Russian Economy General News: #4

Karl Haushofer wrote:

sepheronx wrote:That is the beauty of sanctions. The decrease in the roubles value mixed in with politics has essentially created the enviornment where Russians have little choice but to buy Russian. Hence why rostechnazdor has increased both domestic and foreign sales. People whom were going to buy a dutch tractor now cannot afford it and buys russian. There will be some who buy the used foreign tractor or trawler, but if tariffs goes up, they wont even do that either.

Other way is to force the foreign companies to buy/make the parts locally.  The move to make Vladivostok free trade port will probably see a huge investments from foreign entities to set up manufacturing there.

Everything has its upsides and downsides. Sanctions are forcing Russians to buy more and more Russian products, but it also lessens the pressure from Russian companies to bring their quality up to global level. If Russians are going to buy their products in any case they might not invest as much to improvement of quality and efficiency.

That is true.  There may be less incentive.  But the beauty is that it seems these sanctions are not working as there are still plenty of new plants opening owned by foreign companies, whom are looking at localization of production and also look at exporting from Russia.  As well, Avtovaz is actually aiming to increase quality as larger sales are now export as domestic sales are down due to people tightening belts.

Also, lets be real here, quality of food from EU and North America is garbage.  It is factory farming and taste bland.  Even various Russians are saying that domestic food tastes better/fresher.

Also, quality is bullshit anywhere.  Chinese quality is garbage.  German quality is becoming garbage, etc.  If one looks at the Lemon guide on automobiles, you will find the highest ranking automobiles in reliability and quality are from Asia, like South Korea (Hyundai) or Japan (Toyota).

Karl Haushofer wrote:Soviet Union was a closed economy and thus the consumer products were usually crap compared to western products because there was no pressure on the Soviet economy to compete with the West in the domestic market since western products were not allowed in Soviet market.

Yet their exported goods were of better quality than domestic. Still seems to be in some cases.

But what is YOUR experience with the goods? Relying on someone else to say it is simply expecting nothing more than propaganda and usual bullshit. My experience is in some semiconductors and I see no difference in quality compared to South Korean ones. That could be very different than other stuff, but that is my experience.

In Yekaterinburg opened a new plant for the production of CNC machine tools

Shvabe has launched serial production of modern diagnostic device

In the Tyumen region launched a new dryer and screening plant

In Bashkortostan opened a new plant for the production of cranes

And the biggest one I posted in the other thread about oil and gas:

Gazprom and SIBUR signed the "contract of century" on the construction of the Amur GPP

791 billion Rouble contract!

sepheronx wrote:

But what is YOUR experience with the goods?  Relying on someone else to say it is simply expecting nothing more than propaganda and usual bullshit.  My experience is in some semiconductors and I see no difference in quality compared to South Korean ones.  That could be very different than other stuff, but that is my experience.

Depends on the industry. Our high-grade machinery still can't match japanese or german quality (based on interviews with shipyard directors), on the other hand it seems like our auto parts suppliers just keep getting better (lada's domestic component percentage keeps on growing). I don't think the stimulus is absent since most companies will want to export their product anyway. As long as the investment is there ( which it will be thanks to sanctions on alternatives) we'll get the quality we need eventualiy.

Maximmmm wrote:

sepheronx wrote:

But what is YOUR experience with the goods?  Relying on someone else to say it is simply expecting nothing more than propaganda and usual bullshit.  My experience is in some semiconductors and I see no difference in quality compared to South Korean ones.  That could be very different than other stuff, but that is my experience.

Depends on the industry. Our high-grade machinery still can't match japanese or german quality (based on interviews with shipyard directors), on the other hand it seems like our auto parts suppliers just keep getting better (lada's domestic component percentage keeps on growing). I don't think the stimulus is absent since most companies will want to export their product anyway. As long as the investment is there ( which it will be thanks to sanctions on alternatives) we'll get the quality we need eventualiy.

Shipyards are full of shit though, as evident to the issue on hand. I think it was on VPK.name or whatever that had the interview with the top navy admiral and he sounded not only stressed but perplexed to how the shipyards, no matter what they have done for the shipyards, still keep screwing up. It is getting bad to the point they are bringing in Military engineers to fix their issues.

So I would take the shipyard with a grain of salt in whatever they are saying. Sounds like they are trying to find a cop-out for their mistakes. Something I hear all the time at my workplace when employees get screamed at as to why they cannot make their targets, and they try to blame the equipment (the very equipment I deal with and take care of and I know work 100%).

Karl Haushofer wrote:Soviet Union was a closed economy and thus the consumer products were usually crap compared to western products because there was no pressure on the Soviet economy to compete with the West in the domestic market since western products were not allowed to be imported.

What a terrible analogy. Soviet Union was a closed economy due to the political climate, you know, communism and al that stuff. Just look at the upcoming Lada models, the Vesta and XRAY and tell me with a straight face that they look terrible. Again, terrible quality? I guess Apple doesn't know as much as you do when it chooses a Russian supplier for their sapphire glass.

All discussions about Russia are replete with inane projection. If we are going to start dissing Soviet cars then please
bugger off. The Niva was better than anything in the same size class in the west full stop. Western revisionist BS
would have you believe that Suzuki "invented" the compact SUV when the Niva was being sold long before the Suzuki
Vitara ever showed up:

http://suzuki-media.eu/home/-/news/view_content/24944/20+Years+of+the+Suzuki+Vitara/SUZ_EMW_LATEST_NEWS_WAR_suzlatestnewsportlet/maximized/1;jsessionid=3D3A769C5F65B591725185063602A083?redirect=http%3A%2F%2Fsuzuki-media.eu%2Fweb%2Fguest%2Fhome

The Niva was released in 1977 and puts the POS Vitara to shame. In the real world, details such as the robustness
of the suspension count for something and cupholders don't. I am living in a modern Canadian city and want a vehicle
that will not need thousands of dollars worth of suspension work (the roads are bad due to harsh winter conditions, you
don't have this problem over most of the US). My only choices are large SUVs, the Jeep and pickup trucks. If I want
something small I get a crap suspension. But I may get an LCD screen on the dash. Gee, thanks.

PapaDragon wrote:

kvs wrote:All discussions about Russia are replete with inane projection.   If we are going to start dissing Soviet cars then please
bugger off.   The Niva was better than anything in the same size class in the west full stop.   Western revisionist BS
would have you believe that Suzuki "invented" the compact SUV when the Niva was being sold long before the Suzuki
Vitara ever showed up:

http://suzuki-media.eu/home/-/news/view_content/24944/20+Years+of+the+Suzuki+Vitara/SUZ_EMW_LATEST_NEWS_WAR_suzlatestnewsportlet/maximized/1;jsessionid=3D3A769C5F65B591725185063602A083?redirect=http%3A%2F%2Fsuzuki-media.eu%2Fweb%2Fguest%2Fhome

The Niva was released in 1977 and puts the POS Vitara to shame.   In the real world, details such as the robustness
of the suspension count for something and cupholders don't.  I am living in a modern Canadian city and want a vehicle
that will not need thousands of dollars worth of suspension work (the roads are bad due to harsh winter conditions, you
don't have this problem over most of the US).   My only choices are large SUVs, the Jeep and pickup trucks.   If I want
something small I get a crap suspension.   But I may get an LCD screen on the dash.    Gee, thanks.

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

Niva being world's first SUV is no secret. That piece of info is even in English Wikipedia.

But I have seen articles from car magazines that repeat the lie about the Vitara.

The most important thing is that the suspension on the Niva is something you cannot get in this size class from
western cars even today. Better in the west, my a**.

Thats funny. My buddy and I were talking and his dad used to have two ladas back in the 70's and 80's and I think one was a Niva. He apparently swore by it and his dad had no problems doing maintenance himself on it. This was in Toronto Ontario back then (chief of police southern district). Guy is a hero and has great taste.

You have to know, that effects of economical changes always come later. Sanctions bring a boost in agronomy and industrial production with opening new factories and capabilities. This also bring new jobs in real economy, where people get payments from companies for which they work and not from the budget. More employed people in real economy also bring more money from taxes to budget and what is more important is, when more people have jobs and payments, more people could buy products they need. Maybe they could not afford the most expensive products, but could buy cheaper. Point is, when more people have payments, more products they could buy, more products domestic industry could produce and sell and this open new jobs. Stable production of goods is also good for export. Russian products could bring high quality for low price as they have everything at home and no need to import and they have low taxes and low debt.

Not sure what to make of it , they are betting on further strengthening of Dollah due to upcoming interest rate hike

Russia’s Terrible Bet on the Euro and Gold

I though feel Russia should still buy Gold and buy a lot since prices are down , Gold is a long term asset , 5 years down the line Russia would be happy they bet on gold

Also dump some Euro and USD and bet on Chinese Renminbi , The propotion of Reserves IMHO should be something like

Gold 35 %
Dollah 30
Euro 22
Yuan 10 %
Other Currency 3 %

Gold is getting attacked by speculators no doubt, but probably to be used as a reason to buy.

Like you said, gold is in for the long game.

I Say total diversified forex. Equal amounts in % in the more popular currencies.

gold has a low dollar price, because the dollar is strong right now.

reserve currencies should probably reflect the import needs of Russia as closely as possible (% of reserve currency in proportion to the currencies which are used to pay for imports) you obviously adjust that a bit depending on who is doing QE at the current moment (Euro zone right now)

French Bailiff Seizes Russian State-Owned Building in Paris Over Yukos

Read more: http://sputniknews.com/europe/20150730/1025219482.html#ixzz3hOSuUPeV

http://tass.ru/en/russia/811765

Maximmm, if this is the farmer you were talking about, well, I told you there were other reasons involved.

sepheronx wrote:

Maximmm, if this is the farmer you were talking about, well, I told you there were other reasons involved.

Yup that's the one, thanks for the link.
Still not going to be as blindly optimistic as you though.

Austin wrote:Not sure what to make of it , they are betting on further strengthening of Dollah due to upcoming interest rate hike

Russia’s Terrible Bet on the Euro and Gold

I though feel Russia should still buy Gold and buy a lot since prices are down , Gold is a long term asset , 5 years down the line Russia would be happy they bet on gold

Also dump some Euro and USD and bet on Chinese Renminbi , The propotion of Reserves IMHO should be something like

Gold 35 %
Dollah 30
Euro 22
Yuan 10 %
Other Currency 3 %

Fed will never goimg to increase the rates . Wanna bet ?.

Maximmmm wrote:

sepheronx wrote:

Maximmm, if this is the farmer you were talking about, well, I told you there were other reasons involved.

Yup that's the one, thanks for the link.
Still not going to be as blindly optimistic as you though.

You dont have to be. I will just keep posting news and facts.

Maximmmm wrote:

sepheronx wrote:

Maximmm, if this is the farmer you were talking about, well, I told you there were other reasons involved.

Yup that's the one, thanks for the link.
Still not going to be as blindly optimistic as you though.

That's a cheap shot. You pretty much spout a lot of the tropes that the liberasts love so much. If Russia
was in such a sorry state it would never produce economic indicators that it does.

The pattern is clear, in the west one has exaggerated singing of the praises and the giving of the benefit of the doubt.
In Russia you have doomer BS on every topic that is backed up by nothing but bile. Until all the whiners get real
world data to support their doom and gloom, they are to be discounted out of hand.

US imposes further sanctions on Russia over Crimea, east Ukraine conflict