Russian Economy General News: #3

Russia definitely needs a different health care model than in the west (including the USA and Canada). The cost of getting
what should be standard diagnostics is insanely high in Canada. If you want to get an MRI or a CAT scan, and assuming
you are lucky enough to be referred to specialist who will authorize get them, you need to wait for months and if you want
to pay for it, it costs $2000 for the CAT scan. Pharmaceuticals are a never ending racket where the drug companies just
re-release old medicines with some tweaks and a marketing makeover. Doctors are basically bribed by Big Pharma to push
their crap onto patients (resort vacation "conferences" are an example of this).

There is lots of debate in Canada about public health care. After being exposed to the system I think it isn't what it is being
made out to be. I would rather pay out of my pocket for diagnostics instead of having some retarded bureaucrat decide
to save money by issuing edicts to doctors to not do diagnostics. Also, we have over paid doctors. What is the point of
having a few doctors who are payed a lot but who can only see you for 5-10 minutes? I would rather have more doctors who
are paid less and who have more time to deal with your case. Nothing useful can be done in 5-10 minutes. Especially when
we are dealing with health problems were multiple unrelated problems can manifest very similar symptoms.

We saw this coming from a 1000 km's away...the South Stream project is now officially dead, I see that the EU is dominated by masochists I guess:

Putin: Russia forced to withdraw from S.Stream project due to EU stance

Rubles value dropped to 53rub/usd. Inflation is up to around 9%.

But at the same time, ruble supply is up due to devaluation of ruble countering lower oil prices, and the liquidity of banks is up. As well, one contributing factor that prevented inflation from going up too much, was import substitution manufacturing and agriculture production.

Average Russian is seeing effects though due to the rising exchange rates. Less are able to travel abroad now (russian tourism abroad has dropped significantly), prices of average goods have gone up, and average wages this year has not increased more than 2% (dont envy these people as I got no raise).

At same tocken, budget will be revised possibly (if oil shows signs of further decrease) and it may be revised to lower than $60bbl. As well, there is talk of freezing business tax for 7 years: http://www.finmarket.ru/main/article/3877351

Taxes may increase though. Since Russia has a relative low taxes for a socialized state, the increase ia minimal. VAT may increase to 20% from 18% and Flat tax rate of 13% to 15%.

Fair Russia party is requesting that VAT tax should be reduced for grocery retailers whom sell majority of Russian made produce.

Great news, lots of subsidies, grants, and tax credits for domestic industrial/manufacturing machine tool industry to make them competitive:

Rostec receive state subsidies on production machines
The government will provide asset contribution to the creation of original equipment manufacturers



The Russian government has approved the rules for granting subsidies for the establishment of serial production machine tool products. According to these rules will be provided in the form of subsidies asset contribution Russian State Corporation Rostec for projects to create serial production machine tool products.

Resolution of the rules prepared by the Ministry of Industry grants under the state program "The development of industry and increase its competitiveness." The implementation of this document is aimed at reducing dependence major Russian machine-building organizations and the military-industrial complexes of the supply of foreign funds engineering production.

Decree signed by Prime Minister Dmitry Medvedev, Tass reported . On the basis of the decision will be provided subsidies in the form of property contribution of the Russian State Corporation Rostec for projects to establish serial production machine tool products.

"The subsidy will be given to the creation of modern serial production of domestic machines for domestic demand in view of solving the problems on import substitution. The federal budget for these purposes in the years 2014-2016 provided funds amounting to 5,552,225 thousand rubles, including in 2014 - 2,277,150 thousand rubles, in 2015 - 1,775,075 thousand rubles, in 2016 - 1500 000 thousand rubles, "- reported on the government website.

The adoption of this solution will provide technological modernization Russian machine-building enterprises and should contribute to the improvement of the technologies used.

http://rostec.ru/news/4515135

magnumcromagnon wrote:We saw this coming from a 1000 km's away...the South Stream project is now officially dead, I see that the EU is dominated by masochists I guess:

Putin: Russia forced to withdraw from S.Stream project due to EU stance

In an epic act of servile idiocy the EU has shot itself in the head.

Wow, good news on the machine tool industry. Now they need these subsidies for IT component (semiconductor) industry and farming and Russia can be competitive. Thats how EU and US does it.

Well, at least Turkey will be getting a new pipeline from Russia and 63bcm at 6% discount. This is quite the deal and Russia will get another major trade partner. Turkey does want to increase trade to $100B by 2020 with Russia and may join free trade with customs Union. If this is the case, then Russia gained another reliable partner.

http://www.finmarket.ru/news/3879369
0 growth in October due to agriculture production drop, mining and transportation, due to seasonal factor (makes sense for agriculture, not sure about other two). What levied this loss is manufacturing profits increased. But, GDP growth for first 10 months (jan-oct) stood at 0.7% (better than most figures so far) and disposable income has increased by 2% average.

Not bad but could be much better. I am waiting till all these new businesses open up and production will go up.

Looks like our hero Glazyev blasted the Russian central bank:

http://russia-insider.com/en/2014/12/01/06-58-57pm/suchan_glazyev

sepheronx wrote:Looks like our hero Glazyev blasted the Russian central bank:

http://russia-insider.com/en/2014/12/01/06-58-57pm/suchan_glazyev

The original article in Russian is way too long winded. The main point is that the CBR
is jacking up interest rates to the point where most companies cannot borrow the money since they
cannot pay off the interest. He does not spend enough time to tell his readers that the
interest rate is based on a faulty definition of inflation in Russia. The CBR is also indirectly
propping up the ruble exchange rate with a high interest policy. Being run by monetarist
worms it is fixated on the money and not on the real economy. Monetarists worship money
and think it exists all by itself. Money has not function other than economic transactions.
No economy, no meaning to the money.

Monetarists should be lined up against the wall and shot. If there is demand for money by
the real sector then clearly you cannot have a situation of hyperinflation. Hyperinflation is
only achieved when you keep printing money when there is no demand for it. As I posted
before, the Russian economy is still in a transition state and is in the process of monetization.
(BTW, zerohedge and others use the term monetization in another sense, they are talking
about conversion of debt into liquidity). Also, the Russian real sector is growing and has
had to borrow abroad since the interest rates are affordable. This is proof the CBR is a
detriment to the Russian economy.

http://www.finmarket.ru/main/article/3878947

This guy is saying there will be a recession in 2015 of 0.8% of gdp. His reason is.... sanctions and oil drop, as well as currency drop. That makes no sense. So while sanctions and currency drop happened this year, and oil glut, it doesnt effect it but next year? Mathematically, oil depreciation and currency depreciation balances out the loss. So math is wrong but this guy is right?

Something seems real odd here. I am figuring this prediction may be bs.

just an observation..
I just laugh at the anti Russia propaganda trolls and its media.. that say and repeat on discussion forums every day that Russia is doomed this or doomed that. that it will collapse because look oil at $65..and will lose 40 Billions every year because of sanctions by the west. But what they don't say is how Russia survived when oil was at $20 in 2000 when Putin came to power and how Russia survived in 2008 when was at $30 , neither of them say how much Russia will have lost if they do nothing in crimea and allow NATO to install a military base there.. How seriously dangerous and expensive will have been for Russia to have NATO there.. Imagine the nazis bombing russian border every day for years causing a huge anger and divisions in Russia ,one side asking for war against Ukraine (that will seriously damage russia economy) and another side asking for peace.. while civilians are killed every week.. It will have been a nightmare for Putin and will have destroyed the unity of Russia and the support in Putin. All said , taking Crimea ,was worth of any sanctions in the world from the west.. no matter what.. it was the future of Russia as one nation what was at risk..and fortunately they moved fast and took crimea.


on another note i have a question..

sepheronx wrote:Looks like our hero Glazyev blasted the Russian central bank:

http://russia-insider.com/en/2014/12/01/06-58-57pm/suchan_glazyev

Im far from expert in economy..  so many things need to learn.. but so far it looks to be Glazyev
is wrong.. for many reasons..  I cannot believe.. Putin was close to Risk a major world war with US over Syria.. or order its army to invade Crimea and risk a war with NATO..  but at home.. he will allow a the head of the central bank to sabotage Russia and the quality of life of 150 millions of Russian citizens. That makes no sense.. The central Bank its administration live not in the moon.. but in Russia.. and it will be very easy for Putin to get rid of any enemy of the nation.. arrest them as he have done with others in the past..  The head of Russian bank was hired by Putin as economic advisor assistant  not a long time ago..  So i find hard to believe that Russia government do not have control of their own bank.. and its own policies as Glazyev claims..  He even told that the universal  payment transaction cards that Putin Ordered was sabotage by the central bank.. but in some other media .. i saw reports of some regions in Russia already receiving the new payment cards. The central bank even owns near 60% Sberbank who was under sanctions by US Government..and yet Glazyev claims Russia central bank is on bed with the Americans bank to destroy Russia..  i simply do not understand how his claims can be any true. He claims Russia media says this or that.. using it as reference of his claims .. but does not mention that most Russian media or a significant part is owned by Foreign investors.. The whole story of Glazyev does not make much sense of a Central Bank in bed with the west seeking to destroy Russia.   The whole policy of allowing the RUble to free float  as the central bank is pushing.. also makes sense to me to avoid speculation..

So maybe anyone with more knowledge can clear this?

How can Glazyev be correct.. in claiming Russia do not control its own bank and that actually is "in bed with the west" thats totally nonsense for me.. If Russia central bank was in bed.. long time ago Russia economy will have collapsed.

Vann7 wrote:

sepheronx wrote:Looks like our hero Glazyev blasted the Russian central bank:

http://russia-insider.com/en/2014/12/01/06-58-57pm/suchan_glazyev

Im far from expert in economy..  so many things need to learn.. but so far it looks to be Glazyev
is wrong.. for many reasons..  I cannot believe.. Putin was close to Risk a major world war with US over Syria.. or order its army to invade Crimea and risk a war with NATO..  but at home.. he will allow a the head of the central bank to sabotage Russia and the quality of life of 150 millions of Russian citizens. That makes no sense.. The central Bank its administration live not in the moon.. but in Russia.. and it will be very easy for Putin to get rid of any enemy of the nation.. arrest them as he have done with others in the past..  The head of Russian bank was hired by Putin as economic advisor assistant  not a long time ago..  So i find hard to believe that Russia government do not have control of their own bank.. and its own policies as Glazyev claims..  He even told that the universal  payment transaction cards that Putin Ordered was sabotage by the central bank.. but in some other media .. i saw reports of some regions in Russia already receiving the new payment cards. The central bank even owns near 60% Sberbank who was under sanctions by US Government..and yet Glazyev claims Russia central bank is on bed with the Americans bank to destroy Russia..  i simply do not understand how his claims can be any true. He claims Russia media says this or that.. using it as reference of his claims .. but does not mention that most Russian media or a significant part is owned by Foreign investors.. The whole story of Glazyev does not make much sense of a Central Bank in bed with the west seeking to destroy Russia.   The whole policy of allowing the RUble to free float  as the central bank is pushing.. also makes sense to me to avoid speculation..

So maybe anyone with more knowledge can clear this?

How can Glazyev be correct.. in claiming Russia do not control its own bank and that actually is "in bed with the west" thats totally nonsense for me.. If Russia central bank was in bed.. long time ago Russia economy will have collapsed.

More or less, Central Bank was privatized during the 90's and many people within the government (doesn't even need to be in Putin's party) has influence in CB. It is no secret that CB has worked against Russia for so long. Perfect example recently is the interest rates to so called fight the devaluation of the Ruble. In the end, all it did was fall anyway, and interests become so high that it is too hard to pay off public debt. The Russian auditors are doing an audit on CB and their misconducts. Too many powerful oligarches has too much power on CB. Many were saying this prior to Glazyev has. He pretty much confirmed it for us.

sepheronx wrote:
More or less, Central Bank was privatized during the 90's and many people within the government (doesn't even need to be in Putin's party) has influence in CB.  It is no secret that CB has worked against Russia for so long.  Perfect example recently is the interest rates to so called fight the devaluation of the Ruble.  In the end, all it did was fall anyway, and interests become so high that it is too hard to pay off public debt.  The Russian auditors are doing an audit on CB and their misconducts.  Too many powerful oligarches has too much power on CB.  Many were saying this prior to Glazyev has.  He pretty much confirmed it for us.

But how could Putin with all the support he have in Russia , not put in jail the people that damage Russia economy?
Contrary to USA , Russia do not have a leadership in power that is totally arrogant and only in politics just to become millionaire.. they have real leaders who cares about its society..  it will have been very very easy for Putin to take the easy path and take bribes from the west..become multi billionaire and just allow americans to do as they please with Russia and have NATO military bases inside Russia..and avoid all the fighting with the west.
I do not understand how can Putin have so much power and popularity in Russia , the army is with him.. the FSB too.. and Russian citizens too are with Putin.. how difficult it could be for Putin to change the constitution and nationalize the Russian central bank..  It doesn't makes any sense that Putin risk a world war with the west and his own life too.. but at the same time do nothing about his central bank ..if it is true that is in bed with the west?

Do any of this make sense?  
it will be very easy for Putin to get the control of the bank IF it was in bed of the west.. Pass any law he wanted..
i don't see a problem.. i only see a conflicting logic.. of fighting enemies outside and doing nothing with the enemies inside. Putin goes as far as to do a pact with his enemies Turkey with a pipeline, putting Russia economy in the first place . but inside he do nothing against a couple of civilians destroying his nation economy?  there have to be a less conspirational side of the story.. other than Russia central bank is in bed with the american banks .. while putin fight externally the american banks domination with BRICS.              This fail all logic. i can't see any logic.. it will be like a policeman fighting crime on the streets.. defending innocents civilians.. but if the criminals enter his house ,he allows them to kill his family?    Thats something extremely insane to believe.. specially when the central bank leadership was put there by Putin and the Russian government.

Even if we could say.. ok the russian government and united party of Russia is against Putin.. But then you have Medvedev the leader of United party and the leader of so called pro west factions..visiting Crimea and supporting Putin actions in ukraine?.. is like as if there was 3 powers in Russia.. Putin.. United party of Russia with medvedev and the central bank.. But the bank directive is elected by the people in  power ? do any of this make sense?>     i can't understand ..    it will be impossible with putin popularity and support of medvedev and duma who also welcomed Putin actions in Crimea.. to have a bank.. that neither Putin ,medvedev or the  kremlin can control or force to be aligned with the will of Russian citizens..?  This even become more ridiculous to believe (of a powerful Bank that putin cannot control) when Putin previously have arrested the more richest people in Russia.. who betrayed their nation and tried to damage its economy selling its energy to american companies.. so you can't neither say billionaires elites controls Russia or Putin..Because Putin have experience puting in jail the elite in Russia. is actually the other way.. the billionaires against Putin..that trying to sell the nation to the west.. LEFT the country and seek refuge in UK and Europe..  So all said.. nothing of this make sense from a logical point of view.

-For me makes sense to let the ruble to free float without intervention.. previous interventions cost billions and
helps nothing. only give an illusion of ruble improving abit but for a very small time .
-Its make complete sense that Russia government keep interest high and prefer companies to take their loans in the west.  why? Because There is an economic war against Russia that began when the soviet union collapsed ,(to finish the job) and Russia expect a total trade blockade from the west.. So if the west blockade all trade with Russia..simply Russia don't pay their debts.

This is why Russian Government Pipelines the money they used to build them.. came from nothing less that the IMF.
If  a major war start Russia will have US$ 800billions in savings for loans they will have not to pay for a long time until the war last if ever.

So you see is not as black and white the picture.. Its completely economically tactical to take loans from your
enemies.. so they later think twice before sabotaging your economy completely or else they are not paid..

the way i see it.. Putin strategy , its foreign policy..is clear that is highly focused to take the maximum possible profits of any event or any situation whether is good or bad.. but also without ignoring security of Russia.so this is why you see Putin doing mayor pipelines deals with Turkey that is attacking their allies and even trying to tolerate Saudi arabia which finance terrorist in souther Russia. This is why they avoid war with Ukraine and even tolerate a few of their civilians killed in their own territory. as this is why it is said Russia have no friends.. because they can do business with India.. but if the can make a deal with pakistan safely without losing India they will do it too. Why he do major business with Turkey in one side.. but in the other fight their actions in Syria.. LOL But is not a contradiction .. simply Putin see everything in terms of economical cost.. versus humanitarian help. So they will continue helping Syria for humanitarian reasons ,including weapons .but will not send his army openly to not damage his economy.. The whole Oil price war.. im sure was already planned for a long time.. and the original plan by the west was to have Russian army officially invading and in the middle of a war with a another nation the more the better.. But they failed to lure Russian into a war with Turkey and Ukraine.. so this is why they will be able to more easily adjust to the sanctions of the west and oil prices. This is also why Russian Government media was claiming Putin warned USA to attack Saudi Arabia if they attack Syria.. Why Saudi Arabia? Because doing that will increase the price of oil to the heavens.. lol and at the same time force US to stop their attacks in Syria.. So watch Saudi Arabia.. and its oil fields..thats the first nation that ill be attacked if Russia goes to a war in middle east.

Putin is not as powerful as he is made out to be in the western propaganda chorus and its echo chamber in the liberast Russian media.
We hear all the time of slides into authoritarianism, but Russia is ruled by consensus. It is the USA that is not ruled by consensus.
It is ruled via a circus distraction and the difference between Obama and George W. is negligible.

Putin does not have thousands of minions in key positions pushing an alternative economic model. For good or bad Russia imported
western capitalism and neoliberal economics and is going to try to make it work. But that is a subject for elsewhere.

Putin may be very popular in Russia right now, but that does not translate into a total free hand. Imagine that, a Russian leader
who cannot impose his will on the country!

He would require support from majority of oligarchs and the public in order to nationalize the CB. In this case, I think it is slowly gonna happen, but not yet. I noticed that the Russian government sidesteps the central bank by using reserves from budget in order to create venture funds and other development funds that will end up in the hands of the public (or businesses) in order to diversify. That is why there is billions here and there that is granted to major companies in order to build up industries. Creation of groups like Rostec, Rusnano and UAC are examples of this: this is where they can put a boat load of money into these organizations that end up being the ones who actually fund the Russian economy by investing in companies (public or private) to develop what is actually needed in the Russian economy. If they could create a bank that was apart from the CB, then they would do it, but the CB dictates who can bank in Russia and how they bank. I think closest to be able to sidestep it is Gazprombank as it is owned by Gazprom itself. I doubt CB works directly for West but their policies are very similar to many other CB's in other countries in Europe where they horde money, and place it in various locations in western countries (sberbanks fedex is not in Russia). Technically, CB is not allowed to have a bank of their own, but they own majority share of Sberbank (51%) and this could be one of the key tickets to strip it away from CB and bring all of Russias forex back home and used in the domestic development. As well, there is obvious growing hatred for CB (it is under investigation, Glayzev's statements, the recent talk about bringing back sberbanks forex....

in nature adaptive and flexible survive... so there will be some cuts and its normal ,and people should accept it if current trends continue...

so, continue pak-fa ,cancel longrange bomber?
stop upgrading mig-31 and su-27? ,but continue with new su-35bm production?
cut prospective destroyers and carriers ,continue fregates and patrol ships?
cut boomer submarines by 1-2?
freeze armata project for now, and continue upgrading t-72 and new kurganets?
less equipment for infantry?
continue s-500 development and eventual production , but stop s-400 production?
opinions anyone?

I don't think that there must be any program cuts. Russian economy is OK for the moment and the projection is stable.

Sorry for a little bit of spam but lots of important news came out today that will have profound influence on Russian economy.

Russia for 10 months increased gold production by 17.6% - up to 247.98 tons

Russian President promised to freeze taxes and gave a chance to runaway capital

Russia's international reserves from 21 to 28 November increased to $ 420.5 billion

Russia, India to sign about 15 agreements during Putin’s visit – Alexander Kadakinh

Ulyukayev: implementation of the deal with Iran may start this year

Putin called for a doubling of the volume of road construction in Russia

Putin: Russia must reduce costs and inefficient spending budget

Putin: the freedom of the economy - the answer to external constraints

Putin: it is necessary to discourage speculators hunting play on ruble exchange rate fluctuations

Putin: small business, work begins, to provide benefits

[url=Russia is open to foreign investment, said Putin]Russia is open to foreign investment, said Putin[/url]

I'd like to hear sepheronx opinion with respect to the CNN report in the opening of this vid.

Rmf wrote:in nature adaptive and flexible survive... so there will be some cuts and its normal ,and people should accept it if current trends continue...

so, continue pak-fa ,cancel longrange bomber?
stop upgrading mig-31 and su-27? ,but continue with new su-35bm production?
cut prospective destroyers and carriers ,continue fregates and patrol ships?
cut boomer submarines by 1-2?
freeze armata project for now, and continue upgrading t-72 and new kurganets?
less equipment for infantry?
continue s-500 development and eventual production , but stop s-400 production?
opinions anyone?

How Russian gov did it with sap programs, is genious. They wouldnt need to cut anything, but extend deadline so that budgetis stretched out a but.

They cant afford to cut military production right now. So instead of cutting it, just extend deadline.

So far, there isnt a change in budget. It is still the same.

AlfaT8 wrote:I'd like to hear sepheronx opinion with respect to the CNN report in the opening of this vid.

This reminds me reports earlier in the year that Chinese economy is entering reception and imminent collapse because developing by a mediocre...7,5%
Only retardos like RP, traitors like TR1 or panic kings like Austin can give basis in this crap. Basically I whip my ass with such "analysis".

Hannibal Barca wrote:

AlfaT8 wrote:I'd like to hear sepheronx opinion with respect to the CNN report in the opening of this vid.

This reminds me reports earlier in the year that Chinese economy is entering reception and imminent collapse because developing by a mediocre...7,5%
Only retardos like RP, traitors like TR1 or panic kings like Austin can give basis in this crap. Basically I whip my ass with such "analysis".

No offense, but your typos created some funny lines: "whip my ass". Are you a masochist

"entering reception". Is there some gigantic service agency where economies go for help?

Anyone using the two bit propaganda agency CNN as a source may as well be repeating Kiev regime government press releases.
I recall watching CNN back in 1999 when they were trying to paint Russian forces beating back the invasion of Dagestan by
Chechen Wahabbi warlords as a "Russian invasion". Seriously now, this was not local Dagestani resistance and Dagestan is
part of Russia. Russia "invaded itself".

Another gem of excrement from CNN was their portrayal of passenger trains arriving into FYROM (Macedonia) from Kosovo
as similar to cattle trains carrying Jews to death camps. This was an epic non sequitur that damaged your brain just
by listening to it. The "Kosovars" in those trains were getting to safety. This was the opposite of what CNN was smearing.
But CNN has a job and that job is hate propaganda. Serbs had to be compared to Nazis even if there was no point of
comparison.

Looks like Western Intelligence via FII is involved on Rouble Attack

Foreign investment funds involved in attack on ruble, says foreign intelligence chief

“No one wants to see a strong and independent Russia” he said

MOSCOW, December 4. /TASS/. The U.S. and its allies are seeking to change state power in Moscow through sanctions and attacks on the ruble and the oil price, Mikhail Fradkov, the director of Russia’s Foreign Intelligence Service said in an interview with Bloomberg on Thursday.

“Such a desire has been noticed, it’s a small secret” he said. “No one wants to see a strong and independent Russia.”

Foreign investment funds are tightly involved in the ongoing jobber attack on the Russian ruble and they are taking part in it via intermediaries.

“Any speculation has specific schemes and the schemes have a number of participants,” he said.

Fradkov also believes that a decline of more than 30% in oil prices is caused partly by U.S. actions, which aim to force Russia to focus entirely on the solution of its domestic problems.

Russian President Vladimir Putin said in his annual state-of-the-nation address earlier on the same day the Russian authorities knew who was behind the bearish play against the ruble. He demanded that the Finance Ministry and the Central Bank of Russia /CBR/ punish the jobbers by every means possible.

Putin said the CBR had enough instruments for this, although he made no further specifications.

Hannibal Barca wrote:

AlfaT8 wrote:I'd like to hear sepheronx opinion with respect to the CNN report in the opening of this vid.

This reminds me reports earlier in the year that Chinese economy is entering reception and imminent collapse because developing by a mediocre...7,5%
Only retardos like RP, traitors like TR1 or panic kings like Austin can give basis in this crap. Basically I whip my ass with such "analysis".

Traitors LMAO!

Traitors = not parroting the government line.

You are the kind of guy who goose steps to wherever his dear leader orders him.