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    Russian Economy General News: #12

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    Firebird


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    Post  Firebird Mon Mar 14, 2022 7:21 am

    FTR Putin/anyone else didn't allow Uncle SHam to steal 300 bn USD.
    Just like Putin didn't sell Russian's Avangaard technology for some magic beans and a 3 legged cow.

    Here is a link which touches on the topic.
    Both sides have debts and obligations. Most of it will offset each way. And the main issue will be how the trade war plays out.
    Europe will suffer. Russia will evade stuff.
    And special measures will need to be taken vs the eternal shit stirrer, Uncle Sham.

    https://thecradle.co/Article/columns/7385

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    Post  miketheterrible Mon Mar 14, 2022 6:17 pm

    https://sdelanounas.ru/blogs/145986/#cut

    Due to a significant increase in demand for domestic industrial products, the Ministry of Industry and Trade launches a new online service "Import Substitution Exchange". The service is implemented on Gazprombank's electronic trading platform based on the State Registration and Registration Service (GISP), the Ministry said in a statement. To date, the information system has more than 14 thousand users — industrial enterprises.

    "With the help of the service, customers will be able to publish requests for the purchase of industrial products, as well as spare parts and components, and suppliers will be able to send their price offers and offer analogues without additional costs, approvals and intermediaries," the Ministry of Industry and Trade commented on the launch of the service.

    The next stage in the development of the service will be cataloging and unifying positions, as well as using machine learning algorithms. The main advantages of the Import Substitution Exchange are the presence of a wide base of suppliers, the function of automatically sending out invitations to bid, the ability to check suppliers and offered products for compliance with customer requirements, and a ready-made ecosystem of digital products to reduce suppliers ' labor costs. It includes additional financial services, such as bank guarantees, factoring, and leasing.

    "There are enough manufacturers of components in Russia that previously could not compete with foreign suppliers. They are ready to supply the market with their products, restoring supply chains that were disrupted due to sanctions. Therefore, the government instructed the Ministry of Industry and Trade and the Ministry of Digital Development to create a digital service, " TASS reports with reference to the office of the Deputy Prime Minister of Russia.

    With the help of this institute, direct interaction between Russian production companies and customers will be ensured. The system will help reduce the bureaucratic and administrative burden on enterprises. As part of improving the digital service, the database will gradually include not only Russian, but also foreign suppliers who are ready to continue or start cooperation with Russia, as paradoxical as it sounds in the context of import substitution.

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    lancelot
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    Post  lancelot Mon Mar 14, 2022 7:38 pm

    This is brilliant actually. Gosplan 2.0. Operating on market signals and using machine learning to get the patterns.

    The Russian government needs to identify and focus on solving industrial bottlenecks.
    I think one of the first they need to solve is to substitute imports of bearings.

    From what I understand the main reasons for bearing imports from countries like Sweden is that they use 5 axis machines to make the bearings and you need extensive qualification periods to ensure quality. Well, China has 5 axis machines with 0.02 micron precision, even if Russian industry does not yet. And the aerospace industry and state labs will be able to contribute to the qualification part of the deal. In the short term they should use existing bearings made in Russia, Kazakhstan, together with Chinese imports. These will have lower lifetime and durability but will be able to substitute existing imports until native capacity of high quality bearings comes online.

    Also, AFAIK, not all electronics products have been banned from import. Consumer grade electronics imports are still available. So the government will not need to replace every single consumer product. Most issues with electronics for manufacture of consumer products are basically production stoppages because you cannot pay for foreign components with SWIFT access cut. These will need to be re-routed from hostile countries to friendly countries.

    There will be a temptation by companies to switch to the Russian banks which still have access to SWIFT and use this to resume payments. But the government needs to exploit this window where there is chaos to identify these cracks in self-reliance and eliminate them for good.

    I also hope they already switched all trade with China of oil&gas products from the dollar and euro to the yuan. This will increase Russia's yuan holdings to fund the economic transition.


    Last edited by lancelot on Mon Mar 14, 2022 7:45 pm; edited 1 time in total

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    miketheterrible
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    Post  miketheterrible Mon Mar 14, 2022 7:44 pm

    lancelot wrote:This is brilliant actually. Gosplan 2.0. Operating on market signals and using machine learning to get the patterns.

    The Russian government needs to identify and focus on solving industrial bottlenecks.
    I think one of the first they need to solve is to substitute imports of bearings.

    From what I understand the main reasons for bearing imports from countries like Sweden is that they use 5 axis machines to make the bearings and you need extensive qualification periods to ensure quality. Well, China has 5 axis machines with 0.02 micron precision, even if Russian industry does not yet. And the aerospace industry and state labs will be able to contribute to the qualification part of the deal. In the short term they should use existing bearings made in Russia, Kazakhstan, together with Chinese imports. These will have lower lifetime and durability but will be able to substitute existing imports until native capacity of high quality bearings comes online.

    Also, AFAIK, not all electronics products have been banned from import. Consumer grade electronics imports are still available. So the government will not need to replace every single consumer product. Most issues with electronics for manufacture of consumer products are basically production stoppages because you cannot pay for foreign components with SWIFT access cut. These will need to be re-routed from hostile countries to friendly countries.

    I also hope they already switched all trade with China of oil&gas products from the dollar and euro to the yuan. This will increase Russia's yuan holdings to fund the economic transition.

    They cant trade in USD and Euros anymore so it has already been switched.
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    Post  GarryB Tue Mar 15, 2022 3:49 am

    It is as good as stolen.

    There are plenty of US assets in Russia that Russia can seize in response... Boeing has plenty of buildings etc in Russia, Mcdonalds, KFC, all sorts of banks and other institutions, car production factories etc etc, they can be repurposed to Russian needs and used.

    Then you had the US confiscating the gold reserves the Venezuelan Central Bank stored in London some years back. And the confiscation of the oil refineries and gas stations owned by Venezuelan state oil company Citgo in the US.

    That wasn't frozen, that was seized.

    You will soon see the West do some BS lawsuit where the assets confiscated from Russian businessmen will be sold for pennies on the dollar

    All the more reason to respond in kind before they can prevent it by selling to others first.

    What I think was a mistake was the law passed on ignoring patents and copyright. That will make a lot of companies not want to trade with Russia at all.

    It will effect western companies, but they brutally overcharge for their products anyway.

    The US actually used a similar law to break away from the UK colonialism...


    Just these two laws alone would soften the blow that Western sanctions have made to a substantial degree.

    Softening what blow.... reduce the damage western sanctions are having on Russia....No... make their own sanctions that damage the west, and one area is copyright and IP laws...

    The US has been kidnapping Russians from around the world and putting them on trial.... perhaps Russia needs to do that too...


    The widespread cloning that the Soviets made without paying patent licenses for anything was part of the reason why after a point no one ever wanted to sell them stuff. In the long term it will be self-destructive.

    The Soviets were sanctioned to limit their growth and development.... they are doing the same to Russia and likely soon China... not playing by their rules is the secret to success.

    BTW it is not like they don't already do it... a US company makes a direct copy of the RPG-7 rocket launcher they give to friends and allies but pay no property rights on the design, despite making it compatible with existing RPG-7 rockets...

    Now they want Russian 50 cal and PKM and assault rifles to be produced in the US for special forces use and giving to terrorists, but no royalties there buddy.

    They want everyone else to follow the rules then they need to follow them first.

    A blanket erasure of patents will hurt not just those companies who want to leave but even those which want to stay. And they won't even bother to try to reproduce their production chain in Russia if the state can just confiscate the know-how of the patent of their production process. Those companies will leave too.

    If they wont stand up to their own governments why should Russia care?

    You can't preach morals and ethics if you don't have any of your own.

    We have seen that western morals and ethics are so flexible they really don't actually exist.

    this clearly shows how russia made a major mistake in not developing and modernizing better
    the economy and depending so much in western business.

    If it is on Youtube and has not been banned and is about Russia it is clearly wrong.

    From what I understand the main reasons for bearing imports from countries like Sweden is that they use 5 axis machines to make the bearings and you need extensive qualification periods to ensure quality. Well, China has 5 axis machines with 0.02 micron precision, even if Russian industry does not yet.

    In the innovations thread didn't they mention 6 axis machines being made in Russia and being sold to Germany because the quality was good enough (not better than the German model) but less than a quarter the price....

    franco
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    Post  franco Tue Mar 15, 2022 11:43 am

    Siberian ‘Detour’ Forces Airlines to Retrace Cold War Era Routes

    Russia bypass boosts flight time, fuel and crew expenses
    Some routes no longer feasible with loss of Russian airspace

    https://www.bloomberg.com/news/articles/2022-03-12/siberian-detour-forces-airlines-to-retrace-cold-war-era-routes

    Actually a double win for Mother. Extra costs impact the economy and more Russian oil is needed to make the extra jet fuel... ching ching!

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    rigoletto
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    Post  rigoletto Tue Mar 15, 2022 1:12 pm

    It seems RUB has been strengthening already. Two days a go it was ₽133 against the USD, yesterday ₽120, and at this moment at ₽108.

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    Post  rigoletto Tue Mar 15, 2022 4:51 pm

    The flight of foreign capital from Russia: should it be held back or nationalized?

    The rate of the initiators of the sanctions war against Russia on the flight of foreign
    investors and the subsequent collapse of the Russian economy did not work


    https://russtrat-ru.translate.goog/reports/14-marta-2022-0018-9355?_x_tr_sl=auto&_x_tr_tl=en&_x_tr_hl=en-US&_x_tr_pto=wapp
    GarryB
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    Post  GarryB Wed Mar 16, 2022 12:06 am

    Actually a double win for Mother. Extra costs impact the economy and more Russian oil is needed to make the extra jet fuel... ching ching!

    This is really going to be a windfall for Alaska too... they lost a lot when airlines started to fly across Russian territory going to Asian countries from Europe...

    I seem to remember a story about it where they had just spent money rebuilding and enlarging their airport terminus building just at the end of the cold war and agreements were signed to allow overflights and so it was largely unused for decades.

    Well... think of St Pauls Cathedral for a weekly worshipping group of six or seven... it probably looked empty even at peak times.

    Quite sad really, but the airlines care about money... an extra 20K on your fuel bill with 300 passengers means an extra 60-70 dollars per ticket.

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    Hole
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    Post  Hole Wed Mar 16, 2022 12:55 pm

    Russian Economy General News: #12 - Page 31 Fn9w8m10
    Very Happy

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    miketheterrible
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    Post  miketheterrible Wed Mar 16, 2022 1:02 pm

    Hole wrote:Russian Economy General News: #12 - Page 31 Fn9w8m10
    Very Happy

    Dunno how I feel about this. It won't make it cheaper for third parties to buy Russian resources. Unless artificially deflated.
    franco
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    Post  franco Thu Mar 17, 2022 7:11 pm

    Natural Resources value by country:

    https://twitter.com/spriter99880/status/1504556682734624776/photo/1

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    GarryB
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    Post  GarryB Fri Mar 18, 2022 4:23 am

    Except half the value of Americas resources are Kardashians and Bezoses that have paper value only.

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    Post  Kiko Sat Mar 26, 2022 9:26 pm

    Russia abolished personal income tax on interest on deposits.

    Russia abolished personal income tax on interest on deposits. This is stated in the law on anti-crisis tax measures, which was signed by Vladimir Putin, the Izvestia TV channel reports . Income received from deposits in 2021–2022 is exempt from personal income tax. Also, citizens who are not in the process of reorganization and liquidation are allowed to apply the declarative procedure for VAT refunds. For IT companies, the corporate income tax rate until 2024 will be 0%. And the multiplier for the transport tax will be applied only to cars worth more than 10 million rubles.

    https://iz.ru/1311028/video/v-rossii-otmenili-ndfl-na-protcenty-po-vkladam

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    Post  lancelot Sat Mar 26, 2022 10:27 pm

    This is pretty good. It will increase deposits, decrease the amount of circulating cash, decrease inflation, and the deposits will be able to be used to fund the reconfiguration of the economy to the new conditions as they get handed out as loans to industry. I expect inflation to decrease quickly enough that the Russian Central Bank will be able to reduce the interest rate a lot earlier than otherwise.

    The state should also pursue a policy of giving preferred loans for necessary industries to rise and reduce essential denied products. Much like was done for agriculture some years ago. The focus should, I think, be on food processing, granaries and cold storage of vegetables and fruit, herbicides, pesticides, seeds, mechanical and vehicle parts like bearings and tires, process materials like catalysts, silicon wafers, and photoresist.

    Russia should focus on production of every single energy intensive intermediate product there is from silicon wafers to carbon fiber, glass, and whatever. Export the excess.

    The issue of modern gasoline and diesel engine production for cars, trucks, and small boats needs to be solved. For commercial cars and trucks Chinese gasoline and diesel engine designs should be licensed and produced in Russia when appropriate.

    Make the necessary improvements to reorganize production in semiconductor industry to maximize fab usage. Chip processes should be standardized as much as possible and it should be easier to move production of designs between fabs. Wafer usage and production should be maximized. Semiconductor fabs should work 24/7 by either increasing the amount of shifts or increasing shift time.

    Relax emissions and efficiency standards for fossil fuels for a couple of years as there will likely be an energy glut for a bit until new customers and delivery channels come online.

    Power of Siberia 2 and Soyuz Vostok should be accelerated to top priority of course. The BAM and Trans Siberian Expansion should accelerate. And Russia needs to increase its amount of rail cars for trade with China. In case the West decides to block Russian shipping. If need be Russia should procure rail cars from India and/or China to speed up the transition. If need be Chinese companies could be hired to help with the rail expansion.

    Increase its strategic oil storage capacity so it does not need to fear the Saudis using their own oil storage capacity to engage in oil price wars with them as easily. It should increase transport capacity of oil to Asia. Be it via pipeline or via the Northern Sea route. I expect the Suez Canal to become a problematic way to transport energy in the future. Those dumb Europeans will be importing more LNG and oil from the Middle East. The less Russia depends on the Suez Canal the better. Russia should not allow unfriendly nations to access the Northern Sea Route with their ships.

    I also think Russia needs to expand its own production of titanium consumer goods like sport goods, glass frames, etc. For sale to China and other Asian markets. This could be done in the Russian Far East.

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    Post  kvs Sat Mar 26, 2022 11:56 pm

    Interest on deposits should never be taxed. It is basically government rape. First the money is already taxed.
    Second, the interest rate is always less than inflation (except for some peculiar and short term situations). So
    you have to pay tax on an offset of the inflationary depreciation of your previously taxed (income taxes) money.

    The sheeple submit to this shearing without grasping that it is something else.

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    Post  kvs Sun Mar 27, 2022 12:13 pm



    "Russian economy is imploding" lol1

    2000 new job openings in Ulyanovsk at the Aviastar facilities for aircraft manufacturing.
    2000 new job openings at the United Engine corporation.
    500 new jobs at the Saturn plant.

    Sollers-Ford is still paying its workers even though it shut down.

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    Post  magnumcromagnon Sun Mar 27, 2022 12:17 pm

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    Post  GarryB Sun Mar 27, 2022 11:14 pm

    The two countries that voted not to make access to food a right are America and Israel... two countries with large populations of people they really don't want and like to abuse in the hope they will bugger off somewhere else... for Israel it is the Palestinians and non Jews, and for America it is poor people... not migrants... they need those to pick fruit and bring in harvests and also be nannys for the middle class and richer, but the homeless and mentally ill and the sick.

    Edit: sorry not completely true... sometimes the mentally ill get elected to president...

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    Post  Scorpius Mon Mar 28, 2022 2:36 am

    Currently, the central bank of Russia has frozen payments in favor of foreign investors in an amount equivalent to the value of Russia's foreign exchange reserves frozen in the West. And now the payment of any obligations of Russia to Western investors will be carried out with the help of "frozen" funds. So in the end, Russia does not lose a cent, but the West has dealt himself  reputation a blow with its own hands, from which it is unlikely to recover. They have inflicted an "economic nuclear strike" on themselves.

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    Post  lancelot Mon Mar 28, 2022 2:59 am

    It was pure bait. And the West lapped it up. From what I understand most of the reserves were in euros as well.

    So this totally destroyed any chance the EU had for the euro replacing the dollar as the reserve currency. The swiss franc and the yen also proved their own worthlessness. Singapore also joined the party which means they will lose relevance in global banking as well.

    I think you will see nations switch to trade between their own national currencies more. And they will need someone to convert or recycle those currencies. Right now China is in the best position to do it. Since it is the only major power with relations to both sides.

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    Post  lyle6 Mon Mar 28, 2022 8:00 am

    Scorpius wrote:Currently, the central bank of Russia has frozen payments in favor of foreign investors in an amount equivalent to the value of Russia's foreign exchange reserves frozen in the West. And now the payment of any obligations of Russia to Western investors will be carried out with the help of "frozen" funds. So in the end, Russia does not lose a cent, but the West has dealt himself  reputation a blow with its own hands, from which it is unlikely to recover. They have inflicted an "economic nuclear strike" on themselves.
    Russian Economy General News: #12 - Page 31 2982

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    Post  nero Mon Mar 28, 2022 8:29 am

    Russian President Vladimir Putin has instructed the government, Central Bank, and Gazprom to implement measures to switch to ruble payments for gas for unfriendly countries by March 31, the Kremlin says
    Russia will not supply gas for free if Europeans refuse to pay for fuel in rubles, Peskov said

    Mark down that date.

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    Post  ucmvulcan Mon Mar 28, 2022 8:40 am

    GarryB wrote:The two countries that voted not to make access to food a right are America and Israel... two countries with large populations of people they really don't want and like to abuse in the hope they will bugger off somewhere else... for Israel it is the Palestinians and non Jews, and for America it is poor people... not migrants... they need those to pick fruit and bring in harvests and also be nannys for the middle class and richer, but the homeless and mentally ill and the sick.

    Edit: sorry not completely true... sometimes the mentally ill get elected to president...

    Can't speak for Israel, but you're almost completely spot on About the poor and vulnerable (mentally and physically ill) in the US. Yeah we have a 700 billion dollar military but people can't pay rent, are shackled in debt for medical expenses and going to college, and now will be food insecure as well. Putin is being blamed for some of thus, but these were problems long before Putin ever came to power.

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    Post  franco Mon Mar 28, 2022 9:43 am

    Bank of Russia explains why it kept its reserves abroad

    Russia’s foreign exchange reserves had to be kept abroad and nothing could have been done to avoid a freeze of the country’s dollar and euro assets, the central bank said in the latest question-and-answer post on its website.

    Earlier this month, nearly half of Russia’s foreign reserves – worth $300 billion – were seized as part of sanctions imposed by the US, the EU, and their allies over Moscow’s military operation in Ukraine.

    Keeping gold and foreign exchange reserves in the country would have been like having no reserves at all, as such assets protect the economy against external crises, the Bank of Russia explained.

    It said there were two types of financial crises: a “traditional” one, such as the world experienced in 2008, 2014, and 2020, and a geopolitical one, like the one Moscow is facing at the moment.

    During a traditional crisis, reserves in US dollars and euros help the country pay its debts and keep trade going, so nothing could have been done to prevent a freeze of its assets.

    “Cashless currency is always reflected in correspondent accounts in foreign banks and therefore can be frozen,” it added.

    During a geopolitical crisis, Russia needs alternative assets that are immune to Western sanctions, such as gold and the Chinese yuan, the regulator noted. It has accumulated these over the past few years and they now make up almost half of its foreign reserves.

    Nonetheless, permitting yuan-dominated Russian reserves puts pressure on Beijing, the Finance Ministry noted earlier this month, adding that the West had been pressuring China to limit Russia’s access to those reserves. All of the country’s gold is kept at home, the regulator added.

    According to the Finance Ministry, Russia has a total of about $640 billion in reserves, of which some $300 billion has been frozen. Moscow could not have foreseen such a development, and the freeze essentially constitutes theft, Russia’s Foreign Minister Sergey Lavrov said last week.

    After its dollar and euro reserves were frozen, Russia applied what the central bank described as tit-for-tat measures. The movement of capital was restricted, and the sale of securities by foreign investors was banned, as was the withdrawal of funds from the Russian financial system, among other measures taken. Essentially, the central bank said, it prevented “unfriendly countries” from receiving funds from Russia in an amount comparable to the Russian assets that had been frozen.

    https://www.rt.com/business/552831-russia-explains-reserves-abroad/

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