Russian Economy General News: #3

Interesting Interview


Ruble Collapse Is No Big Deal Within Russia: Tinkov


http://www.bloomberg.com/video/ruble-collapse-is-no-big-deal-within-russia-tinkov-LKo4_atyTiyFug9SJSuchw.html

Hannibal Barca wrote:

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".

Yah I keep forgetting you are the only John Rambo here

Quit it with the personal attacks people, Bullying will not be tolerated.


BTW KVS... I remember watching a CNN infomercial in the late 1980s before the Soviets withdrew from Afghanistan and it had various US Hawks talking about Gorby and about how he was promising to withdraw from Afghanistan but nothing was happening so they should not help him.

Well they did withdraw and they didn't help him and we know what happened then.

The funny thing is that they finished the program with footage of the heroic Muj praying on prayer mats stating that they didn't know what their future was but if the Soviets did leave it was going to be all sunshine and rainbows...

they had no idea US forces would be there a decade and a half later... and still no sunshine and rainbows... unless you take the drugs of course...

^^ I kind of agree to this when Putin says if it was not Ukraine we would be attacked on some other issue.

I closely watched how the entire Olympics was greatly over run by Anti-Gay Law campaign in the west when Gay is not banned in Russia and they just dissallowed minors from it.

Compared that in India where Gay is a Crime punishable by jail and in all Islamic Country where being a Gay could also mean loosing your life and no Western media ever highlights it.

Never seen so much of co-ordinated effort in the West Media to mailgn Russia and I think this will continue irrespective who is in power Putin or some one else

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

Wow, got a response from practicaly everyone except sepheronx.

The US and their Zionist masters know that they cannot go to war with Russia because they would be destroyed, so they are waging an economic war on Russia on Russia be devaluing the Rouble, Russia has respond and soon.

Russian foreign exchange reserves sufficient to cover 2015 external debt needs - Moody’s

Moody’s says in case of necessity, Russia’s authorities may use two special savings Funds - the National Wealth Fund (NWF) and Reserve Fund (RF) - for paying external debt

NEW YORK, December 6. /TASS/. The Russian Central Bank's foreign exchange reserves (FXRs) are sufficient to cover the country's external debt obligations next year, Moody's Investors Service (Moody's) has said in its report.

As of December 1, the Bank of Russia’s FXRs totaled $361 billion. “This is more than sufficient to cover the country's external debt payment obligations through 2015,” which amount to $130 billion across government, banks and corporate debt, the ratings agency says.

Moody’s says in case of necessity, Russia’s authorities may use two special savings Funds - the National Wealth Fund (NWF) and Reserve Fund (RF) - for paying external debt.

“The need for such action could arise if oil prices were to fall still further, eroding the current account surplus, or if there were a further escalation of tensions/international sanctions,” the report says.

The report notes that the Central Bank’s FX sales to support the ruble dropped from $29 billion in October to $1 billion in November after the decision to switch to a freely floating ruble.

Meanwhile, the severe pressure on the ruble resulting from a fall in oil prices poses a significant challenge to the new exchange rate policy and the CBR will “intervene more aggressively to support the ruble if it believes financial stability is threatened.”.

It seems the actual Forex Reserves stands at $360 out of the $420 Total Forex Reserves.

Which means around $55 Billion is in Gold Reserves.

$130 Billion needs to be paid next year ....that leaves about $230 Billion Reserves,


Now the CB is also burning money defending Rouble .....which makes it unpredictable how much Forex will they end up having 6-8 months down the line.


Can some one tell me how more Forex will they end up adding with Oil and Gas Sales this year ? IS it possible to add rough estimate

Well my favorite still is the one with China stagnating with 7.5% increase year to year or collapsing under the ...6% of public debt.

kvs wrote:

Austin wrote:It seems the actual Forex Reserves stands at $360 out of the $420 Total Forex Reserves.

Which means around $55 Billion is in Gold Reserves.

$130 Billion needs to be paid next year ....that leaves about $230 Billion Reserves,


Now the CB is also burning money defending Rouble .....which makes it unpredictable how much Forex will they end up having 6-8 months down the line.


Can some one tell me how more Forex will they end up adding with Oil and Gas Sales this year ? IS it possible to add rough estimate

The Russian state DOES NOT NEED to pay $130 billion next year and so this has ZERO to do with forex reserves of Russia.
It is common by the media monkeys to ALWAYS combine ALL Russian debt private and foreign and to NEVER do this when
they discuss NATO countries.   It is sad to see people falling for this crap and posting it here.

But what if say government or partially government owned companies like Rosneft . Gazprom , Sebrbank etc needs to pay they debt.

In event if these companies are blocked from getting loan from EU/US or ability to reschedule their debt then the Government has to step in and pay their liability ......else they cant afford to default ? Need some clarity here


BTW can any one tell me how much at Brent $70 if Russia exports 500 million tons of oil would earn them ?

Hannibal Barca wrote:Well my favorite still is the one with China stagnating with 7.5% increase year to year  or collapsing under the ...6% of public debt.

I know it's crazy how people claim that China is stagnating *cough, Gordon Chang, cough*, if anything the world is stagnating and the lack of demand world wide for financial transactions is lowering China's true growth. If the world wasn't going through a recession-depression, China would have 13% growth year-in-year-out.

Austin wrote:

kvs wrote:

Austin wrote:It seems the actual Forex Reserves stands at $360 out of the $420 Total Forex Reserves.

Which means around $55 Billion is in Gold Reserves.

$130 Billion needs to be paid next year ....that leaves about $230 Billion Reserves,


Now the CB is also burning money defending Rouble .....which makes it unpredictable how much Forex will they end up having 6-8 months down the line.


Can some one tell me how more Forex will they end up adding with Oil and Gas Sales this year ? IS it possible to add rough estimate

The Russian state DOES NOT NEED to pay $130 billion next year and so this has ZERO to do with forex reserves of Russia.
It is common by the media monkeys to ALWAYS combine ALL Russian debt private and foreign and to NEVER do this when
they discuss NATO countries.   It is sad to see people falling for this crap and posting it here.

But what if say government or partially government owned companies like Rosneft . Gazprom , Sebrbank etc needs to pay they debt.

1.) Partially owned govt. companies? Austin were are you getting your information from? It's well known fact that the Russian govt. owns the controlling shares of Rosneft and it's parent company Gazprom (were talking about 51% of shares), and I'm not so sure on how much shares the govt. owns of Sebrbank.

2.) What makes you think Russia should pay that external debt? If it's debt owed to NATO member countries, than the threat of NATO's Casus Belli of military build up at Russia's borders, plus the economic sanctions is justification to refuse to pay those countries.  Russia should declare a debt moratorium, and refuse to pay. Forget about the discredit rating agencies such as Moody's and Standard Poor's, China and India will still invest in Russia heavily...which is way more important than having Britain, France, or America asset-strip your country in a 'business friendly environment'. Only friendly countries should have debt payed back to them.

Having said this the devaluation of Ruble start becoming worrisome. With this rate of climb not only inflation will hit double digit levels but also bonds will start rising beyond the safe area.

I wonder why they couldnt reign in speculators inspite of Putin saying in his speech that CB knows who they are

And SVR chief stating these are FII working through intermediaries and each attack on rouble is well planned.

Heck the SVR/FSB would have an economic division and they should take these people to task.

There are many countries dependent on Oil but with Oil Going down 40 % only the Rouble has depreciated 40 % the other currencies didnt go down to that extent

Putin ordered to stop currency speculation until December 25

Austin wrote:Putin ordered to stop currency speculation until December 25

Good news, reigning in on speculators is one of the first things you should do in these trying economic times.

Hannibal Barca wrote:Having said this the devaluation of Ruble start becoming worrisome. With this rate of climb not only inflation will hit double digit levels but also bonds will start rising beyond the safe area.  

The bond market is simply funny money. Ths is evident by the stocks of s&p 500.

That said, inflation part i agree with. They need to fight inflation. Ruble at 50/usd is safe. Any higher and problems are gonna arise.

kvs wrote:

sepheronx wrote:

Hannibal Barca wrote:Having said this the devaluation of Ruble start becoming worrisome. With this rate of climb not only inflation will hit double digit levels but also bonds will start rising beyond the safe area.  

The bond market is simply funny money. Ths is evident by the stocks of s&p 500.

That said, inflation part i agree with. They need to fight inflation. Ruble at 50/usd is safe. Any higher and problems are gonna arise.

I totally disagree.  Import prices are not what drives the overall Russian prices.   Where do you get the information that imports will
dominate Russian inflation.    The Russian CPI is mainly a fiction invented by the CBR.   I have not seen anywhere how it is calculated.
In the USA food prices are given a 0.13 weighting.   I suspect the Russian CPI has them weighted at 0.4 or 0.5.   Such differences in the
metrics make any comparison meaningless.   If you pay attention you will see that food prices in Canada are rising by over 7% per year.

This is true. But the value of products imported, can be based upon the value of the currency. For instance, the Ruble is 8/yuan so in the end, products from China are going to cost more than when the Ruble was 6/yuan. Russian prices though is local companies taking advantage of the situation and increased prices due to lack of proper competition. Unless milk from Daegestan is sold all over Russia, competing against Milk from Rostov, then there is true competition that will drive milk prices down.

In Canada, prices of milk for instance has actually increased, due to lack of competition, due to the fact that the few dairy companies left, have purchased all the smaller companies (Lucern purchased Manco Dairies in Dauphin Manitoba, the plant closed, and prices of milk went up).

It really comes down to how the local companies will compete with each other to drive down prices. Maybe more smaller companies whom are involved in it would be better. It seems many villages in Russia are transforming into some big agricultural communities where it is one giant company in each village. This in itself may be a big + as many villages in Russia are mostly just agricultural (be it meat in the areas more cold and cannot grow much, to grain and dairy in all the other regions), and these villages could become quite profitable as long as they get their own respective agricultural industry up and going (something that the mayors/heads of the villages should consider). That in itself will create competition. Avtovaz for instance has competition with Sollers for automobiles. Etc etc etc. As long as there are other companies in the same fields, they can become far more competitive.

As for the valuation of the Ruble, it has its + and -.

(+)
- Cheaper production
- goods become competitive due to lower prices on international market (Russia still has access to more than 66% of the world market)
- Other countries will see that they can get more value with their own respective currency in the Russian market
- Need less to get lots in terms of investments.
- When value of the exported goods are reduced, the lower of the currency, the less losses in its respective currency to those products. Good for nations who are high exporters and national budget is in its currency

(-)
- dramatically increased prices for imports
- less confidence in the market thus stock market drops significantly
- Prior investors may pull out due to losses (prior to devaluation. New investors may find it more attractive now. Especially poorer countries).
- Bond yields drop.

Problem with the stock market and bonds, is that it really is funny money. It used to have a meaning but these days, billions, if not trillions, are traded in microseconds and if someone even sneezes, the stocks will heavily fluctuate. See 2008 stock market crash as an example. Russia will have to just deal with the fact that their stocks are gonna drop and that outside of the country, besides some developing countries, their stocks may not be considered good for developed countries. This wont prevent companies from operating and such, but just means less access to outside funds. They will need to open their companies to other stock markets, local and foreign (Hong Kong, Singapore, Shanghai, Mumbai, etc).

Ahead of Putin's India visit, US warns not good time for business with Russia

magnumcromagnon wrote:

Austin wrote:Putin ordered to stop currency speculation until December 25

Good news, reigning in on speculators is one of the first things you should do in these trying economic times.

I hope so , The falling rouble is the only worry considering now Oil Market has stabilised between $60-70 so Rouble should also stabalise where it is now.

CB cant be running shows accoriding to speculators , instead it should be in driving seat rather then let speculators drive it.

Probably time to deal with these speculators with a very firm hand

kvs or some one can tell me what happens if Rouble currently pegged against USD/Euro moves to pegging against Yuan/Gold ?

Is that something possible and can be tried as long term solution ?

Was Going through latest CBR statistics ( 2014 )


FDI In Russia ( Q1 & Q2 ) -  $23.795 Billion  
http://www.cbr.ru/eng/statistics/credit_statistics/inv_in-country_e.xlsx

Russian Federation: Outward Foreign Direct Investments by Russian Residents,( Q1 & Q2 ) -  $32.915 Billion
http://www.cbr.ru/eng/statistics/credit_statistics/inv_out-country_e.xls

External Debt is Reduced too

http://www.cbr.ru/eng/statistics/print.aspx?file=credit_statistics/debt_est_new_e.htm&pid=svs&sid=itm_8394

External Debt of the Russian Federation as of September 2014 (estimate)
 $ 678.435 Billion