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    Russia and economic war by the west #2

    GunshipDemocracy
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    Post  GunshipDemocracy Wed Jun 22, 2022 7:16 pm

    For me that's fuckin strategic counteroffensive... respekt respekt respekt

    https://ria.ru/20220622/briks-1797327217.html?in=t


    really interesting is below:

    Putin announced his intention to open Indian chain stores in Russia

    Putin announced plans to open Indian stores and increase the share of Chinese cars in Russia

    ----


    In addition, the President announced the discussion of the issue of creating an international reserve currency based on the basket of currencies of the BRICS countries, which will help develop reliable alternative mechanisms for international settlements.


    +



    BRICS proposed to create a single cryptocurrency for the alliance

    The creation of a cryptocurrency for the BRICS countries was discussed by the business council of the alliance during a forum in Brazil, said member of the council, head of the RDIF Kirill Dmitriev. It is also planned to develop a single payment system for transactions between countries

    Подробнее на РБК:
    https://www.rbc.ru/economics/14/11/2019/5dcd27a49a794738b8c6fdd8

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    Scorpius
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    Post  Scorpius Wed Jun 22, 2022 7:32 pm

    Russia and economic war by the west #2 - Page 5 Unknown
    Meanwhile, while the dollar exchange rate reached a level below 53 this morning on the Moscow Stock Exchange, Putin issued a decree according to which Russia will make payments on foreign loans denominated in foreign currency in rubles at the current exchange rate of the Central Bank.
    Russia and economic war by the west #2 - Page 5 Unknown

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    sepheronx
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    Post  sepheronx Wed Jun 22, 2022 8:52 pm

    GunshipDemocracy wrote:
    sepheronx wrote:
    It isn't money sitting in Russian banks.  Most of it are bank notes or promises.  Nothing to do with physical cash.

    Its all zero's at this point and worthless.


    Sure but you need swift/Euroclear to move anything ... so you can have a lot in balance and cannot use it.

    That's not an answer or response to my point, which leads me to believe you didn't understand my comment.
    GunshipDemocracy
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    Post  GunshipDemocracy Thu Jun 23, 2022 12:27 am

    sepheronx wrote:
    That's not an answer or response to my point, which leads me to believe you didn't understand my comment.

    then please elaborate? money don't need al; messaging collateral systems to move? other banks needing to accept them? to how can you move money i.e. information about what's on your account then? Im no banking expert but always happy to learn something new.
    sepheronx
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    Post  sepheronx Thu Jun 23, 2022 12:30 am

    GunshipDemocracy wrote:
    sepheronx wrote:
    That's not an answer or response to my point, which leads me to believe you didn't understand my comment.

    then please elaborate? money don't need al; messaging collateral systems to move? other banks needing to accept them? to how can you move money i.e. information about what's on your account then? Im no banking expert but always happy to learn something new.

    What I'm saying is that, the money you speak of isn't in Russia or Russian banks. It isn't physically in Russia.  It sits in European banks.

    They are more or less ious or notes or whatever you want to call it that then Russia uses to move that money to someone else which is about same thing in the end.  Alexander Mercorus explained it in one video. Don't worry, I wasn't sure myself at first till it was explained to me.

    So I always tell people the Russians might as well put those in backlog for the future if the eurotrash demand anything from Russia in finances but as current time, might as well loom at those IOU notes as a whole lot of nothing. Not even worth the data the note is typed on.

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    GarryB
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    Post  GarryB Thu Jun 23, 2022 9:03 am

    The West preparing to self-fulfil their prophecy about the invasion of the Baltics?

    They are empty and worthless and are just doing this because they are ordered to by Washington.

    That´s an old myth. It looks like that because Gorbi and Jelzin let it all break apart. After that all of the investment was lost. But the same would be true for any part of Russia declaring "independence". Then people would say that all the money spend in Wladiwostok or Krasnodar was a drain for the rest of the country.

    Not the same.

    A good example would be the Crimea... a popular holiday destination for Russians... when it was under the control of Kiev money was extracted from their economy and not invested back into infrastructure and investment in the region... they were bleeding it dry of revenue and stealing assets.

    With the Crimea part of Russia it is no longer being bled of funds so as the boss in the Crimea remarked he had 10 times more money to spend on the Crimea than he had under Kiev because Russia was not taking the income away from them.

    With the Baltic states being ports and rail lines used by Russia to send things to that part of the world lots of goods and trade went through there that could otherwise have gone through other Russian ports and rail lines, but when the Baltic states jumped ship and started being hostile to Russia and changing history to suit that narrative Russia has stopped sending their freight through Baltic Ports and so the ports and the rail lines have suffered... which they obviously blame on Russia and not their own short sighted policies.

    When they were part of the Soviet Union they were a connection to the west, but now with the west and Russia splitting apart they are becoming a dead end attraction at the end of a very long dirt road that most people have no interest in seeing.

    They are now doing all this to show the west how to hurt Russia and Russians and for a short while the west will think they are relevant but once everyone has done their part and Russia adapts its communications links with Kaliningrad, then there is only a slow lingering death for those little outposts of democracy, peace and justice.

    Why invade when they are dead already.

    They also have a coal power plant for backup.

    And in good time they could float nuclear power stations there as required to boost electrical power supplies as needed...

    If the ruble still remains stubbornly overvalued you might see a further increase in pensions and minimum wage. Say by 5%.

    The government will thus increase money supply and put it directly at the bottom of the pyramid. Those hardest hit by price hikes. Not the top.

    A very sensible thing to do... normally in the west money injections into the economy are normally directed at the already rich and big business with the intent that they increase wages and hire more staff... but they never do. Most of the money disappears into bank accounts for a rainy day...

    The 750 billion the US paid to US banks who fucked up and would have gone bankrupt meant most of their CEOs got big bonuses that year... people who don't pay for anything... company car, company parking spot, company health insurance, company lunches, company holidays, etc etc that extra money probably just went into the bank and did nothing.

    Paying the unemployed and elderly means it is more likely to be spent... when bank interest rates are so small it makes more sense to buy things you might need over the next 5 to 10 years... your oven on its last legs... your car a bit worn out and getting expensive every visit to the mechanic... washing machine making funny noises... even if you don't start using it right away it will be cheaper to buy a replacement now than in 5 years time, and if you put the money in the bank it will just get spent over time anyway...

    Here in New Zealand, with the value of our dollar and the low price for fabrics we lost our fabric making industry and reverted to a fashion industry where we make designs and get companies in China or Asia to make the products to our specification and standards... they can simply make the clothes much cheaper than we could so it makes sense... they make them for a few dollars and charge us a few dollars more so they make a profit and then we get to buy the clothes for 10 times that price to pay the fashion designers...

    We sometimes even provide the raw materials like Merino wool for instance is sent to China to make clothes by our design and then sent back to New Zealand to be sold to customers.

    If Russia can make it cheaper than China can then why not do it... but that is not the profitable end of the game... it is the designer labels and cut and design that results in value and the price of clothes.

    Of course for most people clothes are just clothes... I would rather have more pockets than for pants or tops to hang nicely...

    I dont agree here. Baltics location is dangerous for Russia geographically as US weapons can be just placed there/ military or intel.

    Turkey is closer to Moscow and Finland is closer to St Petersberg... anything threatening they put there is far enough away to be dealt with using nuclear weapons... so actually no danger at all.

    Baltics shall be "recovered" from NATO to either friendly countries or...those who dont lik ecan emigrate somewhere else isnt it? (taht's what now Russian speaking population is going through)

    Why... let them sink in the ship they have chosen...

    Russia should not attack them, but equally should not offer them a hand out of the sinking ship they are throwing rocks from.

    Respect their choices. Tell citizens of the Baltic states they can go through a vetting process and if they speak Russian and want to remain Russian they can get a plot of land somewhere and start again in Russia. Elderly can be given flats and full pensions if they want to move to Russia too... and then when all the ones who want to be Russian or are Russia friendly have left Russia can safely ignore those countries moving forward.

    It is not Russias problem to fix their problem or help them regarding the choices they have made... the EU solution to their loss of population could be more immigrants... both the EU and the Baltic States would love that solution.

    The problem is that this all has to go through SWIFT and EUROCLEAR. SWIFT afaik works only in USD... so until new system is created money can be stuck...

    No it does not, but even if it did we are talking about EU countries getting two bank accounts in a Russian bank... one bank account they can pay their money for gas payments and that might be in Euros or US dollars, but their other account in that same Russian bank is in Rubles... so they pay in their western currency and it is converted by the Russian bank into rubles and paid into the ruble account which Gazprom is paid for gas in rubles from.

    The problem mentioned is that this will result in that Russian bank... which ever they decide to use, to end up with lots of western currency that they are initially paid in.

    It also means the Russians control the exchange rate, which is also a good thing.

    That Russian bank getting western currencies could then take ruble dividends from Russian companies and pay out to foreign investors in those western currencies they received for gas payments directly bank to bank... they can work out their own means of money transfer, but suggesting the west could freeze the money from the Russian bank will simply result in that bank refusing EU money... Gasprom wont get paid and the gas supplies to the EU will stop... I don't think the west is ready for that just yet.

    Sure but you need swift/Euroclear to move anything ... so you can have a lot in balance and cannot use it.

    SWIFT was only put into practise in 1973... international inter bank transactions took place before then, and now that the west is abusing its power over that system alteratives will be created for use where it can not longer be used.

    It is just a communication system of codes that idenfies every bank and every region to facilitate notification of transactions... it is not magic.

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    caveat emptor
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    Post  caveat emptor Thu Jun 23, 2022 6:12 pm

    sepheronx wrote:
    What I'm saying is that, the money you speak of isn't in Russia or Russian banks. It isn't physically in Russia.  It sits in European banks.

    They are more or less ious or notes or whatever you want to call it that then Russia uses to move that money to someone else which is about same thing in the end.  Alexander Mercorus explained it in one video. Don't worry, I wasn't sure myself at first till it was explained to me.

    So I always tell people the Russians might as well put those in backlog for the future if the eurotrash demand anything from Russia in finances but as current time, might as well loom at those IOU notes as a whole lot of nothing. Not even worth the data the note is typed on.

    Even if this money was in Russian bank accounts, it would be still worthless, as you can not use it to pay anything with it, since clearing transactions would need to be approved by US and EU.

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    Hole
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    Post  Hole Thu Jun 23, 2022 8:30 pm

    From Moon of Alabama:

    Two Big Errors About Russia - By Helmholtz Smith
    by Helmholtz Smith

    American and Western policy towards Russia is founded on two serious errors. (A considerable understatement, of course – the past thirty years show that conventional Western ideas of Russia are almost completely wrong.)

    But these two are endlessly repeated and, no matter how many times they are proven wrong, they remain the foundational assumptions of the West's attempts to change or control Russia.

    First is the idea that the Russian economy is feeble, unbalanced and dependent on income from the West. The second is that Putin is the chief of a band of thieves who, who if made to feel pain, will get rid of him. Sanctions will collapse the first and bring the pain to cause the second. (Another delusion is that once Putin goes, everything will be to the West's liking – but I did say there was a multitude of misconceptions.)

    First let's consider Russia's economy. Op-eds that say that the Russian economy is the size of Texas or Belgium or Luxembourg or whatever simply translate rubles into dollars and gallop to their preassigned conclusion. They never ask how big the space program of the country Russia is compared to is, or how many nuclear submarines it makes, or new subway stations, airports or bridges it opens, or whether that country makes all kinds of airplanes and trucks, or how much food it grows and exports or anything else that actually measures a real economy.

    As soon as they did, of course, they would see that the Russian economy is much bigger than the puerile ruble-dollar comparison suggests. And, a slightly closer look would reveal that Russia's economy is almost self-sufficient. But the West carries on confident that Russia is a "gas station with nuclear weapons" and its feeble economy can be easily collapsed. RAND based a whole strategy on "Russia’s greatest vulnerability... is its economy, which is comparatively small and highly dependent on energy exports

    They persist in the face of all experience to the contrary. The EU cut food exports to Russia to, I suppose, bring people out into the streets protesting the disappearance of exotic cheese (remember Masha Gessen's heartbreak about my little cheese?) Russia responded intelligently and is now self-sufficient in food and Europe has lost that market. Biden was going to reduce the ruble to rubble but Moscow effortlessly countered him and the ruble is now tied to energy – one of the strongest foundations a currency can have.

    And still the sanctions pile on. But it's educational – now we know a lot more about what potash is used for and where it comes from. And neon – who knew that was important? Rare earths! Beer bottles! Moscow is only just now starting to counter-sanction and the world is discovering that Russia is a major producer of a lot of important things and if you sanction them, you will find yourself running short of lots of things you'd never heard of. (You'd think anyone who owned an atlas would be able to figure out that a country as large as Russia must be a big producer of most resources).

    Biden can blame Putin all he likes, but sanctioning energy and potash is a certain way to drive up prices all round. Biden used to think that Russia had "nuclear weapons and oil wells and nothing else". Maybe the people running Russia are better at thinking things out and seeing reality than we thought they were. (Yet another mistaken Western assumption – what is there in the last twenty years that suggests we're smarter than they are?)

    The idea that Russia is a big criminal conspiracy and Putin is the Boss of Bosses is the foundation of the personal sanctions strategy. So-and-so is deemed "close to Putin", whatever that means, and he's prevented from going to Paris to buy cheese and his yacht is stolen confiscated. Angry, he sits down with the other capos and decides it's time the Boss was found face down in a bowl of kasha and blood. The think tankers tell us that Putin is the Chief Thief holding onto power by spreading the loot around, fake elections and making critics disappear. (By the way, wasn't he supposed to have tried to kill Navalny, where's the oped savant explaining why he's still alive?)

    All elections in Russia are fake, all opinion polls are fake, all media is controlled by the Kremlin, the underbosses are hurting so why is Putin still there? It surely couldn't be that he is the very popular and respected elected head of state – to suggest that would be to call into question three decades of US and EU think tankery. Therefore he must be just one more sanction away from being whacked out. And so more names – all "close to Putin" – are added to more lists. But nothing changes.

    These two errors run on and on. Russia is now the most sanctioned country ever and Western politicians still think another round of "tough sanctions" will do the job. But the more sanctions it survives, the more sanction-proof Russia becomes.

    Wars are irruptions of brutal reality into fantasy and the Ukraine war is laying bare the empty complacency at the root of the West's view of Russia. It's going to be a cold hungry winter in Europe and in parts of America. Can't blame Putin forever.

    But the depressing truth is that minds are rarely changed, you have to change the man. How much longer will the West's leaders outlast their repeated failures?

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    Kiko
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    Post  Kiko Fri Jun 24, 2022 12:32 am

    Bank of Russia calls transition to settlements in national currencies vital, 23.06.2022.

    It is extremely difficult to instantaneously restructure the entire settlement system from yesterday's reserve currencies, the regulator's first deputy governor Vladimir Chistyukhin stressed.

    The Bank of Russia considers it fundamentally important to switch to settlements in national currencies, primarily in rubles, the regulator's first deputy governor said on Thursday.

    Vladimir Chistyukhin noted the regulator is working with Russian banks and the government to move away from the dollar and the euro in settlements.

    "We believe it is critical that entrepreneurs transition to payments in national currencies, mainly the ruble. However, we are willing to accept other currencies in settlements," he said.

    According to him, many partners see the need to move in this direction, but "it is extremely difficult to instantaneously restructure the entire settlement system from yesterday's reserve currencies - the dollar and the euro - to other foreign currencies."

    "Now, together with credit organizations, with the Russian government, we are doing a lot of work to change this state of affairs, so that we move from the dollar and the euro toward national currencies," Chistyukhin said, adding that progress is being made and that settlements in rubles are growing.

    https://tass.com/economy/1470507

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    GarryB
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    Post  GarryB Fri Jun 24, 2022 11:53 am

    Even if this money was in Russian bank accounts, it would be still worthless, as you can not use it to pay anything with it, since clearing transactions would need to be approved by US and EU.

    So if the US and EU prevent that Russian bank from using their currency then I suspect they will simply stop accepting it, which means they will stop transfering any money into rubles so Russia will no longer get paid for gas so they can turn the taps off.

    Equally the US buys Russian Uranium... if they pay in US dollars and then prevent the use of those dollars then the bank would simply stop accepting US dollars or Euros in payment for anything at all because they are useless to them.

    It is the west that suffers because they still need Russian gas and Russian Uranium and other products as well.

    It hurts the west more than it hurts Russia... the EU doens't buy Russian gas as a favour to Russia... the US does not buy Russian Uranium because it wants to help Russia out... both the EU and US are interested in cheap energy from Russia so of course not only will they miss out if they decide to escalate this, but someone else is going to benefit from the cheaper energy... it is not like they can't sell it to anyone else.
    The fact that they prefer long term contracts actually makes them more appealing because middle east and US gas sales to asia are normally short term or market value sales to get higher prices and therefore bigger profits... if they were locked into long term contracts they couldn't redirect ships headed for Asia to go to Europe when the price goes up high enough.

    But the depressing truth is that minds are rarely changed, you have to change the man. How much longer will the West's leaders outlast their repeated failures?

    A good article... and very frightening for those in the west, because the west has made a habit of trying to demonise Russia and Putin and they generally do it by accusing it of having committed crimes the west is guilty of already... so crime bosses likely run the west and the only way to get rid of Biden or Trump is to hurt the 1% in the US... but who would be surprised by that...

    "We believe it is critical that entrepreneurs transition to payments in national currencies, mainly the ruble. However, we are willing to accept other currencies in settlements," he said.

    Not something they would do if the US or EU could block them spending it...

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    Post  owais.usmani Fri Jun 24, 2022 12:50 pm

    https://oilprice.com/Energy/Energy-General/Russias-Revenues-From-Gas-Still-High-Despite-Supply-Cuts-To-Europe.html

    Russia is to be earning more than $100 million every day from the gas it sells to Europe despite the slashed deliveries to major EU consumers in the past week, according to data from Independent Commodity Intelligence Services (ICIS) cited by Bloomberg.


    Dayum!!!

    Very Happy

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    Post  par far Fri Jun 24, 2022 7:19 pm

    GunshipDemocracy wrote:For me that's fuckin strategic counteroffensive...  respekt  respekt  respekt

    https://ria.ru/20220622/briks-1797327217.html?in=t


    really interesting is below:

    Putin announced his intention to open Indian chain stores in Russia

    Putin announced plans to open Indian stores and increase the share of Chinese cars in Russia

    ----


    In addition, the President announced the discussion of the issue of creating an international reserve currency based on the basket of currencies of the BRICS countries, which will help develop reliable alternative mechanisms for international settlements.


    +



    BRICS proposed to create a single cryptocurrency for the alliance

    The creation of a cryptocurrency for the BRICS countries was discussed by the business council of the alliance during a forum in Brazil, said member of the council, head of the RDIF Kirill Dmitriev. It is also planned to develop a single payment system for transactions between countries

    Подробнее на РБК:
    https://www.rbc.ru/economics/14/11/2019/5dcd27a49a794738b8c6fdd8


    When I saw that Indian retail chains were being allowed into Russia, my first thought was, Mukesh Ambani is seeing Rubles and Rupees. Mukesh Ambani directly or indirectly owns the big retail companies in India.

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    ludovicense
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    Post  ludovicense Fri Jun 24, 2022 10:10 pm


    Dagny Taggart
    @DagnyTaggart369
    Blinken “More than a thousand companies have left Russia, this will affect them over time. Russia still has inventories, but they are depleting. The 🇷🇺will not be able to buy what they could buy. The 🇷🇺 will feel it , I don’t want Russian people to suffer , but it will happen “


    ......................

    I don't know how many companies left Russia. But there is no vacuum in capitalism where there are economic and financial resources. It's a matter of time and all this space will be filled by other players.

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    Post  LMFS Fri Jun 24, 2022 11:28 pm

    "Poor Russians, money keeps piling in their vaults and they cannot waste it in useless Western crap, they are suffering badly and soon will revolt"... ffs these people are totally fucked in their heads clown clown clown

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    Post  Kiko Fri Jun 24, 2022 11:38 pm

    ludovicense wrote:
    Dagny Taggart
    @DagnyTaggart369
    Blinken “More than a thousand companies have left Russia, this will affect them over time. Russia still has inventories, but they are depleting. The 🇷🇺will not be able to buy what they could buy. The 🇷🇺 will feel it , I don’t want Russian people to suffer , but it will happen “.

    Don't really know if those words are coming from Tony the Chihuahua or from his master at the State Department and main driver now of US Foreign Policy, Robert Kagan, dear Vicky's neocon husband. One will never know for sure.

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    Post  Broski Sat Jun 25, 2022 4:02 am

    ludovicense wrote:
    Dagny Taggart
    @DagnyTaggart369
    Blinken “More than a thousand companies have left Russia, this will affect them over time. Russia still has inventories, but they are depleting. The 🇷🇺will not be able to buy what they could buy. The 🇷🇺 will feel it , I don’t want Russian people to suffer , but it will happen “
    Poor Russians, how will they ever learn to live without McDonalds, Coca Cola, Starbucks, iPhones and Disney?

    All jokes aside, this only hurts the 5th and 6th columnists who are... or were, the best chance that the US had to subvert Russia and put a Navalny or Khodorkovsky into power.

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    Post  GarryB Sat Jun 25, 2022 12:50 pm

    A thousand companies who were there making money from Russians are now selling their businesses super cheap to people who will buy them.... the people buying them out will then run those businesses so the Russian people are not missing out at all... just those foreign companies that set up their businesses and now are practically giving them away... but teh funny thing is that most have clauses in their agreements that in 1 or 5 or 10 years time they have the option to buy their businesses back for a fixed price if the climate regarding Russia changes... sounds like they don't want to go but idiot politicians in the west are making it too hard to stay.

    In the mean time those people who bought cheap get a bargain and can continue to sell rubbish, though they should adapt it for local tastes and preferences perhaps... Russians might not want the old shit back... some good India and some good Chinese chain stores might become popular.

    Local Russians taking over these franchises might be able to make good money and perhaps open similar businesses in India and China and the rest of the world in direct competition to the companies they used to be... obviously with new symbols and menus and more Russian oriented business practises, and of course publicity about Indian companies entering the market too... why not... more choice is a good thing.

    At least their new Zphones wont spy on them...

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    Kiko
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    Post  Kiko Sat Jun 25, 2022 1:14 pm

    Now Russia will have to proceed with an outright massive import substitution strategy policy. For this it will require massive cheap credit as well. So it's imperative to have negative real interest rates in the shortest run possible, now that inflation is under control.

    Introducing negative real key rates in Russia is a somersault move with respect to what Western central banks were undertaking until inflation skyrocketed there following the imposition of geopolitical sanctions against the former. Now they are being compelled to attack rising food and energy prices inevitably by dramatically raising interest rates to no avail, that is, their only mechanism available, reinforced as it is by the IMF nonsense recently proclaimed. For this, the Collective West will be punished with a long term stagflation process, dragging in the Global South economies which blindly follow the Western central banks predicaments.

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    caveat emptor
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    Post  caveat emptor Sat Jun 25, 2022 7:29 pm

    Kiko wrote:Now Russia will have to proceed with an outright massive import substitution strategy policy. For this it will require massive cheap credit as well. So it's imperative to have negative real interest rates in the shortest run possible, now that inflation is under control.

    Introducing negative real key rates in Russia is a somersault move with respect to what Western central banks were undertaking until inflation skyrocketed there following the imposition of geopolitical sanctions against the former.
    Negative real rates are not good for the economy. You have other side of that equation, such as Russian pension funds, insurance companies and population that want to save money. Not to mention, that overly cheap money always leads to speculation and creating of inefficiencies and systemic risk. I'm all for lowering further interest rate and making it cheaper for citizens and industries to operate. Even subsidize further cheap credit in systemically important sectors and projects.
    Now that Russian oligarch money is not welcome in the west anymore, everything should be done to make them invest more or pay fair share of profits through taxes.

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    lancelot
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    Post  lancelot Sat Jun 25, 2022 8:03 pm

    Just look at what the Soviets did. They basically instituted a dual currency scheme. They had the gold backed currency and the paper money. One was used for international trade, the other for internal one. If they really wanted to maximize capital accumulation and import substitution they could do that. But I do not think it is necessary.

    The government just needs to push the whole boat that is the Russian economy towards Asia and damn the torpedos ahead. Just hugely increase the trade links with India and China. Massive infrastructure in pipelines, ports, rail, etc. Anything transport related like aircraft and cars or trucks also needs to be a priority. Optimize the logistics judiciously and improve Russia's global logistics companies. And then let it flow until it readjusts to new market conditions. As for the import substitution. It needs to be carefully calibrated where it matters.

    If it comes to that, just jack up tariffs on imports, and substitution will happen with minimum government intervention.
    Before the sanctions, Russia couldn't do it because of WTO rules, but with these sanctions? Just jack up tariffs on imports on crap from Europe. Especially all luxury goods. Needs 20% jack up in price stat.

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    Post  Swgman_BK Sat Jun 25, 2022 10:14 pm

    lancelot wrote:Just look at what the Soviets did. They basically instituted a dual currency scheme. They had the gold backed currency and the paper money. One was used for international trade, the other for internal one. If they really wanted to maximize capital accumulation and import substitution they could do that. But I do not think it is necessary.

    The government just needs to push the whole boat that is the Russian economy towards Asia and damn the torpedos ahead. Just hugely increase the trade links with India and China. Massive infrastructure in pipelines, ports, rail, etc. Anything transport related like aircraft and cars or trucks also needs to be a priority. Optimize the logistics judiciously and improve Russia's global logistics companies. And then let it flow until it readjusts to new market conditions. As for the import substitution. It needs to be carefully calibrated where it matters.

    If it comes to that, just jack up tariffs on imports, and substitution will happen with minimum government intervention.
    Before the sanctions, Russia couldn't do it because of WTO rules, but with these sanctions? Just jack up tariffs on imports on crap from Europe. Especially all luxury goods. Needs 20% jack up in price stat.
    I feel like Russia should have long done this in 2000. By now she would be making EVERYTHING internally. Same with the Rubles only policy.
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    Post  GarryB Sun Jun 26, 2022 6:35 am

    The problem is that things like the WTO prevents this sort of self defence of local producers and service providers... but Putin is a clever one so when the EU put sanctions on Russia in 2014 which were not cleared by the UNSC of course so were in fact illegal under international law, he bypassed the WTO by banning the imports of food from the EU.

    The Russian food industry obviously had enormous potential as we see now, but it never got the investment because the market was dominated by EU importers for which this was a gravy market... they could afford to lose money for a couple of years just to take the market share and then when the local competition has dried up slowing increase prices to recover the money and make good profits.

    They were already producing food for their own markets so making a bit more is efficient and cheap and easier that setting up production and building an industry which is what their Russian competition would need to do, and with western bias just make a rule you have to disclose where the product was made... how many europeans will buy food from Russia... all that toxic polution and Chernobyl... (western customers are stupid and believe what their media tells them).

    Western sanctions gave the Russian food industry a chance to develop and grow...if relations with the west were getting better instead of worse what would happen would be big companies in the west woudl buy up the successful Russian companies and use them for cheap production in their own markets and save more money and make bigger profits... so in a sense the current war and wests separation from Russia is a good thing for Russia.

    They need to find new customers and replacement products from the rest of the world... they don't have to go to the trouble of trying to make everything for themselves, there are other countries that already make some of that stuff that want other Russian products so trade is beneficial to both parties, but obviously a local source for most things is a good thing... don't rely on one source for everything in any category unless there is no choice... which is rarely the case... but if there is only one source and it is worth it then that is the sort of thing they should make for themselves to also export and trade...

    Now Russia will have to proceed with an outright massive import substitution strategy policy. For this it will require massive cheap credit as well. So it's imperative to have negative real interest rates in the shortest run possible, now that inflation is under control.

    If a product really is that strategic and important then they should invest some government money into the project as well as perhaps tax breaks for the first few years, but investments by the government should be used to secure IP rights in case they develop something really good and want to run away to the west with it or at some stage in the future some rich westerner might get the chance to buy up the company or product.

    The market will be devoid of western products as competition so it is a question of working with China and India and the rest of the world including South Africa and Argentina and Brazil and anyone else... Iran, Turkey, etc etc to fill any gaps created, whether it is a joint venture or they are already making something similar that Russia can adapt and make localy or import.

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    Post  kvs Sun Jun 26, 2022 2:19 pm

    The story with Russian food production applies to the semiconductor industry. The domestic Russian production has been suppressed
    by imports. This is the base of all the distortions, lack of money flow to domestic production. People love to believe that it is due
    to technological ability failure. That's not how it works. The technological ability is developed by investment of money and for
    a country like Russia where the scientific and engineering talent and depth is not a bottleneck, it is the lack of money that is the
    real bottleneck.

    The NATzO west has f*cked up on an epic scale. Its mentally inadequate wishful thinking about Russia has successfully been
    liberating Russia from the chains of distortion introduced by Yeltsin and the Russian depression of the 1990s. NATzO companies
    have lost their market in Russia and can no longer maintain the neo-mercantilist yoke on Russia. Russia was not a gas station
    banana republic but it was still in a box of economic control by the west. Since 2014 this box has been destroyed. But
    Russia will not be destroyed because of this.

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    Post  owais.usmani Sun Jun 26, 2022 3:40 pm

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    Post  owais.usmani Sun Jun 26, 2022 3:47 pm

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