that Russia ,that
    was leading at one point in space exploration.. but is also no longer sustainable ,since US can very easily
    can harm Russia economy ,by flooding oil prices...   it is oil and natural gas , the reason americans are interested in invading iran ,invading Venezuela ,Lybia and Syria. is not because they need oil..for them.. but because Russia needs it.. So imagine all the irony.. that Putin failure economic model , encourage americans to target all those
    nations with a lot of energy ,allied with Russia.

    Putin's development of Russia (or lack of ) . is what determine in which way the country economy will
    be attacked.. and now here is the catch.. Americans can harm 5G technology .. by starting an oil war to
    sink oil prices..  Cool  americans can't harm china economy /huawei by hosting olympics or by selling more
    oranges or rice or bananas .. No  

    If your economy is based on high tech ,the only way to target that business is with superior business..
    and Trump tried to start a war against china huawei and 5G and ban it from the world.. and Failed .
    even UK welcomed China high tech..   lol1

    So why the moron Putin don't get a fucking clue ,that all that the idiot needs to do ,to bypass american
    sanctions ,and influence in the world.. is create superior modern business than the americans ones..
    in things very popular ,that takes the world into the future.. is Leadership in modern business ,the way
    to defeat the American empire.. not rice and potatoes records.. or sports medals. Russia need to privatize
    its energy industry ,sell it to france and germany , and live happy with extraction fees ,per oil or natural gas sent to europe an you will see in no time , russian energy become a real monopoly in all european continent. and will be sanctions proof. because it will be european business the owners of russia oil and gas and not russia   Wink

    Any government in Russia who wants to end the american empire ,and force them to become a normal cooperative nation ,with Russia ,if don't want to be isolated from the world ,needs to move towards a digital modern economy and space exploration economy. space tourism.. how can you sanction that? if the super rich in US
    will be fighting each other for a ticket to fly around the world in a space ship ? how about a space cruise ship
    to orbit the moon and return to earth ? that can be done in just  6 days.. space travel. and even less in 1-2 days with a plasma engine. The Caveman president is what holds Russia back.. his extremely outdated vision of Russia.. and how its economy should be. it is only through modernization and success.. through Leader ship ,
    how Russia can earn the respect it wants and how they can end the western hostilities against Russia.. that will be the day ,they realize ,they no longer the leader in the world and that will benefit enormously in closer relations with Russia.
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    Post  PapaDragon Fri Mar 20, 2020 4:19 am

    Vann7 wrote:...Any government in Russia who wants to end the american empire...

    And what makes you think that it's Russia's job to end "american empire"?

    Russia is doing fine for itself and is perfectly content to let Americans ride rest of the planet raw as long as they stay away from Russian slice

    If some other nation has issue with that they are free to initiate project 'Ending ​of American Empire' all by themselves

    I am sure Russians will enjoy watching the show on TV

    What you think Russia should do and what Russia wants to do are two vastly different things


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    Post  Austin Fri Mar 20, 2020 8:07 am

    kvs wrote:
    Austin wrote:Russian rouble is a floating currency so there is a balance between appreciation and depreciation of Rouble versus Dollar.

    Due to this the CBR does not have to burn reserves to support Ruble as it did earlier during 2014 crisis where there was a hard pegging of Ruble versus Dollar and CBR had to defend the peg.

    The only thing CBR needs to be worried is inflation.

    More ever few weeks of bad performance or good performance will not make any impact , they will have to average out Ruble performance over yearly , half yearly or quarterly basis.

    There was not hard peg in 2013/14. The CBR had a range of exchange rates to which it intervened to keep the dollar. Once the full blown speculative attack
    started in late 2014 it became clear that this policy only served to feed free money to NATzO financial saboteurs. Once the intervention policy was terminated
    the ruble became instantly a fully floating currency. The NATzO juggernaut that launched its attack in late 2014 managed to drop the ruble exchange by over
    a factor of two. Instead of being a success this was epic self-snookering and fail because it totally nullified the oil price drop in ruble terms.

    As for inflation. The CBR is clearly engaged in economic sabotage by pretending there is an inflation problem with the CPI being around 3%. Unlike the
    USA, Russia does not use dirty adjustment tricks to hide inflation (such as negative price adjustments on goods under the name of hedonics adjustment).
    The real US CPI is closer to 6% and you can see this in food prices which are going up about 10% per year. Following the CBR criminal behaviour the
    prime rate in the USA should be somewhere around 14%, instead it is zero.


    Yes it was a corrider that CBR was defending.

    What I was trying to say is currently CBR is targetting inflation and not into Currency pegging versus Dollar as Rouble is free floating and market forces decides its rate.

    The only time CBR would defend ruble is there is serious macro economy issue with currency exchange.

    CBR has now determined under want circumstances it would defend ruble if oil price ( Ural Blend ) fall below $25

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    Post  Mindstorm Fri Mar 20, 2020 2:09 pm

    Vann7 wrote:Real economy is net profits.. what remains left after your expenses..

    and Russian economy ,its energy exports accounts for 40% of Russia budget.. .. What a Face

    for comparisons American economy net profits in energy exports are about 5% of its nation economy.. lol1

    So this is why americans can bring down oil prices to its knees..FOREvER!!!!!
    they don't care ,they can very easily manage the loses with a loan to their energy sector..
    in fact thats what trump is going to do... they do want piece of shit this oil war.. they want to break
    Russia in a milion of pieces the Russian economy..and the easiest way is driving down oil prices ,that affect
    also natural gas prices.. and the alternative of not fighting an oil war with russia ,is a military war , either
    use biological weapons ,as they did to china ,that is very unpredictable the consequences or bombs and missiles war . so for US is millions times better and easier an oil prices war. hands down.. because US shale industry
    is merely a small profit in their pockets.. only about 5% .


    Vann you have few ideas and confused too.

    Some simple points you can surely understand:

    1) USA is insanely indebted -now at over 23,5 trillions dollars in the the most optimistic, as wronged, computation.... - and this debt continue to grow more and more faster than GDP (rather it would be correct to say that the same foundation of US grow today is fully based-on and fueled by debt's grow)

    2) USA federal budget run an huge chronic and growing yearly deficit

    3) US's shale oil industry (and with it the latest USA's "energy independency") is ,since its beginning, entirely debt-depending and its structure is completely subordinated to the willingness of private Wall Street's investors to burn absurd amount of money in well rigs construction and operations, blinded by momentary dividends generated selling future extractions

    4) The Federal Reserve engineered "era of low rate interests" (that obviously worsened furtherly the already critical US debt charge) has been structural to the same possibility of birth of the US shale oil

    5) At today virtually not even a single US shale oil company could generate enough revenues by mere resource's extraction to sustain itself without aiding macro-financial measure and circumstantial factors would weight-in to allow its existence.



    In substance US government created ,accepting immense "hidden losses" in terms of increased debt that will be felt terribly already within end of this same decade, the right environment to LURE private investors toward this sector accepting the risks and the losses that will unavoidably reach them in the middle terrm in order to establish the shale oil industry.

    Only a simpleton could think to the financiary and geo-strategic inpact of shale oil sector in terms of percentage of tax revenue for the US budget, if in facts this deadly grip on the oil price would remain for even only several months what would happen is that not even a single investor would risk anymore a single dollar in the shale sector.

    Without this army of guillible blind investors, maintain into live the "shale oil revolution" and with it the US energy indipendence would cost to US governement several TRILLIONS DOLLARS.


    miketheterrible
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    Post  miketheterrible Fri Mar 20, 2020 3:07 pm

    https://sdelanounas.ru/blogs/131254/

    Russia's international reserves for the week rose to $581 billion

    According to the Bank, the increase in reserves was the result of "positive market value adjustments and receipts of funds on accounts of the Ministry of Finance of Russia ".

    https://tass.com/economy/1132969

    Bank of Russia keeps key rate at 6%

    MOSCOW, March 20. /TASS/. The Bank of Russia Board of Directors decided to keep the key rate at 6% per annum, the regulator said in a press release following the board’s meeting on Friday.

    I think it should be just down to 2% or lower to spur spending of Russians.
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    Post  Austin Fri Mar 20, 2020 4:17 pm

    miketheterrible wrote:I think it should be just down to 2% or lower to spur spending of Russians.

    More like 3.5 to 4 % I would prefer
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    Post  Austin Fri Mar 20, 2020 4:18 pm

    Russian Defense Expenditure And Military Modernization

    https://www.csis.org/events/russian-defense-expenditure-and-military-modernization


    Interesting video
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    Post  calripson Fri Mar 20, 2020 4:46 pm

    [quote="Mindstorm"]
    Vann7 wrote:Real economy is net profits.. what remains left after your expenses..

    and Russian economy ,its energy exports  accounts for 40% of Russia budget.. .. What a Face

    for comparisons American economy net profits in energy exports are about 5% of its nation economy.. lol1

    So this is why americans can bring down oil prices to its knees..FOREvER!!!!!
    they don't care ,they can  very easily  manage the loses with a loan to their energy sector..
    in fact thats what trump is going to do... they do want piece of shit this oil war.. they want to break
    Russia in a milion of pieces the Russian economy..and the easiest way is  driving down oil prices ,that affect
    also natural gas prices..  and the alternative of not fighting an oil war with russia ,is a military war , either
    use biological weapons ,as they did to china ,that is very unpredictable the consequences or bombs and missiles war . so for US is millions times better and easier an oil prices war. hands down.. because US shale industry
    is merely a small profit in their pockets.. only about 5% .


    Vann you have few ideas and confused too.

    Some simple points you can surely understand:

    1) USA is insanely indebted -now at over 23,5 trillions dollars in the the most optimistic, as wronged, computation.... - and this debt continue to grow more and more faster than GDP (rather it would be correct to say that the same foundation of US grow today is fully based-on and fueled by debt's grow)

    2) USA federal budget run an huge chronic and growing yearly deficit

    3) US's shale oil industry (and with it the latest USA's "energy independency") is ,since its beginning, entirely debt-depending and its structure is completely subordinated to the willingness of private Wall Street's investors to burn absurd amount of money in well rigs construction and operations, blinded by momentary dividends generated selling future extractions

    4) The Federal Reserve engineered "era of low rate interests" (that obviously worsened furtherly the already critical US debt charge) has been structural to the same possibility of birth of the US shale oil

    5) At today virtually not even a single US shale oil company could generate enough revenues by mere resource's extraction to sustain itself without aiding macro-financial measure and circumstantial factors would weight-in to allow its existence.



    In substance US government created ,accepting immense "hidden losses" in terms of increased debt that will be felt terribly already within end of this same decade, the right environment to LURE private investors toward this sector accepting the risks and the losses that will unavoidably reach them in the middle terrm in order to establish the shale oil industry.

    Only a simpleton could think to the financiary and geo-strategic inpact of shale oil sector in terms of percentage of tax revenue for the US budget, if in facts this deadly grip on the oil price would remain for even only several months what would happen is that not even a single investor would risk anymore a single dollar in the shale sector.

    Without this army of guillible blind investors, maintain into live the "shale oil revolution" and with it the US energy indipendence would cost to US governement several TRILLIONS DOLLARS.  

    Don't you know the new economic flavor of the day? Modern Monetary Theory says debt doesn't matter. Simple monetize the debt and keep on going! Now, I don't believe that. Eventually, the debt will result in a debasement of the currency and hyper-inflation. One of the things that is preventing that is a lack of alternative to the dollar.
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    Post  kvs Fri Mar 20, 2020 6:08 pm

    Yeah, the loopy monetarist theory that claims there is such a thing as a free lunch. Economics was always voodoo and not science, but
    the "debt does not matter" "theory" is pure retardation.

    1) Debt servicing costs divert government revenues to paying interest. Zero interest rates are the same as Pancho Villa Peso printing
    operations, so no borrowing has zero cost in a rational system. Even if the interest rates are low, exploding the debt is a big deal:

    https://www.truthinaccounting.org/about/our_national_debt?gclid=EAIaIQobChMIht-ntsGp6AIVhZ-zCh1XTw1uEAAYASAAEgLbi_D_BwE

    https://www.thebalance.com/interest-on-the-national-debt-4119024

    In 2019 the US paid, officially, $393 billion in interest. You can laugh and say it is out of a federal budget of $4.407 trillion. But
    US government revenues were $3.422 trillion, i.e. almost $1 trillion deficit. So the debt is accumulating fast.

    2) Private debt is the same as government debt and is not considered a good thing for some reason. That reason being that
    it diverts liquidity from consumer (or corporate) expenditure.

    According to monetarists, the government can literally create GDP out of nothing by borrowing. So why bother having an economy
    at all and just borrow and spread the borrowed money to the masses. Monetarists have never even demonstrated this ludicrous
    theory to be plausible. All I see is endless brainless quotation (i.e. appeal to authority) and no substance.

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    Post  Mindstorm Fri Mar 20, 2020 6:36 pm

    carlipson wrote:Don't you know the new economic flavor of the day? Modern Monetary Theory says debt doesn't matter. Simple monetize the debt and keep on going! Now, I don't believe that. Eventually, the debt will result in a debasement of the currency and hyper-inflation. One of the things that is preventing that is a lack of alternative to the dollar.


    The status of dollar as world's reserve currency in this instance play a very marginal role ,if any : the problem here instead is that traditional INVESTORS in the shale oil industry, both US and foreign ones, after the serious LOSSES and ,even more, the realization that the main factor influencing the relaibility and profotability of theirs investment in the sector are HIGHLY DEPENDED on the political choices of foreign entities usually object of direct attacks by part of US government, will very likely shrink notably at a level not allowing the sector, already indebted up to the neck before this crisis, to maintain itself.

    If US Governemnt -and therefore all the american taxpayers - choose to carry on itself the burden of this rescue (and it will be an IMMENSE burden) the shale sector will become enslaved to state subsidy because ,after a similar event, not a single private entity will invest in it anymore.

    In mine opinion, in order to obtain the greater benefits from them,, those type of counter-attacks (extremely evoluted and well timed ,to the contrary of what said by our vann) to the USA's illiberal and unlawful actions on the international arena , should proceed at tears and breaks : let the prices recover so to cause some investors to return to the sector and after a while depress suddenly, at the best conjucture ,again the oil price.

    The reiterated bankrupcy of a growing number of private investors will quickly force the US government to put this heavy sector capable to generate only losses on its shoulders.
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    Post  x_54_u43 Fri Mar 20, 2020 6:44 pm

    @Mindstorm

    Could you please give us your opinion and knowledge on future Russian economic growth and potential? What are your thoughts on the National Projects?

    Thanks.
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    Post  PapaDragon Fri Mar 20, 2020 10:42 pm



    Thanks to Sanctions, Russia Is Cushioned From Virus’s Economic Shocks

    Years of economic isolation and bulging financial reserves have positioned the country to ride out the coronavirus panic and bounce right back.

    https://www.nytimes.com/2020/03/20/world/europe/russia-coronavirus-covid-19.html

    MOSCOW — Six years ago, the United States and the European Union slammed the door on Western bank loans for Russian companies, starving the country’s oil and banking industries of financing. The harsh measures were intended to punish Russia for military interventions in Ukraine and Syria and for meddling in the 2016 American election to help Donald J. Trump.

    Paradoxically, however, those sanctions and the policies Russia enacted in response prepared the Kremlin for what came this month: a universal dislocation of the global economy from the coronavirus pandemic and an oil price war that led to a collapse in oil prices and the revenues that Russia relies upon to support social spending.

    Far from being a basket case, Russia enters the crisis with bulging financial reserves, its big companies nearly free of debt and all but self-sufficient in agriculture. After Russia was hit with the sanctions, President Vladimir V. Putin’s government and companies adapted to isolation and were virtually forced to prepare for economic shocks like the one hammering the global economy today.

    “Russia will be a bit better off than other countries because of its experience, because of sanctions and because of reserves,” said Vladimir V. Tikhomirov, chief economist for BCS Global Markets, referring to the roughly $600 billion in gold and hard currency reserves the country has amassed.

    To be sure, Russia has taken a hard hit from the collapse of oil prices, with the national currency, the ruble, losing about 20 percent of its value in recent weeks. Oil and natural gas account for about 60 percent of Russia’s exports. (BS number but whatever)

    Obligatory media bullshit:
    It is still too early to predict how outbreaks of the virus will spread and how various governments will respond. Given the state of Russia’s ramshackle and underfunded health care system, the coronavirus outbreak could be catastrophic. With the state’s tight grip on the news media, many Russians suspect that the Kremlin could be hiding the scale of the problem or the extent of preparedness, hampering an effective response.

    Still, some countries, Russia among them, seem better positioned than others. For Russia, that is linked to the Western sanctions.

    Take, for example, a 2014 sanction limiting loans from Western financial institutions to a maximum of three months. Russian companies responded by paying down their debt so that total government and corporate foreign debt in Russia fell to $455 billion at the start of this year from $713 billion in 2014. By contrast, Western companies have taken advantage of low interest rates to run up trillions of dollars in debt in the past decade.

    “Russia over the past six years has been living with a hostile foreign environment because of sanctions,” said Mr. Tikhomirov. When the virus threat passes, he said, “it’s possible things will come back to life faster in Russia than in other countries because there won’t be the negative drag of debt.”

    The Russian government on Thursday published its plan to contain the virus and maintain economic activity. It said that all pneumonia patients would now be tested and that the country was making 100,000 test kits a day.

    The plan revised rules for paid sick leave so that companies must pay an advance when an employee goes on leave. It will dip into the National Welfare Fund, the main sovereign wealth fund, to pay bonuses to medical workers.

    Russia has 55,000 hospital beds available to treat coronavirus patients and 40,000 ventilators, which are critical in treating the sickest patients, the statement said. By Friday, Russia had reported 199 cases of Covid-19, the disease caused by the virus.

    For now, Russia is relying on quarantines of individuals and contact tracking without major lockdowns. But measures to halt the virus’s spread will most likely bring Russia’s economy to a halt, as they have elsewhere, as companies send employees home. At that point, Russia’s treasure chest of hard currency will be of little help.

    The reserves will come into play during a recovery, though, as Russia will not be competing for financing from capital markets to stimulate the economy.

    For years, economists criticized Russian economic policy as overly conservative, emphasizing saving over spending. It seemed to reflect a deep-seated Russian belief: No matter how bad things are today, they can always get worse. Now, that policy looks justified, particularly in view of the country’s reliance on natural resource extraction for most of its hard currency earnings.

    “Russia is more ready than ever before in its history,” said Vladimir Osakovsky, the chief Russia economist at the Bank of America, referring to the economic fallout from the virus’s spread.

    Russia built those reserves throughout the sanctions period by writing into its budget an artificially low estimate for the global price of oil. All tax on profits above that level went into the national piggy bank. The policy starved the economy of investment — the gross domestic product grew at 1.3 percent last year — but put Russia in a solid position entering the coronavirus crisis.

    Russia’s agricultural sector is also benefiting from changes introduced after sanctions on food imports. Before European agricultural products fell victim to the sanctions war, for example, Koza Nostra, a small company making gourmet cheese, was a barely viable family enterprise. But after sanctions cut off French cheese imports, the company doubled and then tripled its output in ensuing years.

    “It was the right approach,” the general director, Aleksandr Asatryan, said of the Kremlin’s move to prop up Russian agriculture in response to sanctions, useful today as insulation against trade disruptions.

    Since 2014, the share of imported food on the Russian market has fallen to about 10 percent today from about 25 percent. Russia is self-sufficient for most staples other than fresh fruits and vegetables. More than guaranteeing nutrition, the shift allows the government to reserve its hard currency for a recovery rather than expend it propping up the ruble to keep imported food affordable.

    “Even in a bad scenario, Russia can survive this shock better than many other economies,” said Sofya Donets, an economist at Renaissance, a Moscow investment bank, who returned to work last week after a mandatory quarantine.
    kvs
    kvs

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    Post  kvs Fri Mar 20, 2020 11:57 pm

    For now, Russia is relying on quarantines of individuals and contact tracking without major lockdowns. But measures to halt the virus’s spread will most likely bring Russia’s economy to a halt, as they have elsewhere, as companies send employees home. At that point, Russia’s treasure chest of hard currency will be of little help.

    Russia actually has an economy and these articles are fantasy fiction. They either keep on dredging up the trope about "earning hard currency" through exports,
    or "having a hard currency reserve". Neither of these is relevant to Russia's GDP. The 1980s called and they want their cold war propaganda back.

    If Russia is so much less developed and professional than the west, then why does it have 199 cases with 1 death? The transmission of this disease
    has been global so the excuse that it is early days is not valid. U-rope, USA and Canada are all surpassing Russia in daily infection rates by a large factor.
    The Canadian Prime Minister talks about flattening the infection curve. Russia is one of the several countries that have managed, through policy response,
    to actually suppress the infection curve. Every day that Russia falls behind the west in terms of cases means that it is approaching defeat of the pandemic.
    There will be no special Russia-only growth scenario for infections. All pandemics have finite lifetimes and once the aggregate peak is passed there are
    at worst secondary peaks. And there is no regional isolation like there was 200 years ago that could result in staged pandemic spread.

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    Vann7

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    Post  Vann7 Sat Mar 21, 2020 2:22 pm

    take a loot at this report...
    something that incompetent Putin's regime could learn something
    about his outdated economic model  . That is How modern innovative business can
    completely bypass and damage the American empire and its influence in the world.


    Why Huawei's Development of France's 5G Network Will be a Game-Changer



    "Rather than banning it as the US would like, they are instead allowing Huawei products to be used for parts of new 5G networks while at the same time minimising security risks", he highlights. "This keeps the door open to do more business with China and tries to balance diplomatic fallout at the same time".

    "In a nutshell, China, led by Huawei is bigger, better, faster, and cheaper for 5G than any other game on Planet Earth", the author stresses. "Without 5G, cutting edge innovations in aerospace, military, artificial intelligence (AI), Big Data, Internet of Things (IoT), medicine, energy, manufacturing, infrastructure, and logistics – not to mention warp speed telecommunications – are all seriously circumscribed. Either adopt 5G now, or be relegated to faded, 20th century glory".

    "Thus, we will continue to see Paris, London, and Berlin appease and flatter the imperial bully across the Atlantic, while quietly working with Huawei and China’s unbeatable 5G juggernaut", Brown concludes.



    wow!!!!   lol1

    So contrary to Putin's gas station vision , bananas and food records ,and his meaningless olympics non sense spending..and pretty expensive parks..that in no way helps Russia to advance their interest in the world ,and gain any respect or creates a strong brilliant future economy. China gets respect and leadership in the world.. with its high tech business...


    https://sputniknews.com/analysis/202003211078647791-et-tu-brute-why-huaweis-development-of-frances-5g-network-will-be-a-game-changer/

    And this high tech leadership of china in communications , not only give a significant boost to the nation for business worldwide with more nations ,because will develop trust too ,and confidence if europe embrace China
    high tech business ,the rest of the world will say   me too..

    Here is the big deal.. the most important thing China earns.. by having a modern economy.
    1) it directly slows down the US economy ,because once one door opened for china.. all others
       chinese business can penetrate the european and world market..
    2) directly Challenge American leadership in the world ,encourage dissent world wide.. to disobey the bullies.  
    3) it blocks the US companies and intelligence agencies capabilities to continue spying on europeans and any nation who use encrypted communications networks.. makes a hell lot more difficult to spy on merkel phone..  lol1  or any other leader.
    4) this damage the prestige of United States as the leader of the world..  Very Happy

    and the best for the last..
    5) its threaten the US empire , no empire can exist without leadership , without followers. if US is not listened
        any more.. their economy will significantly shrink , more than half of what is today , and this will significantly reduce US capabilities to start wars again , if their economy is dangerously weak ,and will force them to cooperate with China and so Russia.(if it had total domination in space) ,because otherwise ,not cooperating with
    the major leading business in the world.. means being left behind ,and outdated.. and not only in technology
    but in space too.. and this will be really embarrassing for US . only when the american elites realize ,they no longer lead the world.. because foreign nations high tech/space business success have turn away nations from their orbit.. is the day ,we will see US policy makers to seriously consider ending their wars against Russia and China allies and interest /sanctions /economic sabotage policies..
    if they don't want to be isolated from the world.  Cool

    Russia needs to look at China ,at the things they are doing right.. with their business ..how those business
    effectively becomes diplomatic weapons ,that are sanctions proof ,and not affected by oil war prices or sports sanctions or tourism or not even affected by corona virus.  Smile

    To do list.. for China or any other nation who wants to
    stop the US empire.
    the final blows required to the american empire..
    1) a new internet ,not controlled by US
    2) superior alternative to the american semiconductors computer and software industry
    3) Leadership and domination in space..
    4) A new modern culture , that eclipse american movie ,music and entertainment industry.

    In fact.. just achieving one of them... from 1-3 ,will be enough to collapse the Anglo-jews empire..
    and create a new system , nations will just move from the London-washington banking system ,once
    the business leadership is lost in US. this will promote a world of peace ,when Chinese (and Russia if wake up) business leads the way of US foreign policy into cooperation and not confrontation..



    PapaDragon
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    Russian Economy General News: #11 - Page 16 Empty Re: Russian Economy General News: #11

    Post  PapaDragon Sat Mar 21, 2020 4:30 pm

    Vann7 wrote:...stop the US empire...

    Can mods please make new tread called 'Stopping​ the US empire' or some such shit and move all this nonsense there?

    None of this has anything to do with Russian economy


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    Austin

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    Post  Austin Sat Mar 21, 2020 5:18 pm

    Coronavirus is the pin that burst U.S. economy's bubble, says analyst who predicted 2008 crash

    https://www.foxbusiness.com/money/coronavirus-us-economy-collapse-recession
    RTN
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    Post  RTN Sat Mar 21, 2020 7:56 pm

    calripson wrote:Modern Monetary Theory says debt doesn't matter. Simple monetize the debt and keep on going!
    How can Debt be Monetized ?
    kvs
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    Post  kvs Sat Mar 21, 2020 8:04 pm

    RTN wrote:
    calripson wrote:Modern Monetary Theory says debt doesn't matter. Simple monetize the debt and keep on going!  
    How can Debt be Monetized ?

    Print pesos Pancho Villa style.   Monetarists are retards.

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


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