Russian Economy General News: #6

higurashihougi wrote:

Viktor wrote:Its done - for officials as of now    

Putin raised the retirement age for officials Details

May I ask for English translation of the paragraph below ? Somehow I cannot understand fully the content of that paragraph via GG Trans results.

Наряду с увеличением возраста для назначения пенсии по старости Федеральным законом увеличивается с 15 до 20 лет (поэтапно до 2026 года) стаж, необходимый для назначения федеральным государственным гражданским служащим пенсии за выслугу лет, в связи с чем вносятся изменения в Федеральный закон "О государственном пенсионном обеспечении в Российской Федерации".

MOSCOW, May 25. /TASS/. In Russia, there has been a steady trend toward improvement of GDP indicators and the task now is to keep it, President Vladimir Putin said at a meeting with representatives of French business circles.

He mentioned the problem of decline in Russia’s GDP in 2015.

"In the first quarter of this year, the reduction is still there, but it is twice less than last year (in the same period). That is a trend towards improvement of macroeconomic indicators, including GDP has been a steady and our task is to keep all this in the near future," Putin said.

He added that at the same time Russia has one of the lowest levels of public debt which is about 12% while the level of foreign currency reserves is growing.

According to him, the volume of Russia’s gold and foreign currency reserves has increased.

"As of May 1 of the current year, the reserves totaled $391.5 bln." "Nevertheless, our goal is not to just fill up state coffers with reserves, but to create favorable conditions for working on the Russian market," Putin said.

He noted that he recently discussed these issues at the meeting (the Economic Council session) with the representatives of government, business, regions, etc.

According to the Russian Central Bank, Russia’s reserves grew by $1.8 bln in the week of April 29 - May 6 to $391.9 bln.

Russia’s international reserves increased by $4.5 bln in April, month on month, to $391.5 bln.

Russia’s international reserves are highly liquid foreign assets managed by the Central Bank of Russia. They comprise foreign currency, Special Drawing Rights (SDRs), a reserve position in the International Monetary Fund and monetary gold.

Austin wrote:So public debt decreased to 12 % of GDP

Russia’s economic dilemma: Are higher oil prices a blessing or a curse?

The growth in oil prices may impede Russia from kicking its oil addiction. However, more expensive oil would help reduce the country's budget deficit. But it would also stop the budding import substitution programs and the development of domestic production.

KoTeMoRe wrote:

Austin wrote:So public debt decreased to 12 % of GDP

Eye watering from here...

sepheronx wrote:I hear a lot of talk but what exactly are they going to do?  As I said a million times before, they played their real only card too early - sanction on Russian banks and barring the access to foreign credit.  There is absolutely nothing they can do other than forcing Russia out of SWIFT and forcing companies not to invest in Russia.  But that wont end up doing them any good as a lot of the investments are coming in now and Russia is finding alternatives to the credit market through domestic means.

As I said, a lot of barking but no bite.  As well, Russia isn't a signature of the Minsk agreements, so it really doesn't matter to Russia.  As Russian officials said - it is up to the west to decide for themselves regarding the relations.  Russia will simply just keep moving on.

http://russia-insider.com/en/politics/external-debt-russia-has-sunken-rapidly-good-sign/ri14507

On one hand the experts see this as a positive trait — now the government has no problematically high debts abroad, on the other hand, such a situation indicates, that both Russians and foreigners have lost their trust in Russia's future.

Project Canada wrote:

Russia’s economic dilemma: Are higher oil prices a blessing or a curse?

The growth in oil prices may impede Russia from kicking its oil addiction. However, more expensive oil would help reduce the country's budget deficit. But it would also stop the budding import substitution programs and the development of domestic production.

3 ways out of Russia’s crisis: The plans on Putin's table

Russian economists have proposed three programs to help the country get out of the crisis. They were presented to President Vladimir Putin at the session of the Economy Council on May 25. RBTH tries to understand the essence of each plan and how such proposals were realized in the past.

Plan 1: Limit the income of the population

Plan 2: Print money

Plan 3: Reform the justice system

Plan 1 shrinks the economy and reduces the population while aggravating the problems.
Plan 3 is a distraction from the real problem: the non-Russian ruble system (fiercely defended by Kudrin).

Plan 2:
Printing money can be a solution only under conditions of National Credit. The Russian Central Bank should be cut off from the IMF / Federal Reserve agreements and set free to create credit according to the needs of the Russain economy. This means the ruble should be a Russian entity again. Thus: no bonds anymore, let the state create national credit and no new debt for the Russian people.

By far the most troubling factor of the Russian economy is the monetary system: the ruble is NOT Russian. For every ruble in circulation there is a fee for the Federal Reserve. This is why the financial sanctions of the West do really hurt the Russian economy. It is strange that the Russians accept the chains of monetary slavery around their neck.

The Federal Reserve status and policy:
1. is 100% private.
2. functions outside any democratic controls and serves only the private interests of its owners; creates money with the computer to lend at rates near 0.00% to the owners/friends who buy the world with it for nothing !!!
3. it sabotages the interests of the American people since its inception in 1913 and after Bretton Woods it sabotages the interests of the whole world.
4. there is no backing whatsoever for any US Dollar any more.

The Russian Central Bank policy:
1. for every ruble inserted in the Russian economy there must be some dollars/euros or gold as backing; this is a royalty paid to the Fed/ECB (the euro's must be backed by dollars as well, while the dollars are backed by the philosophicaly perfect NOTHING !!! ).
2. in Russia labor, materials and machinery are often not utilised, necessary investments are not done because there are not enough rubles to put them at work to serve the society. That's why the Russian government is always searching for foreign capital as "investments" (selling Russia for fiat dollars e.g FOR NOTHING!!!).
3. and there are not enough rubles because there are not enough dollars (euro's) or gold to back new rubles.
4. there is no cover for the interest, neither in Russia nor in the world as a whole. That's why the debt grows faster than the liquidity (today the world debt is 3 times higher than the world GDP); the Fed NEVER issues liquidity to cover for the interest the physical economy is charged with.

Thus as long as this Russian Central Bank policy is maintained, the Russian people will accept the Federal Reserve monetary slavery and will not be able to decide their own destiny.
The amazing thing here is that only 1/4 of the Russian money supply is produced by Russian banks, the rest is produced by foreign entitities. And the "sanctions" prompted many such foreign players to reduce the money production for Russia. The Russians accept to stay in the financial cage where they were put by the private western central bankers and tolerate an artificial liquidity shortage to be the cause of their own economy contracting (and ensuing misery). They have massive unemployment, large natural resources, huge investment opportunities and blame the cash shortage for failing to spur development. While they can release as much cash as necessary from the Central Bank of Russia, the Nabyullina team refuses to do this.

Russia should adopt a system of National Credit:
- the state issues the base money to be used by the commercial banks;
- the commercial banks produce money for the economy by leveraging the base money (fractional reserve banking) and they get interest for this;
- the state issues interest compensation and injects it in the economy without incurring new debt or interest => The money circuit stays balanced, the available liquidity is enough to keep the total debt not rising.
- the state terminates all sovereign debt FOR EVER!!!