Russian Economy General News: #3

My solution to the current crisis may be Putin can declare this in a year not what I say but something along these lines.

1 ) Stop Selling Oil & Gas in USD , Start asking Yuan and Rouble.

2 ) Cut a deal with China , In return for selling Oil & Gas in Yuan and replacing 40 % of USD reserves thats the propotion CBR holds now ( 45 % USD , 40 % EURO , 15 % Gold and other currency like Australian Dollar , Canadian Dollar , UK Pound )

Replace it with 50 % Yuan ( Reduce USD by 30 % and Euro by 20 % )

Ask China in return to invest in the next 10 years in Russian Economy around 1 Trillion USD equivalent Yuan , it can be Oil & Gas or any thing chinese & Russian wishes.

3 ) Beyond Yuan , Also peg Rouble against Gold.


This should go long way in making Rouble Stronger and Getting out of Anglo-Saxon Blackmail in Economy.


Let me know what All think about it.

Kimppis wrote:

Austin wrote:Should give an idea how MIC is driving Russian Economy

"Collapsing military programs will result in increased costs for the state"

I can't wait to see articles in the western media celebrating how Russian military spending has collapsed. "Evil Putin's devious plan has been foiled!!!11" I'm not an economist, but now that the ruble is down, and nominal GDP is down, the military budget will also be low in dollar terms, right?

Technically, the concept of GDP nominal is flawed because it is all compared to US dollar terms. Instantly Russias GDP fell because the value of its currency dropped a lot, but, productivity in Russia has increased. So in dollar terms, yes, defense spending and all alike has dropped. In practical terms though, it is more or less the same. Since a huge portion of Russian weapon systems use all Russian components or foreign components made in Russia, overall costs will be less. GDP nominal compares what your country produces in usd terms (gdp system was created back in 30's by a senator from US to measure productivity of each state). Since a large portion of Russian defense goods are made in Russia, it can effect them little unless defense companies hike costs which would be somewhat an issue. That said, most defense agencies in Russia are state owned and they do not pay ridiculous prices. So you need to look at it in PPP terms where Russia gets it cheaper (so they get more bang for their ruble sort of say).

In economic terms for average person, it greatly effects them due to many average people import goods. But this will also increase demand for local production. But it will be harder to start it thanks to Russian central bank.

As expected .... from Saudi apes

Saudi Oil Minister Says Russia Doesn't 'Deserve Market Share

Somewhat bigger but nothing Russia has not endured for the past 15+ years

Rosstat: Inflation in Russia since the beginning of the year to 22 December reached 10.4%

and some good news

"Gazprom" has received $ 1.65 billion of "Naftogaz" in payment of debt

Siluanov: at an oil price of $ 60 per barrel, the Russian Federation will be creditworthy

"Gazprom" will buy the entire LNG floating terminal in Colombia

Medvedev called for support of small business in Russia

I do really hope Russia brings Iran into Customs Union. At that point, a free trade deal with Iran can be a huge boost to Russias economy. They would be able to sell Russian products in Iran for a good price thus being competitive. Agricultural, construction equipment, military and otger heavy industrial production would do wonders in Iran. But before they can do this, Russia has to warm relations with Iran. For some reason, Gazprom and Rosneft are still reluctant to invest in Iran because of sanctions on Iran (makes no sense because they are sanctioned themselves) and Russia needs to sell those S-300's to Iran.

lulldapull wrote:Looks like China has to bail out Russia. The Chinese are providing funds already before Russia starts defaulting and there is a run on the banks.

CHINA is not bailing Russia.. the Central Bank in Russia have enough reserves for its financial needs for a couple of years.. if Oil maintain its low price.. What i think CHINA did was swap currency with Russia ,that is not the same.

About Kudrin.. when the crisis ends he needs to be shot in public for treason . What he did ,trying to provoke Panic
(which is the most dangerous weapon for governments economy to fail) should not be forgotten ,and he needs to be put in the same jail of nalvany for 10 years and later shot. fortunately Russia Ruble is bouncing ,since Putin conference and since China announcement of fully supporting Russia in anything they need if asked to do so.

about IRAN.. Russia needs to be careful with them.. their president after Europe block south stream, was saying to be ready to replace Russia pipeline.. not even allowing the differences between Russia and EU to resolve. Aside that is a muslin country and Russia wants to get rid of the growing Islam menace to their nation. This is why Russia is heavily promoting Tourism in latin countries for their Caucasus. When Ukraine Collapse it will significatly boost the Christian community in Russia. Since Ukraine have 40 millions citizens.. at least 10 millions will move to Russia seeking for jobs.. IRAN is a nation that Russia should have friendship but from a distance. Russia instead should seek a major alliance with Latin america from Mexico To Argentina.. they are not taking advantage of the popularity Russia have there. and there is a Lot of talent that Russia can recruit from there.. aside there is a lot of business for Russia there.. that until now US take advantage. Something really wrong Russia is doing for Brazil buying European fighters jets and not Su-35 or Pak-FA. Russia needs to be more efficient is promoting their technology.

Interesting interview with Paul Craig Roberts:

BTW any one who can read russian , Is Finance Minister proposing using 70 % of Reserve Fund for 2015-2017 budget ie 3 years or just for 2015 ?

the Ministry of Finance proposed to allocate 70% of the Reserve Fund on the economy


http://ria.ru/economy/20141225/1040066145.html

Russia has used a lot of resources and money to help out the Ruble, is this a good strategy or not? Should they be doing this?

par far wrote:Russia has used a lot of resources and money to help out the Ruble,  is this a good strategy or not? Should they be doing this?  

They used nearly 25 billions from their devise reserve for december. They got now 398 billions in it.
If we do comparison with the crisis in 2008 this is not even 15% of the value which Russia spent back than.

kvs wrote:An important point to remember is that the ruble was not freely floating until very recently so the CBR was spending billions
of dollars propping it up.   After the change in policy they have stopped spending reserve money.   Instead they limit their
"interventions" to things like jacking up the REPO acution rates (from 10.5% to 17%).   This is not the interest rate for borrowers
but for short term lending between banks.  A way to control liquidity of the ruble.  

Anyway, the ruble is back down into the low 50s to the dollar without any reserve money being spent.  Russia has snookered
Soros and the rest of the maggots trying to take down the currency.

Didn't know this. Thanks.

And finally - import substitution program is here  

The Federation Council approved the law on industrial policy of Russia


and some other news:

approx. 1.3 GDP deficit during 2015

Siluanov: RF budget deficit in 2015 will be higher than the planned 0.6% of GDP

Ulyukayev  approx 37 bin $ in deficit which is not critical but also not that much

Ulyukayev estimated the budget deficit in 2015 to 2 trillion rubles at an oil price of $ 60

0.7% GDP surplus of Russian federal budget

Ministry of Finance: budget surplus of the Russian Federation in 2014 will amount to 0.7% of GDP

and whats important

Russian Central Bank’s key rate should be lowered in first quarter of 2015 — minister

Pirey wrote:

par far wrote:Russia has used a lot of resources and money to help out the Ruble,  is this a good strategy or not? Should they be doing this?  

They used nearly 25 billions from their devise reserve for december. They got now 398 billions in it.
If we do comparison with the crisis in 2008 this is not even 15% of the value which Russia spent back than.

It's not a good strategy whatsoever. Instead of blowing away their forex reserves like the monetarists are foolishly doing, they can nationalize the Russian Central Bank, fire Elvira Nabulina, replace her with Sergey Glazyev, and declare capital and exchange controls and call it a day.

CB: Russia's international reserves fell below $ 400 billion due to currency Repo and "swap"



Who understands more so could explain bolded the part.

"The bulk of the reduction of international reserves due to the placement of foreign currency in Russian banks on a return basis (repos, swaps) to overcome the shortage of foreign currency liquidity. These funds will return to the reserves, but at the balance sheet date, in accordance with the international methodology, they were not included in the calculation reserves. In addition, a reduction of reserves due to the revaluation of foreign currency due to the strengthening of the dollar against the euro ", - told the Bank of Russia.

Viktor wrote:

Ulyukayev estimated the budget deficit in 2015 to 2 trillion rubles at an oil price of $ 60

2 Trillion is a big number since they would be replacing it with Reserve Fund which has mount 4386,91

http://www.minfin.ru/en/reservefund/statistics/amount/index.php?id_4=5817

Hopefully if oil prices say go up to $70 USD then that amount would decrease slightly.

What happened to reduce budget expenditure by 10 %

Nice

China to launch yuan-ruble swaps from Dec 29


and Russian alternative to SWIFT has started to operate

Russian banks admitted to regulator’s alternative to SWIFT for internal banking operations

interesting

Chinese Foreign Ministry: China buys Russian oil at a higher price

hopefully

Russia may develop Northern Sea Route project jointly with Asian countries — deputy PM

sometimes I go to yahoo news to browse international events and lately when the ukraine incident started I noticed an increase of completely exaggerated and negative news about Russia in that website. It seems to me that these anti Russian publications are really trying hard to portray the situation in the Russian economy as bad as they can.

Thats part of concentrated anti-Russia campaign in Western MSM to create a general negitive feeling about Russia.

Information Warfare at its best and its a co-ordinated effort.

I ignore Western MSM and rely on offical info from ria or tass or russia-insider

The Russian move to limit the effect of sanctions on its defense sector.


http://rbth.com/defence/2014/12/27/russian_defense_sector_eyes_change_of_focus_to_limit_effect_of_sancti_42601.html

Word has it that the CRB placed informal capital and exchange controls on the Rouble, maybe when China said they would "support the Russian economy" they meant that they would give advice on how to handle currency speculation, something the Chinese had to fight some 4 years ago with a so-called 'dirty float' of the Yuan. A dirty float being that your national currency is 'semi-floating' while still having 'some' capital and exchange controls. If it's true than it's only a matter of time before President B.O. will label Russia a 'currency manipulator'.

kvs wrote:http://twitter.com/swarog09/status/548771413025624064/photo/1

Kudrin with assorted other well known filth planning a Maidan in Russia.

Kudrin needs a one way ticket to NATO.

'NATO' is not how you spell guillotine. Please correct your mistake.

kvs wrote:http://twitter.com/swarog09/status/548771413025624064/photo/1

Kudrin with assorted other well known filth planning a Maidan in Russia.

Kudrin needs a one way ticket to NATO.

I don't know this asshole has not be shot.

Russia is giving coal to Ukraine, that is just plain stupid(unless it is to Eastern Ukraine).